Review Of The Swiss Competition Commission's 21 April 2010 Decision Regarding The Merger Undertaking Of France Télécom SA And Sunrise Communications AG

Author:Ms Nicola Benz
Profession:Froriep Renggli
 
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This article first appeared in JusLetter

In its decision of 21 April 2010, the Swiss Competition Commission prohibited the planned merger between Sunrise Communications AG and Orange Communications SA. This was the second time only that the Competition Commission has refused to allow a notified merger and the first time that such decision has become effective. The present review contains a summarised translation of the Competition Commission's detailed reasoning, followed by a short assessment of the decision and its effects.

1 INTRODUCTORY REMARKS

1.1 The Planned Merger Undertaking: Parties, Reasons and Structure

On 26 November 2009, the Swiss Competition Commission (Competition Commission) received a notification pursuant to Art. 9 para 1 of the Federal Act on Cartel Law and Other Restraints of Competition (Cartel Act) regarding a concentration of undertakings. According to the notification, France Télécom SA (France Télécom) intended to acquire Sunrise Communications AG (Sunrise; together the Merging Parties). Sunrise and Orange Communications SA (Orange) would then have been merged (the Merged Company).

1.1.1 France Télécom Group and Orange

France Télécom Group (FT Group) provides a broad range of telecommunication services to private and business customers and to very large companies. FT Group's main areas of business are fixed line voice telephony, leased circuits, data transfer, internet, TV broadcasting and information services.

The FT Group operates the network of its (wholly owned) subsidiary Orange in Switzerland, sells and distributes Orange products in Switzerland and abroad, and provides – through Orange – a broad range of mobile telecommunication services to private and business customers. Orange's fixed line telephony and internet activities are marginal. Through its wholly owned subsidiary Orange Network SA, Orange has a GSM- and UMTS-licence and runs its own infrastructure for mobile telecommunication. Orange is FT Group's only brand for internet, TV and mobile telecommunication services. By acquiring Sunrise, the FT Group aimed at strengthening its presence in the Swiss mobile telecommunication market and entering the fixed line market.

1.1.2 Tele Danmark Communications A/S and Sunrise

Tele Denmark Communications A/S (TDC) is the leading service provider of telecommunication services in Denmark, active also in the whole Scandinavian market and, via a minority participation, in Hungary. TDC owns 100% of Sunrise. Sunrise operates telecommunication networks (fixed line as well as mobile...

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