Published On: Mon, Apr 11th, 2016

CMA Says European Commission Objections To O2-Three Merger Fall “Well Short”


The European Commission has until 19th May to make a decision on the merger.

The Competition and Markets Authority (CMA) in the UK has written to the European Commission expressing its concerns that Three’s takeover of O2 could reduce competition in the UK and increase prices for consumers.

Hutchison who owns telecoms company Three agreed to buyout O2 for £10.25 billion in 2015 however after  a review has been undertaken by the European Commission, they have issued a statement outlining hundreds of pages of objections.

Since the objections were outlined the CMA has said that the objections listed by the European Commission fall “well short” of the changed required to avoid reducing competition in the UK mobile market.

Both regulators are worried that the merger would leave just Three-O2, EE and Vodafone operating in the country reducing choice for customers. Following this a separate study by Ofcom has found that prices are 10-20 percent more in markets that have just three mobile operators.

In a letter to the European Commission,  the CMA’s chief executive, Alex Chisholm wrote:

“The proposed remedies are materially deficient as they will not lead to the creation of a fourth mobile network operator capable of competing effectively and in the long term.”

He asked Margrethe Vestager, the Commissions competition chief to “prevent the long-term damage to the UK telecoms market” by placing more arduous terms in place to allow the merger to go ahead.

One such condition which he proposes is Three and O2 selling off some of its mobile network infrastructure and spectrum giving room for a fourth mobile network to compete otherwise he noted the “only option” otherwise is to stop the merger.

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