Spain's antitrust watchdog starts proceedings against Telefonica over DTS merger

MADRID (Reuters) -Spain's antitrust watchdog said on Wednesday it had started disciplinary proceedings against Telefonica for possibly breaching the commitments it made when it bought cable TV operator DTS in 2015.

The CNMC, as the regulator is known, said it found back in 2021 some evidence Telefonica didn't comply with the commitments it made when acquiring control of DTS from Spanish media company Prisa for 724.6 million euros ($769.6 million).

To get the acquisition approved, Telefonica committed, as part of a series of conditions, to refrain from hindering the switching of its pay-TV customers to other operators for at least five years to ensure competition, which got extended in 2020 for another three years, CNMC said.

The regulator mentioned cheap mobile phone rentals and three-year subscription offers as potential infringements.

Telefonica will respond to the allegations and will ask for the case to be dropped, a spokesperson said on Wednesday, adding the company didn't hinder competition as customers had full freedom to leave and the offers mentioned are not related to pay-TV service.

The DTS deal was part of telecom operators' strategy at the time of bundling offers to customers, including cable TV, mobile telephone, internet services and landlines.

CNMC has three months to investigate and make a decision on the case.

In September, CNMC fined Telefonica 5 million euros for failing to provide between 2015 and 2022 "timely, correct and complete" information following the DTS acquisition.

($1 = 0.9415 euros)

(Reporting by Inti Landauro and Jakub OlesiukEditing by Mark Potter)