The deal between the world's second-largest mobile operator and U.S. cable pioneer John Malone's Liberty would enable Vodafone to compete more effectively with Deutsche Telekom
In Germany, the deal might reduce competition in the retail fixed telecoms markets and retail TV markets, curb investments in next-generation networks and give the merged firm more power as a TV broadcaster, the EU competition enforcer said.
Reuters reported on Nov. 30 that the watchdog was set to launch a full-scale probe into the deal.
Vodafone said it still expected EU approval by mid-2019.
"On balance, we conclude based on the language in the press release that this transaction remains on track for a Phase II approval and closing," Bernstein wrote in client note.
The telecoms industry is hoping for a lighter regulatory touch from the Commission after it cleared without conditions Deutsche Telekom's bid to acquire Tele2's
Telefonica Deutschland, which has called for the deal to be blocked, said it expected Vodafone to make every effort to avert the negative effects singled out by the Commission.