June 28, 2023

European Commission shares competition concerns regarding proposed merger of telecom operators in Spain

On June 27, 2023, the European Commission announced that it had sent a statement of objections to Orange and MasMovil, the second and fourth largest mobile network operators in Spain, expressing concerns that the proposed transaction might reduce competition in the retail supply of mobile and broadband services and multiple-play bundles in Spain.  Orange is a global telecommunications operator headquartered in France and operating in Spain through its subsidiary OSP, which provides mobile and fixed telecommunications services to residential, business and wholesale customers.  MasMovil is controlled by Lorca, a holding company headquartered in the UK.  MasMovil provides fixed and mobile telecommunications services primarily to residential customers in Spain.  According to the Commission, Orange and MasMovil are two of the four active mobile network operators in Spain.

The Commission, which launched an in-depth investigation into the merger on April 3, 2023, analyzed internal documents provided by the parties and gathered opinions related to the proposed transaction from competitors, suppliers and customers.  Based on its evaluation of this data, the Commission had concerns that the merger might reduce the number of network operators in Spain and thereby eliminate a significant competitive constraint and innovative rival in Spain’s retail market for mobile telecommunications services, fixed internet services and multiple-play bundles (including fixed mobile convergent ones).  There were also concerns that the merger might result in price increases for retail customers in Spain.

The Commission emphasized that the sending of a Statement of Objections was just a formal step in an investigation, and does not prejudge the outcome.  Next steps for Orange and MasMovil include replying to the Commission’s Statement of Objections, consulting the Commission’s case file, and requesting an oral hearing.  The Commission has until September 4, 2023 to make a final decision.

European Commission Press Release