The German Federal Cartel Office (FCO) is expected to submit a request to the EC to refer the merger investigation into the proposed sale of E-Plus to Telefonica this week.
The European Commission launched a review of the proposed €8.55bn sale of…
The German Federal Cartel Office (FCO) is expected to submit a request to the EC to refer the merger investigation into the proposed sale of E-Plus to Telefonica this week.
The European Commission launched a review of the proposed €8.55bn sale of KPN’s German unit in early November. But German authorities believe that the merger should be reviewed by the local antitrust office rather than the EC.
Under European Union regulation, the question of whether the EC or national regulators of its member states review transactions is based on the turnover of the merging companies. Large transactions usually end up in Brussels.
However, national agencies can submit a so-called “referral request”, if they believe a transaction has strong implications on its home market.
Approval of a referral request is at the discretion of the EC, but if it agrees it will drop its own review.
TelecomFinance understands that the German FCO is currently finalising the documents it has to submit to Brussels. Those documents will outline the regulator’s “theory of harm”, which will explain why the FCO thinks the merger might have a negative effect on competition in Germany, and why it is best placed to review the proposed transaction.
Prior to the submission to the EC the FCO will also require it to be signed off by the German economics ministry.
The FCO expects to formally request referral later this week, or early next week at the latest.
The EC has not always approved referral request in the past. When the Austrian antitrust regulator asked to review the merger of Orange Austria and Hutchison in 2012, the EC rejected the request.
