Sunday, September 25

Competition alerts to the risks that the 5G Cybersecurity Law entails vetoing companies for geopolitical reasons


The report of the National Markets and Competition Commission (CNMC) on the preliminary draft of 5G Cybersecurity Law warns about the risks and consequences that can have to veto companies for geopolitical reasons. The body led by Cani Fernández defends free competition, which could affect multinationals like China Huawei, and distrusts regulations to determine “trusted suppliers”.

In the case of the draft Spanish law, the CNMC report advises that “the standard contemplates a series of regulatory measures that, on the one hand, may prohibit or limit the activity in the market of suppliers considered high risk, and on the other, they may force the number of suppliers in a network to be diversified ”.

It adds that in both cases these measures may alter the conditions of competition in the supplier market and, therefore, their regulatory application for security reasons should be “rigorously analyzed and valued with respect to their effect on competition”, so that This factor becomes one of the criteria to be weighed in the analysis of risk mitigation measures, and especially with regard to the restrictions linked to the risk profile of suppliers, due to their potential ability to exclude some economic agents from the market.

In addition, the CNMC points out that this possible effect of reducing suppliers in the 5G network market may be increased by including as one of the risk profile assessment criteria the level of exposure to interference from third countries, “entering to assess aspects geopolitical that may impact on security ”.

The CNMC argues that this possible loss of competition in the market, derived from a smaller number of agents, could reduce incentives for innovation, “and increase the cost of providing services and reducing quality, negatively affecting operators and 5G service users in downstream markets ”.

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