Commission clears creation of a joint venture by Deutsche Telekom, Orange, Telefónica and Vodafone

The joint venture will offer a platform to support brands and publishers’ digital marketing and advertising activities in France, Germany, Italy, Spain and the UK. Subject to the user’s consent, the joint venture will generate a unique digital code derived from the user’s mobile or fixed network subscription. Such code will allow brands and publishers to recognize users on their websites or applications on a pseudonymous basis, group them under different categories and tailor their content to specific users’ groups.

The Commission’s investigation

Based on its market investigation, the Commission found that the transaction, as notified, would not significantly reduce competition in French, German, Italian and Spanish markets for: (i) the supply of digital identification services for targeted advertising and/or site optimisation; (ii) the retail supply of mobile telecommunications services; (iii) the retail supply of fixed internet access services; (iv) the retail supply of audio-visual (‘AV’) services; and (v) the supply of online advertising space.

During its investigation, the Commission examined:

• The vertical link between the four companies’ activities as retail suppliers of mobile and internet access services and the joint venture’s digital marketing and advertising services. The companies provide the joint venture with a digital code with which it provides its digital identification services for digital marketing and advertising activities. The Commission found that, following the transaction, there would be sufficient alternative input providers for the same purpose. Similarly, the Commission found that the companies’ rivals would be able to supply inputs to the joint venture and/or rival suppliers of digital identification services.

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• The vertical link between the four companies’ activities as customers of online display advertising and the joint venture’s activities as supplier of digital identification services for targeted advertising and/or site optimisation. The Commission found that: (i) the joint venture will not have the ability or incentive to exclude other advertisers and rival providers of mobile telecommunications services by restricting their access to digital identification services, and (ii) the companies would not have the ability to exclude rival providers of digital identification services.
• The conglomerate links between the companies’ activities as distributors of TV channels and the joint venture’s activities as supplier of digital identification services for targeted advertising and/or site optimisation. The Commission found that the companies would not have the ability or the incentive to force TV broadcasters to subscribe to the digital identification services offered by the joint venture given the limited common customer base between these two different products.
• Finally, the Commission found that the joint venture would not increase any risk of coordination between the four companies, in view of the extensive common activities that they will retain outside the joint venture.

The Commission therefore concluded that the transaction would raise no competition concerns in the EEA and cleared the case unconditionally. During its investigation, the Commission has been in contact with data protection authorities. Data protection rules are fully applicable, irrespective of the merger clearance.

Companies and products

Deutsche Telekom, headquartered in Germany, is a multinational telecommunications operator with activities in more than 50 countries worldwide, including Germany. It provides mobile and/or fixed telecommunications services as well as internet access, television and technology products.

Orange, headquartered in France, is a multinational telecommunications operator with activities in 27 countries worldwide, including France and Spain. It provides a wide range of electronic communications services mainly in the area of fixed and mobile telecommunications and internet access as well as telecommunications services to multinational companies.

Telefónica, headquartered in Spain, is a multinational telecommunications operator and mobile network provider with activities mainly in Europe, including Germany and Spain, the UK and South America providing mobile, fixed, internet and television services.

Vodafone, headquartered in the UK, is a multinational telecommunications operator with activities in 21 countries predominantly in Europe, including Germany, Italy and Spain, and Africa. It provides mobile telecommunication services, fixed telephony services and retail television and technology services.

More information: European Commission