According to the Law on Electronic Communications, ANRCETI identifies the relevant markets and performs their analysis in order to identify whether the given market is or isn’t effectively competitive. The market analysis is also targeted at imposition, maintenance, modification or withdrawal of special preventive obligations to providers with significant market power on those markets. To implement these objectives ANRCETI developed and approved the Regulations on Identification and Analysis of Relevant Electronic Communications Markets and Designation of Networks and/or Service Providers with Significant Market Power.
The relevant market is a market of electronic communications products and/or services, the nature of which justifies the imposition by law of special obligations. The Law provides that ANRCETI must perform relevant market analysis at least every two years.
Where as a result of the analysis it is found that a relevant market is not effectively competitive, ANRCETI will set, in compliance with the aforementioned Regulations the providers of electronic communications networks and/or services with significant market power on the given market. In this case, ANRCETI has the right to impose on such providers one or more obligations as provided by the Law on Electronic Communications.
The market analysis performed by ANRCETI consists of three stages:
1. Identification of relevant markets
During the first stage, ANRCETI identifies the markets susceptible to ex-ante regulation. In 2009, ANRCETI, by Administrative Board Decision no. 85 of 28.04.2009, defined the list of relevant markets of electronic communications networks and/or services in order to analyze them and determine whether the ex-ante obligations must be imposed. In the process of market identification, both the relevant EC recommendations and the specific national circumstances were taken into consideration.
Two distinct tools are applied by ANRCETI in the process of market identifications. By means of the SSNIP test (Small but Significant and Non-transitory Increase in Price), the regulator establishes the relevant product market and the geographical product market. Also, ANRCETI applied the test of the three criteria, recommended by the European Commission in order to determine whether the market is susceptible to ex-ante regulation.
The analysis performed for the identification of relevant markets and the draft decisions thereto are subject to public consultations.
2. The detailed analysis of relevant markets identification of providers with significant market power
At this stage, ANRCETI performs the detailed analysis of the identified relevant markets and assesses the degree of their competitiveness. Since the existence of providers with significant market power is equivalent with the competition being inefficient1, ANRCETI analyses the relevant markets on basis of a set of criteria to determine whether there are providers with significant market power on those markets, identifies the competitive problems, including the potential ones and proposes remedies.
The detailed analysis of relevant markets and the draft decisions on designation of providers with significant market power on these markets are subject to public consultations. ANRCETI requires that the National Agency for Competition Protection (ANPC) provide their approval. The decisions on designation of providers with significant market power, approved by ANRCETI, are made publicly available and are sent to ANPC and providers concerned.
3. Imposition of special ex-ante obligations
In the third stage, ANRCETI establishes the set of special ex-ante obligations to be imposed on providers with significant market power on relevant markets, such as to contribute to the remediation of problems on those markets. The draft decisions on special ex-ante obligations to be imposed on providers with significant market power on relevant markets are subject to public consultations. ANRCETI must provide justification for its decisions regarding the obligations imposed on providers, including whether the obligations are proportionate to the identified risks.
In the practices of ex-ante regulation of significant market power, the existence of such a market power means that the given providers might use this power (regardless whether they did so or not in the past or present). In such situations the power of the competition is not effective enough to discipline those providers and remedy potential problems, an ex-ante regulatory intervention being necessary.