Deutsche Telekom AG (FRA:DTE) (PINK:DTEGY) (ETR:DTE), Orange SA (EPA:ORA) and other telecom companies have been raided by authorities with the European Union, reports Bloomberg’s Gaspard Sebag. Sources told Bloomberg that the offices of Telefonica S.A. (NYSE:TEF) (MCE:TEF) were also raided by the European Commission this week.
Internet Competition Probe
The investigation is in connection with allegations that they may have inhibited competition in the Internet market. The EC emailed a statement saying that the raids of the telecom companies were part of “antitrust inspections” which started on Tuesday in a number of “member states.” The raids were on telecom companies which provide Internet service to consumers. The EC did not say specifically which companies were raided.
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According to Bloomberg, the EU has kept an eye on Internet service providers for more than 10 years. Regulators set rules that were meant to enhance competition Telefonica S.A. (NYSE:TEF) (MCE:TEF) and Orange SA (EPA:ORA), formerly known as France Telecom, were both fined in the past for antitrust violations.
Much of the Internet service in several member countries of the EU is controlled by companies that were once monopolies. These companies carry the traffic and also lease their networks to other providers. Orange SA (EPA:ORA) reportedly said it could take days for the antitrust inspection to be finished, although it is confident that it will be exonerated in the investigation.
The EC’s Internet Plans
The EC said in the past that it wants all Europeans to have access to Internet speeds greater than 30 megabits per second. It also said that half of the EU should have Internet connections greater than 100 Mbps by 2020. Currently the average speed in Europe is around 20 Mpbs.
Telecom companies in Europe said the EU’s approach is restricting their cash flow and reduces the funds that are available to build new networks and invest in more technology.