Original ECOMET principles

When ECOMET rules where established by its Member NMSs in 1990-1995, the original idea was to return 11% of Weather Service Providers' (whether private of public) turnover to governmental NMSs, to secure the development of meteorological infrastructure in Europe and the level playing field in commercial activities of private and public parties in weather business. This 11% corresponded to the mean percentage of costs in European NMSs' budget for maintaining the observational network and running atmospheric models. The target was to cover 3% of the infrastructure cost by these data sales, regardless the fact that all meteorological infrastructure costs are already covered by public funding to meteorological institutes in their annual budget. However, these principles should have been the guiding factor when establishing the price level for weather data.

Level of pricing

Using these original principles, the ECOMET Members created the Catalogue and price list, which resulted in prices so high that all Service Providers in Europe (whether private or public), if claiming to use even the minimum set of data necessary for operational daily business, should apply the Small Service Provider discount scheme to pay for data. As an example, in Finland a company should have a turnover well above 100 M€ to pay the full price of data which the Finnish Meteorological Institute alone sells in the ECOMET catalogue. If the use of the climatological database is added, the turnover should be well over 500 M€. The total weather business in Finland is approximately 5 M€, in Europe 200 M€, and in the USA in total 500 M€. This shows how arbitrary, intentional and superficiously high the level of pricing was in the first place and still is.

Barrier to entry

By initiating the ECOMET system, the barrier to entry to the weather market was created. To start a new weather company is extremely difficult in Europe today. A small company can afford to buy only a minimum fraction of necessary data and still has to pay at least 20% of their turnover (see figure and the first years 1-3 for a real case of a private company in Finland). The governmental NMSs use this disadvantage continuously and intentionally in their sales arguments with customers.

The original principle to keep the data costs below 11% of turnover was never established, as the delivery costs and the prices of using ECMWF or EUMETSAT data were added on top of the small provider reduction scheme.

New pricing rules increase the price level even further

As if the original pricing level was not high enough, the ECOMET members have been creating continuously new licence rules, which have been added to the set of original rules for which DG-IV gave the Comfort Letter. These rules are

* Redistribution licences, which a company (or a public entity) must pay if the data is actually used for value-added customer products, not only internally in the company
* Licence for use of data in subsidiaries
* Licence for data used in open Internet sites

Redistribution licences increase the price for data by a factor of three. The licence for a subsidiary increases the price per subsidiary by 80%. The licence for Internet use states that for each 10.000 page loads a company should pay extra 4% of its turnover.

If all these new rules are applied, no company or NMS can do weather business in Europe (see case 10 in the following figure), as minimum data costs would be in most cases more than 60% of turnover. If a company would sell their services to Internet customers, as is common e.g. in the United States, the price for data would very soon reach and surpass the 100% level of company's total turnover.

Other violations of the ECOMET rules

As the principle for transparency in public accounting has systematically been neglected in all but one country (Holland), some NMSs have used this advantage by applying significant cross-subsidisation in their pricing and thus intentionally destroying the weather market in their national territory. This tendency has been most evitable in Finland and Germany.

All data used in NMSs' commercial activities should be included in the ECOMET catalogue. This is still not the case, after more than 6 years since ECOMET started. Examples from Finland are e.g. air quality and UV observations, forest fire indexes and road condition models. Climatological data is priced only by few of the ECOMET members.

Conclusions

The above analysis of original ECOMET principles and the resulting practices clearly indicate that the present ECOMET system is de facto intentionally established data cartel, with its sole meaning to prevent the existence of private competition and to maintain the old status quo of national governmental monopolies. As if the original rules and data prices were not hard enough, new licensing rules have been established, without negotiating with the private sector, which further violate the European competition law and the future of the private weather companies in Europe. As the situation in other global market areas is quite opposite (e.g. the USA and Japan, where weather data use in open and unrestricted), the European weather industry is in huge competitive disadvantage comparing with the large private companies operating in these market areas. Thus it is most urgent to dismiss the ECOMET cartel in order to achieve the similar open and unrestricted data policy in Europe.

Figure 1. Real example of actual data costs accrued to a private weather service provider and what the costs would be if all new ECOMET rules would be applied. The worst case of a company doing extensive Internet weather services is not shown, as it would easily have to pay more than 100% of its turnover for weather data.