BT/AT & T - Telecommunications

Background

The full text of the Commission’s decision authorising the creation of a joint venture between BT and the US company AT&T is now available on the Internet. The decision is dated 30 March 1999 and covers the parties’ global telecommunications networks joint venture.

Assessment

The Commission approved the operation after certain co-ordination issues between the parties in the UK had been resolved through undertakings submitted to AT&T to remedy concerns under the Article 2(4) of the Merger Regulation. These included a divestment by AT&T of a UK-based long-distance network company and provisions to ensure separation of management of an AT&T affiliate through which AT&T held a stake in Telewest, to exclude AT&T nominee directors from participating in decisions or receiving information concerning Telewest. It was the first decision taken after a second-phase enquiry involving the assessment of co-ordination effects under Article 2(4) of the Merger Regulation.

Concerns arose in the following areas: (i) the parties’ combined market position on the global market for the provision of telecommunications to large multinational companies, on that for the provision of international courier services to other operators, and on the UK market for the provision of international voice telephony services on the UK-US route; (ii) the effect of the creation of the joint venture leading to the creation or strengthening of a dominant position for certain telecommunication services in the UK; and (iii) possible co-ordination effects of the proposed joint venture in the UK between ACC, a subsidiary of AT&T and between BT and Telewest, in which AT&T indirectly holds a 22% stake.

After several commitments were undertaken, the Commission cleared the operation. (Case n° III/JV15, decision of 30/03/99).