The joint venture will offer a platform to support the digital marketing and advertising activities of brands and publishers in France, Germany, Italy, Spain, and the United Kingdom. With the user's prior consent, the joint venture will generate a unique digital code derived from the user's mobile or fixed-line network subscription. This code will allow brands and publishers to recognize users on their websites or applications on a pseudonymous basis, group them into different categories, and tailor their content to specific user groups.
The Commission's investigation
Based on its market research, the Commission found that the transaction, as notified, would not significantly reduce competition in the French, German, Italian and Spanish markets for: (i) the supply of digital identification services for targeted advertising and/or site optimization; (ii) the retail supply of mobile telecommunications services; (iii) the retail supply of fixed Internet access services; (iv) the retail supply of audiovisual ("AV") services; and (v) the supply of online advertising space.
During its investigation, the Commission examined
The vertical link between the activities of the four companies as retail providers of mobile and internet access services and the digital marketing and advertising services of the joint venture. 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 considered that, following the transaction, there would be sufficient alternative suppliers of inputs for the same purpose. Similarly, the Commission found that the companies' rivals could supply inputs to the joint venture and/or rival providers of digital identification services.
The vertical link between the activities of the four companies as customers of online display advertising and the activities of the joint venture as a provider of digital identification services for targeted advertising and/or website optimization. The Commission found that (i) the joint venture will have neither the ability nor the 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 have no ability to exclude rival providers of digital identification services.
The conglomerate links the companies' activities as television channel distributors with the joint venture's activities as a provider of digital identification services for targeted advertising and/or website optimization. The Commission considered that the companies would not have the ability or the incentive to compel television broadcasters to subscribe to the digital identification services offered by the joint venture, given the limited shared customer base between these two different products.
Finally, the Commission considered that the joint venture would not increase any risk of coordination among the four companies, given the extensive shared activities they will maintain outside the joint venture.
Therefore, the Commission concluded that the transaction would not raise competition concerns in the EEA and authorized it without conditions. During its investigation, the Commission has been in contact with data protection authorities. Data protection rules remain fully applicable, regardless of the authorization of the merger.
Companies and products
Deutsche Telekom, headquartered in Germany, is a multinational telecommunications operator with operations in more than 50 countries worldwide, including Germany. It provides mobile and/or fixed-line telecommunications services, as well as internet access, television, and technology products.
Orange, headquartered in France, is a multinational telecommunications operator with operations in 27 countries worldwide, including France and Spain. It provides a wide range of electronic communications services, primarily in the areas of fixed and mobile telecommunications and internet access, as well as telecommunications services to multinational enterprises.
Telefónica, headquartered in Spain, is a multinational telecommunications operator and mobile network provider with operations mainly in Europe, including Germany and Spain, the United Kingdom and South America, providing mobile, fixed-line, internet and television services.
Vodafone, headquartered in the United Kingdom, is a multinational telecommunications operator with operations in 21 countries, primarily in Europe, including Germany, Italy, and Spain, and Africa. It provides mobile telecommunications services, fixed-line telephony services, and retail television and technology services.
Rules and procedures for controlling concentration operations
The transaction was notified to the Commission on January 6, 2023.
The Commission has an obligation to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent mergers that significantly impede effective competition in the EEA or a substantial part of it.
The vast majority of notified mergers do not raise competition concerns and are authorized following a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant authorization (Phase I) or initiate an in-depth investigation (Phase II).
