In a release, the Commission said it was concerned that the transaction may reduce competition in the retail supply of mobile and fixed broadband services in Spain.
The merger, which is worth around €18.6 billion, was initially announced in July 2022. The deal will take the form of a 50-50 joint venture controlled by both companies with equal governance rights.
Orange and MasMovil are the second and fourth largest operators at retail and wholesale level for fixed broadband and mobile services in Spain.
The preliminary investigation indicated that Orange and MasMovil are close competitors in the Spanish market for the retail supply of mobile telecommunications services, fixed broadband access services and multiple-play bundles.
In particular, the Commission said that the deal would reduce the number of network operators in Spain, eliminating an “innovative and significant rival”.
“This could lead to higher prices and lower quality of telecom services for customers,” the Commission said.
“As result of the transaction, Orange and MasMovil would have the ability and incentive to restrict access of virtual operators to wholesale mobile network and wholesale fixed network access services.”
The Commission will carry out an in-depth investigation into the effects of the proposed transaction to determine if its initial concerns are confirmed.
The Commission has 90 days, until August 21, 2023, to take a decision on the matter.
