The Italian Competition Authority starts a phase II investigation into a merger between telecommunication tower operators

The Italian Competition Authority (ICA) has recently opened a phase II investigation into the proposed merger between two telecommunication tower operators (CaseC11987, EI Towers/Ray Way). By the notified transaction EI Towers (EIT), wholly owned by the general TV broadcaster Mediaset, plans to buy Ray Way, controlled by the Italian public broadcaster Rai. The parties own networks to host television and radio transmission equipments.
The ICA feared that post-merger EIT would have a dominant position in the market for the facilities for television and radio transmissions. With the implementation of the merger the only operator capable to exert a reliable competition pressure on EIT would exit the market. Indeed, the networks owned by the parties could not be replaced with the facilities owned by local competitors. In addition, taking into account that EIT is vertically integrated with the TV broadcaster Mediaset, the ICA also believed that the merger might restrain competition in some downstream markets, such as the markets for access to contents, for the provision of advertising services and for digital broadcasting. Finally, with the merger RAI would acquire a minority shareholdings in EIT, as result of which RAI and Mediaset would have incentives to restrain from competing in the market for TV advertising.



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