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The Competition Council intervenes in Norlys’ acquisition of EWII Fibernet
The Competition Council could not unconditionally approve Norlys’ acquisition of Ewii Fibernet because there was a risk that the merger would reduce competition, resulting in customers having to pay more for their broadband and TV services. Therefore, Norlys has chosen to allow another provider to supply TV and broadband to seven antenna associations in the Triangle Region. This removes the competitive concerns, and the Competition Council has now approved the merger.
Christian Schultz, Chairman of the Competition Council, says:
It has been necessary to intervene in the merger between Norlys and Ewii Fibernet to protect end users against higher prices. A very large number of customers in Ewii’s area have so far been able to purchase broadband and TV delivered via Ewii’s fiber network or from Norlys via the antenna associations’ coaxial networks. Without the intervention, the merger would mean a risk of price increases for customers on both networks.
The Competition Council has approved that Norlys Fibernet A/S (now Sinal A/S) acquires Ewii Fibernet A/S. The approval is given subject to certain remedies. Specifically, Norlys has committed to ensuring that seven antenna associations in the Triangle Region will get a different supplier of broadband and TV than Norlys. Norlys is not permitted to achieve full or partial influence over these activities for a period thereafter.
In the area covered by Ewii Fibernet, many households today have two options for receiving broadband and TV via high-capacity infrastructures. One option is Ewii Fibernet’s fiber network. The other option is the coaxial network, including coaxial networks owned by several antenna associations, which have entered into long-term agreements under which Norlys is the sole supplier of broadband and TV to their members.
The DCCA’s investigation show that if the merger were approved without intervention, there would be a risk of higher prices or worsened terms for the approximately 135,000 end users in the Ewii Fibernet area. This is especially the case for customers who want a fixed internet connection and cannot opt out of Norlys, because Norlys, without the intervention, would both own the fiber network and be the sole supplier to the customers’ antenna association. The intervention ensures that Norlys cannot limit competition in the sale of broadband and TV to these households, thus resolving the concerns the Competition Council had regarding the merger.
The merger may only be completed once Norlys has either entered into agreements with one or more new suppliers for the antenna associations, or agreed with the associations that the cooperation will be terminated, and these agreements have been approved by the Competition Council. Thus, Norlys commits to either divesting the activities related to the antenna association agreements or entering into mutual agreements with the antenna associations for an early termination of these activities.
Ewii Fibernet owns and operates fiber infrastructure in the Triangle Region, i.e., the municipalities of Vejle, Fredericia, Kolding, Middelfart, and Vejen. Ewii Fibernet’s fiber network is open to service providers who lease access to the fiber network in order to sell broadband and TV to end customers.
Norlys owns and operates fiber infrastructure covering approximately 875,000 households in Denmark, the majority of which are located in Jutland. In addition, Norlys owns and operates coax networks throughout all of Denmark. Norlys also sells broadband, TV, and fixed telephony to end users, including to antenna associations and their members.