Tuesday, 8 September 2009
When Prime Minister Brown allowed Lloyds TSB and HBOS to merge, he merrily waved UK competition law off in order to secure his 'great deal' (ask Lloyds Shareholders what they think of this deal!).
Now though the EU competition commission is taking a good look at the banks and there is little doubt that many of the HBOS assets will have to be sold off. So in the end it may have just generated investment banking and legal fees for third parties.
But there has been a market impact for other industries. Just today there is news that Orange and T-Mobile are likely to try and merge their UK operations. This will mean we go from 4 big mobile telephony providers in the UK down to 3 (not including 3, if you see what I mean).
This would not have been contemplated even a year ago as the competition commission would have ruled it out altogether; now with the recession and the Lloyds precedent, it may well be waved through in some form.
This will no doubt be bad for UK consumers, as less competition means less offers in the market and . Surely if 3 or Virgin Mobile were the buyers then this would be ok, but not to reduce competition by so much.
As far as the Labour Government are concerned though: you reap what you sow.