Vodafone and Unitymedia: ECJ dismisses lawsuits against cable merger

Five years after the takeover of cable network operator Unitymedia by Vodafone, the European Court of Justice (ECJ) has dismissed the complaints of three competitors against the EU Commission's approval of the merger under competition law. At the time, the Commission had concluded that the takeover would not have a detrimental effect on competition. The court confirmed this and dismissed the actions, the ECJ announced on Wednesday (cases T-58/20, T-64/20, T-69/20).

Vodafone on a shopping spree

Following the successful takeover of Kabel Deutschland in 2013, Vodafone soon put out feelers for further cable networks. However, talks with the global cable giant Liberty Global about the possible acquisition of some European networks dragged on. It was not until 2018 that it became clear: Vodafone would take over the German cable network from Unity Media, among others.

The takeover meant that the German cable network would largely be back in one hand. Competitors were not the only ones up in arms about this; the EU Commission was also initially skeptical and announced a stricter review. Following a number of concessions by Vodafone –, including the opening of the cable network for Telefónica Deutschland –, the EU competition authorities finally gave the green light.

Deutsche Telekom and the regional cable network operators Netcologne and Tele Columbus had taken legal action against the EU Commission's approval of the merger before the European Court of Justice. They argued that the new cable giant would create a dominant position, particularly in the television market. Other network operators had also feared that a new "copper duopoly" on the market would make competition more difficult.

A network to enslave them

Telekom CEO Tim Höttges had repeatedly described the merger as a "distortion of competition" and spoke of a "remonopolization of the cable market". At the time, Telekom was convinced that the conditions imposed by the EU Commission did not offer sufficient protection against "negative effects in the area of media and program diversity" – and saw this as leverage for a successful court case.

The ECJ has now rejected this. "The Commission's assumption that the companies involved in the merger are not competitors on the retail markets for the provision of television signals in Germany is not objectionable," the court stated. The fact that the cable networks of Unitymedia and Vodafone do not overlap regionally played a role in the approval.

The plaintiffs can still appeal against the decision, but this is limited to procedural issues. It remains to be seen whether this will happen. The companies concerned did not comment on the ruling when asked.

(vbr)