Office for Competition initiates investigation into proposed Melita takeover of Vodafone

GO notes, and welcomes, the decision by the Office for Competition, within the Malta Competition and Consumer Affairs Authority, to initiate a so-called ‘Phase 2’ in depth investigation of Melita’s proposed takeover of Vodafone’s Malta business.

The Office initiates such an investigation when it considers that the proposed market concentration raises serious concerns on significant impediment to effective competition in the market.

Typically during Phase 2 investigations the Office will conduct detailed research and analysis on issues such as the possible increase in prices that the acquisition may cause and possible anti-competitive behaviour that may result from the creation or strengthening of dominance in the market.

A GO spokesperson noted: “The proposed takeover of Vodafone, in a critical sector such as telecommunications, is unprecedented as it reduces the number of major competitors in the market down to two. This would be, by far, the largest market concentration in Malta’s history and, unless it is properly implemented and adequate remedies and safeguards are provided for, it could have very far reaching and long term implications and negative outcomes for consumers and ultimately for the whole country. It is hardly surprising therefore that the case is being followed closely in Malta and beyond, and that objections have been raised by consumers groups.

“The fact that the Office has, correctly in our view, decided to go into a much more thorough Phase 2 investigation should mean that the proposed acquisition will be given proper evaluation and that adequate safeguards may be provided to ensure the sector remains viable and that consumers continue to enjoy real choice.

“Naturally, as an interested third party, GO will continue to collaborate fully with the Office for Com- petition and present detailed technical economic assessments on the matter.

“As we have repeatedly stated, GO does not fear competition – indeed we welcome it because healthy market competition benefits consumers and drives innovation. However unless there is a proper level playing field one might end up in a scenario where ultimately competition and the consumer lose out. We augur that this can be averted.’’