The concurrent application of competition law and regulation: the case of margin squeeze abuses in the telecommunications sector

This paper explores the issue of margin squeeze in the telecommunications sector. It observes that margin squeeze abuses can be addressed through ex ante and/or ex post intervention. As far as ex ante intervention is concerned, this paper reviews the various regulatory strategies that can be used to address margin squeeze before concluding that such conduct has been generally prevented through price controls. It then evaluates how wholesale and retail price control mechanisms can affect the ability and/or incentives of vertically integrated operators to engage in margin squeeze. As far as ex post intervention is concerned, this paper discussed the way in which margin squeeze has been addressed under national and EC competition law. It then explores several unresolved issues that emerge from the decisional practice of the competition authorities and the case law of the courts. Finally, the paper explores the interface between competition law and sector-specific regulation and in particular the jurisdictional and substantive conflicts that it can lead to in the area of margin squeeze.