For the Industry We Stand (& Reply by the European Commission)

For the Industry We Stand (& Reply by the European Commission)


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Earlier this summer, Commissioner Viviane Reding undertook the initiative to reduce roaming charges in the single-market European territory. Two of her colleagues, however, Gunter Verheugen (DE, SPD) and Peter Mandelson (UK, Labor), apparently supported the industry by opposing the initiative, despite its only objective to serve the interests of European citizens and the political concept of single European market. President Jose Barroso backed the proposals of Mrs Reding without reservation.

Thus, the Commission achieved a first victory in the war against organised business interests that is anticipated to be long, hard and rude. The right to communicate is an issue of concern to all Europeans; and mobile telephony, together with the protection of personal data, the right to be informed by the administration and the right to quality of life, is becoming part of the new generation of human rights.

Mobile telephony in Europe is controlled by an oligopoly, with (British) Vodafone as the leader. With today?s technology, the whole of Europe, for each mobile telephony company, is one single network and the trans-European connectivity is a matter of the one-time activation of software only. This explains why Mrs Reding insisted to substantially reduce roaming charges. A service, which has a cost of no more than ten Eurocents per minute, is sold to consumers at 1.30 Euro per minute, and strangely, all operators charge, in an apparently concerted practice context, more or less the same amount. This exceeds the limits of robbery and becomes an insult to European law.

Indeed, we have the oligopoly and we have the abuse of a collective dominant market position, or, we are before a flagrant concerted practice, which means we are before a series of clear violations of the Treaty (i.e. Art. 82 etc.). Therefore, before talking of roaming charges? reduction or abolition we should be wondering why the Competition service of the European Commission did not open an investigation for the mobile telephony industry, as so far it has been acting as a "Cartel," for years. This case concerns almost every EU citizen and is by far much more important in that respect than the Microsoft case. Is this the correct way that the (British) Director General of the European Commission for Competition Mr Phillip Lowe is using (or abusing) his discretionary powers? Is he running after Microsoft because it is EC law transgressor but is closing two eyes to Vodafone (and cohorts) because it is "our" EC law transgressor? For everything there is an explanation and we are looking forward it with great interest. In the meantime I will tell you in brief a true story with protagonist "our" EC law transgressor for the shake whom the gentlemen in the pictures above put at risk their reputation at the closing of their careers, in order to protect it.

Vodafone is currently under criminal investigation, at least in one Member State, because it was flagrantly caught in violating criminal law by systematically and secretly recording private conversations of hundreds of citizens, including Ministers, journalists and even the Prime Minister. These are the hard facts. Controlling Vodafone a single network for the entire European territory, once the criminal software was installed in one facility of its network no matter if it is in Portugal, Greece or Finland, the sky is the limit. All citizens of Europe, including Members of the Commission and Directors General of the Commission, are potential victims of Vodafone and, why not, of any mobile telephony company sharing with Vodafone the same business ethics and the same moral values.

This is what we know. What we do not know is how many thousand European citizens were tapped by Vodafone, who are they, what positions do they keep in the European hierarchy and what is the scope, in the various cases, of Vodafone?

This is something that Commission Vice-President Franco Frattini should consider examining. In the meanwhile, Director General of Competition Philip Lowe owes, not to us, but to the citizens of Europe who entrusted him with this very sensitive position and who pay for his salary, a satisfactory explanation as to why, so far, he did not initiate an investigation against the mobile telephony ?Cartel? for abuse of its collective dominant position and/or concerted practices. If he waits for a Complaint, he will have it!

Reply 31/08/2006

Dear Mr Coronakis,

With reference to your article in the Kassandra’s Notebook column of 27 August 2006, I would like to draw your attention to the following facts.  

First, and contrary to what is stated in your article, possible anti-competitive practices in relation to mobile roaming charges are being actively investigated under the EC competition rules. The Commission pursues such investigations on the basis of consistent and company-specific evidence that satisfy the requisite standard of proof laid down by the Community Courts. In our roaming charges investigations, we have carried out inspections at the premises of several major mobile network operators and the GSM Association, which is the industry body gathering virtually all operators worldwide. On the basis of the evidence collected during the inspections and further investigations, in 2004 and 2005, the Commission initiated formal proceedings against Vodafone, T-Mobile and O2 regarding their roaming tariffs. The proceedings were launched on the basis of the Commission’s own initiative, and not prompted by a formal complaint.

Both the above mentioned inspections and the following proceedings have been widely reported in the press.

At the time of writing, we are waiting for the final submissions from the companies concerned who have legal rights of defence which must be respected. It is however to be expected that the Commission will be able to take a final decision in the very near future. At this time, no comment as to any possible outcome of these cases is appropriate, except that any Commission decision must be solidly grounded on proven facts and the law.

Secondly, I should add that Commissioner Kroes and my Directorate General have from the outset, actively supported and contributed extensively to the recent Commission’s initiative to table a regulation on roaming charges to the Council and the Parliament. The draft Regulation is a horizontal instrument which aims to set a price cap applicable to all Member States and mobile network operators, based on the internal market rules. We regard this instrument as a necessary complement to the application of the competition rules.

I would be grateful if you could publish this letter and make reference to this correction of the facts in the Kassandra’s notebook column.

 

 Yours sincerely,

 Philip LOWE

 Director-General

 

 

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