The European Union has faced a strange task during the past two decades. In the wake of the mandate to liberalize the continent’s telecommunications industry, there has been the need to enforce regionwide antitrust regulations even when they sometimes conflict with national regulatory policies.
During the past several years, one such antitrust case against Deutsche Telekom (DT), a major German telecommunications provider, has made its way through the European justice system. In that case, the European Commission fined the company EUR12.6 million for price squeezing. DT charged very similar prices for both wholesale and retail access to the landlines it controlled. The prices were so close that smaller competitors purchasing infrastructure from DT could not afford to charge competitive retail prices. The violation seemed straightforward, except that Germany’s telecom regulator–not DT–set the wholesale prices.
