The Court of the EU annuls the ban of the EC to sell the British subsidiary of Telefónica



The General Court of the European Union (EU) annulled this Thursday the decision of the European Commission (EC) to prohibit the sale of the British subsidiary of Telefónica, O2, to Hutchison.

On 11 May 2016, the Community Executive prevented the acquisition, considering that it would have eliminated a major competitor in the UK mobile telephony market and the merged entity would only have had to face competition from others. two operators, Everything Everywhere (belonging to British Telecom) and Vodafone.

Brussels then pointed out that this move from four to three competitors would have likely led to an increase in the prices of mobile phone services in the United Kingdom and a reduction in the choice of consumers.

It also considered that the acquisition of O2 by Three from Hutchinson 3G could have negatively influenced the quality of services to consumers, by hindering the development of the infrastructure of mobile networks in the United Kingdom.

Finally, it would have reduced the number of mobile network operators willing to share their networks with other operators.

Three appealed to the General Court of the EU and requested that the Commission decision be annulled. In its sentence issued today, the Luxembourg-based court agrees with the telephone company and annuls the ban of the Community Executive.

However, the EC may appeal the decision to the Court of Justice of the European Union.

In any case, the judgment made public today considers that the effects of the operation on the prices and quality of services to consumers have not been demonstrated in accordance with law and according to the requirements of evidentiary requirements.

It adds that the Commission has not demonstrated that the effects of the purchase on network sharing agreements and on mobile network infrastructure in the United Kingdom would have constituted a significant obstacle to effective competition.

Likewise, it indicates that the effects of the operation on the wholesale market have not been considered sufficient to demonstrate the existence of a significant obstacle to effective competition.

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