The European Commission (EC) agreed to give the UK’s Competition and Markets Authority (CMA) final authority over a proposed tie-up between Telefonica’s O2 UK and Liberty Global’s Virgin Media, after ruling the deal will affect competition in the country.

In a statement, the EC said the merger, first announced in May 2020, would be referred to the CMA following an overall assessment and the UK body will now deal with the case under national law.

The EC’s decision comes after the CMA had requested last month to be given the authority to clear or reject the proposed merger, arguing it did not have implications anywhere other than the UK.

Based on its assessment, the EC confirmed the proposed transaction threatened competition in the UK, where Telefonica and Liberty Global are currently large players.

The EC is able to cede power over ruling on a transaction to national authorities under special circumstances when the member state requests it, the Commission explained.

Deals in the UK are still subject to European Union (EU) law until 31 December, when the country leaves the internal market, the EC explained.

Any implications of the deal, therefore, will be felt after the UK leaves the EU, giving the CMA more support in its bid to take control of the case.