German cable operator association FRK wants to achieve that US media company Liberty Global has to revoke the acquisition of cable company Kabel BW by its subsidiary Unitymedia.
The association will evaluate the legal possibilities to take action against the settlement Liberty Global reached with its competitors Deutsche Telekom and NetCologne. Both companies subsequently withdrew their appeal against the approval of the takeover by federal German cartel office Bundeskartellamt. As part of the settlement, Liberty Global pays both companies €183 million in total.
The cartel office approved the acquisition of Kabel BW by Unitymedia in December 2011 under restrictions. Deutsche Telekom and NetCologne lodged a complaint against the approval at appellate court Oberlandesgericht Düsseldorf. The latter’s judges lifted the cartel office’s approval in August 2013, thereby effectively prohibiting the takeover. Unitymedia submitted an appeal against this decision at the Federal High Court of Justice, Bundesgerichtshof.
In February 2015, the companies involved in the legal case announced that they have reached a settlement and that Deutsche Telekom and NetCologne will withdraw their appeals at Oberlandesgericht Düsseldorf. The cartel office agreed to the settlement.
FRK has now commissioned Frankfurt-based law firm Schalast & Partner to evaluate whether and how legal action can be taken against the cartel office’s decision to approve the settlement. Applications for inspection of files were submitted at the appellate court and the cartel office.
“The target is clearly the lifting of the settlement and the unwinding of the merger between Unitymedia and Kabel BW,” said FRK chairman Heinz-Peter Labonte. “The small and medium-sized companies are once again left alone by the cartel office.”
According to FRK, through the payment of “such a high amount” to only two, yet financially strong competitors, competition will be harmed more severely than though the merger of Unitymedia and Kabel BW in the first place. Also, in the view of FRK, the payment of such a large sum two just two competitors in the market is not suitable to clear the appellate court’s concerns regarding the effectiveness of the restrictions imposed by the cartel office.
