July 19 (Bloomberg) -- Italy’s limits on the powers of its telecommunications agency may violate European Union rules, the European Commission said.
An amendment to an Italian law that aims to separate the provision of access to Telecom Italia SpA’s wholesale network from the activation and maintenance of lines may contravene EU rules, the EU’s executive arm said in a statement today.
“The law in question would prescribe one solution and thus pre-empt the discretion” of the Italian telecoms regulator AGCOM, the commission said. “AGCOM should be able to address any potential competition issue independently.”
The EU said it started legal action against Italy today by sending a so-called letter of formal notice. Italy has two months to respond. The EU can ask the EU courts to impose fines on a country that isn’t complying with the law of the 27-nation bloc.
Italy sought to boost competition in the telecommunications market with rules to open up network access and services, including maintenance.
Telecom Italia fell as much as 6 cents, or 8.1 percent, to 68.4 cents and traded 7.7 percent lower as of 5:02 p.m. in Milan.
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