On 5th  February 2014, the Italian Competition Authority (“ICA”) opened an in-depth investigation into twelve Italian companies in the electro-mechanics sector (the “Companies”) for alleged infringements of Article 101 TFEU, the prohibition against anti-competitive agreements.

The investigation was triggered by a parallel inquiry of the Public Procurator’s office of Florence which provided the ICA with certain documentation showing a possible anti-competitive strategy among the Companies.

The Companies are accused of coordinating invitations for tenders and monitoring prices for supplying Trenitalia S.p.A. (“Trenitalia”), the primary train operator in Italy, between 2010 to 2011. It is alleged that the Companies periodically shared emails containing the prices to be offered in tenders so as to pre-establish the winner of the tender at issue.

The ICA pointed out that the behaviour could potentially affect the European Union market as the alleged cartel would impact the entire Italian railway market which is an important part of the wider European Union railway market.

In light of the above suspicions, the ICA decided to open an in-depth investigation for alleged infringements of Article 101 TFEU.

The alleged behaviour raises serious potential issues regarding its compatibility with European Union competition rules and specifically with Article 101 TFEU. Indeed, any agreement or concerted practice aimed at fixing prices and allocating customers would cause a serious detriment to competition.

In our view, the investigation and scrutiny is particularly welcome as the railway sector in Italy is a quasi-monopolistic market with higher costs for customers compared to other European Union member states. If wrongdoing is found, the ICA investigation and subsequent enforcement action could be considered an effective deterrent for this kind of behaviour and make the railway market more competitive with high cost savings.

Moreover, the ICA decision points out that even for tenders launched by a privately owned company as Trenitalia (a rare occurrence in Italy) cartels can cause harm to the trade between member states and therefore the behaviour triggers a violation of European Union competition rules along with the national ones.

However, the alleged wrongdoing is not proven at this stage and the investigation continues.