Brussels abstains on the Saudi entry into Telefónica and indicates that the decision corresponds to Spain

2023-10-22 13:59:53

The Vice President of the European Commission and Commissioner for Trade, Valdis Dombrovskishas indicated that the Community Executive “is not in a position to make observations” on the entry of the Saudi STC into the shareholding of Telefónica and has stressed that the “final decision” in this regard corresponds to the State where the investment takes place, in this case the Government of Spain.

This is how he responded to a written question from the IU MEP Manuel Pinedawho questioned the European Commission if it considered the purchase a “security threat” and if it planned to “intervene to prevent” the entry of “an absolutist regime” like that of Saudi Arabia in the EU telecommunications sector.

In his response, Dombrovskis pointed out that the EU “is open to foreign direct investment (FDI) and allows foreign service providers to establish themselves freely in its telecommunications market”, but has pointed out that “certain investments may constitute a risk to security or public order, which is why the EU’s opening to FDI must be balanced through appropriate instruments.”

In this sense, he recalled that the Regulation for the control of foreign direct investments establishes a cooperation mechanism that allows the Commission and the Member States to “detect, evaluate and mitigate possible risks to security or public order in relation to investment”, a regulation that also allows control in the telecommunications sector.

This, he specified, “implies that the Member State where the investment is planned, or where it is carried out, may, in accordance with its national control mechanism, impose conditions or, in extreme cases, prohibit the investment if it reaches the conclusion that this particular FDI may affect security or public order in the country or in other Member States”. “The final decision lies with the Member State in which the investment takes place“, has explained.

Furthermore, he has pointed out that article 40 of the European Electronic Communications Code requires operators to “adopt appropriate and proportionate technical and organizational measures to adequately manage existing risks to the security of their networks and services.”

In this way, he has refrained from commenting on the Saudi entry into Telefónica. “Disclosure of any information relating to specific transactions would undermine the Commission’s obligation to ensure the confidentiality of information transmitted within the framework of the cooperation mechanism,” he concluded.