The EC publishes consultation responses to SMP Guidelines review

The European Commission (EC) published on the 5th of October the responses to a public consultation it undertook between March and June 2017 as part of its review of the “Significant Market Power” (SMP) Guidelines. The SMP Guidelines, first published in 2002, are a framework for national regulatory authorities (NRAs) across the EU to assess whether one or several communications service providers are exercising SMP in a relevant market.

The review is timed around the implementation of the new European Electronics Communications Code, through which the EC intends to deliver a modernised, simplified framework to provide guidance for all regulatory decisions linked to the telecommunications sector. The Code is particularly important given recent developments in this sector, such as the development of high-quality fixed and wireless connectivity; and increased use of online content services, such as cloud computing, over the top (OTT) players, the Internet of Things, and Machine-to-Machine communication (M2M).

In total, 54 stakeholders from 22 EU countries participated in the consultation process, including the Body of European Regulators for Electronic Communications (BEREC), five NRAs, multiple network operators (both incumbents and alternative operators), services providers, and industry associations (such as ECTA). Stakeholders were consulted in relation to the following areas: (i) market definition, (ii) SMP assessment, (iii) collective dominance findings, (iv) remedies and (v) procedural issues. Stakeholders raised interesting points around the competitive constraints posed by OTT services; the relevance of market shares (such as cases where revenue-based market shares are taken into account even when non-monetary services are being provided); and the regulation of oligopolies and collective dominance. While incumbent operators argue that the regulation of oligopolies should be rigorously based on SMP findings and identifying collective dominance based on the criteria provided in the Airtours case law, alternative operators are concerned that the Airtours criteria might not be capable of fully capturing certain forms of anti-competitive behaviour.

The EC plans to set out the new guidelines in the second quarter of 2018.

Frontier has advised extensively on market reviews in Europe and other geographies including Latin America, Africa and Middle East.

For more information, please contact Julia Caldano on j.caldano@frontier-economics.com, or call +34 91 343 2350.

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Related Sectors:
Telecoms
Related Disciplines:
Regulation