Telefónica and Portugal Telecom fined €79m Telefónica and Portugal Telecom have been fined €79m by Europe's top antitrust authority for agreeing an illegal deal not to compete in their home markets. The European Commission decision fines the Spanish operator €66.8m and Portuguese group €12m for attempting to carve up markets to the detriment of consumers. "The Commission is committed to ensuring the creation of a genuine single market in the telecoms sector," said Joaquín Almunia, the EU competition commissioner. We will not tolerate anti-competitive practices by incumbents to protect their home markets, as they harm consumers and delay market integration. The Commission argues the deal to "preserve the status quo" in the Spanish and Portuguese markets held back the integration process in the EU telecoms sector. "Non-compete agreements are one of the most serious violations of EU competition rules, as they potentially result in higher prices and less choice for consumers," the statement said. Brussels served the telecoms groups with formal charges in 2011 over the non-compete clause, which was in place for less than a year. The clause was part of Telefónica's €7.5bn acquisition of Portugal Telecom's stake in Vivo, the Brazilian mobile joint venture. According to one person with knowledge of the deal, it followed lengthy negotiations to win the approval for the deal by the Lisbon government, which had originally vetoed a previous agreement. The limited size of the fine reflects the willingness of the groups to drop the clause and the short period of time - from July 2010 to February 2011 - that it was in force. The non-compete clause said that it should be allowable only as permitted under law, said the person, and was withdrawn in February 2011 following interest from Europe's antitrust authorities. However, the regulator has argued that the cancellation does not mitigate the fact that the agreement existed in the first place. The Commission is committed to ensuring the creation of a genuine single market in the telecoms sector Joaquín Almunia, EU competition commissioner The decision comes as European authorities are taking a closer look at how the telecoms market can be opened up across the region to benefit consumers, given the wider range of pricing and services in different countries. The commission sees the agreement as potentially hindering the creation of a single EU telecoms market. Although the fine could have been much larger - in theory up to 10 per cent of revenues - the decision is still expected to be opposed by Telefónica. The Spanish group is seeking to reduce its net debt to near €50bn, from €58bn last year, through asset disposals and a flotation of its business unit in Germany. The companies are likely to appeal against the decision. Telefónica and Portugal Telecom were not immediately available for comment.