EU Takes Germany to Court
June 27, 2007
The European Union's executive arm said it was referring Germany to the European Court of Justice because Berlin had repeatedly ignored warnings that the new law violated EU regulations.
"The Commission has repeatedly warned Germany that its new telecom law violates EU telecom rules, but without success," said EU Telecom Commissioner Viviane Reding.
"We want to ensure Germany can benefit from a healthy, competitive and fully functioning market and encourage both competition and investment in broadband markets," she added. "This is why we have decided today to go to court."
The EU competition watchdog said the new law, which took effect in February, effectively exempts from competition a fast Internet access network that Deutsche Telekom is building.
Issue of access
Deutsche Telekom, which is 32-percent owned by the German state, enjoys a broad share of the national telephone market, controlling the access of 9,400,000 lines in Germany out of a total of 12,900,000.
However, there is considerable scope for the former state monopoly to strengthen its hand in the Internet access market, since Germany has a broadband penetration rate well below other leading EU countries.
The commission estimates that only 16 percent of the German population has access to broadband Internet access compared with nearly 30 percent in Denmark and the Netherlands.