Vodafone says EU regulators could learn something from the UK 

Vodafone has said that the European Union regulators could learn a thing or two from its merger case with Three UK, reviewed by the UK’s Competition and Markets Authority (CMA). After more than a year of weighing up the pros and cons of the merger, the CMA ultimately allowed the merger but set some social commitments that had to be met.

According to Vodafone, the EU has been too firm on demands for structural remedies when assessing mergers. Structural remedies are those that involve changes to the assets, organization, or structure of the firms that are merging.

The mobile network provider said that the UK regulators also have a preference for structural remedies, but in the case involving the merger between Vodafone and Three, the UK’s CMA was more flexible and allowed for a ‘quasi-structural’ commitment from Vodafone, where the firm has agreed to invest a certain amount in the country’s mobile infrastructure.

Vodafone has called on the EU to modernize its competition regime so that it is more dynamic and addresses lagging fixed and mobile connectivity in the bloc. In the mid- to long-term, Vodafone said it would like to see the following items implemented:

• Consider merger efficiencies in a forward-looking manner and over a longer time horizon.
• Consider investment intensity of competition in certain strategic sectors, including the role of MVNOs in mobile.
• Remove the current strong preference for structural remedies and broaden the proportionality test to account for the impact of remedies on transaction benefits.
• For regulated sectors, the EU should explicitly recognize that the sector regulator can and should play an important role in monitoring and enforcing behavioral remedies.

As the European Union seeks to overhaul its regulatory framework, Vodafone says the bloc should look towards its case with the UK’s CMA for inspiration on how to address concerns of businesses.

Regarding the Vodafone-Three merger in the UK, the CMA ultimately allowed it to go ahead with conditions. Over the next 8 years, improvements to mobile networks will need to be made to improve the service for everybody, certain plans have been capped for 3 years to avoid shock price rises for consumers, and MVNOs must get price protection for 3 years too, so they can adapt.

Source: Vodafone