4-to-3 telecom merger cleared unconditionally by the European Commission

On 27 November the European Commission cleared the acquisition of Tele2 Netherlands by Deutsche Telekom, the owner of T-Mobile Netherlands, after an in-depth Phase II investigation without remedies being required. This transaction reduces the number of mobile network operators in the Netherlands from 4 to 3. In its press release the Commission indicates that important reasons for its unconditional approval are (1) the relatively small combined market share of the merging parties, (2) the limited market share of Tele2 NL and (3) uncertainty as regards Tele2 NL’s future in the Dutch market, in the absence of the transaction.The case is noteworthy for several reasons. First, it signals that there is no “magic number”, and that 4-3 mergers can be approved in the telecom sector, depending on the specificities of the case. Second, the Commission cleared the transaction unconditionally, even though it had issued a Statement of Objections against the transaction in the course of its Phase II investigation. Third, and most importantly, it shows the importance of counterfactual assessments in the context of merger control. The assessment of the likely future role of Tele2 NL in the Dutch market in the absence of the transaction was a crucial element in the Commission’s decision to clear the transaction unconditionallyRBB Economics assisted Tele2 throughout the procedure, alongside Clifford Chance.