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The General Court has handed down a landmark mergers judgment in CK Telecoms UK Investments Ltd v European Commission.

The European Commission blocked CK Hutchison’s acquisition of O2 UK from Spain’s Telefonica for 10.25 billion pounds ($12.6 billion) in 2016, stating that the merger would have led to increased prices and less choice for consumers, alongside reduced innovation by reducing the number of mobile network operators in the UK from four to three. Hutchison appealed against the Commission’s decision.

The General Court annulled the Commission decision in its entirety. The Court found that the Commission had erred in its application of the concepts of “important competitive force” and “significant impediment to effective competition”. The Commission failed to show that the effects of the merger on the UK’s network-sharing agreements and on the mobile network infrastructure in the UK would constitute a significant impediment to effective competition. The Commission had failed to prove that the acquisition would have harmed competition or that prices would have increased. Following the Court’s findings, the Commission will need to revisit its approach to merger reviews in this key sector.

Brian Kennelly QC acted on behalf of CK Telecoms UK Investments in the General Court.

The full judgment can be found here.

Clerks

Staff