European Commission -v- Eircom???

The Clown Man

I don't know if this has been raised before but I've been meaning to point it out for a while. I am doing my final year of a Law degree and I stumbled across some very interesting stuff in EC Competition Law which may be of interest to IOFFL.

Basically, Article 82 of the EC treaty states that:

"Any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it shall be prohibited as incompatible with the common market insofar as it may affect trade between Member States.
Such abuse may, in particular, consist in:
(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
(b) limiting production, markets or technical development to the prejudice of consumers."

Now, we all know that eircom have a dominant position in the market but the important thing is does the law recognise it?

Well, the European Court of Justice in Continental Can -v- Commission (Case 6/72) defined a dominant position:

"Undertakings are in a Dominant Position when they have the power to behave independently which puts them in a position to act without taking into account their competitors, purchasers or suppliers. That is the position when, because of their share of the market, ... they have the power to determine prices or to control production or distribution for a significant part of the products in question."

Great. Couldn't have put it better myself!

So the next question is "Are they abusing their dominant position?"

Now I'll point out that in the past, the European Court of Justice (ECJ) has found it fairly easy to find abuses by a dominant undertaking once it has been shown to be a dominant undertaking. But the main abuse that we can see of eircom is price discrimination.

Now, there is no case law to date on unfairly high price discrimination because, basically, there was never a need to charge anyone. However, in the case of United Brands (Case 27/76), the court held that it is abuse in breach of Article 82 to charge a price:

"Which is excessive because it has no reasonable relation to the economic value of the product supplied."

Whether eircom could convince a panel of five judges that seem to be, in general, very left-wing, that their prices are not of an excessive standard in comparison with the rest of the Member States, would be interesting.

Remember also that EC Law holds total supremacy over any Irish Legislation.

Now I'll stress once more that I am but a lowly law student and by no means take this as being absolutely accurate, but if I haven't hit the nail on the head, I have, I believe, found the right hammer. To verify the above you would have to seek professional advice from a solicitor who would deal with EC Law frequently. But it would make interesting artillery to play with should it prove to be accurate.

Look into it maybe. I'm pretty sure that it is not too flawed. Not taking any bets though...
Or ignore it. My 2 cents anyway. :cool:

zynaps

What's frustrating is that eircom inherited their dominant market position by simply having it handed to them when the government privatised our incumbent operator.
IMO it should really be taken back by the government and managed in a more basic-right-like way, like electricity and water and such.

What can we do with this info?
Give it to TD's, or simply rat eircom to the EU?
*rubs hands*

zynaps

MDR

IMO it should really be taken back by the government and managed in a more basic-right-like way, like electricity and water and such.

don't have the 2.4 billion required to by it back anymore, anyway EU Competition legislation wouldn't allow it without a VERY good reason (ie the company was going bust and there was no buyer).

Give it to TD's, or simply rat eircom to the EU?

TD's are gonna run a mile from this kind of thing, they hate drawing it attention to Irish Issues, they are still smarting after we got fined for a our poor water quality. We would have to back to the European Commission, Internally within IOFFL we have thought about the possiblity of a formal CA (Irish CA) complaint for sometime. Abuse of market position etc, however it sortof hit the rocks, we will need to revisit it in the new year me thinks.

Richard Barry

Originally posted by MDR

the company was going bust and there was no buyer

Who eircom? Are you serious?

Going bust = running out of cash.

While one’s share price might be down to 1 cent (which eircom’s did not)– it is irrelevant in the solvency scheme of things. So long as you have enough cash in the bank to pay the bills as they fall due you will never “go bust”.

Cash is king and on a cashflow basis there are few companies in Ireland that have greater monopolistic cash grabbing resources than eircom.

They can put up their prices whenever they like in practice.

And they control about 90% of the market.

And they have a firm grip on the local loop which ensures that you will have to pay €100 to 200+ for a broadband connection*.

The bastards have been milking and abusing the fastest growing economy in Europe for the past seven years.

They charge the highest subscription fees for analog and ISDN lines in Europe and up to ten times as much as Deutsche Telekom for international calls.

Of late they have left their network infrastructure go into melt-down due to infrastructure maintenance cutbacks, which I have no doubt any *INDEPENDENT* national survey of customer satisfaction with the company’s repair operations would confirm.

R.


*On reflection, perhaps it is part of their game plan? Let the infrastructure rot so it can’t support DSL. Customers will be forced to resort to modems trundling along at 9.600 bps or thereabouts. Eircom might then make more money out of Microsoft service pack downloads than Microsoft did on selling the original software.

kamobe

Who eircom? Are you serious?

Eircom have money falling out their ears....
What he means is they would have to GO bankrupt for the government to buy them back again....

Richard Barry

Originally posted by kamobe
Eircom have money falling out their ears....
What he means is they would have to GO bankrupt for the government to buy them back again....

Oh I see, just like the EU allowed Belgium to bail out Sabena.

R.

The Clown Man

Originally posted by zynaps
What can we do with this info?
Give it to TD's, or simply rat eircom to the EU?
*rubs hands*

zynaps

The beauty of it is that this is way over the Irish government's heads. The competition policies of the EC states is governed by EC law and in this circumstance, enforced by the Commission and declared by the ECJ. So, if there is an infringement of EC law apparent in Ireland, or in a particular trade for that matter, the European Commission has the responsibility of challenging it in the ECJ. So no-one but Eircom and the EC gets involved in proceedings etc. (Ireland might get a slap on the wrist for not doing something about the infringement in thier own back yard but tbh they are trying to do something now - Ahern seems to be anyway.)

Basically, there is a chance that the Big Boys (EC) can take a hand on this because it is against thier policies, and hence, illegal.

Getting the attention of the European Commision is the bit that I can't help with. I don't have a clue how to get them to look at it but if they saw it they would certainly be interested.

But basically the answer to the original question is to rat eircom to the EU...

That or threaten them which works with 80% of the resolving of most legal issues.


I hope I have made the point clear. Dustaz tells me it looks too much like legal bullsheet. I'm just so used to looking at this sort of stuff that it looks like english to me.

If I can clarify any further please post. I will hopefully have an answer for any questions.

optip

it would pretty clever if they did buy it back - even from a financial point of view.

they sold it at a really high price and could buy it back at a really cheap price.

they should then do what they should have done in the first place and split the company into a (perminantly) state owned infrastructure company and a private phone company operating in a similar way to esat do now... when (if) the markets pick themselves up again they could make (another) nice profit by selling off the telephone company (not the infrastructure) :-)

LLU, FRIACO, etc would no longer be an issue (i would hope!!)

I am sure that the government could buy it back and tell the EU that they are buying it back because the market is too small for commercial operators to afford to be at the cutting edge - which is something required to be an "information society"

/optip

Stonemason

From what you have posted it seems quite clear cut that this could be the way to go.Irelandoffline has tried to go through the right channels i.e the irish goverment but as it has taken them the best part of two years to even admit there is a problem a faster route maybe to go through the EU courts people who may not have such a vested intrest(perhaps) in letting eircon get away with this BS.The only problem is it may mean a civil suit which i presume would cost a fair few quid.

The Clown Man

That's the thing. I don't believe it will cost anything. It is the European Commission that should be stamping down on illegalities.

It's task (part of it anyway) is to find where there are possible infringements in EU regulations and to charge the offending country/company in order to stop the infringment. Something like what the Director of Public Prosecutions does here in Ireland. They would take the matter into thier own hands.

Hence the title of the thread.

Now, I don't have a clue how to get on to the Commission but any of our MEPs would. Or anyone who would deal with European Law, ie. a solicitor or barrister that has dealt with it before.

Basically, if I'm right, and it would need to be checked to be 100% sure, a new and probably very effective lobbying campaign would be along the lines of "Eircom could be breaking the laws of the EU."

Could spark up some attention...

MrPudding

OK then, I like it. So the next question is... Is anyone here or does anyone know a lawyer who knows a lot about EC law and will put in a few hours for free?

dahamsta

Why don't you drop the EU Competition Authority a line with the above information first MrPudding?

(Personally, I think that the EU CA is only too well aware of Ireland but has decided not to take action simply because it's not high profile enough.)

adam

Dustaz

Please keep all replys to this thread STRICTLY on-topic as it may get some views from uniniatiated parties.

No doubt peoples political opinions on the rights and wrongs of the EU make for fascinating reading, but thats what we have a politics board for.

dahamsta

I'm not entirely sure whether that was about my comment or not Dusty, but assuming it was, I hope you realise that although there was certainly a political subtext, that wasn't the core of my statement. In this particular case though, possibly unfortunately, the political aspect of the topic needs to be outlined in order to make the point.

The political aspect is that the EC appears wholly unwilling to get involved in serious competitive problems in smaller member states. The reasons behind this are certainly arguable, but the underlying subject is irrefutable: The EC CA has announced numerous times now that it is investigating Spain, Germany and <some other country that I can't remember right now> for anti-competitive behaviour by incumbent operators, yet Ireland has been mentioned only twice in passing, never to reappear. And this is in the stark light of gross improprietries committed by our incumbent.

I mean, it simply can't be argued in good faith that our incumbent is not acting anti-competitively. This latest case with regard to fixed-line text messaging is just the latest in a series of blatant anti-competitive actions, but ultimately it's just an aside compared to the core problem of grossly overpriced - or non-existant, in the case of FRIACO - wholesale offerings. We have the most expensive wholesale offerings in Europe, and the EC CA has far better access to those figures that IrelandOffline ever will, so why haven't they done anything?

There are many possible reasons, and I would argue strongly that this disinterest stems from the simple fact that there is more to be gained by tackling the larger members, both in terms of numbers and perceptions. Whether I'm right or not is ultimately irrelevant, and I certainly don't believe IrelandOffline should be making accusations of impropropriety; however I do believe that have to make a reasonable effort to understand the reasons behind this, so they can develop effective plans to tackle those problems. That means projecting political reasoning.

Take this entire thread as an example. The Clown Man has certainly given us a tool that could well kick off a new front for IrelandOffline, but the front has always been there, it's just never been tackled. We know the wholesale prices are too expensive, we know something should be done about it, should have been done about it long ago. But, and now we come back to my original point, we don't need to go looking for lawyers to do that, we just need to think about it politically.

In this case, the obvious quick fix is for IrelandOffline to get the ear of the EC CA, so how do we go about that? Well, obviously we contact them and put forward our case, but do we stop there? Certainly not. We also contact our MEP's and put pressure on them to bring pressure to bear on the EC CA to reply to us. We contact the foreign minister to bring general pressure to bear on everyone. How about the Irish Competition Authority? They won't talk to us directly about the incumbent, but they have closer ties to the EC CA than RegCom does, so how about them? And how about RegCom too?

To come back to the topic of politics and IrelandOffline, I accept that this isn't a political board, but IrelandOffline has morphed itself into a political organisation to a degree, and whether we like it or not the political machinations of both local and European governance will weigh heavier on the operations of the organisation as it goes further down this road. Whether that's the right direction or not is an argument I'm unwilling to get into publicly, but simply put, the bed is made now, and it must be slept in or abandoned.

What will happen is unknown to us, but with the current status, politics is part and parcel of "the game". That means it has to be part and parcel of our debates here. I realise it makes your job more difficult, but that's the way it has to be, at least for now.

adam

dahamsta

It's been pointed out to me that Dusty's comments were directed at a couple of posters who went far more off-topic than me, and who's posts were moved to the Recycle Bin -- I never even saw 'em. From this, I am able to deduce that Dusty may not in fact be the lazy slacker I accuse him of being, and therefore retract all suggestions of same in my previous post. In my defense, I would like to point out that had I my ISDN connection, I would be online far more at the weekends, and would have seen this. So it's Eircom's fault. Well, it would be if I'd paid my bill.

Feel free to delete this and my previous post if you want Dustaz, but I think that most of it still applies. In fact I've been trying to figure out a way of weaseling it into the threads for some time now...

adam

Calibos

We also contact our MEP's and put pressure on them to bring pressure to bear on the EC CA to reply to us. We contact the foreign minister to bring general pressure to bear on everyone. How about the Irish Competition Authority? They won't talk to us directly about the incumbent, but they have closer ties to the EC CA than RegCom does, so how about them? And how about RegCom too?

It was my post dahamsta. Must be a 'lighthearted post' free thread.

Anyway back to the issue at hand. Does anyone know whether there is a party whip applied to MEP's in which case I'm sure it would be a waste of time trying to get Fianna Fail MEP's involved. The government probably dont want their 'dirty laundry washed in public'. In which case, opposition affiliated MEP's would be the way to go. As for our Domestic Competition Authority, I'm sure they would prefer not to help in highlighting their own failings in this country. We do have to question the reasons for the EU CAs' inaction on cases in Ireland as Dahamsta says and start making a big enough noise to get their attention. Maybe the best tactic if/when the side channels' (MEP's, Irish CA) fail to deliver would be to take the same approach as mentioned so often. ie Try to shine the media spotlight on the issue. Ask Mr Cassidy from the Trib or Sinead from the Times to ask in their columns, why the EUCA fail to get involved even when our own CA seem to be inactive or ineffectual on Irish competition issues.

Stonemason

One I cant help feel that though Irelandoffline has made great steps in highlighting Irelands shortcomings re internet access to our beloved leaders i still get the distinct feeling we are being kept at bay with pointless new bills departmental name changes and snake oil.

As we all know from the budget serious cutbacks are being made in the governments funding of the broadband rollout.Eircom are making out they are in trouble (the 1000 job cuts of awhile ago) these facts alone are enough to make me think it will take an outside influence with real power to change things in this country at an acceptable speed.

As for the EU and the Irish government who remembers that little thing called the nice treaty? wasn’t that all about us being more in line with Europe well in my eyes that’s a two way street if they want more control over us then they should be more involved when miscarriages of justice like the eircon situation is highlighted to them.

Soz my last point would be as dahamsta said

The EC CA has announced numerous times now that it is investigating Spain, Germany and <some other country that I can't remember right now>

The countries mentioned are on mainland Europe the Germans especially a very vocal when the aren’t happy here in Ireland we are a backwater and have a tendency to moan to each other shrug our shoulders and say but what can we do? (Nothing being the standard reply)The truth is it wouldn’t hurt to throw a few E-mails at the EC CA who knows if we are Eloquent and noisy enough they may include Ireland more often on the above list

Praetorian

I mean, it simply can't be argued in good faith that our incumbent is not acting anti-competitively.

I think its more incompetence than anti competitive behaviour.

It's a pity your no longer officially involved with IOFFL. Do they even talk to you anymore?

The Clown Man

I personally would have thought that getting the attention of the media would be a good start. If it gets any attention from the press, you may have far more complaints directed at the Commission than you would from IOFFL alone. It's one thing for a relatively small activist group to complain, but another entirely for a whole country to kick up a fuss.

I don't know what links IOFFL or it's supporters have with the press but with a little research and a little time, the whole thing could make for some very interesting reading in any newspaper. A topical debate would be an excellent way of showing the nation how it is letting eircom get away with competitive murder.

All it needs in any case is the strict attention of the Commission for one day. In my own opinion, one look at the state of our central comms system will be enough to raise doubts.

And it is entirely possible that the Commission has just never looked at it. They do have 15 member states to control and the bigger states like Spain, Germany and Italy would require a lot of attention from the 20 members of the Commission.

Also, the main EU website is
http://europa.eu.int/index_en.htm
And the Irish Commission office is at
http://europa.eu.int/comm/offices.htm#ir
The Commissioner over competition is
http://europa.eu.int/comm/commissioners/monti/cv_en.htm

Worth a browse. You can email the Commission but I wouldn't know how effective that would be.

spongebob

Eircom is using its near monopoly to stiff competition.

First we must complain to Comreg and the CA....same letter, give them 14 days to remedy the situation. I doubt if Comreg and the CA will even read it within 14 days

The government has given itself the power to 'direct' Comreg but not the CA

Second we write to Mary Harney and Dermot Ahern telling them to tell their regulators to get their finger out. Civil service twaddle will be duly ejaculated towards your premises within 14 days. Naturally this will not be a 'remedy' for the situation you complained about....such as price of DSL lines, lack of FRIACO etc etc. The EU commission report discussed in here last week provides some interesting comparative data .

Now you have exhausted ALL remedies AVAILABLE to you in Ireland in matters of competition you may complain to the EU... Mario Montis department (thanks for the link there clownman)

A vital part of any complaint directed to the EU is that you have

a) brought it to the notice of the appropriate Irish authorities in the correct sequence but
b) that they have not provided a remedy or tried civil service bullsh1t out on ya instead of attempting a remedy.

That is what is known as Due Process. IE escalate through the correct channels.

While Monti will start investigations himself these tend to be transnational and not inherent to one member state only.

The first one to get a case number should quote it in here so we can all contact Mario and his crew in Brussels with our complaints.

M