WRITTEN QUESTION E-0098/99

by Alessandro Danesin (PPE) to the Commission

(27 January 1999)

Subject: The revision of telephone charges in Italy

The new charges set by Tim and Omnitel for calling a cellular phone from an ordinary phone sparked off such widespread consumer resistance that the government had to intervene.

Finally, on 12 January, the authority responsible for guarantees of communication decided to intervene and officially ordered that the new charges to be abolished and those preceding the increase be restored.

But the damage has already been done and legitimate doubts have been raised: the action taken by the two companies which decided at the same time to increase the prices for the same services, is clearly contrary to competition policy and the free market in telephone services. The situation is, at the very least, abnormal: are we faced with a cartel, a duopoly or an oligopoly? Whatever one chooses to call it, we are dealing with collusive action against the interests of consumers.

It would be useful if these latest events were to prompt a series of measures to bring greater transparency to the current price jungle, especially with a view to the revision of all the charges which will take place in the Spring, and in the light of the example set by the rest of Europe (in the United Kingdom the relevant authority forced the two national companies in this sector to cut the costs of calling from an ordinary phone to a mobile by a quarter) and the rest of the world (in Hong Kong, the new liberalisation policy has led to the setting up of 30 new international telephone service providers, and the cost of calling America has been cut by 90 %).

Can the Commission answer the following:

- Can it do something about this matter?

- Despite the fact that each Member State has its own authorities responsible for enforcing national regulations on competition, should the Commission not continue to monitor the single market and investigate possible violations, especially because the recent introduction of the euro should benefit consumers by stimulating competition?

- Is it not also true that the single market would be meaningless if it were permissible for cartels and restrictive agreement, to limit competition between firms, thus inevitably denying consumers the full benefits of a healthy competitive market?

Answer given by Mr Van Miert on behalf of the Commission

(4 March 1999)

Article 85(1) of the EC Treaty prohibits concerted practices which may affect trade between Member States and which directly or indirectly fix the selling prices of goods or services. It is for both the Commission and the national authorities to ensure compliance with this provision. As a rule, the Commission does not intervene in respect of action against infringements of this provision when action to the same effect has been initiated by a national competition authority, as is the case in Italy.

In paragraphs 29 et seq. of its notice of 22 August 1998 on the application of the competition rules to access agreements in the telecommunications sector - framework, relevant markets and principles(1), the Commission identifies cases where it could take parallel action, namely where a formal complaint is referred to it and where national proceedings could lead to an excessive delay of the Commission's action, without a satisfactory resolution of the matter at national level. An excessive delay could arise where the national authority fails to resolve the dispute within a reasonable period of time and where there is a substantial Community interest in the case affecting, or likely to affect, competition in a number of Member States.

Moreover, the Commission shares the opinion of the Honourable Member that the internal market would be affected if firms were able to limit competition by agreements and concerted practices at the expense of consumers in the telecommunications market which has first been opened up to competition. For that reason, it attaches special importance to the application in full of the competition rules in this sector, as emphasised in the notice referred to above.

(1) OJ C 265, 22.8.1998.