European Commission to investigate Wind-Three merger
The European Commission has launched an investigation to assess whether the planned joint venture of Hutchison and VimpelCom is in line with the EU merger regulation.
The regulatory body stated concerns of higher prices, less choice and reduced innovation for customers in Italy. A merger between VimpelCom subsidiary Wind and Hutchison's Three Italia would create an entity which would overtake Telecom Italia and Vodafone Italy's position in the country’s mobile market.
“The Commission has concerns that the transaction would remove two important competitive forces and that the joint venture would have limited incentives to exercise significant competitive pressure on the remaining competitors,” said the European Commission.
It added that the reduction in the number of competitors following the merger risks weakening competitive pressure and increasing the likelihood that MNOs would coordinate their competitive behaviour and raise prices on retail and wholesale markets.
The European Commission is expected to make a decision by August 10, 2016.