WRITTEN QUESTION P-1196/02 by Giovanni Fava (PSE) to the Commission. Mobile telephony market in Italy and Community competition laws — Vertenza Blu S.p.A..
Date: 2002-04-22
Institutions: European Parliament, Provisional data
Subjects: Italy, company in difficulties, economic concentration, job preservation, merger control, receivership, telecommunications industry

5.12.2002

EN

Official Journal of the European Communities

C 301 E/101

Answer given by Mr Monti on behalf of the Commission

(10 June 2002)

The Commission’s knowledge concerning the circumstances of KirchMedia GmbH & Co.
1. and 3.
KGaA’s filing for insolvency and the state of play of the insolvency procedure is based on publicly
available information. KirchMedia GmbH & Co. KGaA had previously acquired the broadcasting rights of
the German first and second division football league matches. The Commission does not have information
on the insolvency procedure’s exact impact on this contract.

2.
A cartel is an arrangement between firms designated to limit or eliminate competition between them,
with the objective of increasing prices and profits of the participating companies and without producing
any objective countervailing benefits. The Commission does currently not have indications that the Kirch
group or parts thereof have engaged in such an activity in order to obtain their position on any market.

However, as pointed out in the Union of European football Associations (UEFA) Champions League
case (1), an agreement among football clubs to sell their media rights jointly on an exclusive basis for a
long period of time to a single broadcaster, via a football association, fosters oligopolistic structures in the
broadcasting markets. The Commission has not yet examined whether this would create a dependency of
the football clubs on the buyer.

The Commission is currently not aware of any measure in favour of the German football clubs contrary to
Article 87 of the EC Treaty.

The Commission will continue to monitor closely the ongoing developments and ensure compliance

4.
with Community competition law.

(1)

IP/01/1043.

(2002/C 301 E/105)

WRITTEN QUESTION P-1196/02

by Giovanni Fava (PSE) to the Commission

(22 April 2002)

Subject: Mobile telephony market in Italy and Community competition laws (cid:1) Vertenza Blu S.p.A.

The crisis affecting the mobile telephony company Blu S.p.A. is not due to market considerations since its
results have often exceeded the targets set in its initial business plan, giving the impression of a small but
thriving company.

The measures currently being taken will jeopardise existing jobs (cid:1) some 400 young operators have so far
lost their jobs, but 1 700 posts are threatened in the company’s various branches in Italy, including 500 in
the Palermo Call Center alone (cid:1) with the aim of proposing as the only possible solution in the current
emergency to transfer its assets temporarily to TIM (at present controlled by the same majority
shareholders as Blu) and thus to effect a lucrative break-up of the company (by selling Blu’s more valuable
assets).

These measures take no account of the fact that the company has a debt to the institutions which have
contributed to making it the country’s fourth operator and setting up the ‘centro-sud’ production unit,
including the support of national and European legislation on employment aid for disadvantaged areas
(Objective 1).

The objective of eliminating a thriving competitor from the mobile telephony market on the eve of the
introduction in Italy of MNP (mobile number portability) will in fact mean a reduction in competition on
the market, with obvious implications in terms of the service available to customers.

C 301 E/102

Official Journal of the European Communities

EN

5.12.2002

The current measures contravene the rules issued by the Commission on 20 September 2001 following
the bid by Benetton-Pirelli to take over Telecom Italia, which provided for the identification of a suitable
purchaser for the company, capable of maintaining its position and role on the market.

In view of the break-up plan put forward by TIM, it would seem that the possible purchasers who had
taken part in negotiations until July 2001 with a view to taking over the company as a whole have now
disappeared. The relevant institutions and shareholders would also seem to be ignoring the need to identify
other purchasers who have already expressed an interest (E-Do, Anthill).

What measures has the Commission taken, or does it intend to take, to guarantee competition and
transparency mechanisms on the mobile telephony market, with due regard for the difficult employment
situation which the current situation is creating?

Answer given by Mr Monti on behalf of the Commission

(31 May 2002)

On 20 September 2001, the Commission adopted a decision authorising the acquisition by Pirelli SpA.
and Edizione Holding S.p.A. of Telecom Italia SpA, subject to certain commitments offered by Edizione
with regard to its participation into Blu SpA.

The purpose of such commitments was to remove the serious competition concerns that would arise in
the Italian market for mobile telephony given that, after the above acquisition, Edizione Holding would
have controlled both TIM and BLU.

Therefore it is clear that a transaction that included (directly or indirectly) the sale to TIM of Edizione’s
participation into Blu, followed or not by a break-up of Blu, would be against the spirit of the decision
adopted by the Commission on 20 September 2001, and would not be compatible with the commitments
given by Edizione.

The foregoing condition remains in place and can only be altered upon request supported by valid reasons.

(2002/C 301 E/106)

WRITTEN QUESTION P-1197/02

by Esko Seppänen (GUE/NGL) to the Commission

(22 April 2002)

Subject: Commissioners’ salaries

There has been much talk about MEPs’ possible future Rules of Procedure and salaries. Less has been said
about the Commissioners’ salaries and their social privileges.

What institution decides about the Commissioners’ salaries, social advantages and taxation,
in what
documents are these decisions taken and what is a Commissioner’s current salary (in euros)? What is the
level of the residence allowance, and is it tax-free or taxable? What is the average percentage of the
Commissioner’s income payable in EU tax and the Commissioner’s severance allowance at the end of his
or her term of office?

Answer given by Mr Kinnock on behalf of the Commission

(4 June 2002)

The Rules of Procedure and salaries of Member of the Parliament’s are, of course, not matters for the
Commission.