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Mobile telecoms consolidation in Europe - for better or for worse?

14 July 2014

In the wake of recent mobile telecom mergers across Europe, Angeline Woods of Freshfields and Cristina Caffarra of Charles River Associates discussed the key legal and economic implications of the recent developments with an audience of practitioners and economists at a Law Society seminar.

The Competition Section at the Law Society organised this evening seminar following recent EU Phase II investigations and clearances of 4-3 mobile merger consolidations in Ireland and Germany. It is part of a series of seminars that explore the latest topics of interest in competition law.

Angeline Woods, senior associate in the Antitrust, Competition and Trade Group at Freshfields, discussed the evolution of the approach of the EU Commission to investigating mobile merger consolidation over the past 10 years and the key learnings for future cases. She said:

'This is likely to have implications for consolidation in other oligopolistic industries.'

Cristina Caffarra, head of the European Competition Practice at Charles River Associates, added:

'The modelling tools which are typically used to predict merger effects are not well suited to situations where there are important investment dynamics. It is no surprise that if the EU Commission focuses on UPP/GUPPIs on the one hand, and merger simulation on the other, it finds material price effects. But both overstate the potential consumer price increase of the merger as they do not capture the need to invest in network quality. There is thus a disconnect between what these stylised models can do, and the longer term perspective of "investment efficiencies" argument - analyses need to evolve.'

At the next seminar in the Competition Section series, Davina Garrod from Bingham McCutchen and Adrian Majumdar at RBB Economics will look at the legal and economic implications of the recent General Court judgment on Intel, providing practical guidance on how to approach rebate schemes in the future. The evening event follows the Section's annual general meeting on 29 July and carries CPD points. Attendance is free to Section members. A reduced part-year Competition Section membership is now available for £87.50.

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Ends

Notes to editors

'Mobile virtual network operator' (MVNO) is a wireless communications services provider that does not own the wireless network infrastructure over which it provides services to its customers. An MVNO enters into a business agreement with a mobile network operator to obtain bulk access to network services at wholesale rates, then sets retail prices independently.

The EU's radio spectrum policy, which sets principles for managing radio spectrum used for mobile communications, is available on the Europa website.

Angeline Woods acted on behalf of Hutchison Whampoa on its recent mobile telecoms acquisitions in Austria and Ireland, which were conditionally cleared by the European Commission following in-depth Phase II reviews. Angeline is based in Brussels and practices general EU antitrust law.

Cristina Caffarra heads up CRA's European Competition Practice. Cristina is an expert in the application of modern industrial economics to competition law, and in the empirical analysis of markets in the context of competition investigations. She has provided economic advice to companies on issues of merger control, vertical restraints, findings of dominance, evaluation of abusive conduct including bundling, tying, rebates, price discrimination, margin squeeze and other forms of potentially exclusionary conduct, intellectual property rights, as well as collusion/information exchanges and assessment of damages. She has appeared as witness before the courts on competition matters in a number of jurisdictions. She has published and lectured widely in the area of competition economics. In the area of mobile mergers, Cristina has been advising on some of the recent high-profile transactions examined by DG Competition.

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