Only two of the 12 national competition regulators advising the European Commission on Telefonica's proposed takeover of E-Plus from KPN supported the remedies proposed by the EC, two unnamed officials told the Financial Times. At a recent meeting to review the European Commission proposal to approve the merger of the third and fourth largest mobile operators in Germany, only Sweden and Belgium voted in favour of the proposed conditions. Germany, Ireland, Austria, Italy and the UK voted against the remedies, which require Telefonica to lease network capacity to rivals. Five other countries abstained: France, Spain, Denmark, the Netherlands and Portugal.
The advisory committee's vote is not binding, but it is unusual - in most cases, the vote is a formality to approve the proposals from the EC. Opponents of the Telefonica deal in Germany hope that the negative vote will prompt Joaquin Almunia, the EU competition commissioner, to revisit his plan, the paper said. However, the commission usually says there must be an absolute majority against a proposal – at least 15 votes – for their position to be formally considered.
All 12 watchdogs present agreed with the EC conclusion that without remedies, the tie-up would increase prices and stifle competition. Almunia's team recommended that the deal proceed on the basis of Telefonica's pledge to set aside at least 20 percent of its network capacity for MVNOs. Germany’s Bundeskartellamt, the national antitrust regulator that led the revolt in the advisory group, had warned Almunia that the remedies failed to compensate for the loss of a network operator.
