The European Commission has launched a second-stage investigation into the planned merger between WorldCom and MCI Communications because of initial concerns about the parties' combined control over the supply of Internet backbone services, according to a Commission spokesman.
The Commission now has four months in which to decide whether the merger is compatible with competition guidelines in the European Union.
The companies renotified the Commission of their plans in early February after the Commission asked for additional information regarding WorldCom's acquisition of MCI for US$37 billion, announced last November.
The Commission has prior authorization rights over all large mergers involving a minimum combined global turnover of ECU 5 billion ($6 billion), provided revenue in the European Union is at least ECU 250 million. It has the right to authorize, ban or to
require changes in the structure of a large merger.
MCI competitor Sprint has endorsed the Commission's decision, saying in a statement that the Commission "has accurately determined that the WorldCom/MCI merger, as currently constructed, raises serious anti-competitive issues that require thorough investigation." Sprint maintained in its statement that the merged company would carry more than half of all U.S. Internet backbone traffic, control more than half of all direct connections to the Internet and have connections with nearly two-thirds of all Internet service providers.