Culture Secretary Lisa Nandy is facing criticism for her support of BT’s £400 million acquisition of struggling broadband provider TalkTalk. The move, announced this week, bypassed usual regulatory obstacles that might have blocked the deal due to competition concerns.

BT’s takeover of TalkTalk, the UK’s fourth-largest broadband operator, came as the latter faced imminent collapse. TalkTalk serves approximately 1.5 million households directly, in addition to supplying about one million customers through its wholesale division. The intervention aimed to prevent disruption to vulnerable customers and protect critical national infrastructure.

Under normal conditions, BT’s acquisition would likely have been challenged by competition authorities given BT’s dominant position in the market. However, Nandy used emergency powers introduced during the COVID-19 pandemic to override standard merger regulations, citing public health considerations. This exceptional step allowed the deal to proceed quickly in an effort to stabilize the broadband sector.

The takeover followed the failure of other negotiations as TalkTalk sought potential buyers. BT’s Chief Executive Allison Kirkby described the situation as “genuinely unprecedented” and cautioned that TalkTalk’s collapse could have had “catastrophic” effects on consumers and the wider network.

Despite the Government’s rationale, Lutz Schüler, Chief Executive of rival Virgin Media O2 (VMO2), expressed strong opposition. In a letter to Nandy, he challenged the Government’s decision to predetermine BT as the buyer, arguing that other credible options should have been thoroughly explored. Schüler called for transparency regarding the evidence underpinning the Secretary of State’s intervention and described the process as a “stitch-up.”

The Competition and Markets Authority (CMA) has been instructed to conduct a formal review of the BT-TalkTalk deal, with a report expected by October 19. Nandy will consider the CMA’s findings before making a final ruling.

The Department for Digital, Culture, Media and Sport has not issued a public comment on the matter.