The European Commission has responded to Orange and MásMóvil’s proposed 19,6 billion euro merger with a Statement of Objections. The preliminary view of the Commission is that the “proposed joint venture may reduce competition in the retail supply of mobile and fixed internet services” in Spain.
If approved, the tie-up would see Orange and MásMóvil, the second and fourth largest providers in Spain respectively, form a 50:50 joint venture. The combined operator would have approximately 7.1 million fixed customers and 20.2 million mobile users.
Plans for the merger were announced in March 2023 and the European Commission subsequently launched an investigation on 3 April. The investigation assessed whether the transaction would restrict competition in Spain for the retail supply of both mobile and fixed services and multiple-play bundles.
Following the investigation, the Commission has expressed its concern that the joint venture would reduce the number of network operators in Spain thus “eliminating a significant competitive constraint and innovative rival in the Spanish retail markets” for fixed and mobile telecommunications services, and potentially leading to “significant price increases for affected retail customers”.
So, what happens next? The ‘Statement of Objections’ is a formality within an investigation, but it doesn’t necessarily reflect the final decision, which will come no later than 4 September 2023. Both companies now have the opportunity to respond to the Commission’s objections and can request a hearing.