South Korea's Fair Trade Commission has blocked SK Telecom's controversial proposal to merge with media company CJ HelloVision until the potential impact on market competition can be evaluated.
An official with the antitrust authority told the Korea Times that the FTC agrees with the concerns raised by SK Telecom's rivals KT and LG Uplus over the potential impact on pricing power.
The FTC will accordingly hold a full commission hearing into the proposed merger on July 20.
KT and LG Uplus have urged the FTC to block the deal arguing that the merger has the potential to restrain competition by handing SK Telecom market dominance, and give SK Telecom the ability to distort competition by offering bundle pricing that rivals may not be able to match.
As a result of the FTC's decision, the ministry of Science, ICT and Future Planning and the Korea Communications Commission will conduct a joint review into the merger plan. The ministry is expected to make a decision as to whether to approve the merge by August.
SK Telecom last year announced plans to acquire a 30% stake in CJ HelloVision for 500 billion won ($429 million), taking its total holdings to a controlling 75.3%.