The European Commission has introduced a significant action plan called the 'Competitiveness Compass,' which underscores the essential role of competition in driving productivity, investment, and innovation across Europe. The Commission aims to enhance competitiveness as a key parameter for the European economy, setting ambitious goals for growth, resilience, and technological sovereignty.

Competition is viewed as a fundamental pillar of the European economic order, enabling innovation, investment, affordable prices, and consumer choice. The telecommunications sector, which began its liberalization in the late 1990s, is particularly highlighted as a field where competition is crucial for dynamic development. However, there are growing political voices suggesting that competition hinders growth, interpreting competitive rules as obstacles to consolidation and efficiency.

Misinterpretations surrounding the Draghi report often argue that strict competition rules have fragmented the telecommunications industry, stifling investment and innovation. In reality, a lax merger control can harm consumers and weaken investments. The telecommunications market is complex, with new digital services creating new business opportunities alongside traditional revenue losses. A robust infrastructure, driven by competition and associated investments, is essential for both aspects.

To clarify these points, six European competition authorities from medium-sized EU economies (Belgium, Ireland, Czech Republic, Portugal, the Netherlands, and Austria) have issued a joint statement on the significance of competition in the telecommunications sector.

The Austrian competition enforcement demonstrates that a differentiated approach can lead to high-quality networks, fair prices, and effective competition. Data from the RTR Internet Monitor shows that intermodal competition between mobile and fixed-line services is functioning well. Proactive regulation has allowed for the reduction of sector-specific ex-ante regulation, replaced by ex-post reviews of general competition law and merger control, without jeopardizing market openness.

Despite a common legal framework, significant differences remain among member states regarding infrastructure development, data handling, and consumer protection regulations, which impact the creation of a European telecommunications internal market. These markets are primarily national and must be assessed accordingly from a merger control perspective to maintain competition.

Statements claiming that Europe has 170 telecom providers while the USA has only three are misleading. The reality is that competition in the USA is less intense, negatively impacting consumers. Consolidation from three to two providers empirically eliminates price and quality competition, undermining the regulatory successes of the past two decades. This cannot be the EU's goal. While the Draghi report contains valuable ideas, the telecommunications sector is not its strong suit, according to Klaus Steinmaurer, Managing Director of the RTR.

The Austrian Federal Competition Authority (BWB) emphasizes the importance of not jeopardizing the competitiveness of small and medium-sized enterprises (SMEs) through lax enforcement against already dominant companies. Anticompetitive mergers typically do not yield broad economic benefits, and the BWB carefully scrutinizes potential mobile telecommunications mergers at both European and national levels.

As European competition policy approaches a critical juncture in 2024/25, competition authorities advocate for the promotion of competitive markets to ensure fair prices, innovation, and investment across all sectors, particularly in those vital for industrial competitiveness, such as telecommunications. This is crucial for the many SMEs in Austria, as well as for consumers.

In conclusion, competition is not a hindrance but rather a strength for Europe. The push for industrial policy realignment should not dismiss competition as disruptive. A nuanced, fair, and forward-looking approach is essential in strategically important sectors like telecommunications, where competition serves as the foundation for sustainable growth, innovation, and investment readiness.