Belgian Competition Authority and Mid-Sized Peers Express Belief in Strong Competition Policy for Europe
- 23/04/2025
- News
On 22 April 2025, the Belgian Competition Authority and fellow competition authorities of medium-sized EU Member States (Austria, the Czech Republic, Ireland, the Netherlands, and Portugal) published a statement expressing their firm belief that a strong competition policy is necessary to preserve Europe’s competitiveness and the “sustainability of its social market economy model” (see, attached press release).
The six competition authorities (the Six) specifically challenge what they regard as a false tension between the role of competition and the realisation of economies of scale. This apparent contradiction was thrown in sharp relief by the Draghi report on European competitiveness which favours cross-border mergers and the creation of EU-wide players in the telecommunications sector by defining relevant markets at the EU level (and not at national level) and focusing on behavioural remedies rather than compulsory divestments. Large telecommunications firms around Europe, including Telefonica, relied on the Draghi report as authority to advocate for transnational economies of scale.
The Six dispute that view and maintain that in “the electronic communication[s] sector, competition in most relevant markets still takes place at a national level and across multiple layers, at the infrastructure level (roll-out, wholesale access, coverage, drop-rates, etc.) as well as in the services market”. They add that “service competition cannot offset potential disadvantages arising from a reduced number of competing infrastructure providers”. This is because, according to the Six, a “reduced number of infrastructure providers can also weaken incentives to improve service quality, network coverage, density, and innovation” and may even “undermine resilience and supply security”.
This is why the Six will continue to scrutinise carefully far-reaching and structural consolidation that takes place within a single Member State. However, this does not necessarily contradict the findings of the Draghi report. As a matter of fact, the Six say, presumably to the extent that larger transactions do not fall outside their merger review powers, that they will take a favourable look at cross-border mergers, provided these are expected to benefit European businesses and consumers.
The Six add that their approach will apply across the full economy, not just the telecommunications industry.
Significantly, the BCA takes this stance while still reviewing a large, proposed local telecommunications infrastructure deal between Fiberklaar, Proximus, Telenet, and Wyre for the roll-out of fibre networks in Flanders (see, VBB Belgian Antitrust Watch of 30 July 2024). The length of the review procedure, which is subject to the regular antitrust rules and not the merger control provisions, suggests that the notifying parties have not yet convinced the BCA that the loss in infrastructure competition will be offset by thriving downstream service markets.
