Vodafone brings action against Comreg over competition concerns

Vodafone Ireland has brought a legal action against communications regulator ComReg arising from concerns about the effect on its competitive interests of the acquisition of O2 by rival company Hutchison for merger into 3 Ireland.

Eileen Barrington SC, for Vodafone, argued the regulator should take certain steps in relation to this merger as it meant half of the total spectrum used for radio communications in Ireland was coming under the control of Hutchison.

The acquisition means Vodafone has been placed at a significant competitive disadvantage, counsel said.

She secured leave from Mr Justice Michael Peart to bring judicial review proceedings against ComReg aimed at requiring the regulator take steps arising from the €780m merger. The matter is urgent because there are certain investment decisions to be taken by Vodafone, Ms Barrington outlined.

ComReg had expressed some concerns about the acquisition but the problem for Vodafone was the regulator had not substantially outlined what it was prepared to do, she said.

Vodafone had been in correspondence with ComReg since May last asking the regulator to consider the exercise of its statutory powers, including the power of divestment, she said.

ComReg had also asked Vodafone to provide a detailed document outlining the nature of its concerns and that was done. The most recent response from the regulator was that it was awaiting legal advice, counsel said.

The relevant regulations provide ComReg shall ensure radio frequencies are efficiently and effectively used and that competition is not distorted by any transfer of use for radio frequencies, she said. It was Vodafone’s case, as a result of this merger, ComReg should consider execrising its powers and “at the very least” consider the effect or the merger generally.

The European Commission had had concerns about the merger but had accepted commitments as to how the spectrum would be used following the merger, counsel said. ComReg had published a information note indicating it respected the Commission's decision but had concerns whether the post-merger commitments were adequate.

Given the Commission’s approval of the merger, the regulator said it would proceed with a strategy for monitoring the spectrum and Vodafone took some comfort from that statement, counsel said.

The merger does not preclude ComReg execrising its statutory functions but Vodafone’s problem is the absence of a substantive response from the regulator as to what it is willing to do as a result of the merger, she added.