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European Union Legislation on Competition Law and Electronic Communications

European Union Legislation on Competition Law and Electronic Communications

The purpose of European Union competition law is to facilitate the creation and maintenance of the internal market11. The main provisions with regards to competition law in the European Union are Article 101 and Article 102 of the Treaty on the Functioning of the European Union (TFEU). Article 101 prohibits anti-competitive agreements between undertakings while Article 102 prohibits the abuse of a dominant position in a market. These two provisions often overlap and in some cases, both have been plead.

 

Despite having rather comprehensive appearances, the two provisions are mere guidelines and therefore they must be read in conjunction with judgments from the Court of Justice of the European Union (CJEU)‟s case law in order to fully understand the complexity of this area of law.

 

1. Effect on trade between Member States European

 

Union competition law does not apply unless the practice has an appreciable effect on trade between Member States. The definition of “trade” is wide, as the Court has sought to include Nevertheless, the court has established a de minimis rule so that a practice which has an insignificant effect on the market. The Commission published a notice on the NAAT (no appreciable affection on trade) test to support this notion. 

 

2. Abuse of dominant position in the scope of EU Law

 

Article 102: (ex Article 82 TEC)

 

"Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States. Such abuse may, in particular, consist in:

(a) Directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;

(b) Limiting production, markets or technical development to the prejudice of consumers;

(c) Applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; 

(d) Making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts".

 

3. Electronic Communications in EU Law

 

The general framework for EU legislation on telecommunications is laid down under the „telecoms package‟ of 2002, consisting of one general directive and four sector-specific directive. 

 

a) General Directive Directive

 

2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive).

 

The objective of the Framework Directive is to “strengthen competition in the electronic communications sector, stimulate investment and foster freedom of choice for consumers and enable them to benefit from innovative services, quality and lower rates”. This Directive establishes a harmonised network for the regulation of electronic communications networks and services14. The Directive also provides for tasks which are needed to be fulfilled by national regulatory authorities by each Member State, as well as the details of their underpinning operations15. In addition, the legislation covers the substance of regulation of electronic communications networks and services as well as the procedures needed to implement such regulation. The legislation states that Member States must lay down rules and regulation as to the penalty applicable to infringement of this Directive. 

 

b) Sector-Specific Directives

 

(1) Directive 2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the authorisation of electronic communications networks and services (Authorisation Directive). 

 

The Authorisation Directive seeks to “implement an internal market in electronic communications networks and services through harmonisation and simplification of authorisation rules and conditions in order to facilitate their provision throughout the Community”.

 

According to the Union‟s summary on the legislation, the main innovation here is the replacement of individual licences with a network of general authorisation for all electronic communications networks and services, whether they are provided to the public or not. It provides for the granting of rights to use radio frequencies where such use involves the provision of an electronic communications network or service, usually for remuneration. The aim is to harmonise the market for electronic communications networks and services by limiting the amount of necessary regulation.

 

Companies obtain the right to provide electronic communications networks and services to the public from this Directive, which also entitles them to negotiate interconnection with other providers across the EU region, obtain access or interconnection from other providers and be designated to provide certain universal service functions. Member States are able to facilitate the use of radio frequencies under the general authorisation but must adhere to certain requirements in order to avoid harmful interference, ensure the technical quality of service, safeguard efficient use of the frequency spectrum and fulfil other general objectives defined by EU countries. This usage of radio frequency and numbers must also respect the principles of transparency, non-discrimination and proportionality. The Annex to the Directive lists conditions which the general authorisation and the rights of use must be subjected to. 

 

(2) Directive 2002/19/EC of the European Parliament and of the Council of 7 March 2002 on access to, and interconnection of, electronic communications networks and associated facilities (Access Directive).

 

The Access Directive aims to harmonise the way which different Member States regulate access to and interconnection of, electronic communications networks and associated facilities. The Directive is to be applied to all forms of public communication networks carrying publicly available electronic communications services. Under this legislation, Member States must ensure that there will be no restriction which prevents undertakings from negotiating agreements on access and/or interconnection subject to competition law. The Directive adopts a technologically neutral approach which aims to establish a framework which will encourage competition and facilitate efficient investment in network infrastructure as well as ensuring that any bottlenecks in the market will not be able to limit the emergence of innovation that could benefit the users.

 

The Directive also seeks the enforcement of principles such as transparency, equality, encouragement of the provision of services at reasonable prices, consideration of special conditions of users and avoidance of cross-subsidy. The Directive seeks to define “access”, which is to be interpreted broadly, and that “access” should not limit to only networks but also to all elements of these networks and services.

 

National Regulatory Authorities (NRAs) are given the responsibility to carry out regular market analyses in order to determine whether one or more operators hold significant power in the market. If an operator is found to hold significant power in a given market, the NRAs will be responsible to impose one or more obligations on that operator. If market failure still persists following the application of these obligations, the NRAs may opt to require a vertically integrated undertaking to place its activities relating to the wholesale provision of access products and services in an independently operating business entity. 

 

(3) Directive 2002/22/EC of the European Parliament and of the Council of 7 March 2002 on universal service and users’ rights relating to electronic communications networks and services (Universal Service Directive).

 

This legislation ensures specific rules for the provision of electronic communications services within the EU. It seeks to set out obligations for the supply of certain mandatory services (universal services) and to lay down the rights of end-users and the corresponding obligations on companies which provide electronic communications networks and services to the public.

 

Within the framework of this Directive, Member States are obliged to guarantee the provision of electronic communications services of a certain quality to all users in their territory regardless of geographical location at an affordable price. Member States must also ensure that at least one comprehensive telephone directory is available to end-users and is updated yearly at a minimum. It must also be maintained that disabled users are able to benefit from an offer tailored to their needs at a level equivalent to that enjoyed by other users and that low-income users have access to special tariffs or receive special help.22 Consumers must be able to receive information which enable them to fully comprehend the services which they are subscribing to. 

 

Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications).

 

This Directive sets out rules to ensure security in the processing of personal data, the notification of personal data breaches, and confidentiality of communications. Providers of electronic communications services must secure their services by ensuring that personal data are only accessible to authorised individuals; that personal data are protected from being destroyed, lost or accidentally altered and from other illegal or unauthorised forms of processing; and that the implementation of a security policy on the processing of personal data is guaranteed. The service provider has the obligation to inform the national authority of any personal data being breached within 24 hours. The national authority must also be informed if the personal data or privacy of a user is likely to be harmed, except in the situation where specifically identified technological measures have been taken to protect the data. Member States must also ensure the confidentiality of communications made over public networks. In particular, any surveillance or interception of communications and traffic data without the consent of users is prohibited except for when the person is legally authorised and in compliance with specific requirements. The storage of information and access to information stored on a user‟s personal equipment is only permitted if the user has been fully informed, inter alia, of the purpose and been given the right of refusal. 

 

The Directive also prohibits unsolicited communications where the user has not given their consent. Therefore, user consent is required before unsolicited communications (spam) can be sent to them, before information (cookies) is stored on their computers or devices, and before telephone numbers, e-mail addresses and postal addresses can appear in public directories.

 

Member States are to implement a system of penalties which includes legal sanctions against actions which breach the obligations laid under the Directive.

 

The telecoms package is complemented by Commission Directive 2002/77/EC of 16 September 2002 on competition in the markets for electronic communication networks and services (Competition Directive).

 

The objective of the Competition Directive is to ensure the rights of undertakings in terms of providing electronic communications services or putting in place, extending or exploiting electronic communication networks without restriction. The Directive seeks to continue the trend of liberalising the communications sector launched by the Commission. The Directive clarifies the terms “electronic communications” and “electronic communications networks” so that the regulatory framework does not include the provision or exercise of editorial control over content transmitted using electronic communications networks and services. The key feature of this Directive is the abolition of exclusive or special rights of Member states for the establishment and/or the provision of electronic communications networks, or for the provision of publicly available electronic communications services. Member States must also ensure that vertically integrated public undertakings which provide electronic communications networks in a dominant position in their market do not discriminate in favour of their own activities. 

 

In 2009, the telecoms package was amended two further Directives focusing on better lawmaking (Directive 2009/140/EC of the European Parliament and of the Council) and citizens‟ rights (Directive 2009/136/EC of the European Parliament and of the Council), as well as by the creation of the Body of European Regulators for Electronic Communications (BEREC).

 

(4) Regulation (EC) No. 1211/2009 establishing a Body of European Regulators for Electronic Communications (BEREC) and the Office.

 

The rules on the establishment and operation of BEREC are defined in this Regulation. BEREC‟s purpose is to advise the relevant EU institutions in relation to the development of a better internal market for electronic communications networks and services. BEREC also seeks to form links between national regulatory authorities (NRAs) and the European Commission. The main objectives of BEREC are to develop and disseminate best practices among NRAs, to assist NRAs in the regulatory field, to deliver opinions on draft decisions, recommendations and guidelines, and to issue reports and provide advice on this sector. BEREC‟s current strategy for the timeframe of 2015 to 2017 is to prioritise on the promotion of competition and investment, the promotion of the internal market, and the empowerment and protection of end-users.

 

In addition to this, various instruments have been implemented in order to supplement the above regulatory framework.

 

Regulation (EU) No. 531/2012 on roaming on public mobile communications networks within the Union, implemented on 13 June 2012. The key aim of this particular Regulation is to boost competition in the market for mobile phone users who use their phones for calls, text messages and/or Internet access when travelling abroad within the EU region (also known as „roaming‟). Under these new roaming rules, the price caps for the amount people pay for roaming services while travelling within the EU will be further reduced.  

 

Directive 2014/61/EU of the European Parliament and of the Council of 15 May 2014 on measures to reduce the cost of deploying high-speed electronic communications networks. The aim of this Directive is to facilitate and encourage the deployment of high-speed electronic communications networks by promoting the joint use of existing physical infrastructure and enabling more efficient deployment of new physical infrastructure to reduce costs of setting up these networks.


  

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