Three owner ‘launches legal action’ against EU for blocking O2 acquisition

CK Hutchison wants compensation after the EU overruled the £10.25 billion bid

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Three's parent company is allegedly taking legal action against the European Commission (EC) after it quashed Three's bid to acquire O2.

CK Hutchison had tried to buy UK mobile operator O2 for 10.25 billion, but the EC overruled the proposal in May, saying it would have been "bad for UK consumers and bad for the UK mobile sector".

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The company confirmed to IT Pro that it has appealed the decision, but the Daily Telegraph, citing industry sources, said Hutchison has also launched legal proceedings against the EC at the European Court of Justice, seeking compensation.

The EC based its decision largely on the fact that the deal would have reduced the number of mobile operators from four to three in the UK.

Its ruling was in line with the views of both the Competition and Markets Authority (CMA) and UK telco regulator Ofcom, whose own research found that mobile prices were 10 per cent to 20 per cent higher in countries with just three mobile operators.

Hutchison's proposed remedies were to allow mobile virtual network operators and Virgin Media to use its network, but the EC believed they fell short of what was required.

Hutchison's appeal is unlikely to make much difference now, with O2's owner, Telefonica, trying to float a minority stake in the UK mobile operator.

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Its legal challenge will seek compensation and a precedent for mobile market consolidation as it pursues another takeover in Italy, the Telegraph said.

A Hutchison spokesman told IT Pro: "CK Hutchison can confirm that it has lodged an appeal to the European General Court against the decision adopted by the European Commission on 11 May 2016 to prohibit CK Hutchison's acquisition of O2 UK."

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