The European Commission has decided not to refer the planned acquisition of Telefónica UKby Hutchison to the UK competition authority. The Commission concluded that it was better placed to ensure consistency in the application of merger control rules in the mobile telecommunications sector across the European Economic Area (EEA).
On 11 September 2015, Hutchison 3G UK notified its plans to acquire sole control of Telefónica UK to the Commission.
On 2 October 2015, the UK competition authority submitted a request under Article 9(2) (a) of the EU Merger Regulation. This provision allows a Member State to request the Commission to refer all or part of the assessment of a case to it, provided that the competitive effects are purely national.
In deciding whether to refer a case upon such a request, the Commission particularly takes into account which authority is better placed to deal with the case at hand. In the case of Hutchison 3G UK/Telefónica UK, the Commission concluded that, given its extensive experience in assessing cases in this sector, it was better placed to deal with the transaction and ensure consistency in the application of merger control rules in the mobile telecommunications sectors across the EEA.
The Commission has recently carried out merger investigations in:
- the mobile telecommunications sector in Ireland , Germany and Denmark;
- the mobile and fixed telecommunications sector in Germany and Spain;
- the fixed telecommunications sector in the UK and Ireland and in the Netherlands.
The Commission will nonetheless continue to cooperate closely with the UK competition authority in the assessment of the case.
The Commission will continue its in-depth investigation into the proposed transaction, which was opened on 30 October 2015. The Commission has until 18 April 2016 to take a final decision.
Companies and products
Three UK is a subsidiary of CK Hutchison Holding, based in Hong Kong.
Telefónica UK is a subsidiary of Telefónica S.A, based in Spain.
Three UK and Telefónica UK are both mobile network operators and provide mobile telecommunications services to end consumers in the UK, as well as in related markets such as the wholesale of network access and call origination.
Merger control rules and procedure
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
More information will be available on the competition website, in the Commission's public case register under the case number M.7612.