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Uproar as EC blocks 3, O2 merger in the UK


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Date d'inscription : 24/12/2013

Uproar as EC blocks 3, O2 merger in the UK

Message par Maximus.1222 le Jeu 12 Mai - 7:21

Uproar as EC blocks 3, O2 merger in the UK

   | 12 May 2016

In a move receiving huge criticism and generating accusations of bias, the European Commission has blocked Hutchison's proposed acquisition of Telefónica UK, halting the merger of the O2 and Three mobile networks.

THree 12 May 2016While a huge blow for the two firms’ ambitions in the UK, the refusal has also caused shockwaves across Europe where a number of similar deals are in the offing. Adding insult to injury, the refusal comes only months after BT concluded the acquisition of UK mobile operator EE in a similar deal.

The deal combing O2 and Three would have created a new market leader in the UK mobile market. The Commission says thatfollowing an in-depth investigation it has blocked the proposed acquisition of O2 by Hutchison under the EU Merger Regulation mainly due to the fact that the takeover would have removed an important competitor, leaving only two mobile network operators, Vodafone and BT’s Everything Everywhere (EE), to challenge the merged entity.

The EC added it had strong concerns that UK mobile customers would have less choice and end up paying higher prices as a result of the takeover, and that the deal would have harmed innovation in the mobile sector. There were also worries that a takeover would also likely have had a negative impact on quality of service for UK consumers by hampering the development of mobile network infrastructure in the UK and that it would have reduced the number of mobile network operators willing to host other mobile operators on their networks.

Hutchison had proposed a number of remedies to the EC’s concerns but the authority was not satisfied that the telco had adequately addressed the serious concerns raised.

“We want the mobile telecoms sector to be competitive, so that consumers can enjoy innovative mobile services at fair prices and high network quality,” explained EC Commissioner Margrethe Vestager, in charge of competition policy.

“The goal of EU merger control is to ensure that tie-ups do not weaken competition at the expense of consumers and businesses. Allowing Hutchison to takeover O2 at the terms they proposed would have been bad for UK consumers and bad for the UK mobile sector. We had strong concerns that consumers would have had less choice finding a mobile package that suits their needs and paid more than without the deal. It would also have hampered innovation and the development of network infrastructure in the UK, which is a serious concern especially for fast moving markets. The remedies offered by Hutchison were not sufficient to prevent this.”

In a brief statement on the EC’s move, O2 said: “The O2 business has continued to perform well in the market whilst the commission process has taken place. Our customers are our priority and we will continue to differentiate, compete fiercely and remain successful, long into the future.”

    La date/heure actuelle est Dim 27 Mai - 19:44