14 March 2019

Dutch telecom companies to be protected against unwanted acquisition or exercise of control

The Dutch government has submitted a bill to parliament to protect companies in the Dutch telecom sector against unwanted acquisition or exercise of control. Under the proposed amendment to the Dutch Telecommunications Act, the Minister of Economic Affairs can prohibit an acquisition if it leads to significant influence over the Dutch telecom sector and compromises Dutch national security or public order. The Minister can also eliminate existing control over a telecom company if Dutch national security or public order are breached. A party has “control”, for instance, if it can exercise at least 30% of the voting rights at the company’s general meeting or if it can appoint or dismiss the majority of the company’s managing or supervisory directors.

Clients do not need to take action in anticipation of the proposed changes.

This bill responds to the public debate about protecting Dutch telecom service providers after América Movil’s attempt to acquire KPN in 2013. According to the government, control over a telecom infrastructure can be used for political motives, or misused to learn the contents of communications distributed via the infrastructure, which could affect Dutch national security.

Click here for the text of the bill, which is only available in Dutch.

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