“high respect and rich validity”* - ECJ: Roaming Regulation valid

Posted on June 8, 2010 | Filed Under communication technologies 

The European Court of Justice today gave judgment in the case C-58/08 Vodafone and others and confirmed the validity of the roaming regulation. Just as the advocate general in his opinion of 1 October 2009, the Court came to the conclusion that the legal basis (article 95 EC [now article114 TFEU]) was correct, the measures were proportionate and the principle of subsidiarity had not been infringed.

As to the legal basis, the Court notes that there was a high level of retail charges, that this was a persistent problem that could not be solved by NRAs, and that there was pressure for Member States to take measures. Such national measures in turn would have been likely to lead to a divergent development of national laws.

“As regards the functioning of the roaming market […]  and taking into consideration the considerable interdependence of retail and wholesale charges for roaming services, it is clear that a divergent development of national laws seeking to lower retail charges only, without affecting the level of costs for the wholesale provision of Community-wide roaming services, would have been liable to cause significant distortions of competition and to disrupt the orderly functioning of the Community-wide roaming market, as is clear from recital 14 in the preamble to Regulation No 717/2007. Such a situation justified the Community legislature’s seeking to protect the proper functioning of the internal market”. 

As regards the principle of proportionality, the ECJ points out that the Community legislature must be allowed broad discretion, yet must base its choice on objective criteria. The Court then examines the history of the roaming regulation and comes to the conclusion, that the introduction of ceilings for retail charges “must be considered to be appropriate for the purpose of protecting consumers against high levels of charges” and “that regulation of wholesale charges alone would not have had a direct and immediate effect for consumers. By contrast, only the regulation of retail charges could improve the situation of consumers directly.” The Community legislature therefore “could legitimately take the view that regulation of the wholesale market alone would not achieve the same result as regulation such as that at issue, which covers at the same time the wholesale market and the retail market, and that the latter was therefore necessary.”

In Nr 69 of the judgment, the Court states:

“Finally, in the light of the importance of the objective of consumer protection within the context of Article 95(3) EC, intervention that is limited in time in a market that is subject to competition, which makes it possible, in the immediate future, to protect consumers against excessive prices, such as that at issue, even if it might have negative economic consequences for certain operators, is proportionate to the aim pursued.” [emphasis added]

To me it is rather striking that the Court in its legal reasoning only in this paragraph makes mention of the limited duration of the measure. The advocate general, in contrast, had dwelled on that issue more explicitely (in Nr 42 of his opinion):

“Moreover, the existence of a sunset clause reduces its impact on the rights of the economic operators. Such clauses ensure that the Community legislature will periodically reassess its interventions in areas, such as roaming, that are undergoing rapid social and economic change. [footnote omitted] If the Community legislature were to extend the price controls or make them permanent, that decision would also need to be proportionate and additional reasons would need to be presented to justify it.” 

This of ocurse is not just an academic issue: the roaming regulation meanwhile has been amended and the original “sunset” (30 June 2010) has been extended by two years to 30 June 2012. So according to the advocate general, in a possible future case it would be necessary to examine whether there were sufficient “additional reasons” for the prolongation. The Court - limiting itself strictly to the issue to be decided in the present case, the  original version of the regulation - remains silent on that matter. Still, considering that the Court in its legal reasoning only makes one almost fleeting reference to the “intervention limited in time”, I would expect that the extension until 2012 should not make the regulation invalid (after all, it is still “limited in time”).

Finally, subsidiarity does not pose a problem either:

“As is clear from recital 14 in the preamble to the regulation, the interdependence of retail and wholesale charges for roaming services is considerable, so that any measure seeking to reduce retail charges alone without affecting the level of costs for the wholesale supply of Community-wide roaming services would have been liable to disrupt the smooth functioning of the Community-wide roaming market. […] the Community legislature could legitimately take the view that it had to intervene at the level of retail charges as well. Thus, by reason of the effects of the common approach laid down in Regulation No 717/2007, the objective pursued by that regulation could best be achieved at Community level.”

*) Shakespeare, All’s Well That Ends Well, Act V, Scene 3

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One Response to ““high respect and rich validity”* - ECJ: Roaming Regulation valid”

  1. This year’s list of the “top 3″ pending cases at the ECJ : contentandcarrier on June 18th, 2010 3:33 pm

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