Displaying items by tag: EU
The European Commission has sent a Statement of Objections alleging that multinational telecommunications company Altice (the Netherlands), breached the EU Merger Regulation by implementing its acquisition of telecommunications operator PT Portugal before notification or approval by the Commission.
Commissioner Margrethe Vestager, in charge of competition policy, said: "If companies jump the gun by implementing mergers prior to notification or clearance, they undermine the effective functioning of the EU merger control system. The Statement of Objections sent to Altice shows how seriously the Commission takes breaches of the rules designed to protect the merger control system.”
The EU's Merger Regulation requires that merging companies notify transactions prior to their implementation ("the notification requirement"), and do not implement transactions unless and until they have been notified and cleared by the Commission ("the standstill obligation").
The obligation to notify concentrations prior to their implementation safeguards the Commission's ability to detect and investigate concentrations. The standstill obligation prevents the potentially negative impact of transactions on the market, pending the outcome of the Commission's investigation. The early implementation of transactions in breach of EU merger review procedural obligations is a very serious infringement, as it undermines the effective functioning of the EU merger control system.
Compliance with these obligations is essential for legal certainty, enables the Commission to conduct a correct analysis of the impact of mergers in the market and prevents the potentially detrimental impact of transactions on the competitive structure of the market. In this way, market forces work for the benefit of consumers.
In February 2015, Altice notified the Commission of its plans to acquire PT Portugal. The Commission cleared the transaction subject to conditions on 20 April 2015.
In the EC’s Statement of Objections, the Commission takes the preliminary view that Altice actually implemented the acquisition prior to the adoption of the Commission's clearance decision, and in some instances, prior to its notification.
In particular, the Commission considers that the purchase agreement between the two companies put Altice in a position to exercise decisive influence over PT Portugal before notification or clearance of the transaction, and that in certain instances Altice actually exercised decisive influence over PT Portugal.
Such behavior, if established, would be in breach of the company's obligations under the EU Merger Regulation to respect the notification requirement and the standstill obligation. The sending of a Statement of Objections does not prejudge the final outcome of the investigation.
If the Commission were to conclude that Altice did implement the transaction prior to its notification or prior to adoption of the clearance decision, it could impose a fine of up to 10% of Altice's annual worldwide turnover.
On 9 December 2014, Altice entered into a transaction agreement with Oi, the Brazilian telecommunications operator which controlled PT Portugal, with a view to acquiring sole control over PT Portugal. On 25 February 2015, Altice notified the Commission of its intention to purchase PT Portugal. On 20 April 2015, the Commission adopted a clearance decision declaring Altice's acquisition of PT Portugal compatible with the common market, subject to conditions.
At the time of the notification, Altice's Portuguese subsidiaries Cabovisão and ONI were competitors of PT Portugal for telecommunications services in Portugal. The Commission had concerns that the merged entity would have faced insufficient competitive constraints from the remaining players on the market for fixed telecommunications. This could have led to higher prices for clients. The decision was therefore conditional upon Altice's divestment of both ONI and Cabovisão.
The ongoing procedure against Altice for early implementation has no impact on the Commission's April 2015 decision to approve the transaction, subject to conditions.
The European Commission has adopted a decision that renders legally binding commitments offered by Amazon. The commitments address the Commission's preliminary competition concerns relating to a number of clauses in Amazon's distribution agreements with e-book publishers in Europe.
Commissioner Margrethe Vestager, in charge of competition policy, said: "Today's decision will open the way for publishers and competitors to develop innovative services for e-books, increasing choice and competition to the benefit of European consumers. Amazon used certain clauses in its agreements with publishers, which may have made it more difficult for other e-book platforms to innovate and compete effectively with Amazon. We want to ensure fair competition in Europe's e-books market worth more than 1 billion euros."
With the EC’s decision, Amazon will no longer enforce or introduce these clauses in agreements with publishers. These commitments will contribute to fair competition in the platform economy, says the European Commission.
The Commission opened an investigation in June 2015 because it had concerns about clauses included in Amazon's e-books distribution agreements that could have breached EU antitrust rules. These clauses, sometimes referred to as "most-favored-nation" clauses, required publishers to offer Amazon similar (or better) terms and conditions as those offered to its competitors and/or to inform Amazon about more favorable or alternative terms given to Amazon's competitors.
The clauses covered not only price but many aspects that a competitor can use to differentiate itself from Amazon, such as an alternative business (distribution) model, an innovative e-book or a promotion.
The Commission considered that such clauses could make it more difficult for other e-book platforms to compete with Amazon by reducing publishers' and competitors' ability and incentives to develop new and innovative e-books and alternative distribution services. The clauses may have led to less choice, less innovation and higher prices for consumers due to less overall competition in the European Economic Area (EEA) in e-book distribution.
Amazon has sought to address the Commission's concerns by offering not to enforce, introduce or to change the terms of its agreements with publishers. It amended its proposal following feedback received from interested parties on the suitability of Amazon's originally proposed commitments.
On May 4, the Commission concluded that the amended final version of the commitments offers a timely, effective and comprehensive solution to the competition concerns it had identified. They will help ensure that innovation for e-books by publishers and other third parties can benefit companies other than Amazon and protect effective competition for e-books to the benefit of consumers.
More specifically, Amazon has offered the following commitments:
- Not to enforce (i) relevant clauses requiring publishers to offer Amazon similar non-price and price terms and conditions as those offered to Amazon's competitors or (ii) any such clauses requiring publishers to inform Amazon about such terms and conditions. The commitments cover in particular provisions related to alternative/new business models, release date and catalogue of e-books, features of e-books, promotions, agency price, agency commission and wholesale price.
- To allow publishers to terminate e-book contracts that contain a clause linking discount possibilities for e-books to the retail price of a given e-book on a competing platform (so-called Discount Pool Provision). Publishers are allowed to terminate the contracts upon 120 days' advance written notice.
- Not to include, in any new e-book agreement with publishers, any of the clauses mentioned above, including Discount Pool Provisions.
The commitments apply for a period of 5 years and to any e-book in any language distributed by Amazon in the EEA. If Amazon were to breach the commitments, the Commission could impose a fine of up to 10% of Amazon's total annual turnover, without having to find a violation of the EU competition rules.
UK telecommunications provider O2 has confirmed after months of speculation that they will scrap roaming charges for its customers in Europe. From June, O2’s Pay Monthly and Business customers will be able to avail of their UK data and call plans in a total of 47 different countries within the EU – at no extra cost.
The move follows a similar trend made by other providers who all scrapped roaming charges, companies such as EE, Three and Vodafone. The decision by O2, which is owned by Spanish multinational Telefonica – coincides with the incoming abolition of such fees by the European Union on June 15th.
It has also confirmed that O2 customers will be able to utilize their UK plans into some non-EU countries as well, which includes Iceland, Switzerland and Monaco. Prior to this announcement when travelling in the Europe Zone out of the UK – customers were charged when making and receiving calls – and sending texts to other countries.
However, that has all changed which now means you can send and receive texts and make and receive calls without any additional charges to your current data package. The move benefits thousands of customers who travel frequently in the EU, but experts claims that Brexit will present a challenge to operators.
He stated that operators will have a hugely difficult task to reintroduce roaming charges after the UK leaves the EU in two years. A telecoms analyst at CCS Insight, Kester Mann told the BBC, “I think it would go down very, very badly with customers - it would be a very bold and perhaps foolhardy option. It would be very difficult for them to do that just because the UK is such a competitive market and we've moved such a long way from roaming."
Mann added that whilst mobile operators had taken a "financial hit" from not being able to charge roaming fees as they had in the past. They were increasingly trying to recoup that revenue through other means, he added.
The European Union will now allow citizens of the EU to stream online subscription services such as Netflix or BBC iPlayer in any country in the EU. Collectively, EU citizens spend about one billion nights in other EU nations every year but are faced with the frustration of not being able to stream their subscription services outside their home country.
The European Union’s executive arm, the European Commission, proposed the change and reached a compromise with negotiators from the European Parliament and the European Council of 28 member states, who collectively agreed that the measure should go forward and succeed. EU citizens will be able to enjoy the new measure in early 2018, the commission said.
“Today’s agreement will bring concrete benefits to Europeans,” said Andrus Ansip, the European Commission’s vice president for the Digital Single Market. “People who have subscribed to their favorite series, music and sports events at home will be able to enjoy them when they travel in Europe.”
As it currently stands, subscribers to Netflix or Amazon streaming services in, for example, Germany, will only have access to the service if the country they are visiting has the service available, and often the movies or series available differ drastically from their home version. The same goes for digital subscribers to Sky Sports in London who are unable to access Premier League football matches on their iPads or laptops when traveling abroad.
“This is very good news for EU consumers,” said Monique Goyens, head of Brussels-based the European Consumer Organization. “Artificial barriers blocking you from using your online video, music or game subscription contradict the very principle of a single market.”
The measure puts a zero limit on the amount of time travelling Europeans can enjoy their home-based subscriptions. This is unlike the EU's free roaming promise for mobile phones that comes into effect in June, which comes with a list of restrictions.
The first step has been taken toward implementing “free roaming” for the European Union. The bloc came to an agreement that travelers will no longer have to pay roaming charges for using their mobile phones within the EU. The new arrangement will take effect in June this year.
“This was the last piece of the puzzle. As of June 15, Europeans will be able to travel in the EU without roaming charges,” said Andrus Ansip, the European Commission’s vice president for the Digital Single Market.
The “free roaming” promise within the EU was first mentioned in Brussels in early 2015. But the plan was delayed after telecom operators in tourist hub areas such as Italy and Spain complained about how the deal’s effects could threaten to increase domestic prices to pay for travelers from northern Europe using their networks.
Some telcos expressed concern that “free roaming” would in effect make poorer Europeans in the south pay for wealthy tourists contacting home or surfing for data while on holiday. The reason being roaming charges have been a lucrative source of revenue for telecom companies in southern Europe.
To ease the concerns of telecom operators, negotiators for the European Commission, the European Parliament and the EU’s 28 member states agreed on a scale of wholesale charges that operators pay each other when customers use their mobile phones abroad. The deal is still awaiting final approval by the European Parliament and member states, but it’s said that this is just a formality.
In a move that angered consumer advocates, the European Commission had said in December that "free roaming" would have some limits to ensure there was no abuse of the new system. Telecoms operators would be able to closely track usage and crack down on users unfairly taking advantage of cheaper phone deals available in other EU countries.
“Android hasn’t hurt competition, it’s expanded it,” said Kent Walker, senior vice president and general counsel of Google, after the internet giant recently rejected EU allegations that it abused the market dominance of its successful Android mobile phone operating system. Android is a vital segment of Google’s business, now that smartphones are dominant over laptops and PCs.
Google was responding to a long list of charges involving Android that Margrethe Vestager, the EU's outspoken competition commissioner, filed in April. They include the claim that the firm used practices such as making manufacturers pre-install its market-leading search engine as well as its Chrome browser as the default in their phones, AFP reports. "The response we filed today shows how the Android ecosytem carefully balances the interests of users, developers, hardware makers and mobile operators," Walker said.
EU regulators brought a third antitrust charge against the online search giant on Thursday, July 14, accusing Google of blocking rivals in the lucrative online search advertising market. The Android charges are seen as especially sensitive for one of Google's most strategic businesses that could alter a global smartphone sector which has taken over traditional PC's as the biggest segment in the world of computing. The case only pertains to Android-run phones, with the European Commission not considering Apple's iPhone as a factor in the case.
The EU in its charge sheet accused Google of obstructing innovation by giving unfair prominence to its own apps, especially its search engine, in deals with giant mobile manufacturers such as South Korea's Samsung or China's Huawei. "No manufacturer is obliged to preload any Google apps on an Android phone," Google insisted.
The internet giant has also been accused of restricting manufacturers from installing rival version or modifications of Android an open source software operating system, on their phones. The commission, through a spokesman, confirmed the receipt of Google's official response.
"As is standard practice, we will carefully consider Google's response before taking any decision on how to proceed and cannot at this stage prejudge the final outcome of the investigation," said Google.
Some have spoke out against Google in agreement with the EU’s move, such as Thomas Vinje, legal counsel to FairSearch, a group that represents many of the complaints in the case, who said: “Google imposes severe sanctions on those who defy its insistence on conformity. This is a problem that law enforcement can solve, by acting to bring Google into compliance with competition law.”
The case was brought to Google by the likes of Yandez, a Russa-based search engine that claims Google is preventing it from expanding beyond Russia. Telecom companies have also come forward saying they want better control of the Android software they provide on their smartphones.
But Google, which originally created Android, says limiting changes by companies to the system helps software developers so they do not have to make many versions of their apps to run on different versions of Android. Developers of apps such as Spotify or WhatsApp, "depend on a stable and consistent framework to do their work," Google said.
The launch of 5G is supported by many major telcos, including 20 that have promised to introduce 5G in the European Union by 2020 under one condition: governments must weaken net neutrality rules. The coalition, including Deutsche Telekom, Nokia, Vodafone and BT, have outlined their plans in a seven-page document called ‘5G Manifesto’ which details how the companies will introduce 5G across Europe over the next five years. But the document also warns that if European governments don’t allow more openness of internet usage, the 5G plans will not go ahead.
5G is essentially being held ransom by the coalition of companies who hope to see internet used freely. The Manifesto says the coalition plans on designing a 5G Action Plan that will allow them to demonstrate the benefits of 5G in vehicles, health, public safety, smart city, and entertainment by 2018. The coalition also calls for investment from countries to allow for the infrastructure needed to launch the new technology across all 28 Member States of the EU by 2020.
The Verge reports that the coalition is pushing for what they call the “right regulatory environment,” which would involve brainstorming what “dangers” could actually occur if internet policies were less stringent. The Manifest reads: “The EU must reconcile the need for open internet with pragmatic rules that foster innovation. The telecom industry warns that current net neutrality guidelines, as put forward by BEREC [the Body of European Regulators] create significant uncertainties around 5G return on investment. Investments are therefore likely to be delayed unless regulators take a positive stance on innovation and stick to it.”
Last fall the EU rejected amendments to legislation that would have protected net neutrality in Europe. But the laws in place have loopholes that allow for so-called “specialized services” such as self-driving vehicles and medical operation to hop onto internet fast lanes. If the EU hopes to see more innovative services come into play, then Member States will have to pull back on current internet rules. The current rules state that services providers should “treat all traffic equally, without discrimination, restriction or interference.”
The Manifesto has received support from a number of companies such as Airbus, Siemens and Philips. The document has also been praised by the European Union’s Commissioner for Digital Economy and Society, Gunther Oettinger, who said: “The Manifesto is a valuable input for the 5G action plan that will be presented in September, together with the proposal for the review of the telecom regulatory framework.”
The European Commission is pushing to speed up the standards-making process with a focus on five priority areas related to telecommunications, according to a report by Mobile World Live. The five priority areas include: 5G which is expected to be implemented in 2020, cloud computing, the Internet of Things (IoT), data technologies and cyber-security.
The EU's standard decision-making procedure is known as 'co-decision'. This means the European Parliament has to approve EU legislation together with the Council based on a proposal from the Commission. The push to make the standards regime faster is just one of many measures unveiled by the European Commission in order to help the European industry, as well as researchers, SMEs and public authorities who could benefit from new technologies that become available. With technologies like cloud computing and increased cyber-security, businesses will be able to function more efficiently and safely, which would in turn boost the EU economy.
The European Commission is reportedly going to set up large-scale pilot projects in order to boost the Internet of Things, advanced manufacturing, technologies related to smart cities and homes, connected cars, and mobile health services. Smart cities and homes would ultimately benefit peoples’ health, improve government services and reduce emissions, by providing citizens the tools to reduce energy consumption.
Reports haven’t indicated exactly how much will be spent on these areas of smart technologies, however the European Commission has said that its plans in total should “mobilize over €50 billion of public and private investments” in support of the new areas of digital expansion. “We need the right scale for technologies such as cloud computing, data-driven science and the Internet of Things to reach their full potential,” says Andrus Ansip, VP for the digital single market.
There are, however, those who doubt that Europe has the current infrastructure to support a rapid digitization. For example, Vodafone, a leading global operator, supports the initiatives, but has expressed concerns about Europe’s underlying infrastructure and whether it can support it the initiatives suggested.
Vodafone expressed concerns saying the European Commission just assumes that fibre optic networks delivering gigabit speeds will be ubiquitous across the European Union. “Yet the connectivity required to attain digital leadership is lacking in many Member States which remain reliant on outdated copper telephone networks rather than gigabit fibre,” said Vodafone in a statement.
An example of this is in Germany, where Vodafone is one of the leading operators in both fixed and mobile networks. According to Vodafone, the European Commission has the decision before it from the German regulator that supports “short-term incremental” upgrades to legacy copper networks, “which would leave German businesses and consumers trapped in the slow lane of Europe.”
According to Fu Jing, the China Daily's Brussels correspondent the EU can benefit by accepting China as a market economy.
Fu Jing says: "Over the last four decades, China has successfully transformed itself from a planned economy into an open economy where almost all commodities are priced by market forces. More than 80 countries have recognized China's strenuous efforts in this regard by granting it market economy status. However, the United States, the European Union, Canada and some other developed economies have yet to do the same, either to restrict the flow of China's low-cost exports into their markets, or to take advantage of their willingness to bestow such status as a bargaining chip when meeting Beijing at the negotiating table to discuss other issues."
Fu Jing claims that Washington has opposed China's rise and has even recently warned the EU not to 'compromise' by granting China market economy status. However: "In the EU itself, opinion is divided, although there are strong voices in favor of giving China such status."
Meanwhile, Fu Jing says, "the US is trying every means to lobby the EU in favor of supporting its position, warning that if the EU grants China market economy status it will be 'unilaterally disarming' itself." And, "Over the last two years, a lot of European countries have ignored Washington's will and joined the China-led Asian Infrastructural Investment Bank and supported China's currency being included in the International Monetary Fund's Special Drawing Rights basket of global currencies. All these decisions are forward-thinking and benefit the world. In return, China has become the first country outside the European Union to support the European Investment Scheme. It would not only be the correct decision, but also a historic one, for Brussels to grant China market economy status."