EU rules not a barrier to telcos scaling up, senior EU official says

By Foo Yun Chee

COPENHAGEN (Reuters) -EU merger rules do not prevent telecoms operators from scaling up through acquisitions, a senior European Commission antitrust official said on Wednesday, rejecting criticism from the European industry about the tough approach by regulators.

More than 20 of Europe's biggest telecoms providers on Tuesday called on Commission President Ursula von der Leyen to ease merger rules to boost investment in digital infrastructure and help them compete with U.S. and Asian rivals.

"I need to remind everyone from time to time, that merger control is not about scale as such. There is no problem with scale as such. The issue is always market power," said Deputy Director-General for mergers Guillaume Loriot.

Europe's telecoms sector has long chafed at EU regulators' tough line against four-to-three mergers, which companies say are needed to increase scale, over price hike concerns.

"Merger control is not a hurdle to scaling up provided that you don't have excessive market power in those markets where it may happen," said Loriot.

EU regulators see the scale up argument as more relevant in deals involving startups not established players, he said.

"We are looking very closely at the issue of the acquisitions of innovative players and startups. For the vast majority it's not an issue but there are those deals in nascent markets where we need to be vigilant," he added.

(Reporting by Foo Yun Chee; Editing by Alexander Smith)