Italy’s antitrust authority, the Autorità Garante della Concorrenza e del Mercato (AGCM), has raised significant competition concerns regarding Fastweb’s parent company, Swisscom, and its proposed EUR 8 billion acquisition of Vodafone Italia. In its latest report, the AGCM highlighted potential issues primarily within the fixed-line market while noting that the merger would likely have minimal impact on the mobile sector.
“The transaction is likely to determine a significant impediment to competition in the market for fixed communication services for residential users, as well as in some specific competitive areas that it appears appropriate to distinguish within it,” the AGCM said, highlighting Fiber-to-the-Home (FTTH) from a product perspective and urban areas from a geographical standpoint.
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The AGCM’s assessment revealed that while the combined entity would hold a dominant position in certain segments, it would still have a smaller overall market share compared to TIM, Italy’s incumbent operator. However, concerns have been raised about how the merger might affect competitive dynamics in the wholesale market. Despite Fastweb’s relatively modest market share of approximately 5%-10%, its dual role as both a retail and wholesale operator has sparked apprehension among competitors. The regulator has noted that Vodafone’s significant role as a buyer of wholesale services could exacerbate these competitive concerns, necessitating a thorough investigation.
Further complicating the scenario, rival companies like iliad and TIM have voiced objections not only regarding the potential impact on fixed-line competition but also about issues related to mobile competition and spectrum distribution. The AGCM has taken these concerns seriously and is delving deeper into the implications of the merger for various market segments. This additional scrutiny aims to ensure that any potential anti-competitive effects are fully understood and addressed.
Further Reading: Swisscom Faces Phase II Probe into Vodafone-Italy Deal
The AGCM is expected to complete its phase two investigation within 90 days. This extended review period will determine whether the merger proceeds as planned or if additional regulatory conditions are required.
The potential imposition of regulatory remedies, such as increased oversight or conditions on the merged entity’s operations, will be crucial in ensuring that the merger does not harm competition or consumer interests in Italy’s telecommunications sector.
