The irreversible concentration process involving companies operating in the Italian port industry, typically fragmented into a multitude of small- and medium-sized enterprises, raises again the vexata questio of preventing terminal operators from controlling more than one terminal in a port.

Article 18, paragraph 7 of Law no. 84/1994 provides that “In each port, the concessionaire of a State-owned area shall directly exercise the activity for which concession was granted while at the same time being prevented from being a concessionaire for another area in the port, unless the activity for which any new concession is applied for is different from the activity authorised under the concessions in place in the same State-owned area […]”.

The question arises as to whether the circumstance that two concessions are granted to two distinct (albeit related) legal entities is sufficient to exclude application of Article 18, paragraph 7, of Law No. 84/1994.

To answer the question, it is fundamental to understand the meaning of “affiliated companies”. Italian Administrative case law shows that what is relevant is not just the relationship under Article 2359, paragraph 4, of the Italian Civil Code [1] but any substantive relationship existing between two companies, as stated by the Consiglio di Stato[2]. There is substantive relationship where two companies can be traced back to a single center of interest, which, in case of participation in calls for tenders, can result in breach of the principles of equality and transparency.

Starting from this premise, which, despite applying to tenders, may also apply by analogy to the grant of concessions, it is clear that the purpose of Article 18, paragraph 7, of Law No 84/1994, whose ratio is the protection of competition, is to prevent any excessive concentration arising as a result of a single business operating through affiliated companies, all of which being formally distinct legal entities.

In this way, the law aims at preventing an undertaking from “closing” the market, obtaining access to all the services offered in a given territorial area.

From a review of the relevant case law, with a focus on Article 18, paragraph 7, Law 84/1994, we can see that there has been an evolution over time in the interpretation – restrictive at first and then more open – of such provision.

It should preliminarily be taken into account that the activity of a Port Authority should be aimed at ensuring “increase in trade and port productivity” (judgment No. 747 of 24 May 2012 of the Regional Administrative Court (“TAR”) of the Liguria Region, Second Division).

As stated by the TAR of Liguria, a Port System Authority, in carrying out its activities and granting access to maritime concessions, should also ensure “compliance with the principles of competition, freedom of establishment and guarantee of the exercise of development, enhancement of entrepreneurship and investment protection[3].

Particularly noteworthy is the decision of the Tribunal of Genoa of 18 September 2009 on a case in which the applicability of the prohibition under Article 18, paragraph 7, of Law No. 84 of 28 January 1994 was questioned. In such case, the court held that Article 18, paragraph 7, of Law 84/94 is not a primary and mandatory norm of Italian law but “a norm addressed to administrative authorities and relating to the conditions required for granting and maintaining port concessions”.

In other words, the provision at issue would be a rule that can be “administered” by the Port System Authority with a view to ensuring competition (namely, “good” competition) in a port and, at the same time – as said above –, “increase in port traffic and productivity“, in accordance with Article 18, paragraph 6, of Port Law.

Regarding the power of Port System Authorities to verify cases, from time to time, in the light of Article 18, paragraph 7, reference must be made to decision No. 747/2012 of the TAR of Liguria: “in reality, according to the most advanced view, space limitation as well as the specialisation needs of individual terminals can make very complex […] the presence of multiple concessionaires engaged in identical business in a port under actual competition conditions. This has led to the shared conclusion that the provision aims at preventing the availability of excessively large port facilities to a single operator, declaring illegality of construction or of the strengthening of a dominant position, which, according to the legislator, is in itself capable of generating anti-competitive practices, regardless of assessment of any abusive conduct”.

In a circular issued by the Port Authority of Livorno[4] – after the court decision mentioned in the previous paragraph –, it was stated that “a slightly flexible application of the rules is not unlawful… provided that the fundamental principles of transparency, equality of treatment and protection of competition are guaranteed by preventing abuse of dominant position”.

Moreover, according to a recent ruling by the Consiglio di Stato[5], the scope of the prohibition under Article 18, paragraph 7, of Law No. 84/1994 is limited to the grant of new concessions, without applying to their extension.

Finally, an extensive interpretation seems preferable also having regard to the recent reform of Italian port law, which has involved the unification of several ports under the control of a single Port System Authority. A restrictive interpretation would indeed prevent a terminal operator from operating, for example, in the port of Genoa and in the port of Savona at the same time, as both ports fall within the competence of the same Port System Authority.

From the examination of the above case-law it follows that the ratio of the provision at issue is to protect competition and equal treatment in a given port and, therefore, the limitation under Article 18, paragraph 7, of Law 84/1994 can be overcome insofar as such principles are complied with and levels of competition are maintained without abuses.