Transfer Pricing Associates

Possible Antitrust Violations in the European Telecom Industry

post Tuesday March 27, 2012



In their 2010 Digital Agenda, the European Commission (EC) set out priorities for the creation of a single market for content and telecom services in order to regain progress lost during the economic crisis.  In this Digital Agenda, the Commission aims to bring to near zero the difference between roaming and national tariffs by 2015 and has been working to increase competition in the telecom industry by attracting new entrants and forcing existing companies to raise their standards of service and reduce their prices.  To expand competition, the EC seeks to safeguard equal access to IT and telecom markets by applying general EU competition rules on antitrust, state aid (prohibiting types of State aid that distort competition), and mergers (prohibiting mergers that would impede competition). [Source:]

This month, the European Commission is taking preliminary steps in a possible investigation of alleged antitrust violations by the five largest mobile operators in Europe (Telefónica, Deutsche Telekom, Vodafone, France Télécom and Telecom Italia).  The EC has sent out questionnaires to the carriers to better judge whether the carriers are colluding on standards that could exclude or penalize smaller rivals that tap into the carriers’ wireless networks. 

The chief executives of these five mobile operators have publicly complained about the inquiry and deny that the allegations are true.  The new investigation definitely does not help the already tense relationship between carriers and lawmakers, a relationship that has been deteriorating ever since the EC enacted caps on roaming fees in 2007.    [New York Times]

The inquiry also comes as operators are struggling to develop new services and technologies ranging from mobile advertising to new messaging technologies to counter advances from Apple and Google (whose smartphones and internet services can provide a means to circumvent mobile networks, reducing revenues for mobile carriers).  With these new aims and new competitors, big operators are seeking to work together to expand revenues and overcome competitive threats, but unfortunately, these efforts could be violating EU antitrust laws.

Antoine Colombani, a spokesman for Europe's competition regulator said that the questionnaires have been sent but formal proceedings and investigations have not yet commenced.  "The requests for information relate to the manner in which standardisation for future services in the mobile communications area is taking place," he said, "These fact-finding steps do not mean that we have competition concerns at this stage, nor do they prejudge the follow-up."   [Reuters]


Image by David Castillo Dominici

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