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EU’s Vestager Cautions Against Telecoms Merger Threats to Competition

 |  April 18, 2024

EU’s competition chief, Margrethe Vestager, has warned that telecom company mergers could endanger market competition and the EU’s single market. While speaking at a Brussels conference, Vestager argued against the findings of a recent EU report, which suggested that such mergers could strengthen the sector.

“No evidence suggests that more concentrated national markets lead to better outcomes,” Vestager said. “To the contrary, it would lead to less competitive national markets and to a more fragmented single market.”

According to a report by Bloomberg, Vestager dismissed the idea that fewer, larger telecom companies would lead to better market outcomes. She stressed that consolidation is likely to weaken competition in national markets and fragment the single market, opposing views suggesting mergers could make the industry more efficient.

Read more: Vestager Steps Down, Reynders Takes Charge of EU Competition Policy

Vestager’s warning reflects the EU’s approach to preventing mergers that the regulator believes could raise prices, decrease choices for consumers, and hinder innovation by reducing competitive pressure on companies to advance.

Vestager’s stance is also part of the EU’s stated strategy of keeping its market competitive, favoring the broader economy and consumer interests over the consolidation goals of individual companies, Bloomberg reported. 

Telecom firms in Europe have long advocated for in-market mergers. This year at the Mobile World Congress, Europe’s four major operators argued that consolidation is crucial for financing the costly network upgrades necessary to meet 5G deployment and fiber goals across the continent.

Source: Bloomberg