Telefónica and P Telecom face EU probe

European antitrust regulators are to probe “non-compete” arrangements between Spain’s Telefónica and Portugal Telecom over suspicions that the companies may have breached European Union rules.

A formal agreement was reached between the two groups last year when the Spanish company took full control of Vivo, the Brazilian mobile operator which had previously been owned jointly by Telefónica and Portugal Telecom. Competition officials at the European Commission said on Monday that they had a copy of the agreement and the non-compete clause which, according to Brussels, runs from September 2010 to the end of 2011. This will be investigated under EU rules that ban restrictive business practices. But officials in Brussels added that they would also look into the “scope and effects of the co-operation” between the companies in the Spanish and Portuguese markets ahead of the Vivo transaction.