The European Commission announced the opening of an in-depth investigation into Vodafone's planned takeover of Liberty Global's cable assets in Germany, Czechia, Hungary and Romania. The merger could reduce competition in particular in Germany and Czech Republic, the Commission said in a statement.
In Germany, Vodafone and Liberty Global's subsidiary Unitymedia compete on the retail fixed market. Unitymedia has a cable monopoly in North Rhine-Westphalia, Hesse and Baden Wurttemberg, while Vodafone is active in the other 13 federal states, after it bought the Kabel Deutschland in 2013, and also uses DSL and fibre infrastructure to compete in other areas.
The deal would eliminate a competitor and could discourage the new company from competing effectively with the remaining operators, both in areas already served by Unitymedia and in Germany as a whole, the Commission said. The deal could also lead to less investment in next-generation networks and give the merged company too much power in negotiations with TV broadcasters.
In Czech Republic, the Commission is concerned that other providers of standalone telecommunications services would have difficulty competing with Vodafone after its merger with cable operator UPC. The retail markets for mobile services, internet access and TV could all be affected if the merged company introduced converged fixed-mobile packages.
The Commission has not identified competition concerns in the Hungarian and Romanian markets. It will take a decision on the merger by 2 May 2019. A request from the German cartel authority to investigate the German part of the merger is still pending, the Commission said.
Completion by mid-2019
Liberty Global said in a statement that the Commission's decision to extend the investigation was "welcome and expected", and the companies still expect to complete the deal by mid-2019. CEO Mike Fries said "it it is clear that the EU is retaining regulatory authority over the case. This provides us with the appropriate forum to demonstrate the consumer benefits that will be delivered by the creation of fully converged, fixed-mobile operators in these four markets."
