The UK competition watchdog has asked the European Commission (EC) to refer the planned £31bn merger between O2 and Virgin Media for a full UK investigation.
The tie-up, which was confirmed by O2's Spanish owner Telefonica and Virgin's US parent Liberty Global in May, comes under the remit of the EC's antitrust commissioner but a review can be transferred to the UK’s Competition and Markets Authority (CMA).
The CMA said it should investigate the deal “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 have been met, the CMA said.
“We’ve sent a formal request to the European Commission to review the proposed deal between Virgin and O2,” CMA chief executive Andrea Coscelli said in a statement.
“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.”
The combined O2-Virgin, with around 32mln direct customers as well as 34mln non-direct clients such as Tesco Mobile, would be a big rival for BT Group PLC (LON:BT.A), which owns EE, as well as Vodafone PLC (LON:VOD), Talktalk Telecom Group PLC (LON:TALK), Sky and Three.
TalkTalk received a preliminary offer from major shareholder Toscafund on Thursday.