CMA requests review of Virgin and O2 merger

CMA requests review of Virgin and O2 merger

The 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 Competition and Markets Authority (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.

Notes to editors

1.   Mergers that initially fall within the jurisdiction of the EU Merger Regulation may, in some circumstances, be referred to the UK to be examined by the CMA under the Enterprise Act 2002. In this case, the CMA is requesting that the European Commission refers the proposed joint venture between Liberty Global plc and Telefónica S.A to merge their UK operating businesses Virgin Media/Virgin Mobile and O2, respectively, to the CMA under the provisions of Article 9 of the EU Merger Regulation. The CMA has 15 working days from receipt from the Commission of a copy of the formal notification documentation to request that a merger is referred to it.

2.   The EC will, as a general rule, inform the CMA and the notifying parties of its decision in respect of a request for referral under Article 9 within 35 working days from the formal notification of the merger or, where the EC has initiated proceedings under Article 6(1) (c) EU Merger Regulation, within 65 working days.