The UK’s Competition and Markets Authority (CMA) has said it may ask the European Commission (EC) whether it – rather than the Brussels watchdog – can review the merger of O2 and Three.
The UK’s Competition and Markets Authority (CMA) has said it may ask the European Commission (EC) whether it – rather than its Brussels watchdog – can review the merger of O2 and Three.
Three’s parent Hutchison Whampoa (SEHK:0013) agreed to pay up to £10.3bn (US$15.3bn) to buy O2 from Telefónica (BMAD:TEF) in March, and formally asked the EC to approve the transaction on 11 September.
The CMA said that while the transaction fell under the EC’s remit, it was considering seeking a referral request under article 9 of EU Merger Regulation. A deal can be referred if it “threatens to affect significantly competition” in a distinct market within an EU member state, and would therefore be more appropriately investigated at a national level. It is up to the EC whether or not it decides to refer a review.
The CMA has issued an invitation for public comment on whether it should review the transaction. The deadline for submissions is 24 September.
The EC has rebuffed recent requests by national regulators to review telecoms transactions. The combination of Three and O2 would reduce the number of UK mobile network operators from four to three. In recent years, the EC had relaxed its approach to such in-country consolidation, using remedies aimed at strengthening MVNOs to ensure robust competition.
The commission’s new antitrust chief, however, has different ideas. On 11 September, TeliaSonera and Telenor abandoned their proposed Danish mobile merger following opposition from Margrethe Vestager’s office to the first four-to-three mobile merger it reviewed.