Brussels, 09/07/2002 (Agence Europe) - On Tuesday, in response to demands for a new common regulatory framework for electronic communications service, the European Commission adopted Guidelines on market analysis and the assessment of Significant Market Power (SMP). 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. 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. 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. Directive provisions will also apply as from 25 July 2003.
The framework directive recognises the complex and dynamic character of today's electronic communications market. It 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 the EC Treaty, Article 82. In so doing, the framework directive provides for the need to guide NRAs in applying the competition law concepts of "relevant market" and "dominant position" used in competition law. It therefore requires the Commission to adopt guidelines on market definition assessment of SMP for NRAs to use in the application of the new concept of SMP. The new regulatory package will only impose ex ante regulatory obligations in the absence of effective competition, that is, when there is one or several companies with SMP on a "relevant market" (the emerging markets being generally excluded). Conversely, when competition is effective and no operators have SMP (significant market power), 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 should be subject to ex ante regulation.
The guidelines fixed on Tuesday are based on the relevant case law of the Court of First Instance and the Court of Justice, as well as on the Commission's own decision-making practice in defining the relevant markets applying the concept of single and collective dominance, in particular with regard to the electronic communications markets. Other competitive law notions, such as "leveraging of market power" are also addressed in the guidelines. In more concrete terms, the guidelines: - describe the methodology to be used by NRAs (National Regulatory Authorities) to define the geographic scope of the markets identified in the Commission's Market Recommendation as well as to define relevant markets outside this Recommendation; - describe the criteria for assessing SMP in a relevant market; - outline the possible conclusions that NRAs may reach in their market analyses, and describe the possible actions that may result; - describe the powers of investigation of NRAs, suggest procedures for coordination between NRAs and between NRAs and NCAs, and describe the coordination and cooperation procedures between NRAs and the Commission; - and describe procedures for public consultation and publication of NRAs' proposed decisions.
These guidelines are a final version, that follows adoption of a draft in March 2001 and public consultation. The text was also discussed on two occasions with the national regulatory authorities and the national authorities responsible for competition. It is foreseen that these guidelines will be reviewed and re-examined by the Commission if necessary. They may be consulted at the following address: http: //europa.eu.int/comm/competition/liberalization/others/