On 10th December 2013, the Italian Competition Authority (the “ICA”) opened an in-depth investigation into twenty-three companies providing TV programme services for alleged infringements of Article 101 TFEU, the prohibition of anti-competitive agreements.
The investigation stemmed from a complaint filed by RAI-Radiotelevisione Italia S.p.A. (the “RAI”), the Italian public television incumbent.
The companies are accused of avoiding competing with each other for tenders. The ICA focused its attention on invitations made by the companies from 15th July 2013 to 3rd October 2013. This is the most important period of the year for businesses operating in the TV programme services sector.
In the TV programme sector, tenders are based on a lowest bid mechanism so that the invitation containing the lowest discount to a set price wins the tender.
The ICA pointed out that in such a period the discounts were too similar to each other to be the result of true competition and alleged that the companies had decided the winner of the relevant tender before making invitations.
Through this strategy, the companies would win the tender and avoid far lower costs than if they were competing. These higher costs were to the detriment of both the RAI and Italian taxpayers.
Such behavior raises serious potential issues regarding its compatibility with European Union competition rules and specifically with Article 101 TFEU. In fact, any agreement not to compete with competitors would fall within the prohibition in Article 101 TFEU that forbids bid rigging and market allocation.
In our view, the investigation and scrutiny is welcome. If wrongdoing is found, the ICA investigation and subsequent enforcement action could be considered a high profile deterrent against bid rigging and allocating markets. However, the alleged wrongdoing is not proven at this stage and the investigation continues.