EC decision blocking telecom merger annulled

The European General Court (EGC)  has, in its judgment in Case T-399/16 CK Telecoms UK Investments v Commission ,annulled the European Commission's (EC) decision from 2016 which banned the proposed acquisition of Telefónica UK O2 by Hutchison 3G UK3 (Three). 

In 2016, the EC banned the £10.25 billion acquisition of O2 by Three in the UK, based on the consideration that the merged entity would only have two other competitors on the UK mobile-telephony market, thus harming the competitive environment and leading to higher prices and less choices for customers. This EC decision sets precedent that less than four independent mobile-network operators on a single market would not be allowed. 

In its decision, the EGC questioned the EC’s approach from 2016 on mergers, stating that the EC had made ‘several errors of law’ in calculating the potentially harmful effects of the O2-Three deal, and argued that the EC had not proven that prices would rise or that competition would be harmed as a result. By annulling the EC decision, the EGC opened the possibility for reviewing other telecom mergers not allowed by the EC since 2016, and additionally indicated the possible consolidation of the telecom market in the EU.

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