Telekom Austria/Libro - Telecoms

Background

Acquisition of joint control of an Internet access provider, Libro by Telekom Austria and a consortium led by UIAG and with the participation of DBAG. The decision also includes the establishment of Libro’s e-commerce subsidiary (“Lion.cc”) and the acquisition of joint control of this firm by Libro and Telekom Austria.

Assessment

The Commission analysed the market for fixed network telephony, where Telekom Austria already holds a dominant position in Austria. According to the Commission, the entrance of Libro in the market would have led to a strengthening of a dominant position with a particular danger of a development of a joint strategy of market domination by both undertakings because of the strength of Libro especially in the area of marketing.

The parties gave a commitment to the Commission to renounce a license to Libro until further notice. The danger of a further strengthening of the already very strong market position of Telekom Austria was thereby avoided.

On the other markets affected by the operation, in the Commission’s view, there was sufficient competition. These markets included the marketing of mobile phones in Austria and Internet services. Although there will be increasing market shares, the combined market share is below the market dominance threshold. According to the Commission, the advantages of Libro in the area of high-speed Internet access can not be disputed. However, the Commission concluded that the transaction would not lead to a dominant position. The language of the decision is German. (Case n° COMP/M.1747, decision of 28/02/00).