The planned merger of mobile networks O2 and Three should be blocked or broken up by EU regulators, Britain’s competition regulator has said.
The Competition and Markets Authority (CMA) expressed ‘serious concerns’ to the European Commission (EC) about the deal and warned them the merger could cause ‘long-term damage’ for UK customers. There fears stem from the fact that Three’s acquisition of O2 would create Britain’s biggest mobile phone company and reduce the number of UK network owners from 4 to 3. Back in October, the UK’s CMA asked the EC to refer the acquisition to it but the commission turned down the request, saying it was better qualified to apply European rules. However undeterred, Alex Chisholm, the CMA’s chief exec, has written to the EC’s commissioner, Margrethe Vestager, a week before the decision is due to be made.
Chisholm said: ‘It is clear that the remedies offered fall well short of what would be required to meet the relevant legal standard, as detailed in our case submissions. The proposed remedies are materially deficient as they will not lead to the creation of a fourth mobile network operator (MNO) capable of competing effectively and in the long-term with the remaining three MNOs such that it would stem the loss of competition caused by the merger.’
He said the company should be forced to sell either Three or O2 to an approved buyer, or the deal shouldn’t take place. The UK’s authorities have repeatedly stressed their unhappiness about the takeover, but so far their pleas have fallen on deaf ears. The commission is due to make their decision on April 18th.