Competition watchdog warns planned O2-Three merger one day will undermine market

The UK competition watchdog has come out against a planned £10.5bn takeover of the O2 mobile network by rival Three, warning that any such deal should be forestalled or granted only in tandem with heavy restrictions on its ability to operate by EU regulators.

Driven by ‘serious concerns’ about the potential impact on UK consumers the Competition and Markets Authority has called on the European Commission to intervene so as to intervene to prevent the number of big mobile networks operating in the country being reduced to three.

The CMA’s stance was detailed in a letter sent to the European Commission outlining its case but a final decision rests with the Europe-wide body, which must make its deliberations by 19 May.

Three owner CK Hutchison said: “It is no surprise that CMA opposes the merger. It always has, and so has Ofcom. But it is for the Commission to assess any competition concerns, on the basis of the facts and proposed remedies."

In the deals defence Hutchison said that it would allow Sky, Virgin, Tesco and UK Broadband to the combined entity’s share of the UK broadcast spectrum to sell their own mobile packages.

The decision has become politically charged amidst the ongoing build up to the 23 June vote on Britain’s membership of the European Union, with campaigners for an exit claiming that the decision ought to be taken by the CMA or Ofcom.

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