CJEU general lawyer calls for re-analysis of European Commission veto later overturned, which could hinder the union between Orange and MásMóvil in Spain
In 2016, the European Commission vetoed the sale of Telefónica’s British subsidiary, O2, to the Asian group Hutchison, but following appeals from the operators, the General Court of the EU overturned this decision, considering that the alleged price increase it would entail has not been proven. But now the mergers between the telecoms are on the air as the general counsel of the Court of Justice of the European Union (CJEU) has proposed to quash the verdict that overturned the Brussels veto.
If so, the major operators would have trouble executing more mergers, causing the major operators (Telefónica, Vodafone and Orange) to lose value in the stock market mid-session despite starting the day with gains. The European Commission’s position contradicts these unions, stating that it is negative for consumers because the telephone market is shrinking, affecting prices, competition and innovation. The operators, for their part, assure that the European market is too fragmented and that they do not have enough margin to become profitable.
The case is considered of particular importance for the Spanish market, as this veto could impede the terms of the merger between Orange Spain and MásMóvil. But if not, it could trigger a wave of mergers at European level. The intention to merge between the two was announced in July with the aim of creating the largest Spanish telecommunications company by number of mobile phone customers, with 31 million lines, ahead of Telefónica, which would maintain the leading position in revenue volume.
The proposal of the CJEU’s general counsel, Juliane Kokott, is not binding on the court, but is usually adhered to. In addition, it implies a strengthening of the strict competition policy that the European Commission has pursued in recent decades, which the telecommunications sector hoped to revise to allow operators to gain scale.
In his presentation, he emphasized that in these types of investigations the Court of Justice only has jurisdiction to determine whether competition laws have been complied with, on the one hand, and whether the European Commission’s analysis of evidence contains “some sort of manifest error or allegation. Similarly, she pointed out that it is impossible to provide “objective evidence” in the prohibition of a merger because of future competition concerns, as it is a forecast that is always subject to a degree of probability.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
