Brussels, 9 July 2002
Commission issues market power assessment Guidelines for electronic communications
The European Commission has adopted Guidelines on market analysis and the assessment of Significant Market Power (SMP), as required by Directive 2002/21/EC on a new common regulatory framework for electronic communications service(1) (the Framework Directive). The Guidelines set out the principles that national regulatory authorities (NRAs) will use to define markets and analyse effective competition. The Guidelines were developed on the basis of existing case law and the Commission's practice in the enforcement of EU competition law.
The Guidelines are a joint initiative of Mario Monti, Commissioner for Competition, and Erkki Liikanen, Commissioner for Enterprise and the Information Society.
On 7 March 2002, the European Parliament and the Council of Ministers adopted the new regulatory framework for electronic communications, consisting of four Directives and one Decision(2). The final adoption of a Directive on data protection in the telecommunications sector will take place shortly. The five Directives will apply in national markets from 25 July 2003. The new legislative package overhauls the existing regulatory framework by modernising and simplifying existing regulation with the aim of encouraging more competition and greater transparency of regulation in this crucial sector of the European economy. The Commission will complete the legislative package with a single new Directive on competition in electronic communications networks and services, based on Article 86 of the EC Treaty, which is a consolidation of related existing texts. This Directive will apply from the same date as the five Directives of the Parliament and Council.
Recognising the complex and dynamic character of today's electronic communications markets, the Framework Directive provides a new definition of undertakings with "significant market power" (SMP) by equating SMP in the new regulatory framework with the concept of dominance under Article 82 of the EC Treaty. In aligning SMP with the concept of dominance, the Framework Directive foresees a need to guide NRAs in applying the competition law concepts of "relevant market" and "dominant position". It therefore requires the Commission to adopt Guidelines on market definition and the assessment of SMP for NRAs to use in the application of the new concept of SMP.
The new regulatory package will impose ex ante regulatory obligations only where there is no effective competition, i.e. where there are one or more undertakings with SMP in a relevant market (generally excluding emerging markets). Conversely, where competition is effective and no operator is deemed to have SMP, regulators are obliged to remove any obligations imposed under the current regulatory framework. The concept of SMP is therefore central to the procedure for deciding which operators will be subject to ex ante regulation.
The Guidelines are based on the relevant case law of the Court of First Instance and the Court of Justice and on the Commission's own decision-making practice in defining the relevant market and applying the concept of single and collective dominance, in particular with regard to electronic communications markets. Other competition law notions, such as "leveraging of market power", are also addressed in the Guidelines. The Commission Guidelines adopted today are the definitive version, following the adoption of a draft version in March 2001 and a public consultation thereon. The text was also discussed with national regulatory and national competition authorities on two different occasions. The Guidelines will be reviewed and revised by the Commission as and when necessary.
(1) OJ L 108, 24.04.2002, p. 33.
(2) Directives 2002/19/EC, 2002/20/EC, 2002/21/EC and 2002/22/EC, as well as Decision 676/2002/EC, published in OJ L 108, of 24.04.2002.