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Europeans May Enlist Antitrust In Struggle For Net Neutrality

Posted  April 25, 2011

The European Commission may use antitrust law to enforce new “net neutrality” rules, according to an administrator who has directed both antitrust and telecommunications regulation for the 27-country European Union.

New EU rules on non-discrimination by Internet service providers go into effect on May 25, 2011 and, like the rules enacted last year by the U.S. Federal Communications Commission, they represent a compromise that appears to satisfy neither ISPs nor “open Internet” advocates – the two vocal sides of the net neutrality debate.

In a speech on April 19, Neelie Kroes, the European Commissioner for Digital Agenda, suggested that the European Commission may also use antitrust law to enforce net neutrality.  Kroes was, until 2010, the Commissioner for Competition, tasked with enforcing EU antitrust law.

Although there is no generally accepted definition of net neutrality, specific ISP policies and actions are often included.  In Europe, many mobile Internet providers and some wired providers block their customers from making voice-over-Internet-Protocol phone calls using services like Skype which compete with wired and wireless phone companies.  Also, as in the U.S., some European ISPs have proposed charging popular websites for “priority” access to their networks.

The upcoming May 25 telecom rules, which are based on a 2009 EU directive, require that ISPs allow all Internet users to “access and distribute information or run applications and services of their choice” in a way “that ensures open and neutral Internet principles are respected in practice.”  The rules are vague, though, and leave tricky questions of definition and implementation to the member countries.

In what many commentators described as a wait-and-see attitude, Kroes proposes to pay close attention to ISPs’ compliance with the new rules for six months before considering further measures.  She did suggest that antitrust enforcement could work alongside telecom regulation where blocking or “traffic-shaping” policies distorted competition.  Such behavior by ISPs could theoretically favor content and services that are allied with, or vertically integrated with, the ISP, at the expense of independent competitors.

While telecom regulation and antitrust law address the same goal – promoting competition – enforcement mechanisms may be very different in speed, expense, and political difficulty.  In the U.S., the Supreme Court’s 2006 Trinko decision largely precludes antitrust suits against problematic conduct that is also a violation of FCC rules.   In the EU, where “competition” and telecom regulation both flow from the European Commission’s broad regulatory mandate, Kroes’s announcement suggests that regulators will bring both to bear.

Tagged in: International Competition Issues,