Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: EC clears acquisition of mobile network operator BASE by Liberty Global, (Feb 4, 2016)

By Linda O’Brien, J.D., LL.M.

Following an in-depth investigation, the European Commission (EC) today has cleared under the European Union (EU) merger regulation the proposed acquisition of BASE, a Belgian mobile network operator, by Liberty Global, a U.K-based telecommunications company.

The transaction will combine BASE, one of Belgium's three mobile network operators, with Telenet, a Belgian cable operator controlled by Liberty Global that also offers mobile services as a mobile virtual network operator. Mobile virtual network operators do not own a network of their own but rent that of other operators.

The Commission was notified of the transaction in August 2015 and opened an in-depth investigation in October 2015.

The EC's investigation revealed that BASE competes aggressively on the Belgian retail mobile market and has challenged other operators with attractively priced offers. Telenet has been an exceptionally successful mobile virtual network operator in Belgium, and its mobile offers have contributed to bringing mobile prices down. Without effective commitments, a merger of these two dynamic players would have significantly reduced competition, with a risk of higher prices and less choice and innovation for Belgian mobile consumers.

To address the Commission's concerns, Liberty Global has committed to: (1) sell BASE's share in Mobile Vikings, a mobile virtual network operator that uses BASE's network, to Belgian broadcaster Medialaan; and (2) transfer part of BASE's customer base to Medialaan. BASE and Medialaan currently have an agreement under which BASE sells mobile services under the brand JIM Mobile, owned by Medialaan. Liberty Global will transfer the customers of the JIM Mobile brand to Medialaan.

Liberty Global also has determined that an agreement with Medialaan, giving the latter access to BASE's mobile network, will allow Medialaan to compete effectively as a full mobile virtual network operator.

The EC concluded that the remedies adequately address its concerns, since they ensure that a new mobile virtual network operator will enter the retail mobile market, to compensate for the loss of competition resulting from the exit of Telenet as an independent mobile virtual network operator.

Margrethe Vestager, Commissioner in charge of competition policy, stated "We have made sure that Liberty Global's merger with BASE will not reverse the trend of declining mobile prices in Belgium in recent years. To maintain healthy competition in the Belgian mobile market, Liberty Global and BASE will sell part of their customer base to a new virtual mobile operator."

Companies: BASE Company; Liberty Global plc

News: AcquisitionsMergers Antitrust