Clifford Chance

The Netherlands introduce a draft Act on undesired control in telecommunications

15 March 2019

A draft Act on undesired control in telecommunications  (Wet ongewenste zeggenschap telecommunicatie) has been submitted to Dutch Parliament on 5 March 2019, aiming to prevent undesired parties gaining control over telecommunications parties in the Netherlands.

The draft Act introduces powers for the Minister of Economic Affairs and Climate Policy (the Minister) to block an acquisition leading to predominant control over a Dutch telecommunications party and to intervene in the existing ownership of such control, where such control is acquired or held by an undesired person.

The draft Act relates to the control of telecommunications parties, which comprise not only providers of electronic communications networks and services, but also providers of hosting services, data centres, trust services and internet exchange points.

The draft Act provides that predominant control (overwegende zeggenschap) in any event concerns (1) the possession (solely or jointly) of at least 30 percent of the (direct or indirect) voting rights, (2) the ability to name more than half the board members, or (3) the ability to exercise control through special governance rights. Although seemingly similar to the concept of control under merger control rules, the draft Act may allow for a lower threshold to assume control than is the case under such rules.

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