German cable operator association FRK intends to take legal action against the European Commission’s decision to approve the acquisition of Liberty Global’s German cable subsidiary Unitymedia by Vodafone.
FRK intends to apply for legal aid for this purpose, the association’s legal counsel Professor Dr Christoph Schalast (pictured in the centre) announced at the FRK Broadband Congress in Leipzig on September 24, 2019. With this “creative solution”, FRK wants to avoid having to pay the estimated €300,000 to €400,000 in lawyers’ fees of the other side in the case of a defeat in court, which would plunge it into insolvency.
According to Schalast, after the combination with Unitymedia, Vodafone reaches a market share of 81% in the German cable market. The merger would therefore “acually not be permissible”. Tele Columbus follows with a market share of just 14% with the remaining 5% being shared by all other cable operators.
At the general meeting taking place during the FRK Cable Congress, the FRK members unanimously approved the proposal to apply for legal aid.
If the application is rejected due to a lack of prospects of success, FRK could join a community of plaintiffs, in which all participants pay into a joint pot in order to spread the risk of legal costs among them. Schalast sees Deutsche Telekom, NetCologne, Tele Columbus, wilhelm.tel and EWE TEL as possible participants in such a move.
If the legal action against the European Commission’s approval is successful, the complete reversal of the merger or tougher conditions could be the result, explained Schalast.
FRK had criticised the approval of the acquisition as “a slap in the face” for small and medium-sized market players, adding that the conditions imposed by the EU Commission were insufficient. The association announced at the same time that it would legally review the decision and, if necessary, take legal action against it.
