• EC appears poised to cede review to Paris in rare move
• Draghi report pushes for EU-wide sector consolidation
• French political context critical for strategic decision

All for one, and one for all. With Altice’s mobile telecom business SFR faltering, the three other French network operators – Orange, Bouygues and Free iliad – have joined forces to divide the spoils amongst themselves.

What could possibly go wrong?

It’s the kind of situation the European Commission (EC) merger watchdog would normally be all over – a four-to-three mobile consolidation in one of the European Union’s (EU) biggest markets.

After all, in virtually every such instance, when the national regulator has argued it was best placed to review the deal – most recently where Orange sought full control of its joint venture with MásMóvil – the EC has refused to cede jurisdiction.

The EC has long taken the view that mergers of this kind in large member states pose serious competition risks across a substantial part of the single market and should therefore be handled in Brussels, to prevent a patchwork approach to telecoms consolidation across the EU.

This time around, both France and the EC have jurisdiction over parts of the deal, and it has been agreed that one regulator should handle the entire review. The elements of the transaction are inextricably linked, and it is important to assess the expected impact on competition of the whole deal, not each part in isolation.

But surprisingly, indications are that the lead regulator will be Paris this time around, not Brussels, as this news service reported last week.

Why?

First, it’s true that the preponderance of the deal does not meet EC thresholds. While all the companies are big enough to merit EC-level review, both Orange and Bouygues earn more than two-thirds of their turnover in France. Only Free iliad, with its activities in Italy and Poland, meets EC thresholds.

One could argue moving the whole deal to Brussels is the tail wagging the dog.

That being said, the EC could have leaned on France and insisted on taking the lead. It is a precedent-setting deal if ever there was one, and the fact that Orange doesn’t meet EC thresholds is a bit of a technicality – its MásMóvil turnover is not yet consolidated since it only took sole control of the JV in June 2026, but once it is, Orange is in EC-territory.

Yet a French lawyer familiar with the sector posited that the EC might not insist on this being the first telecom case it reviews after the EC started consulting on its new merger guidelines.

Mario Draghi made his views on the telecom industry very clear in his landmark 2024 report on the EU’s competitiveness, arguing the bloc needed to work towards “facilitating consolidation in the telecoms sector” by “defining telecoms markets at the EU level”.

The industry seized upon it as a potential opening for the consolidation it has long argued is necessary.

A Brussels-based lawyer agreed. “I imagine the Commission would be pretty scared about this one being its maiden voyage. Imagine they blocked it! They’d have everyone screaming, ‘You see! You see! Nothing has changed!’”

On the other hand, another French lawyer said just because the EC reviews the deal doesn’t mean it would veto it, pointing out that it reviewed Orange/ MásMóvil but did not prohibit it.

“Sure, the deal looks pretty anticompetitive. But they could come up with remedies to address that,” they said.

The first French lawyer agreed the SFR case would in fact be the perfect occasion for the EC to demonstrate its new approach, calling it “the mother of all cases, the mega occasion to apply their new guidelines”.

They said the case has many of the elements the EC tries to address in its guidelines regarding dynamic competition in a capital-intensive sector. Tackling it would also give the EC an opportunity to communicate its position on investment remedies following the UK’s acceptance of them in the Vodafone/Three case, they said.

However, the EC might prefer to avoid wading into this particular quagmire, and potentially being blamed for its consequences.

SFR’s struggles feed the narrative that consolidation is needed to stabilize the sector and prevent disorderly restructuring.

Yet allowing the deal has the potential to result in price increases for French consumers. The Orange CEO has denied this threat for SFR subscribers, but that doesn’t rule out potential coordinated effects between the three remaining operators.

Might these mobile musketeers get a taste for comradely solidarity rather than fierce competition?

That is a risk even the French authority would have to consider carefully – and there is no reason to assume that either Brussels or Paris is more likely than the other to block or clear the transaction, another French antitrust lawyer said.

Indeed, a merger review by the national competition authority isn’t necessarily a cakewalk.

For example, Portugal showed with its block of Nowo/Vodafone in 2024 that a national watchdog can be as tough – if not tougher – than the EC in telecom mergers.

Intriguingly, when the SFR deal was announced, France’s competition chief Benoît Cœuré gave an interview to Le Monde in which he raised potential competition concerns with the deal.

He has also said more than once that when a national government wants a deal cleared to promote goals broader than competition policy, that should be a political decision, and the national ministry should be fully accountable for that.

There’s no doubt this will get political within the domestic French context as 2027’s presidential election cycle looms. Heightened scrutiny through a political lens is inevitable, which the parties seem to realise.

In their memorandum of understanding, SFR’s rivals have already committed to safeguarding jobs during a transition period lasting until 2029, while maintaining service quality, stable pricing and continued infrastructure investment, particularly for SFR’s approximately 20m subscribers in France.

Those commitments could prove decisive, as political overrides of competition concerns have to be on public interest grounds, a French lawyer said. “If that’s what they want to do, I think they could find a way,” they added.

In that respect, letting the French handle the case may leave space for more nuanced outcomes, and let the EC keep its powder dry for a less explosive post-Guidelines début.