CMA requests review of Virgin and O2 merger

The Competition and Markets Authority (CMA) has made a request to the European Commission to refer the proposed merger of Virgin Media and Virgin Mobile with O2 to the CMA for investigation.

Liberty Global plc (Liberty) owns Virgin Media and Virgin Mobile in the UK, and Telefónica S.A. (Telefónica) owns O2. Liberty and Telefónica formally notified the planned merger of Virgin Media, Virgin Mobile and O2 to the European Commission (EC) on 30 September 2020.

The proposed merger falls under the remit of the EC to review but can, subject to the agreement of the EC, be transferred to the CMA.

The CMA believes that the case should be transferred given its potential impact on competition in several retail and wholesale telecommunication markets in the UK. The legal requirements for the case to be transferred to the CMA are met, and any impact on competition will be limited solely to UK consumers.

Andrea Coscelli, Chief Executive at the CMA, said: “We’ve sent a formal request to the European Commission to review the proposed deal between Virgin and O2. Ultimately, this is a decision for the EC, but as the merger will only impact UK consumers – and any effects would only be felt after the end of the transition period – it is only right for the CMA to request it back.”

While the EC has previously highlighted its strong interest in ensuring consistency across different merger cases in the telecommunications sector, the CMA believes that this is not relevant in this case given the imminent end of the transition period following the UK’s exit from the EU.

The initial deadline for the EC to respond to this request is 19 November 2020. The CMA has liaised closely with the EC on its investigation to date and will continue to do so in the event that the EC decides jurisdiction should not be transferred.