EC opens investigation into Vodafone-Liberty deal

12 Dec 2018

An in-depth investigation into the proposed acquisition of Liberty Global’s UPC/Unitymedia-branded operations in Germany, Hungary, Romania and the Czech Republic by UK-based Vodafone Group has been opened by the European Commission (EC).

Confirming the development in a press release, the EC noted that the decision to examine the deal further had been taken after its initial market investigation had raised competition concerns. Specifically, the Commission has suggested the deal could see providers of standalone telecommunications services in the Czech Republic ‘shut out’ from the retail markets for mobile, internet access and TV services, ‘because of the converged products that the merged entity could offer’. Meanwhile, in Germany a number of concerns have been flagged, not least that: the transaction would eliminate competition between the merging companies, reduce the number of players and limit the merged entity’s incentives to compete effectively with the remaining operators, both in areas already served by Unitymedia and in Germany as a whole; and that it could eliminate competition between the merging companies in terms of investment in next generation networks. At this stage in proceedings, however, the EC has not identified any specific competition concerns relating to the proposed merger for the Hungarian and Romanian markets.

With the EC now planning to look at the deal in more depth to determine whether its initial competition concerns are justified, it has 90 working days (i.e. until 2 May 2019) to make a final decision. Commenting on the matter, Commissioner Margrethe Vestager, in charge of competition policy, said: ‘It’s important that all EU consumers have access to affordable and good quality telephone and TV services. Our in-depth investigation aims to ensure that Vodafone’s acquisition of Liberty Global’s telecommunications businesses in Czechia, Germany, Hungary and Romania will not lead to higher prices, less choice and reduced innovation in telecoms and TV services for consumers.’

Czech Republic, Germany, Hungary, Romania, United Kingdom, Liberty Global (incl. LGI), Unitymedia, UPC Ceska Republika, UPC Hungary (part of Vodafone), UPC Romania, Vodafone Group