The European Commission has opened an in-depth investigation into the planned acquisition of KPN's E-Plus by Telefonica Deutschland, rejecting a request from the German competition regulator to examine the proposed merger of the third- and fourth-largest mobile operators in Germany. The EC has 90 working days, until 14 May 2014, to take a decision. The investigation will focus on the possible reduction in competition in the retail mobile telephony market as well as in the market for wholesale access and call origination on mobile networks in Germany. Moreover, the commission has concerns that after the transaction the remaining MNOs might have fewer incentives to grant access to their network to MVNOs and service providers. Prospective and existing MVNOs and service providers would have less choice of host networks and hence weaker negotiating power to obtain favourable wholesale access terms.
The EC will investigate the transaction in-depth to determine whether these initial concerns are confirmed or not. The commission will in particular examine questions, such as how close competitors the parties are, the merged entity's post-merger incentives to compete, the likely reaction of competitors and possible positive effects for consumers related, among others, to the roll-out of 4G mobile networks. The transaction was notified to the commission on 31 October.
