BT, EE merger gets regulatory clearance from CMA

15 Jan 2016

BT’s proposed acquisition of UK mobile network operator EE has been given final clearance by the Competition and Markets Authority (CMA), the latter has announced, following a provisional decision to approve the merger of the two companies back in October 2015. In announcing its final ruling, the CMA noted that a ‘range of concerns were raised by other operators and customers in the UK telecoms industry’, while saying its assessment of the matter had been ‘complex, detailed and rigorous’. Having considered responses to its provisional findings, as well as evidence gathered during the inquiry, the CMA inquiry group has argued that the merger of BT and EE (currently a joint venture of Deutsche Telekom and Orange Group) is not expected to result in a substantial lessening of competition (SLC) in any of the UK’s telecoms markets, including in relation to the supply of retail mobile, wholesale mobile, mobile backhaul, wholesale broadband and retail broadband services.

As part of its investigation, the CMA inquiry group reportedly looked at how the tie-up would affect competition in a number of different areas of the telecoms sector, while also examining how the merger might affect competition for services to consumers which both companies currently provide. Specifically it was noted that consideration had been given to whether the tie-up might alter the merged company’s incentives to continue to supply services to other communications providers on a wholesale basis. In total, the inquiry group considered ten areas of concern (or theories of harm) outlined in an issues statement published in July 2015, and the overall impact of the merger on the UK telecoms sector, with the group unanimous in its final report in finding no SLC in relation to any of the markets reviewed.

Commenting on the development, John Wotton, Inquiry Chair, said: ‘Since our provisional findings, we have taken extra time to consider responses in detail but the evidence does not show that this merger is likely to cause significant harm to competition or the interests of consumers … We have heard wider concerns about the sector, including about Openreach and its regulation by Ofcom. Our job has been to examine the specific impact of this merger on competition and consumers and, where relevant, we’ve looked at how these issues might be affected by the merger. There is also an ongoing Ofcom review into the sector and its future regulation, where such concerns may have more relevance.’

United Kingdom, BT Group (incl. Openreach), Deutsche Telekom (DT), EE, Orange Group