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EU antitrust investigation into Three’s O2 purchase extended

The European Commission has given itself more time to investigate the planned merger between UK mobile networks Three and O2.

A week after announcing plans to investigate the deal, the continent’s competition regulator has extended the deadline for its review to mid-April 2016 (via WSJ).

The antitrust investigators are peering into the deal, which will see Three owner Hutchison hand over a whopping £10.25bn to Telefonica to take control of O2, if approved.

The commission will look into whether the deal will negatively impact competition in the UK, leading to higher prices and less choice for British consumers.

See also:
Three-O2 deal Is it good for consumers?

Last week, the commission said it “has concerns that the transaction would remove an important competitive force and that the merged entity would have limited incentives to exercise significant competitive pressure on the remaining competition.”

Today’s extension of the deadline is likely designed to give representatives from both networks the opportunity to make their case to the commission.

If the EU decides the deal will harm competition in the UK they could choose to block the deal. It could also advise the two parties on how to bring the deal in line with the rules.

Ofcom has also expressed concern: “We’re concerned that this proposed takeover would damage mobile competition, reduce customer choice and see prices go up. The deal could undermine important aspects of the UK market, such as shared networks and high street retail competition, which have helped deliver good results for mobile users over many years.

“Once competition is weakened, it is hard to re-establish. We have explained our concerns to the Commission, and will continue to engage with its review.”

The deal comes under increased scrutiny given the consolidation of the UK telecoms scene in recent years.

Orange and T-Mobile merged to become EE and now EE has been purchased by BT. With Three and O2 also set to become one, it would leave Vodafone the only major operator left as a standalone entity in the UK market.

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