Merger Remedies and Regulatory Measures in the EU Electronic Communications Sector: A Critical Assessment

Abstract

Electronic communications operators can be exposed to two types of ex ante measures - merger remedies and regulatory measures. Although in a merger control procedure competition authorities prefer structural remedies, these seem to be less adapted to the electronic communications sector, since communications operators naturally tend to concentrate. Given that the electronic communications sector is characterised by economies of scale and a network effect, behavioural remedies seem more appropriate. In EU sector-specific legislation, regulatory measures that can be imposed on operators with significant market power can be defined as behavioural as well. This can make the difference between the two types of measures even vaguer. However, the difference should be found in the very purpose of state intervention. Competition law should not be used to make an existing market more competitive, unless some element of the market is illegal. Conversely, regulation only requires that some, form of conduct is considered undesirable for some reason (it need not necessarily be illegal). Unfortunately, on several occasions, the European Commission (mis)used competition law powers to regulate the market. Should this approach be applied extensively, it would result in the creation of what could be defined as hybrid competition law.