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October 28, 2015

BT-EE merger unlikely to stifle competition, says CMA

News: Consultation is open until mid-November.

By Alexander Sword

The Competition and Markets Authority (CMA) has given provisional approval to BT’s acquisition of EE.

According to the CMA, the merger "is not expected to result in a substantial lessening of competition (SLC) in any market in the UK."

"We provisionally think that the retail mobile market in the UK, with 4 main mobile providers and a substantial number of smaller operators, is competitive," said John Wotton, Inquiry Chair. "As BT is a smaller operator in mobile, it is unlikely that the merger will have a significant effect on competition.

"By the same token, it is unlikely that the merger will have a significant effect on competition in the retail broadband market, where EE is only a minor player."

The CMA acknowledged that there could be conflicts of interest, but that the combined company would be unwilling or unable to act on them.

"We have provisionally found that in some areas it is unlikely that they would have both the ability and incentive to do so – and in others that the effects of their attempting to do so would be limited," said Wotton.

Concerns were dismissed unanimously in all but the wholesale mobile market, where the inquiry group was divided over a possible substantial lessening of competition (SLC). However, the two-thirds majority required to find this as an SLC was not achieved.

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Stakeholders can respond to the provisional findings until 19 November. The deadline for the CMA’s final report is 18 January 2016.

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