EC raises concerns of Orange-MásMóvil deal

The European Commission (EC) has voiced it concerns that the joint venture of Orange and MásMóvil may reduce competition in the retail supply of mobile and fixed internet services as well as of multiple-play bundles in Spain.

Orange and MásMóvil are the second and fourth largest providers of retail mobile and fixed internet services in Spain.  There are in total four mobile network operators active in Spain. There are also several mobile and fixed virtual network operators which use network operators’ infrastructure to offer mobile and fixed telecoms services to consumers.

The EC launched an in-depth probe into the possible anticompetitive impact of the plan from Orange and MásMóvil to combine their activities in Spain in a JV in April.

The EC has conducted a wide-ranging investigation to understand the affected markets and the potential impact of the transaction. This investigation included, among others, analysing internal documents provided by the parties and gathering views from competitors, suppliers, as well as customers.

As a result of this in-depth investigation, the Commission is concerned that the proposed transaction may reduce the number of network operators in Spain, thereby eliminating a significant competitive constraint and innovative rival in the Spanish retail markets for mobile telecommunications services, fixed internet services and multiple-play bundles (including fixed mobile convergent ones).

Additionally, the Commission highlights that this may lead to significant price increases for affected retail customers across the Spanish market. Predicted anticompetitive effects are substantial even after taking potential cost savings into account, in a context where competition has been a driving force for investment and quality of services in the Spanish market.

Orange and MásMóvil have the opportunity to reply to the Commission’s Statement of Objections, to consult the Commission’s case file and to request an oral hearing.