EU approves acquisition of UPC Austria by T-Mobile Austria

Mergers: Commission approves acquisition of UPC Austria by T-Mobile Austria

BRUSSELS — The European Commission has approved unconditionally under the EU Merger Regulation the proposed acquisition of UPC Austria by T-Mobile Austria. The Commission concluded that the transaction would raise no competition concerns as the companies’ activities and assets are largely complementary.

UPC Austria (“UPC”) and T-Mobile Austria (“TMA”) both provide telecommunications services in Austria. UPC’s main activities are related to fixed telecommunications, while TMA is mainly active in mobile telecommunications.

The Commission examined the impact of the proposed transaction in the limited number of markets in the fixed and mobile telecommunications sector in Austria where the activities of TMA and UPC overlap. In particular, both companies are active in the provision of internet access services for residential customers, since in Austria internet access at home is often provided through a router connected to a mobile network.

However, the Commission found that the impact of the transaction on this market is likely to be limited, considering in particular that UPC’s fixed internet access products differ considerably from TMA’s mobile broadband products. These products differ both in terms of the underlying technology and product characteristics and as a result are not closely competing.

The Commission also found that the merged entity would continue to face significant competition from other players such as the incumbent A1 Telekom Austria and Hutchison Drei Austria.

Additionally, the Commission examined a number of vertical and conglomerate relationships in the fixed and mobile telecommunications markets in Austria arising as a result of the transaction, in particular concerning bundled multiple play services. The Commission concluded that the merged entity would not be able to use its market power to shut out or marginalise its fixed or mobile competitors by bundling fixed and mobile products.

Therefore, following its phase I investigation, the Commission concluded that the transaction would raise no competition concerns in any of the affected telecoms markets and cleared the case unconditionally.

Merger control rules and procedures

The transaction was notified to the Commission on 18 May 2018.

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The vast majority of mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).