The European Commission has rejected a request from U.K. competition regulators to examine the proposed tie-up between Hutchison’s 3UK and Telefonica-owned O2, it emerged on Friday.
In a statement, the Commission concluded that it is better placed "to ensure the consistency in the application of merger control rules in the mobile telecommunications sector" across the EU.
At the time of writing there was no official response from the U.K.’s Competition and Markets Authority (CMA), which asked Brussels for the right to investigate the deal two months ago, noting that it would only affect consumers in the U.K.
However, it became clear that the European Commission had other ideas when it opened an in-depth investigation of its own into the transaction in late October.
It expressed concerns that the merger could lead to higher prices in both the retail and wholesale markets, reduced network investment, and harm the negotiating power of mobile virtual network operators (MVNOs).
The Commission is due to rule in the case by 18 April.
Hong Kong’s CK Hutchison agreed to acquire O2’s U.K. unit in March for £10.25 billion, with a view to merging it with its own mobile operation in the market, 3UK. It submitted the proposed deal to the European Commission for examination in September.
This article was updated at 13:35 on Friday 4 December 2015 to include the Commission’s official statement.
