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NMa clears KPN / Tiscali acquisition

The Netherlands Competition Authority (NMa) has granted clearance to the acquisition of Tiscali B.V. by KPN B.V. after an in-depth investigation. The NMa earlier voiced competition concerns about the proposed acquisition. KPN's market share will rise by approximately 4 per cent following the acquisition, with KPN providing internet services to approximately 49 per cent of Dutch homes (referred to as the retail market). Still, the NMa has established that no dominant position, detrimental to competition in the markets for broadband internet, will be created or strengthened.

Tiscali is an internet service provider (ISP) in the retail market and deploys its own DSL network, through which it provides services to other ISPs (referred to as the wholesale market). Following its initial investigation during the so-called 'notification phase', the NMa feared that after the acquisition Tiscali wholesale customers would not be left any viable options for buying the services they need. It is now apparent from the NMa's in-depth investigation that Tiscali is indeed a player exerting competition pressure on KPN. However, its position is not large or special in such a way that other DSL players, such as Orange and Tele2, in conjunction with cable companies, would not be able sufficiently to counter KPN in the retail market for broadband internet access.

On the basis of its in-depth inquiry, the NMa also found that KPN's most important competitors in the retail market (DSL players deploying their own network and cable companies) are not dependent on wholesale broadband access provided by KPN and Tiscali. The NMa could not identify any concrete indications that the Tiscali acquisition would restrict the joint power of remaining DSL players. It was also apparent that the various DSL parties and cable companies remaining after the acquisition would be able sufficiently to counter KPN.

KPN has announced that it will replace the existing network, the so-called All-IP plan. OPTA is now investigating the effects of All-IP. The NMa has concluded that All-IP is an autonomous development, which must be assessed separately from the Tiscali acquisition. The plan's potential adverse effects on the position of competitors are not significantly strengthened by KPN's acquisition of Tiscali.

In instances where mergers and acquisitions exceed specified turnover thresholds, the NMa assesses whether the merger or acquisition creates or strengthens a dominant position. Fair competition positively affects prices, quality and diversity of supplies, so enhancing consumer welfare. With a view to this, the NMa may impose conditions on, or decide not to clear, a merger or acquisition.