The final decision of the Competition Authority (AdC) on the acquisition of Nowo by Vodafone, which is expected to be rejected, should be taken soon, said the president of the entity, who, in Parliament, blamed the delay in the analysis on Vodafone, which has successively presented suggestions for compromise. Nuno Cunha Rodrigues, given the time it is taking to take the final decision, mentioned all the dates.
The transaction has been underway for a year and a half but was the subject of an in-depth investigation in April 2023. As of December, Vodafone had not submitted any package of commitments, which was rejected on 17 January 2024. On 30 January, Vodafone submitted a new proposal, withdrawn on 26 February, and submitted a new proposal which was rejected on 22 March. The fourth package of commitments was submitted by Vodafone on 22 April, and the tender was answered on 29 May.
If the Nowo acquisition fails, “it won’t change Vodafone’s entire strategic plan,” says the CEO
“I hope it will be finalised soon,” said Nuno Cunha Rodrigues, adding that the timing “is not motivated by the AdC, but by the fact that the entities have submitted successive commitments in light of the concerns raised in April 2023.”
Cunha Rodrigues, faced with Nowo’s share of less than 2%, speaks of unilateral and coordinated effects. The analysis carried out detected a Nowo effect, which means that in the areas where Nowo is offered, the prices of the other three operators (Meo, Nos and Vodafone) are lower. But this, he said, “is not the only concern.”
And compared to Spain, where the merger of two operators (MásMóvil and Orange) was approved, which will create the largest operator in that market, Cunha Rodrigues says that no parallels can be established. “The market [espanhol] “It is totally different”, it has more than 30 virtual mobile operators; Portugal has two, he explained. He said that if in Spain the so-called coordinated effects are not detected, in Portugal “they are”, and this is a reason that could lead to the failure of the operation. The “AdC analysis is robust” and it is a complex process from a technical point of view, he indicated.
Cunha Rodrigues, confronted by MPs about the possibility of this leading to layoffs at Nowo, said he was not aware of this, but the objective of the Competition Authority is to protect consumers, so the analysis referred to “I don’t know how it can be assessed”. But he assured that he was not aware of any possible layoffs.
What is life like for Nowo after the merger with Vodafone halted competition?
At the hearing in Parliament on the activity of the Competition Authority, Cunha Rodrigues took stock: in 2023, eight condemnatory decisions were issued (in energy, distribution, public procurement, the labour market, health, audiovisual production) with fines of 34.3 million euros. That year there were also four more complaints of illegality (indictments that have not yet been completed) in food distribution, the labour market, condominiums, IT and software. There were three search and seizure actions. This year there were two new investigations, one complaint of illegality and three final decisions resulting in fines of 15 million. In 5 months there were three search actions, seizures and three requests for pardon.
He also referred to the judicial confirmations, in the Court of Appeals, of cases such as Super Bock, Meo/MVNO and EDP Produção, indicating that in the latter case there was already a decision by the Constitutional Court to uphold the sentence. Cunha Rodrigues also reported that the Contest has not yet received the amount of the fine from EDP Produção, which “is appealing. It has not been paid,” he said. EDP has not officially commented on the matter, and Expresso said that the company would be considering new steps in this dispute, considering that the TC decision is essentially based on formal issues.
And in the case of concentration processes, a new record was registered in 2023 with 82 operations, 30% above 2022. “We kept the average analysis period identical to the previous year” and “we intensified the detection of unnotified operations.”
Source: Observadora
