With the merger of the Spanish operators Orange and MasMovil, “Brussels endorses concentration”

OWe must pop the champagne at Orange, but also at its competitors. The decision of the European competition authorities to authorize the marriage between the Spanish telecommunications operators Orange and MasMovil were expected well beyond the Iberian borders. With this 18.6 billion euro merger, Spain will go from four telephone operators to three. And it’s a revolution.

Until now, the competition police in Brussels and member countries have always considered that this reduction was harmful to the interests of the consumer. Manufacturers think the opposite: that prices are too low to allow them to invest in network modernization. And they provided in support of their intense lobbying, the case of the American market, of the same size but operating with three operators instead of a hundred. Same thing in China. Considering it negligible, even unhealthy, that European consumers benefit from the cheapest phone in the world.

The pressure from Orange and other Deutsche Telekom therefore seems to have finally paid off. It must be said that they have one of their supporters in the place. Thierry Breton, former CEO of France Telecom, the ancestor of Orange, from 2002 to 2005, now Commissioner for the Internal Market, has always said that we must let the market consolidate and stop this obsession with the lowest price for the consumer, which harms long-term investment.

Europe’s strategic vulnerability

The argument reached the office of Margrethe Vestager, the competition commissioner who, however, does not have this arrogant Frenchman in her heart who is always ready to defend his champions (French of course).

Read also: Brussels opens investigation into merger of Orange and MasMovil activities in Spain

Why this change of heart? In a Commission working document, unveiled on February 14 by the Financial Times, the authors of this one put forward two arguments. Firstly, the necessary acceleration of investments in fiber and networks, where Europe is lagging behind, a classic thesis of operators, but also the question of Europe’s strategic vulnerability. A rupture of a telecommunications cable, at the same time as that of a gas pipeline, in the Gulf of Finland, in October 2023, caused fear.

As noted in the said document: “industrial competitiveness and economic security” become essential in the turbulent world that is opening up before Europeans. And it’s well worth the sacrifice of the competition… and consumers. After Spain, Italy could well become the next testing ground for this new doctrine which further buries the traditional liberalism of Brussels. But does not abolish the nationalist reflexes that are often stronger than all the great speeches on European sovereignty.

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