Brussels, 16 October 2014
Telecoms: Commission refers Luxembourg to Court for persistent delays in analysing relevant markets
The European Commission has referred Luxembourg to the European Court of Justice (ECJ) because its National Regulatory Authority (NRA), the Institut Luxembourgeois de Regulation (ILR), has failed to carry out a timely analysis of the relevant markets for fixed access to the public telephone network (Market 1) and for leased lines (Market 6), in breach of EU telecoms rules.
The consequence of not carrying out timely analysis of the relevant markets is that regulation may be imposed when it is no longer needed, which would lead to negative consequences for investment incentives, for innovation, and for competition in the market.
The most recent analysis of the above markets in Luxembourg, which dates back to 2007, led the ILR to impose obligations in both markets. While the renewed analysis of the market for leased lines in Luxembourg is expected to be completed in November 2014, there is currently no concrete timetable for the completion of the renewed analysis of the market for fixed access to the public telephone network. Given the significant delays, it is imperative to urge swift completion of the analysis to determine whether these obligations are still justified in view of how competition in the market has developed since.
To provide market players with legal certainty, EU law requires NRAs to conduct a market analysis on a regular basis: two years after the adoption of a Commission recommendation on relevant markets, or three years after the last analysis. NRAs carry out such analysis to determine whether a market is effectively competitive, in which case ex ante regulation has to be withdrawn. However, where one or more undertaking(s) have significant market power in a market that is still not effectively competitive, NRAs must impose obligations on them to promote competition.
Article 15 of the Framework Directive (Directive 2002/21/EC) requires NRAs to define relevant markets appropriate to national circumstances, in accordance with the principles of EU law and taking the utmost account of the Commission Recommendation.
In 2007, the Commission adopted Recommendation 2007/879/EC on relevant product and service markets within the electronic communications sector susceptible to ex ante regulation. In particular, it identified in annex seven markets which the NRAs should analyse in accordance with Article 15 of the Framework Directive.
Article 16 of the Framework Directive requires NRAs to carry out an analysis of the relevant market and notify the corresponding draft measure in accordance with Article 7:
(a) within three years from the adoption of a previous measure relating to that market. However, exceptionally, that period may be extended for up to three additional years, where the national regulatory authority has notified a reasoned proposed extension to the Commission and the Commission has not objected within one month of the notified extension;
(b) within two years from the adoption of a revised Recommendation on relevant markets, for markets not previously notified to the Commission; or
(c) within two years from their accession, for Member States which have newly joined the Union.
Where an NRA is unable to complete a market review within the appropriate timeframe, it may request the assistance of the Board of European Regulators for Electronic Communications (BEREC). It must submit the market analysis completed with this assistance within six months to the Commission.
On 9th October the European Commission published a new recommendation on the relevant markets (see IP/14/1112).
On the October infringement package decisions, see MEMO/14/589.
On the general infringement procedure, see MEMO/12/12
For more information on infringement procedures: http://ec.europa.eu/eu_law/infringements/infringements_en.htm