EU approves Vivendi control of Telecom Italia

The European Commission has approved Vivendi’s acquisition of de facto control over Telecom Italia, after Vivendi agreed to divest Telecom Italia’s stake in Persidera.

The EC said in a statement that, with this concession, the deal “would not significantly reduce competition in the European Economic Area or any substantial part of it, including Italy.”

It also deemed that Vivendi’s Italian activities in advertising, music, TV and mobile gaming, combined with Telecom Italia’s activities in fixed and mobile telecommunications, would not be able to shut out other competitors.

Persidera offers wholesale access to digital terrestrial networks for the broadcast of TV channels and is jointly owned by Telecom Italia and Gruppo Editoriale L’Espresso.

Among its assets, French media giant Vivendi also holds a significant minority stake in Mediaset, which is also active in the market for the wholesale access to digital terrestrial networks.

In a statement, the EC said that post-transaction “Vivendi would have had an incentive to raise prices charged to TV channels in the market for wholesale access to digital terrestrial television networks.”

“The benefits of such a strategy would be obtained either directly through Persidera or indirectly via the minority shareholding in Mediaset, since other players active in the market do not represent a viable alternative for TV channels. As a result, TV channels would have found it more expensive to reach their audiences in Italy.”

“In order to address the competition concerns identified by the Commission, Vivendi committed to divest Telecom Italia’s stake in Persidera.”

Vivendi is Telecom Italia’s largest shareholder with a 23.94% stake in the business. Earlier this month took effective control over the business by securing a two-thirds majority on the board.