The European Policy Response to Convergence with Special Consideration of Competition Policy and Market Power Control

1999

Just, Natascha /

Michael Latzer

IWE – Working Paper Series No. 1.

This paper addresses the controversial subject of convergence in the communications sector and analyzes the regulatory implications of this phenomenon, in particular the leading role and steps taken by the European Commission with regard to media and telecommunications policies. Special attention will be given to the implications of convergence for European competition policy and market power control, as these policy aspects are at the very center of the debate while Europe moves towards the "information society". In liberalized and converged markets competition policy is a very important, but also a very contentious area of concern. It is a prime example of the clash between the telematics and the media side, of the clash between economic rationales and cultural concerns. We start with a brief description of the changed societal communications system of the information society, called mediamatics (media & telematics), followed by an outline of the policy challenges it involves and a rough delineation of a suitable mediamatics policy. This will be followed by a description and analysis of the European CommissionÕs initiatives in response to the convergence phenomenon. We will then turn to the analysis of competition policy and market power issues, highlighting some major characteristics of the European competition policy framework, analyzing the challenges posed by convergence and offering some conclusions regarding the reform of these policy fields.