In a joint declaration, signed by regulators from Austria, Belgium, Czechia, Ireland, the Netherlands, and Portugal, the entities emphasize that “the current debate on the competitiveness of the European Union (EU) industry often posits a tension between the role of competition and the realization of economies of scale.”
This thesis, the national authorities contend, is bolstered by examples involving the electronic communications industry, “whose fragmentation, allegedly caused by excessively strict competition rules, would jeopardize investments and innovation.”
“As Competition Authorities, we fully affirm the need to further integrate the EU single market to maximize its potential benefits for European citizens and highlight the importance of cooperation among Member States to achieve common goals, including among the national competition authorities,” they caution.
In the specific case of the electronic communications sector, they argue that “competition in the most important markets still takes place at the national level and spans various layers, from infrastructure (deployment, wholesale access, coverage, outage rates, etc.) to the service market.”
“Though relevant, competition in the service sector cannot compensate for the potential disadvantages arising from a reduced number of infrastructure providers,” which might also diminish incentives to enhance service quality, network coverage, density, and innovation, they add.
The regulators further argue that “the notion that fragmentation in the electronic communications sector, undermining investment and innovation, is allegedly caused by excessively strict competition rules is incorrect.”
“Comprehensive and structural consolidation within a single Member State still requires thorough scrutiny,” and “if harmful to competition, the concentration should be blocked, or approved only when concerns identified in the competition domain have been fully and effectively mitigated,” they assert.
However, the entities acknowledge that concentrations between Member States can be pro-competitive, simultaneously deepening the single market without compromising national competition. “Thus, competition law does not prevent nor will it prevent cross-border concentrations that could benefit European companies and consumers,” they maintain.
“In these challenging times, we remain committed to promoting competitive markets to ensure fair prices, innovation, and investments across all sectors of the economy, particularly in sectors crucial for industrial competitiveness, such as telecommunications,” the document reads, as published on the website of the Portuguese regulator led by Nuno Cunha Rodrigues.
Lastly, the six regulators mention their ongoing commitment to advocating the “removal of unnecessary barriers to entry and expansion that inhibit market integration and economic growth.”
“The elimination of these barriers is a key factor for the development of competition and the single market, and competition authorities play a fundamental role in this matter,” they conclude.
