Since its enactment, Italian Law No. 84/94 on “Recast of the rules on ports” (so-called port law) has been based on the principle of free competition among port operators, preventing holders of concessions over State-owned land from applying for, and obtaining, concessions in respect of further areas of the same port to carry out the same activities as those carried out in the area under concession.
The ratio for such provision can be easily found in the report accompanying the first version of the port law. It basically reflects the necessity for ports to be at any time opened to multiple companies operating in full competition among each other, with a view to progressively improving quality and innovation in port services. Indeed, according to Italian law makers, “only steady confrontation and competition can generate a port policy aimed at reducing costs and, at the same time, at providing increasingly well-structured and comprehensive services”.
Article 18 of Italian port law was the subject of a number of pronouncements – in particular by Italian Regional Administrative Courts (TAR) and by the Italian Communication Authority (AGCOM). In other cases, and particularly having regard to EU anti-trust rules, they provided an interpretation of the prohibition stricter than the one inferable from the literal meaning of the Italian provision at issue.
It should be noted that, in 2002, the TAR of Puglia still regarded the structure of the State concessions in place at that time at the Port of Brindisi as noncompliant with EU principles. Indeed, in the administrative court’s view, not only the authority responsible issuing concessions should ensure that multiple companies be allowed to carry out port operations related to handling specific and different goods categories but it should also – depending on the size and traffic capacity of the port concerned – ensure the co-existence of multiple companies dealing with the same goods category, in order to ensure competition among them.
This is, therefore, the “historical” interpretation and application of the prohibition to award a double concession for performance of the same activity in the same port.
The ratio for such a strict provision and for its legal interpretation, likewise strict and closely connected with EU competition rules, is justified when the reference parameter for applying such prohibition is an individual port, its operation and traffic capacity.
The question here however relates to identifying the scope of the said rule (Article 18(7) of port law) when the scenario changes. The reform of Law No. 84/94 enacted in 2016 has in fact changed the pre-existing system.
Fifty-seven national ports were reorganised and, as it were, merged into the new fifteen Port System Authorities, strategic decision-making centres having their headquarters in ports identified by the EU as ports of strategic interest (“core” ports).
Therefore, as a result of the rationalisation brought about by the reform, the prohibition to award a double concession to carry out the same activity in the same port should now be reviewed in the light of the new structure, where a “system” is made up of two ports.
It is therefore legitimate to wonder – for the purpose of the above prohibition – whether the ports belonging to a single system should still be regarded as two separate entities, or whether a port operator can be refused a concession in respect of a port that is now part of the same system of the port to which the granted concession relates.
In other words – and in the absence of an express provision on the point in the revised port law –, is it reasonable to assume that the scope of the statutory prohibition under examination has extended?
If the above interpretation were to be the case, it would be impossible for a terminal operator to carry out his/her activity also in another port that has – until recently – been regarded as a separate and different commercial and competitive market.
A hint for the interpretation of the scope of Article 18(7) can be found in certain recent judgements and administrative regulations that seem to reflect a more concrete and functional view of the port concession system and, thus, of the prohibition to award a double concession to carry out the same activity in the same port.
Starting from the assumption that a concession should be regarded as a contract, which, as such, reflects “a functional model that allows pursuing, with the consent of the economic operator, interests that could not otherwise be achieved through authoritative power alone”, the TAR of Liguria started mitigating the strict interpretation of Article 18(7) of port law, including in terms of protection of competition.
The Administrative Court of Liguria first and foremost recognised the power of Port Authorities to verify on a case-by-case basis the existence of any circumstance that may adversely affect the prohibition to award a double concession to carry out the same activity in the same port – and, thus, free competition, stating that “the limited space, coupled with the level of specialisation required for individual terminals can make complex, and even inappropriate, the presence, in the same port, of multiple concessionaries performing the same activity in actual competition among each other particularly (…)”.
Said topic was addressed also by the Port Authority of Livorno, who stated that “a somewhat flexible application of the rules is not unlawful (for example, by allowing a terminal operator to work beyond the scope of his/her concession), provided that the basic principles of transparency, equal treatment and protection of competition are ensured, thus avoiding abuse of dominant position”.
Therefore, competent authorities so far seem more inclined to give a less restrictive interpretation to the above rule, the application of which – subject to compliance with the basic principles for protection of competition and prevention of abuses – should take into account the contractual and co-operative nature of concessions with a view to attracting traffic.
An interpretation of the prohibition under Article 18(7) of port law involving its application also to two different ports – even if belonging to a single system – might indeed appear as a step backwards, compared to an interpretation that can without fear be said to be more modern than the one given by the legislator in 1994.
In this new scenario, one may expect that the prohibition under Article 18(7) of port law – which competent administrative and jurisdictional authorities will have to interpret in the near future – will evolve into a well-established more practical and functional interpretation, in any event in accordance with the objectives of development and improvement of Italian ports expressly pursued by the Italian port reform of 2016.