The European Commission (EC) laid out its formal list of objections to an Orange and Masmovil proposal to merge units in Spain, citing a reduction in competition and the potential for significant consumer price increases.
The authority’s move, which was the subject of media reports last week, is part of an investigation opened in April to assess the competition implications of the tie-up, which will cut the number of players in the market to three.
Its formal statement of objections expands on the EC’s preliminary view the deal could reduce competition in the supply of mobile, fixed and multi-play bundles in the market.
“Predicted anti-competitive 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,” it added.
Orange and Masmovil now have the opportunity to respond to the EC’s concerns, consult the case file for the probe and request a hearing. The regulator noted sending the document does not prejudge the outcome of its investigation.
The EC is working to a deadline of 4 September to take a final decision.
When the operators announced the deal, they estimated it would close in H2 2023.
In their original statements, which came after various market players regularly cited difficulties in the market, Orange and Masmovil claimed a merger would drive competition, provide significant efficiencies, and allow an acceleration of investment into fibre and 5G.