Following the Competition and Markets Authority’s provisional decision to allow the BT/EE merger, the European Commission has launched an investigation into the proposed buyout of O2 by telecoms giant Hutchison Whampoa (trading as Three). The European Commission investigation comes following a request by the CMA that they look into it, made on the 2nd of October.
The CMA’s initial decision on the merger was that it ‘threatens to affect significantly competition in the UK retail mobile and wholesale mobile markets.’ Should the European Commission agree with this decision, the Three/O2 merger may be prevented from going ahead. The European Commission has recently prevented the merger of telecommunications companies in Denmark TeliaSonera and Telenor, despite the Danish competition authorities previously giving the go ahead to cooperation between the companies.
The deal has raised significant regulator investigation as it stands to reduce the number of primary mobile network operators in the UK from four to three, and create a company with a larger market share value than even the BT/EE merger would create. It could also stand to damage mobile virtual network operators, such as Tesco Mobile, giving them less choice when it comes to infrastructure access.
The European Commission has 90 days, until 30th March 2016, to reach a decision on the matter.