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BT's plans to merge with EE have been cleared by the Competition and Markets Authority (CMA).

Critics had argued that the acquisition would push up bills for consumers and lead to less competition in the industry.

However, the CMA is confident this will not happen if the £12.5 million deal goes ahead, as BT is a relatively small player in the mobile market.

Similarly, it argued that EE is "only a minor player" in retail broadband, which means it is "unlikely" that the merger will significantly affect this market.

John Wotton, Chair of the inquiry, commented: "The evidence does not show that this merger is likely to cause significant harm to competition or the interests of consumers."

He also argued that a combined BT/EE would not have either the ability or incentive to put competitors at a disadvantage.

This follows the CMA's provisional decision to clear the merger in October last year and paves the way for the creation of a telecommunications business that offers broadband, TV, mobile and fixed-line phone services to approximately 35 million customers.

Rival company TalkTalk, which had already criticised the proposed merger, has responded by warning it will create huge pressure in the market and lead to smaller mobile companies being squeezed out.

Dido Harding, Chief Executive of the firm, added: "It's a disappointing decision which will increase costs for all mobile customers."

BT, however, has refuted this suggestion, with Chief Executive Gavin Patterson insisting the combined organisation will be a "digital champion" for the UK that is focused on investment and innovation.

"I have no doubt that consumers, businesses and communities will benefit as we combine the power of fibre broadband with the convenience of leading edge mobile services," he commented.

BT is now set to commence the formal process of completing the deal, with a view to closing it on January 29th.

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