The sale of O2 to Hutchison, owners of the Three mobile network, is to be subjected to an “in-depth investigation” by the European Commission.
On Friday the Commission said it had “concerns” the merge between the UK’s smallest two mobile providers could “lead to higher prices, less choice and reduced innovation for customers”.
The proposed tie-up was announced in January, just weeks after BT decided to buy EE rather than O2. The firm had been in talks with the owners of both networks about a potential purchase.
Last week the UK’s competition authorities gave their unconditional preliminary go-ahead for the BT/EE transaction but Hutchison and Ow owners Telefonica have been less lucky.
Commissioner Margrethe Vestager says their tie-up would reduce the number of network owners from four to three, reducing competition both for end users and reducing choice for virtual networks looking for a host.
Vestager commented: “Mobile telecom services are increasingly important to consumers. Both to keep in touch with family and friends and to access online services.
With this investigation we want to ensure that consumers in the UK do not pay higher prices or face less choice as a result of this proposed takeover.”
The Commission now has 90 working days, until 16 March 2016, to take a decision and will investigate the extent to which the parties are close competitors, the market incentives that would be faced by the merged entity and the potential reaction of its competitors.