The European Commission is to open an in-depth competition probe into Vodafone’s 18.4 billion euro (£16.6 billion) acquisition of a raft of Liberty Global assets.
Earlier this year, Vodafone struck a deal to acquire Liberty’s operations in Germany, the Czech Republic, Hungary and Romania.
But the EU’s antitrust watchdog said on Tuesday it was concerned the takeover may reduce competition in Germany and the Czech Republic.
Competition commissioner Margrethe Vestager said: “It’s important that all EU consumers have access to affordable and good quality telephone and TV services.
“Our in-depth investigation aims to ensure that Vodafone’s acquisition of Liberty Global’s telecommunications businesses in Czechia, Germany, Hungary and Romania will not lead to higher prices, less choice and reduced innovation in telecoms and TV services for consumers.”
When it announced the deal in May, Vodafone said assets would help it become “the leading next generation network owner in Europe” with a total reach of 110 million homes and businesses, including wholesale arrangements.
However, the Commission believes that in the Czech Republic, providers of standalone telecoms services could be shut out from the retail, TV and internet market because of the “converged products” Vodafone would be able to offer.
In Germany, where Vodafone and Liberty currently compete against each other, the Commission expressed concerns that the transaction would eliminate this competition, reduce the number of players and limit the merged entity’s incentives to compete effectively with rivals.
It is also concerned about the knock-on impact of investment in next generation networks.
The deal could also “substantially increase the bargaining power of the merged entity vis-a-vis TV broadcasters”, the Commission said.
The Commission now has 90 working days, or until May 2 2019, to make a decision.