Christian Bergqvist. Studies on the limitations of. competition law and its ambiguous. application to the supply of electricity

Transcription

1 Christian Bergqvist Between Regulation og Deregulation Studies on the limitations of competition law and its ambiguous application to the supply of electricity and telecommunications in the EU 1. edition Jurist- og Okonomforbundets Forlag 2016

2 Foreword 13 Chapter I. Market power and competition The use of exclusive rights in response to the market power problem Market power and competition Market power creates welfare loss and foreclosure The manifestation of market power is well known Market power and the supply of electricity and telecom An enhanced level of market power Limited ability to contain market power Strong barriers for competition Barriers and the supply of telecommunications Barriers and the supply of electricity The barriers might not be that unknown Competition law contributing to the market opening 32 Chapter II. The concept of dominance Outline of the chapter The Single dominance doctrine A clear foundation of our perception is lacking An applicable doctrine dislodged ffom market shares Competition barriers Super dominance - when size does matter Summary of Single dominance and market power Oligopolistic dominance Oligopolistic competition - partly uncharted waters Coordinated effects Non-coordinated effects Summary of coordinated and noncoordinated effects From single to Joint dominance in oligopolistic markets. 53 5

3 Older practice indicated little room for a Joint dominance concept Airtours and the Commission's great leap forward Airtours and later practice Summarising joint dominance Vertical market power - Dominance and multi markets Vertical exercise of market power - a legal characteristic Leverage and the Court's approach From Tetra Pak (II) to Tetra Laval/Sidel Microsoft I - foreclosure or leverage? Summarising vertical market power Temporary dominance Limited theory and practice The concept of dominance and market power 64 Chapter III. The concept of Abuse Outline of the chapter Market opening and the Obligation to liberalise Article 106(1) Special and exclusive rights Article 106(1) and exclusive rights Article 106(2) and its consequences Article 106(1) or (2) and the shifting between them The concept of abuse Exploitative abuse Exclusionary abuse Objectivejustifications Meeting competition Efficiency defence A aggravated Standard of abuse Abusive behaviour targeting the direct market Excessive & unfair pricing Excessive pricing in practice Costs and the unfair probt Price comparison Excessive pricing and electricity and telecom Summary of excessive pricing Artificially low prices and predation Predatoiy pricing in practice 97 6

4 Calculating costs Other cases contributing to the concept Predatory pricing and electricity and telecom Single branding arrangements Single branding and economies of scale Single branding and electricity and telecom Summary of single branding Cross-subsidising Cross-subsidising and the delivery of electricity and telecommunication Abuse capitalising on the vertical Integration Margin squeeze Margin squeeze and early practice Mature practice - Deutsche Telekom and Telefönica Other cases contributing to the margin squeeze concept Summarizing on margin squeeze Tying & bundling Tying/bundling and the delivery of electricity and telecommunication An unclear practice on bundling and tying Discrimination Theory and practice and their many ambiguities Discrimination and the delivery of electricity and telecommunication The problem of condemning discrimination Refusal to supply and shared access to the inffastructure The foundation for a legal Obligation for shared access Shared access and potential sub-doctrines The non-legal arguments against shared access The Commission's attempt to summarise a doctrine The Access Notice and its relationship to practice Other notable Commission cases The Courts' contribution and the Commission's follow-on From Tierce Ladbroke to IMS Microsoft I, II, Sot Leios and later cases Practice and the requested Standard for shared access

5 7. Summary on market power and abuse 163 Chapter IV. The limitations of competition law Outline of the chapter The limits of competition law Ideological limitations Limits dictated by competition law Reviewing excessive pricing Reviewing vertical foreclosure Reviewing the sanctions The many ambiguities in the concept of abuse Limits dictated by the markets Underdeveloped legal doctrines and Standards A risk ofpollution The contribution fforn competition law 181 Chapter V. The sector regulation Outline of the chapter The purpose of sector regulation and its characteristics Restructuring for competition Non-discriminatory access Implementing vertical and horizontal splits (unbundling) Securing universal service Protecting competition Legal characteristics of sector regulation Sector regulation and competition law The limitations of competition law and the need for sector regulation The contribution from competition law Why competition and the limitations of sector regulation? Sector regulation addressing the risk of market failure Chapter VI. EU models for regulating telecom Outline of the chapter PTT Model - a system of exclusive and special rights The PTT-model and competition law The system errors of the PTT model and the Commission's dilemma The 1987 Green Paper Model Implementing the Green Paper 204 8

6 Service Directive and ONP-Frame Directive Competition law and the 1987 Green Paper Model Competition law limits Cooperation agreements Unfolding the 1987 Green Paper Models National sector regulator (NRA)- Independent sector authorities Privileged undertakings and reserved Services Regulating market access Shared access to the infrastructure Accounting unbundling and a few nondiscrimination obligations Füll Liberalization Model Implementing füll liberalisation Later adjustments to the Füll Liberalization Model Competition law and the Füll Liberalization Model Access Notice and the (few) cases Sector Inquiries The concentrations and implied problems Competition law as a sledgehammer The use of Article 106(1) post liberalisation Unfolding the Füll Liberalization Model Developing national regulatory authorities Market access - Licensing Directive Adjusting the ONP Frame - Signihcant Market Power Shared access to the infrastructure Accounting unbundling and non-discrimination Universal service Review Model Drawing up a new legal framework Gradual translation and a new role for the Commission Later adjustments to the 99 Review Model Competition law and the 99 Review Model The risk of a foreclosure in case law Few problems with the concentrations Competition law and sector regulation and its limits New sector inquiries 246 9

7 Competition law in a quasi-regulatory role Unfolding the 99 Review Model Market access The NRAs and their tasks Market analysis and ex ante regulation SMP and effective competition SMP toolbox and shared access to the infrastructure Other forms of shared use Accounting unbundling and non-discrimination Universal service The EU telecom models and competition law Competition law and sector regulation Competition law and its ambivalent relationship with itself 268 Chapter VII. EU models for regulating electricity Outline of the chapter Utility Company Model The Utility Model and competition law The missing system failure of the Utility Model First Electricity Model The slow Implementation of the Energy Working Paper Competition law and the First Electricity Model Supporting the First Electricity Directive A more normal application? Unfolding the First Electricity Model National Regulatory Agency Market access Eligible costomers Production of electricity Dispatching Shared access to the infrastructure New infrastructure Unbundling the sector Public Service Obligations Second Electricity Model Implementing the Commission proposal Competition law and the Second Electricity Model Competition law in quasi regulatory role

8 EDF and the French "problem" EDF's acquisition sets the Standards One horizontal and three vertical mergers Second Electricity Model National Regulatory Agency Market access Production of electricity Dispatching Shared access to the infrastructure Derogations Unbundling Public Service Obligations Third Electricity Model Implementing the Commission proposal Competition law and the Third Electricity Model The sector Inquiry Competition law in quasi regulatory role Ownership unbundling through the backdoor A somewhat lose concept of dominance A more normal application? The Third Electricity Model National Regulatory Agency Market access Production of electricity Dispatching Shared access to the infrastructure Derogations Unbundling the sector Public Service Obligations The EU electricity models and competition law Competition law and sector regulation Competition law and its ambivalent relationship with itself From unusual to unexplainable and perhaps undefendable 339 Chapter VIII. Competition law and sector regulation Outline of the chapter A sector framed competition law The real content of sector regulation

9 2.2. The ambiguous role of competition law The roles allow overlapping competences The overlaps create areas of conflicts The conflict might lead to uncoordinated decisions A practica! priority rule formulated by the Commission Formulating a priori ty rule requires a prudent balancing Does the Commission respect the priority rule? A pollution of competition law Doctrines are influenced by the sector and the Commission's approach The direct influenae The indirect influenae An influenae embracing the core of competition law Would the influenae have been stronger without sector regulation? Sector regulation protects competition law against it seif Reframing the relation of competition law and sector regulation 363 Table of Cases 367