On 20th December 2013, the Italian Competition Authority (the “ICA”), after receiving a complaint by a foreign company named Cedicor Sociedad Anonima (“Cedicor”), decided to open an in-depth investigation into Società per azioni Esercizi Aeroportuali (“SEA”) for alleged infringement of Article 102 TFEU, the prohibition against an abuse of dominance.

SEA is an Italian company entrusted with the management of the two Milan airports (Linate and Malpensa). SEA provides handling services to aircraft, passengers, luggage, cargo and post.

SEA entered into a license agreement (the “Agreement”) with another Italian company ATA, by which ATA was licensed to provide handling services for general aviation instead of SEA.

However, in September 2012 the Italian company SAPAM, the controlling company of ATA, filed in the Court of Rome a bankruptcy agreement and tried to sell its ATA majority shareholding.

Both Cedicor and SEA made offers to acquire ATA’s controlling shareholding, but as Cedicor’s offer was about to be accepted, SEA tried to terminate the Agreement alleging non-fulfilment of certain obligations by ATA.

The ICA alleges such conduct could be considered an abuse of a dominant position, aimed at impeding the access to the market of providing handling services in the general aviation sector to a potential new competitor (Cedicor).

The ICA alleges that SEA, by leveraging its dominant position in the handling services, tried to terminate the Agreement in order not to allow Cedicor to benefit from the Agreement entered into by ATA.

The ICA is basing its assessment on three specific grounds:

  1. The timing and the terms for the termination request of the Agreement (i.e. after knowing that the Cedicor’s offer was about to be accepted);
  2. the circumstance that SEA had made an offer to acquire the controlling shareholding of ATA without invoking the termination of the Agreement; and
  3. the fact that in case of effective termination of the Agreement, SEA would control and manage all the handling services at the Milan airports both for general and commercial aviation.

Furthermore, the ICA held that, although the SEA conduct seems to affect only the relevant airports (Linate and Malpensa), the alleged anti-competitive behaviour could also affect international companies through Cedicor and several aircraft and handler companies operating on other national markets.

In our view, the ICA’s investigation highlights that legitimate contractual conduct, such as a termination request, can be deemed anti-competitive if it constitutes an abuse of dominance and is capable of impairing a competitor.