Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: U.K. Competition and Markets Authority provisionally approves BT/EE telecommunications merger, (Nov 3, 2015)

By Linda O’Brien, J.D., LL.M.

The U.K. Competition and Markets Authority (CMA) provisionally approved the anticipated acquisition of EE by BT, the agency announced on October 28.

BT Group plc and EE Limited are large telecommunications companies in the U.K. BT is a U.K. company and EE is a joint venture between French company Orange and German company Deutsche Telekom AG.They operate largely in separate areas with BT strong in supplying fixed communications services such as voice, broadband, and pay TV; EE strong in supplying mobile communications services; and limited overlap between them in both categories of service. Through its Openreach division, BT also provides many fixed services to other communications providers, including backhaul services to mobile communications providers including EE, O2, Three, and Vodafone. These backhaul services connect radio masts to core networks. EE also provides wholesale mobile services to other mobile service providers.

The CMA’s inquiry group conducted an in-depth investigation of how the merger would affect competition in a number of different areas of the telecoms sector. As well as looking at how the merger might affect competition for services both companies provide to consumers, the group considered whether it might alter the merged company’s incentives to continue to supply services to other communications providers on a wholesale basis.

According to a summary of the provisional finding, after looking in detail at different markets—including the supply of retail mobile, wholesale mobile, mobile backhaul, wholesale broadband and retail fixed broadband services, the agency has provisionally determined that the merger is not expected to result in a substantial lessening of competition (SLC) in any market in the UK.

The inquiry group considered 10 areas of concern outlined in the issues statement published in July. The group is unanimous in provisionally finding no SLC in relation to all but one of the markets reviewed. In relation to the wholesale mobile market, the group is evenly divided over whether the concerns it investigated gave rise to an SLC. However, a finding of SLC requires a two-thirds majority of the group, and therefore no SLC has also been found in relation to that market.

“We recognize that this is a merger which is important to many consumers and businesses. We have heard a number of concerns from competitors,” said Inquiry Chair John Wotton. “After a detailed investigation, our provisional view is that these concerns will not translate into a competition problem in practice.”

The full provisional findings report will be published later on the case page along with all other published information relating to the inquiry. The CMA has also extended the deadline for its final report to January 18, 2016 to allow it to consider all responses to the provisional findings in detail before finalizing its decision.

Responses to the provisional findings must be submitted in writing by November 15. Send emails to BT.EE@cma.gsi.gov.uk or write to:

Project Manager BT/EE merger inquiry Competition and Markets Authority Victoria House Southampton Row London WC1B 4AD

Companies: BT Group plc; EE Limited

News: AcquisitionsMergers Antitrust