Local view for "http://purl.org/linkedpolitics/eu/plenary/2000-09-06-Speech-3-180"
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".
Mr President, ladies and gentlemen, thank you for giving me the opportunity to tackle this major, interesting subject together with you, here in plenary as well as on the frequent occasions when I am able to speak to the Committee on Economic and Monetary Affairs.
I will take as an example the issue of maintaining open national markets. One of the first decisions taken by the present Commission on the subject of mergers was to authorise the merger of the Swedish company, Thelia, and the Norwegian company, Telenord, last autumn, subject to certain conditions. The merger was subsequently abandoned by the parties in question but the conditions imposed by the Commission nevertheless served as evidence of its intention to protect the liberalisation of national markets from concentrations of dominating carriers. I do not have the time to go into the conditions imposed by the Commission in detail now, but they are available to the public.
I would also like to touch upon another major risk which we must combat, preventing operators using mergers to gain control of innovation and the new markets. Here are two major examples: firstly the proposed Worldcom and Sprint merger. On 28 June last, the Commission refused to allow the merger between two US companies, Worldcom and Sprint. Combining the extensive Internet networks and the vast client bases of Worldcom and Sprint would have produced such a large company that the new company would have been in a position to dictate the conditions of access to its Internet networks and its clients, which would have been to the detriment of the client and created barriers to innovation. I regret that, unfortunately, there is not enough time for me to go into details here.
Another example of action taken to avert the risk of an operator gaining control of innovation is that of the Vodaphone/Mannesmann decisions and, subsequently, the Vodaphone/Vivendi/Canal Plus decisions. The Commission had to assess the implications of the mergers on the emerging markets and authorised the parties to go ahead in both cases during the initial stages, once they had proposed to abide by a limited number of commitments. The commitments are intended to maintain competition in the newly emerging markets in addition to resolving the classic situations generated by the combining
of market shares
The Vodaphone/Mannesmann operation caused problems on the emerging pan-European market of seamless mobile telephony services for multinationals. In order to eliminate these competition problems, Vodaphone proposed to allow non-discriminatory access to its integrated network and allow competitors to provide similar services during the period in which they were developing their own networks.
However, in order to ensure that competitors did not just take advantage of a company which was the product of a merger without developing their own services autonomously, the Commission limited the duration of the undertaking to a period of three years.
Shortly afterwards, the Commission had to examine the case of
the joint venture made up of Vodaphone and Attach, Vivendi and Canal Plus, to develop an Internet access portal.
was going to produce a multiple-access Internet portal for the whole of Europe, providing the clients of the companies involved with the choice of a range of Web services accessible through the clients' PCs, mobile phones or set top boxes.
The Commission's study revealed that the joint venture would have caused problems for the emerging national TV Internet access
markets and the emerging national and pan-European mobile phone Internet access markets.
In order to eliminate these problems, the parties undertook to ensure that the clients of the companies making up the joint venture were able to choose other portals and would not necessarily have to use a particular company's portal to connect to the Internet. This undertaking supplemented the undertaking proposed in the previous case, the Vodaphone/Mannesmann case, which I have just described.
Mr President, as the examples of the cases of which I have just given a brief outline show, Community competition law plays a crucial role in ensuring that the benefits of liberalisation and innovation do, in effect, filter down to the European citizens.
The role of Community rules on merger control is to prevent the creation or consolidation of dominant positions, which would hold back technological and economic progress, and to ensure that the European Union consumers are able to benefit from this progress.
The liberalisation of the Community telecommunications market reached a climax in 1998 with the full liberalisation of services and infrastructures in the majority of European Union countries. This contributed significantly to a boom in our economies, to the lowering of prices – by up to 35% – to the arrival of a large number of new operators and to the constant introduction of innovative services. This, of course, resulted in substantial benefits for the consumer and for workers as well.
As we have learned from the experience of these initial years of liberalisation and careful control
to preserve competition, workers are also among those who benefit, as shown by the figure I gave just now as an example.
The expansion of the telecommunications and Internet sectors is creating large numbers of new jobs both within those sectors and in other sectors, and bringing an increase in efficiency. Over 500 000 jobs have been created in the mobile telephony sector alone over the last five years.
In July 2000, the Commission proposed a new package on electronic communications, which particularly stresses the need to facilitate high-speed Internet access – while keeping costs down – and to develop a legislative framework which is not too burdensome for operators in the sector. However, part of the Commission's task is to ensure that the benefits generated by competition are not lost and that there are no barriers to innovation in the future.
The possibilities for Commission intervention in the field of competition policy are clearly defined by Articles 81 and 82 of the Treaty and by the merger regulation.
Let us now look at mergers, which are the direct result of demand. There has been an increase in mergers in the telecommunications sector in recent years and this trend looks set to continue. At the moment, there appears to be a shift on the European market from consolidation operations to convergence operations, and this is borne out by the alliances recently examined by the Commission, such as the Vodaphone-Vivendi deal, and those which are currently under examination, such as the merger between America On Line and Time Warner.
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The rapid rate of technological development has also generated an increase in cooperation between the different sectors and boosted convergence. Globalisation has prompted many companies to expand in an effort to be competitive on world markets. These include the mobile telephony group, Vodaphone, the recent take-over of Global One and Orange by France Telecom
the combining of the AT[amp]T and BT international activity in the company Concert, and the proposed take-over of Voice Stream in the United States by Deutsche Telekom. All these changes are positive from the point of view of competition, for they characterise opening-up of the markets, they increase the companies' efficiency and they lead, amongst other things, to the creation of a genuine single market in Europe.
However, in the telecommunications sector, the Commission must ensure that the operations under consideration do not detract from the benefits of liberalisation and that they do not restrict the innovation flow, as could happen, for example, were an operator to gain control of a new market. In this regard, Mr President, I would like, very briefly, to illustrate these two risks and the action which the Commission intends to take to avert them."@en1
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