The European Commision (EC) launched a full-scale probe into Telia’s €1 billion acquisition of Bonnier Broadcasting, after the operator failed to address competition concerns.

The acquisition, announced in 2018, is part of the operator’s multiplay efforts to combine its mobile and fixed networks with TV services, boosting options for its customers.

However, the EC threw a spanner in the works, announcing it is concerned the proposed acquisition could reduce competition and lead to higher prices for consumers in Finland and Sweden.

Not enough
It decided to launch a full review despite Telia offering concessions to push the deal through last month. In a statement, the EC said it considered the commitments “insufficient to clearly dismiss its serious doubts as to the transaction’s compatibility with EU merger regulation”.

Outlining its concerns, the EC said Telia’s competitors in TV distribution in Finland and Sweden could be prevented from accessing Bonnier Broadcasting’s specific TV channels. The merged entity could also deny access to TV advertising space on its free-to-air and basic TV channels to Telia’s competitors in all markets for retail mobile, fixed internet and TV services; and it could block access to its streaming application “to customers using competing mobile and fixed internet providers”.

The Commission now has 90 days, running to September, to rule on the deal.

In its own statement, Telia said it looked forward “to continuing the constructive dialogue with the European Commission”, adding it still expects to complete the deal during the second half of 2019.

Aside from the EC’s concerns, Telia’s deal for Bonnier Broadcasting also has implications for Swedish government.

The government owns 37 per cent of the operator and has been put in a sensitive position as a result of the deal, as it already controls Sweden’s big traditional broadcaster, SVT. Reuters reported the government would consider selling its stake in Telia, should the Bonnier deal be approved.