Competition Police Say Three/O2 Merger is Damaging for the UK

By Gary Cutlack on at

The UK's Competition and Markets Authority -- a sort of professional nose-poker-inner -- has grassed up Three and O2 to the European Commission, saying that it would like the merger between the two mobile giants of the UK subject to strict terms or canceled altogether.

The actual letter [PDF] the CMA sent to the EU says: "...the Competition and Markets Authority (CMA) has serious concerns regarding the proposed merger between Hutchison 3G UK and Telefonica UK. We believe this merger would give rise to a significant impediment to effective competition in retail and wholesale mobile telecoms markets in the United Kingdom," bemoaning the "loss of competition" caused by the merger and elimination of one standalone mobile network.

As for remedies, the CMA says it would like to see either the existing Three or O2 networks divested from the owner along with a chunk of spectrum to create at least some layer of differentiation, and failing that, it threatens a complete "prohibition" of the deal, which O2 and Three though had been tuned well enough to be approved by everyone with a pen to push.

The CMA finishes its appeal to the EU with the vague threat of: "The CMA urges the Commission to act to prevent the long-term damage to the UK mobile telecoms market, and therefore to the interests of UK consumers, that both of our authorities have predicted will result from this merger."

A final, final, really final this time decision is set to be made by EU competition bureaucrats in May. [GOV via BBC]


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