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Competition watchdog turns attention to O2 acquisition

The Competition and Markets Authority invites formal comments on whether or not it should ask the European Commission to allow it to investigate the acquisition of O2 by Three

The Competition and Markets Authority (CMA) is preparing to turn its attention to the proposed £9.5bn acquisition of O2 by Three parent CK Hutchison Holdings (CKHH), also known as Hutchison Whampoa.

The CMA has previously said it would run the rule over the tabled purchase of O2 in light of the parallel acquisition of EE by BT, which it is also investigating as a matter of course.

Now the proposed acquisition of O2 has been notified to the European Commission (EC), the CMA is seeking input on a number of points.

In a statement released 16 September 2015, the CMA said the proposed merger met the threshold for review under European Council Regulation 139/2004/EU (EUMR), and it therefore needed to consider whether or not the proposer qualifies for a request to be made under Article 9 of the EUMR to have the merger referred to the UK authorities, and whether it would be appropriate to make such a request.

It is also seeking preliminary input from interested parties and stakeholders on whether or not allowing Three and O2 to merge would be damaging for competition.

If the EC does grant such a request, it will pave the way for a full examination of the proposed merger by the CMA, with a view to deciding whether or not even more in-depth investigation under the 2002 Enterprise Act would be warranted.

CKHH is understood to be preparing to base its case on the claim that because the combination of BT and EE would control nearly half of the UK’s mobile radio spectrum, not allowing Three and O2 – which control approximately 27% between them – to merge would risk both networks being squeezed out of the market.

The consultation period will close on Thursday 24 September 2015. Meanwhile, the CMA’s report on the BT-EE merger must be presented by 23 November 2015.

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