On May 9, 2013, the Italian Competition Authority (“ICA”) fined Telecom Italia, the Italian incumbent operator, for exclusionary conducts aimed at hampering market expansion by its competitors.
The ICA determined that Telecom Italia abused its dominant position by committing two separate infringements of Article 102 TFUE:
- denying wholesale network infrastructure access and broadband access to its competitors; and
- offering anticompetitive discounts to its business clients, thereby squeezing its rivals' margins.
The two infringements took place in 2009-2011.
In relation to the first infringement, the ICA found that Telecom Italia unfairly refused a number of requests for activation of wholesale services from other operators. According to the ICA, Telecom Italia treated requests coming from other operators in a discriminatory manner compared to those originating from its internal divisions, therefore obstructing competitors' access to its infrastructure and making service access activations significantly more difficult.
As to the second infringement, the ICA found that Telecom Italia's discount policy was unfair and harmed competition in the market for retail access to the public telephone network at a fixed location for non-residential customers. According to the ICA, Telecom Italia aggressively discounted its pricing to large business clients to the extent it would prevent equally efficient competitors from operating in a profitable manner.
The ICA opened an in-depth investigation and raided Telecom Italia's offices in June 2010 after receiving complaints from Wind and Fastweb. It published and market tested undertakings offered by Telecom Italia and eventually rejected them.
The ICA imposed two separate fines totaling Euro 103.794 million (about 0.3% of Telecom Italia's total turnover in 2011). In determining the fines, the ICA took into account Telecom Italia's recidivism as aggravating circumstance and its cooperation and recent financial losses as mitigating circumstances.
Telecom Italia stated that it ensured alternative operators full and equal access to its network, partly through the voluntary implementation of the 'Open Access' model. It also said that it would appeal the ICA's decision before the Administrative Court of Lazio.
This case demonstrates the ICA's continuous focus on the Italian telecommunications market with Telecom Italia playing a difficult role in trying to protect its declining market position.