CMA provisionally clears BT planned acquisition of EE

28 Oct 2015

Having examined the likely impact of the proposed acquisition of British mobile network operator EE by local fixed line incumbent BT, the Competition and Markets Authority (CMA) has provisionally given the green light to the deal. The competition watchdog said that it had reached its initial decision after studying how the tie-up would affect competition in a number of different areas of the telecoms sector, while also looking at how the merger might affect competition for services to consumers which both companies currently provide. Stating that it does not believe the merger of BT and EE would result in a ‘substantial lessening of competition (SLC) in any market in the UK’, the CMA’s full provisional findings report will be published later this week.

One initial detail that has been revealed is that, with the inquiry group having considered ten areas of concern (or theories of harm) outlined in an issues statement published in July, it was unanimous in provisionally finding no SLC in relation to all but one of the markets reviewed. In relation to the wholesale mobile market, however, the group was said to have been evenly divided over whether the concerns it investigated gave rise to an SLC.

Commenting on the decision, John Wotton, Inquiry Chair, was cited as saying: ‘We provisionally think that the retail mobile market in the UK, with four main mobile providers and a substantial number of smaller operators, is competitive. As BT is a smaller operator in mobile, it is unlikely that the merger will have a significant effect on competition. By the same token, it is unlikely that the merger will have a significant effect on competition in the retail broadband market, where EE is only a minor player.’

In announcing its provision decision, the CMA confirmed that it had extended the deadline for its final report by eight weeks, to 18 January 2016, to allow it to consider all responses to the provisional findings in detail before finalising and publishing its decision.

United Kingdom, BT Group (incl. Openreach), EE