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Sanctions threat looms for Telefónica as Spanish watchdog opens investigation

Spain’s competition regulator has opened an investigation into an alleged regulatory breach at Telefónica during the 2016-17 season, which could lead to sanctions against the telco.

The Comisión Nacional de los Mercados y la Competencia (CNMC) has said the investigation will last a maximum of three months and while it does not presuppose guilt on the telco’s part, it could end in a series of sanctions being handed down. The CNMC has not made public any details about what form the sanctions could take.

Telefónica is alleged to have broken conditions of its 2015 acquisition of Spanish pay-TV platform Digital+. The CNMC had stipulated that Telefónica’s competitors must be allowed to carry a proportion of Telefónica’s premium channels in any configuration they desired to broadcast on their own platforms. Also, payment for access to this content was required to be at a rate proportional to factors such as subscriber base.

One particular instance of the latter was Telefónica’s pricing of its Movistar Partizado channel, which broadcasts football and motor racing content.

Rights held by Telefónica that season, which were shown on Movistar Partizado, included matches from the Spanish LaLiga and Uefa Champions League as well as Formula One races.

The telco has already admitted fault for miscalculations when licencing rights to the channel, which resulted in licensees paying a higher price than they should have during the 2016-17 season.

Telefónica is said to have claimed it had fewer subscribers when receiving offers for licensing, causing the telco and licensees’ subscriber bases to appear closer in size than was the case. Licensees were then required to pay higher amounts when carrying Movistar Partizado as they would have appeared to be more direct competitors.

The CNMC has ordered Telefónica to reimburse licensee, though the telco is not yet thought to have refunded those inflated costs.

Telefónica was approached for comment by SportBusiness Media, but had not responded at time of writing.