When Diebold wrapped up its $1.8 billion Wincor Nixdorf acquisition last August, there was one asterisk on the deal: The U.K. Competition and Markets Authority (CMA)—which this week threw a flag on Mastercard’s proposed acquisition of VocaLink—wanted to explore whether the ATM network giants’ merger stifled local competition.

The verdict, revealed late last month, wasn’t good news. The CMA concluded after an investigation that the Diebold Nixdorf merger in the U.K will hurt competition by narrowing the local field of ATM operators from three to just two, including NCR, and the agency won’t be satisfied until there are at least three ATM operators in force.

The CMA proposed a handful of remedies, including suggesting that Diebold Nixdorf sell off some of its ATM assets to an independent operator. The CMA is inviting comments on the proposed remedies through Jan. 10 before finalizing its decision.

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Diebold Nixdorf said it is disappointed but the company with headquarters in Paderborn, Germany and Canton, Ohio, so far is taking the high road, emphasizing in a recent press release the positive in the CMA’s provisional report: Diebold Nixdorf may pursue “the least costly and intrusive remedies” among those proposed.

Diebold Nixdorf is still functioning in a pre-merger mode in the U.K., though the company has completed all other aspects of the merger in other markets around the world, a Diebold Nixdorf spokesperson said.

“We will continue to operate as two separate entities in the U.K. until we complete this process, which we expect will be during the first half of 2017,” he said in an emailed statement.

One of the structural options the CMA proposed is selling off an undetermined number of the ATMs operated by Diebold and Wincor before the merger. Under a behavioral remedy, the CMA suggests that Diebold Nixdorf would give or trade its services and facilities to a potential new ATM entrant or an existing third party, so they could enter or expand in the U.K. market.

The silver lining may be that Diebold Nixdorf won’t face a price cap on ATM fees, which is another remedy the CMA was considering. The CMA said after its investigation that ATM pricing and service levels are too variable and uncertain to respond to price caps, and in any case price caps wouldn’t restore healthy rivalry to the local ATM industry.

Observers aren’t raising red flags yet about the CMA’s recent scrutiny of ATM industry mergers at a time when ATM manufacturing is in decline and consumers rely less on cash in many developed markets.

“I think the (Diebold Nixdorf) action is less to do with whether the ATM industry is growing or declining, and more with reducing the number of credible suppliers to operate the ATM network in the country,” said Zilvinas Bareisis, a senior analyst in Celent’s London office.

As for the CMA’s focus on Mastercard’s proposed acquisition of VocaLink: “Visa has most of the debit cards in the U.K., and if the ATM network is controlled by Mastercard, it’s understandable that the authorities would want to ensure all market participants operate fairly,” Bareisis said.

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