Draft BEREC Report on oligopoly analysis and regulation

Recently, the European telecommunication markets have witnessed several developments, such as the increased uptake of bundled services and a trend towards consolidation of the markets via mergers and acquisitions, which can result in oligopolistic market settings. It is generally recognised that oligopolistic communications markets face a risk of evolving in a non-competitive manner.

However, there are some market developments for which scale is an important determinant, such as the deployment of (new or upgraded) infrastructure or introduction of new services, leading to the development of market structures characterised by a small number of actors. In order to tackle the increased risk of non-competitive behaviour, NRAs should have an adequate set of tools at hand. For this purpose BEREC started its own investigation in 2014 and is currently preparing a report in order to determine whether the current regulatory toolkit and/or its practical application is adequate to tackle oligopoly issues. NRAs have accumulated great experience in the regulation of markets characterised by individual SMP. On the contrary, there are only a few clear precedents that deal with oligopoly markets in an ex ante context. Moreover, the 2002 Guidelines on market analysis do not cover the most recent decisions on joint dominance adopted by the courts, which set the relevant parameters for determining the creation or strengthening of a joint dominant position in ex post and merger scenarios. On the other hand, Article 7 cases based on joint SMP situations are few and have implied difficult notification processes, even ending up with withdrawals of the measures after the initiation of Phase II procedures.

The draft BEREC Report on Oligopoly analysis and regulation was discussed and approved for public consultation at the BEREC Board of Regulators meeting in Bergen on 4 June 2015. This BEREC draft report aims to provide initial assistance to NRAs about the analysis and regulation of oligopoly markets and review the different outcomes for oligopoly market settings.

The public consultation will run from 10 June to 1 August 2015.

This draft report seeks to provide a better understanding of implications of oligopolies on the application of the regulatory framework, acknowledging that the notion of collective or joint dominance under competition law captures the possibility of an oligopolistic market having multiple operators with SMP and that there is little precedent of findings for ex ante regulation of joint SMP market structures. It also seeks to address the questions in which way the current regulatory framework is effective with respect to the analysis and regulation of oligopolistic market settings, as well as to whether there is a need to change the framework to address any issue not already covered under the existing joint SMP concept.

All stakeholders are invited to send their contributions by 1 August 2015 to e-mail: [email protected] preferably in English in order to speed up their processing.

For more details on the public consultation, please consult the notice published by BEREC available here.