Liberty Global Plc (LBTYA) faces an extended European Union probe of its 4.9 billion-euro ($6.8 billion) purchase of Dutch cable operator Ziggo NV (ZIGGO) as regulators cited antitrust concerns over Dutch pay-TV and telecommunications.
The European Commission set a Sept. 18 deadline to rule on the deal, saying it saw possible problems in combining two of the main providers of Internet, TV and fixed telephone services in the Netherlands, according to an e-mailed statement today. It also cited concerns that the deal could harm Dutch-language content providers and other TV channels.
Liberty Global, controlled by billionaire John Malone, wants to add Ziggo’s 2.7 million cable customers in a combination with its UPC cable unit to take on Dutch carrier Royal KPN NV. The company, which owns cable providers from Hungary and Poland to Germany and the U.K., has spent almost $50 billion to consolidate Europe’s cable industry in recent years.
“The removal of Ziggo as an autonomous player could increase the likelihood that the remaining competitors, in particular the merged entity and KPN, would coordinate their competitive behavior and increase prices or delay investments,” the EU said.
Liberty Global expects to close the deal in the second half of this year and will work with the EU “to support them in fully understanding this transaction and the markets in which we operate, said Bert Holtkamp, an Amsterdam-based spokesman for the company.
‘‘We remain confident that we can address any competition issues that may, in the end, be identified by the commission and of ultimately receiving a positive decision,’’ Holtkamp said.
Ziggo said it took note of the EU decision.
The combined firm might also have the ability and incentive to shut out or hinder TV services delivered by the Internet in order to strengthen its own TV offering, the EU said. The deal may also harm competition in the TV market because it brings together two of the main buyers of Dutch-language audiovisual content and TV channels as well as two of the country’s premium pay-TV film channels, Ziggo’s HBO and Liberty Global’s Film 1.
Although the two companies’ cable networks don’t overlap geographically, the EU said its initial probe showed they exert ‘‘some indirect competitive pressure on each other.” That could reduce competition for retail pay-TV and telecommunications, it said.
The EU declined to comment on whether a decision had been made on a Dutch request for the Netherlands’ competition authority to take on the deal. Dutch regulators said they know the country’s market best and all the cable customers are in the Netherlands. Joaquin Almunia, the EU’s antitrust chief, said last month that he was “surprised” by the Dutch request because the size of the deal made the EU responsible for approving it.
To contact the reporter on this story: Aoife White in Brussels at firstname.lastname@example.org
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