AZTN: Concentration in this form cannot be permitted

The Competition Protection Agency received the notification of the intention to concentrate Hrvatski Telekom (HT) and OT- Optima Telekom on June 28, 2013.

Considering the publicly announced information that HT submitted a notification of the intention to concentrate and media interpretations according to which the Agency should make its decision in this procedure within the deadlines stipulated by the Financial Operations and Pre-Bankruptcy Settlement Act, in this specific case, by mid-August 2013, the Agency emphasizes that the Financial Operations and Pre-Bankruptcy Settlement Act does not take precedence over the Competition Protection Act. 

In other words, the pre-bankruptcy settlement procedure as stipulated by that Act cannot change the conditions and deadlines for assessing concentrations of entrepreneurs to which the Agency is obliged by the Competition Protection Act. If the implementation of the pre-bankruptcy settlement procedure requires approval from this Agency because it involves the acquisition of control or concentration, then, in the Agency’s opinion, that approval should be obtained even before concluding the pre-bankruptcy settlement. 

In this specific case, Optima Telekom, when preparing the Financial and Operational Restructuring Plan, which represents a proposal to creditors for concluding a pre-bankruptcy settlement and includes the acquisition of control over that entrepreneur by HT, should have taken into account the Competition Protection Act and the need for approval for the implementation of the concentration from this Agency. Moreover, since the pre-bankruptcy settlement procedure began on April 11, 2013, and the regulations on competition protection allow for the submission of a preliminary notification of the intention to concentrate even before concluding the control transfer agreement, it is evident that there was sufficient time for the intended concentration to be submitted to the Agency for assessment well before June 28

The Agency, based on the data from the notification and other information at its disposal, can currently conclude that there are no arguments that would allow the concentration in this form to be deemed permissible. Namely, the share of the entrepreneur HT, which already has a dominant position in the markets for providing services in the fixed network, would increase to between 60 and 70 percent with the implementation of this concentration, and in some markets even above 80 percent. 

In conclusion, the Agency understands the time constraints in which both Optima Telekom as the debtor and its creditors find themselves in this specific case, without any responsibility of this Agency. However, the Agency’s task is not to protect the interests of creditors or individual entrepreneurs in the pre-bankruptcy settlement procedure, but our exclusive task is to implement the regulations on competition protection, that is, to preserve and enhance the competitive structure of the market in order to protect consumer interests.