The Italian Competition Authority clears a merger between media operators by imposing a divestiture remedy

By a decision made on 11 November 2015 the Italian Competition Authority (ICA) has closed a II-phase investigation into the proposed acquisition of Seat Pagine Gialle (Seat) by Libero Acquisition (Libero) in the Case C12001, LiberoAcquisition/Seat Pagine Gialle. The ICA took the view that the merger may have a negative impact on the competition in the market for directory assistance services. In this market the merging parties were the two major operators and collectively very high market shares, close a monopoly, as it was reflected by the relatively high result of the HHI test. Therefore, the ICA feared that the with the implementation of the merger the parties would have less incentives to compete on prices and quality.
To resolve the competition concerns voiced by the ICA, the parties proposed to sell to an independent operator an undisclosed class of numbers used by them. The ICA approved this proposal as it believed that the divestiture was a remedy suitable to remove the competition problems arising from the merger. The implementation of the remedy would almost completely eliminate any overlapping between the activities of the parties. Additionally, the purchaser of the divested asset would exert on the parties the same

Interestingly, the ICA did subject the proposed remedies to a market test as it usually does. Instead, it contented itself with an opinion released from the AGCOM, the Italian telecommunication regulator. In essence, the AGCOM substantially agreed with the ICA views about the competition problems arising from the merger and the suitability of the proposed divestiture to address such problems. Finally, the ICA accepted a deadline by which the merging parties should complete the sale of class of numbers which was longer than that generally recommended by the European Commission. As a justification for that, the ICA pointed to the specificities of the relevant market and the assets to be divested. Such factors, in the ICA’s view, would call for more time to find a suitable buyer.

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