WRITTEN QUESTION E-1227/00 by Jaime Valdivielso de Cué (PPE-DE) to the Commission. Competition.
Date: 2000-04-14
Institutions: European Parliament, Provisional data
Subjects: intra-EU trade, mobile phone, monopoly, oligopoly, trade licence

C 89 E/16

Official Journal of the European Communities

EN

20.3.2001

(2001/C 89 E/014)

WRITTEN QUESTION E-1227/00

by Jaime Valdivielso de CuØ (PPE-DE) to the Commission

(14 April 2000)

Subject: Competition

In recent months the various European telecommunications companies have been battling over the
telecommunications market in Europe, particularly with a view to securing as many UMT licences as
possible in the various Member States and to establishing themselves firmly on the market.

In the light of what happened in the case of first-generation mobile telephony (frequent abuses resulting
from dominant positions, which adversely affected consumers), what action is the Commission intending
to take in order to prevent a monopolistic or oligopolistic situation from arising and to avoid any further
erosion of consumers(cid:146) rights?

Answer given by Mr Monti on behalf of the Commission

(15 June 2000)

The Commission is following closely the attribution of third generation (3G)
licences including the
universal mobile telecommunications system (UMTS) to telecommunications operators in the Member
States. Those processes have to comply with the obligations resulting from Directive 97/13/EC of the
Parliament and of the Council on a common framework for general authorisations and individual licences
telecommunications services (1), Commission Directive 96/2/EC of 16 January 1996
in the field of
amending Directive 90/388/EEC with regard to mobile and personal communications (2), Decision
No 128/1999/EC of the Parliament and of the Council of 14 December 1998 on the co-ordinated
introduction of a third-generation mobile and wireless communications system (UMTS) in the Commun-
ity (3) and the principles of Community competition law. In particular, attribution of licences will have to
be transparent, fair, and non-discriminatory.

The fact that, in each Member State, the provision of mobile telephony services (under special mobile
group (GSM)900, GSM1800 or 3G/UMTS standards) is or will be limited to a restricted number of
companies results from the limited spectrum of radio-frequencies available for operating those services. In
most Member States, mobile telephony services are offered by at least two and, generally, between three
and five companies.

Both the Commission and the national competition and regulatory authorities monitor the competitive
conditions of the markets related to mobile telephony services. At national level, competition authorities
have started proceedings in a number of Member States and imposed fines on mobile operators because of
collusive behaviour in their respective territories (e.g. in Italy, case Telecom Italia mobile (TIM)-Omnitel,
regarding collusion on the level of tariffs for termination of calls on the mobile networks).

In February 1998, the Commission started an inquiry initially involving 45 operators in the 15 Member
States to examine possible distortions of market conditions related to the provision of mobile telephony
services. The Community-wide investigation was closed in May 1999, following an assessment of the
substantial price reductions, up to more than 80 % in some cases, which have taken place since the
the Commission co-operated closely with national
investigation began.
competition and regulatory authorities in the Member States.

In conducting the inquiry,

In February 2000,
the Commission launched a sector inquiry under Community competition rules
concerning the conditions and pricing of national and international mobile roaming. Almost 200 formal
requests for information were sent out simultaneously Community-wide to national competition autho-
rities and telecommunications regulators, as well as to mobile network operators and service providers.
Mobile roaming is the second of three telecommunications areas that are currently under investigation as
part of a general telecommunications inquiry under the competition rules. The Commission expects to
draw initial conclusions from this investigation before August 2000.

20.3.2001

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Official Journal of the European Communities

C 89 E/17

Moreover, in January 2000 the Commission sent administrative letters to the Member States in order to
obtain information on the measures which they have taken in order to ensure that national legislation is in
conformity with Decision No 128/1999/EC. This includes looking into the relevant legislation in particular
with regard to selection procedures for licences to provide 3G services, measures taken to promote
competition in the market and measures taken to ensure coverage of regions with low population density.

According to the information available to the Commission, Member States which have adopted 3G
licensing procedures have prohibited multiple licence applications by single operators or by groups of
operators. On the other hand, the fact that individual operators or groups seek to obtain licences in a large
number of Member States is not objectionable as such, as it may contribute to the further integration of
the European mobile market and the improvement of services to European consumers. Surveillance against
abuses of dominant position will continue to be enforced in accordance with Community competition
rules, and taking into account the interests of consumers.

(1) OJ L 117, 7.5.1997.
(2) OJ L 20, 26.1.1996.
(3) OJ L 17, 22.1.1999.

(2001/C 89 E/015)

WRITTEN QUESTION E-1228/00

by Sebastiano Musumeci (UEN) to the Commission

(14 April 2000)

Subject: Reduction of the tax and social contributions burden on undertakings in southern Italy

including Ireland, the Netherlands and
Given that the Commission has allowed other Member States,
Portugal, to provide assistance to firms operating in disadvantaged and run-down areas and that in
southern Italy, and particularly Sicily,
the development of small and medium-sized undertakings is
seriously limited by Italy(cid:146)s draconian fiscal policy, could the Commission state whether it considers that
the following could be envisaged for southern Italy:

1. measures to assist undertakings by reducing the burden of tax and social charges to which they are

subject with a view to increasing investment and employment?

2.

inclusion of the unemployment rate as a benchmark criterion for the allocation of Community funds?

Answer given by Mr Monti on behalf of the Commission

(9 June 2000)

Provided that the conditions laid down by the EC Treaty are met, the Commission authorises the aid which
a Member State decides to grant in order to pursue certain objectives, such as the economic development
of areas where the standard of living is abnormally low or where there is serious underemployment, the
execution of important projects of common European interest or to remedy a serious disruption in the
economy of a Member State, or the development of certain economic activities or of certain economic
areas, or culture and heritage conservation. Through the Structural Funds, the Commission may contribute
to the co-financing of national aid schemes, which it has first authorised.

Aid intended for regional development which a Member State decides to grant firms by reducing the
burden of tax and social contributions with a view to increasing investment and employment may be
considered to be compatible with the EC Treaty if it complies with all the conditions laid down by the
Community Guidelines on national regional aid and the Guidelines on aid to employment (1) and, where
appropriate, by the Commission notice on the application of the state aid rules to measures relating to
direct business taxation (2). The latter states in particular that, if it is to be considered by the Commission
to be compatible with the common market, state aid intended to promote the economic development of
particular areas must be (cid:145)in proportion to, and targeted at, the aims sought(cid:146).

Tax measures or measures to reduce social contributions which are not directly linked to initial investment
or to job creation but are aimed at reducing a firm(cid:146)s current expenses are normally prohibited.
Exceptionally, however, such aid may be granted in regions eligible under the derogation in Article 87(3)
(formerly Article 92(3)) of the EC Treaty provided that (i) it is justified in terms of its contribution to
regional development and its nature and (ii) its level is proportional to the handicaps it seeks to alleviate. It
is for the Member State to demonstrate the existence of any handicaps and gauge their importance.