European Court of Justice: Price Caps Established by EU Roaming Regulation Declared Valid

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(Jun 29, 2010) On June 8, 2010, the Court of Justice of the European Union issued a judgment on the validity of the Roaming Regulation adopted by the EU in 2007. The Regulation established limits on the wholesale and retail prices charged by mobile operators for roaming voice calls, that is, calls made by a resident of one EU Member State while he or she is in another EU Member State. The limits were imposed until June 30, 2009, and called for €0.46 per minute for all calls made abroad and €0.22 for all calls received abroad; limits were expected to be further reduced. The validity of the Regulation was extended in 2009, and its scope was also broadened to include text messages and mobile data services. As of March 2010, in order to protect customers from "bill shocks," operators had to give them the option to set their own monthly cut-off limits for Internet surfing through their mobile phones and laptops while using the devices in another EU Member State. The Regulation proved to be an effective tool in reducing the prices for mobile phone calls; since its adoption, prices have fallen by 70% compared to the prices in 2005, and the price for sending a text message from another EU Member State has been reduced by 60%. (Press Release, Digital Agenda: Commission Welcomes Court of Justice Ruling on the Legal Validity of EU Roaming Rules, MEMO/10/242 (June 8, 2010), RAPID, available at http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/10/242.)

The Court held that the European Commission, in adopting this Regulation, had applied the correct legal basis, which is article 95 of the EC Treaty, on the effective and correct operation of the internal market. The Court also held that the Regulation met standards of proportionality and subsidiarity.

The Court examined the issue of proportionality in connection with the Regulation fixing the upper limits not only for wholesale prices but also for retail prices. The Court noted that the Commission had adopted the Regulation after carefully surveying and studying the alternatives and their economic effects on consumers. Thus, the Court held that establishing upper limits was a necessary measure to protect consumers against high prices. On the question of subsidiarity, the Court held that the Commission had the legal authority to act in order to ensure the proper functioning of the internal market by permitting operators to act on an equal footing across the EU's single market. (Id.)

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Last updated: 06/29/2010