The notion of margin squeeze in competition law in relation to the telecom sector

Abstract

The objective of this Research Project is to analyse the notion of margin squeeze under competition law relating specifically to the telecommunication sector. Margin squeeze is a rather recent concept in European Competition Law mainly due to the liberalisation of the telecom market in many Member States. This Research Project starts off by ascertaining the aims and objectives of Competition Law. It briefly examines the core concepts required for an infringement of Article 102 TFEU which regulates exclusionary abuses that lead to an abuse of dominant position. The Research Project then goes on to give a definition and an overview of the development of margin squeeze. Such a development is very important since initially margin squeeze was not recognised as a standalone abuse. An identification of the conditions required for the presence of such an abuse of dominant position is then made. Margin squeeze in the telecom sector is also regulated by sector specific regulation and this is seen within the context of competition law and the relationship between these two regimes is considered. The regulation of the Maltese Telecom sector is examined more in depth and an interview is conducted with Chief of Operations of the Malta Communications Authority. The imputations test applied for margin squeeze, namely the Equally Efficient Competitor’s Test is evaluated together with the appropriate costs which have to be taken into account. Since margin squeeze has developed mainly through the jurisprudence of the European Union Courts a thorough analysis of case law is done and reference is also made to a case decided by the Courts in Malta. The Research Project then carries out a comparative analysis with US Antitrust Law which takes an opposite approach to that taken by the EU Competition Law. Finally, a conclusion is made where the essential themes of the Research Project are summarised and issues which require close attention are addressed.