The European Commission opened a more in-depth investigation into cable operator Liberty Global’s proposed €1.33 billion acquisition of Base, KPN’s Belgian mobile unit.
The commission is concerned the transaction “could lead to higher prices, less choice and less innovative services” for Belgian consumers.
The deal would combine Base with Telenet, the Liberty subsidiary which is the country’s largest MVNO.
The commission’s initial investigation unearthed two concerns. Firstly that the transaction may reduce competition in the retail mobile telephony market where Base and Telenet currently compete.
A second concern is that combining the two reduces the incentive for Base to offer other virtual operators access to its mobile network. Reducing wholesale options for MVNOs would also harm competition in the retail mobile telephony market.
In addition, the Commission will also investigate whether the deal increases Telenet’s ability to sell its fixed services to Base’s customers via bundling, and whether this increases the entity’s market power and ability to exclude competitors.
Liberty recently offered concessions to the commission in an attempt to gain approval for the Base deal but clearly failed to convince the regulator.
The Commission now has 90 working days, until 18 February 2016, to take a decision.