Antitrust Law Daily Wrap Up, ANTITRUST NEWS: EC rejects another referral request from Germany, will continue review of telecom merger, (Jan 30, 2014)

By Jeffrey May, J.D.

The proposed combination of two providers of mobile telecommunications services to end consumers in Germany will continue to be reviewed by the European Commission (EC) and will not be referred to the German competition authority, the EC announced today. The EC rejected a request from Germany to refer the planned acquisition by Telefónica S.A.’s German subsidiary—Telefónica Deutschland—of E-Plus—a subsidiary of the Dutch operator Koninklijke KPN N.V. (KPN)—for assessment under German competition law.

The decision follows an announcement earlier this month that the EC had denied Germany’s referral request to assess global cement supplier Holcim’s proposed acquisition of operations from rival Cemex in western Germany (Cemex West) under its national competition law. In that matter, the EC concluded that it could not refer the assessment of the transaction to Germany because the geographic scope of the affected cement markets was wider than national. The EC’s phase II merger investigation of that deal is continuing.

As for the Telefónica/E-Plus transaction, the EC concluded that it was “better placed to deal with the case” than the national competition authority because of its “experience in assessing mergers in the mobile telecommunications sector and the need for a consistent application of the merger control rules in the EU.” The EC intends to continue to cooperate closely with the German competition authority in the assessment of the proposed transaction, it was noted.

The EC opened an in-depth investigation of the proposed acquisition on December 20, 2013. It will make a decision on the transaction by May 14.

Telefónica and E-Plus are both mobile network operators (MNOs) and provide mobile telecommunications services to end consumers in Germany, as well as in related markets such as the wholesale of network access and call origination. According to the EC, only two other MNOs are present in these markets in Germany, namely Deutsche Telekom and Vodafone.

Companies: Telefónica S.A.; Telefónica Deutschland; Koninklijke KPN N.V.

News: Antitrust