The already strained relationship between Europe's big telecoms operators and the European Commission looks likely to plunge to the ultimate stygian depths with the news that the European Commission (EC) is considering mounting a full-scale investigation into allegations of collusion between the former national incumbents Deutsche Telekom, France Telecom, Telecom Italia, Telefonica and the mobile operator Vodafone. Martyn Warwick reports.
In what is regarded as being a preiminary move towards a major investigation that could result in a possible anti-trust case, the EC is requiring some of Europe's biggest and most powerful telcos to provide officials with detailed information about meetings and talks held at the so-called 'E5' gatherings where top executives of the five biggest wireline and wireless operators in Europe get together to discuss issues impacting the industry.
The E5 meetings began back in 2010 with occasional, informal gatherings of the great and the good of European telecoms. The frequency of these get-togethers then declined and eventually the E5 was more or less disbanded - until, fairly recently, it was re-vivified under the aegis of the mobile industry body, the GSM Association.
This morning the GSMA has confirmed that it has “recently received correspondence" from the EC in the form of a detailed questionnaire to which the GSMA "will respond to in due course.' The organisation went on to say that it is "a confidential matter." And so it may be...
for now anyway.
It is not yet known what, if any, specific actions or events have caused the EC to cast it's basilisk stare directly at Europe's five biggest operators but, in the past, investigations that have preceded anti-competition court cases have come about because of the actions of whistle-blowers, complaints from others within a similar or adjacent market sectors and from Commission apparatchiks undertaking their own investigations into particular aspects of an industry.
According to the Financial Times newspaper, which broke the story, E5 meetings have, recently at least, been held with legal representatives for the various interested parties being present throughout, and "notes" have been sent to the EC outlining the substance of the talks.
After the inaugural E5 meeting was held, in Paris in October, 2010, the members sent a private communication to Neelie Kroes, the EC member with responsibility of Europe's 'Digital Agenda' in which complaints were voiced about the network congestion resulting from the ever-increasing demand for bandwidth by users of and subscribers to video apps and services provided by (mainly US-based) OTT players.
The Financial Times points out that at that time, someone "close to the operators" involved told its reporters that the E5 would have to be circumspect in its actions so as not to lay itself open to allegations of anti-competitive behaviour.
In other words, a warning flag was raised at the time the E5 came into existence and simultaneously to the letter sent to Neelie Kroes in which the group stated that its aim was/is "to pursue a common vision” for digital communications and added that it was looking at processes and systems that the industry would need to take to ensure the success of a period of 'standardisation'.
Other subjects known to have been discussed by the E5 have included regulation and the harmonisation of technology platforms.
Wikipedia defines "collusion" thus: "In the study of economics and market competition, collusion takes place within an industry when rival companies cooperate for their mutual benefit. Collusion most often takes place within the market structure of oligopoly, where the decision of a few firms to collude can significantly impact the market as a whole."
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