On 20 Feb 2004, the European Commission issued Decision C(2004)527, which is a “Request of withdrawal of a notified draft measure”, i.e. a veto decision based upon Article 7 of the Framework Directive 2002/21/EC.

The decision is addressed to FICORA, the National Regulatory Authority in Finland, and relates to the retail markets for publicly available international telephone services provided at a fixed location, on the one hand, for residential customers (Market 4), and on the other hand, for non-residential customers (Market 6).

The European Commission Decision follows the opening of the Phase II Investigation, i.e. the issuance of "serious doubts" letter on 18 Dec 2003 (published on 5 Jan 2004), on which we reported earlier, and follows the the public consultation, on which we also reported earlier, and a formal discussion in the Communications Committee (with representatives of all Member States) on 11 Feb 2004.

This Decision represents the very first veto decision taken by the European Commission in application of the new EU regulatory framework for electronic communications networks and services, specifically Article 7.4 of the Framework Directive 2002/21/EC.

FICORA had decided not to declare any fixed operator as having Significant Market Power (SMP) on the retail markets for international calls, even though the leading operator has a market share of 55% on the residential market and around 50% on the business market, and other operators also have high market shares.

The European Commission has now decided that FICORA must "withdraw the notified measure" in which it did not find any operator as having SMP, on the grounds that "FICORA did not provide sufficient evidence to support the conclusion of its market analyses", and thus FICORA's draft measures are "not compatible with Community law".

"FICORA is encouraged to analyse to what extent TeliaSonera is in a position to behave to an appreciable extent independently of its competitors, customers and ultimately its consumers". [...] "FICORA should make clear in its notified draft measures whether a finding of lack of SMP in a defined retail market relies principally on existing regulatory obligations. If this is the case, FICORA should make clear on which basis the existing regulatory obligations in the same or other closely related markets will continue to exist for the relevant period of forward-looking assessment".

The full text of the European Commission Decision can be accessed by clicking here.

For a detailed discussion of this development, and the events leading up to this veto decision, please contact Yves Blondeel.