Managing the Intersection of Utilities Regulation and EC Competition Law

Utilities regulation in the Member States is always subject to the application of EC competition law. However, this undermines the effectiveness of utilities regulation and the European Courts should deploy a more flexible standard than that which has been confirmed by the Court of First Instance in Deutsche Telekom. The grounds for affording greater latitude to regulators are threefold: first the regulator should be free to make decisions on economic grounds that support dynamic over allocative efficiency; second it should also be free to make decisions on non-economic grounds to prioritise other objectives at the expense of competition; and third the present scope of EC competition law is so wide that in several instances the Commission acts in a regulatory manner, stepping over tasks best left to the regulator. No general principle is recommended to demarcate the borderline between competition law and sector regulation but a case-by-case assessment should be carried out to determine whether the application of competition law would cut across the policy choices reached by the utilities regulator, and competition law should not apply when it would harm the regulatory goals