Sectoral Regulation in Austria before and after EU Accession — The Network Industries as a Case in Point

The network industries, which had been organized in a monopolistic fashion up to Austria's EU accession, were opened to competition following a number of EU Directives and are now mostly regulated by sectorspecific authorities. This fundamental change to the regulatory system has so far developed quite positively, both in economic terms and from a regulatory perspective regarding the transparency of these authorities' decision-making processes. Accession to the EU served as an essential catalyst for reforming the relevant regulations, which had come to meet their original purpose of correcting market failures only in part. Thus, Austria's EU entry extended the principle of competition from the already exposed manufacturing sector to other sectors of the Austrian economy. However, chances are that the network industries would have been opened to competition even without Austria joining the EU, e.g. on account of its WTO membership or the discrimination against other sectors which would eventually have demanded such reforms.