Brussels, 07/11/2013 (Agence Europe) - On 6 November, the European Commission opened an in-depth investigation to assess whether the planned acquisition of Telefónica Ireland by Hutchison 3G UK (H3G) is in line with the EU Merger Regulation. Both companies provide mobile telephony services in Ireland. The Commission has concerns that the transaction may reduce competition in the markets for retail mobile telephony and for wholesale access and call origination in Ireland. The Commission's initial market investigation indicated that the planned acquisition (notified on 1 October) may substantially lessen competition in the retail mobile telephony market in Ireland where Three Ireland, a subsidiary of H3G, and Telefónica Ireland currently compete with each other. The transaction would combine two of the four mobile networks in Ireland and create a player of similar size to the currently largest operator, Vodafone. The Commission has concerns that the transaction would remove an important competitive force and change the merged entity's incentive to exert significant competitive pressure on the remaining competitors. The Commission also has concerns that the transaction would reduce the merged entity's incentive to continue a network-sharing agreement with Eircom, which could hamper Eircom's ability to compete effectively after the merger. Finally, the Commission's initial market investigation indicated that the reduction of the number of competitors following the merger may lead to a weakening of competitive pressure by increasing the likelihood that mobile network operators are able to coordinate their competitive behaviour and increase prices on a sustainable basis, as there may be a certain degree of market transparency at the retail level. The Commission now has 90 working days to decide whether these concerns are founded and whether to give approval to the merger. Interested parties may submit their comments during this time period. (FG/transl.fl)