By Tom Fairless and Ruth Bender
BRUSSELS--The European Union has halted for a second time its
antitrust probe into Orange SA's EUR3.4 billion ($3.62 billion)
acquisition of Spanish broadband and cellphone operator Jazztel SA,
as regulators seek to establish whether the merger will drive up
consumer prices in Spain.
The move injects fresh uncertainty into a deal that would almost
double Orange's market share in broadband Internet access in Spain,
leapfrogging Vodafone Group PLC to become the country's
second-largest provider in that segment. Both companies trail the
market leader, Telefónica SA.
The merger is being closely watched by investors as a test case
for how the EU's new antitrust chief, Margrethe Vestager, will
approach deals in Europe's rapidly-consolidating telecoms
sector.
A spokeswoman for Ms. Vestager said Thursday that "the clock has
been stopped" on the Orange-Jazztel deal since March 4.
"Information is missing from the file that we require before
resuming the investigation," the spokeswoman said. The commission
previously suspended the probe for a week in January.
Orange couldn't immediately comment. Spain is Orange's
second-largest market, accounting for around 10% of the group's
revenue.
When the commission opened the probe in December, it expressed
concern that the deal would lead to higher prices for Spanish
customers of fixed Internet and fixed-mobile triple play deals.
Orange submitted fresh remedies aimed at addressing those
concerns on March 6, according to a statement posted online. The
company also presented its arguments at an oral hearing organized
by the commission in Brussels on Monday, two people familiar with
the matter said. Such hearings allow companies to make their case
to a broader audience.
Ms. Vestager's predecessor, Joaquín Almunia, was widely regarded
as supportive of telecoms mergers, after he approved deals that
reduced the number of mobile operators in Germany and Ireland from
four to three.
The EU's new executive team, led by former Luxembourg prime
minister Jean-Claude Juncker, entered office in November with a
pledge to create a digital single market by breaking down national
silos in telecoms regulation and competition law.
In a speech earlier this month, though, Ms. Vestager warned that
she wouldn't allow large mergers to take place at the expense of
consumers.
"The argument goes that we need to protect companies, to help
them become bigger companies, otherwise they can't take on
international rivals," she said.
"I'm not convinced about these arguments," she said. "[Mergers]
should not happen at the expense of consumers."
Write to Tom Fairless at tom.fairless@wsj.com and Ruth Bender at
Ruth.Bender@wsj.com
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