On 25th March 2015, the Italian Competition Authority (the “ICA”), after a two-year investigation, fined two large Italian insurance companies (the “Companies”) approximately €29 million cumulatively for infringements of Article 101 TFEU, the prohibition of anti-competitive agreements. In particular, the ICA found anti-competitive conduct during tenders made by public transportation companies for providing insurance services within the territory of 15 Italian cities.
According to the ICA, the Companies agreed not to compete amongst themselves in order to make all tenders fail because, through this strategy, they were entitled to renew the contracts already in place with the public transportation companies.
The ICA had 58 tenders under scrutiny, from 2010 to 2014. The ICA found that these tenders ended up with one offer to the public authority or no offers at all and held that this behaviour could not be the result of true competition and that the Companies had illegally decided the outcome of the tenders.
Further, the ICA found the anti-competitive coordination was proved by numerous meetings among the Companies held in the premises of their representing association (“ANIA”), during which the Companies shared information about the tenders.
The ICA held that this concerted practice permitted the Companies to sustain far lower costs then they would have borne by competing and allowed them to charge higher prices for the insurance.
Therefore, the ICA found that the conduct raised serious potential issues regarding its compatibility with Article 101 TFEU. In fact, any agreement not to compete with competitors would fall within such provision which forbids collusive tendering.
The ICA has increased its focus on public tenders as fines and investigations of such a kind are becoming numerous. This of course represents a serious deterrent against collusive tendering, which is among anti-competitive practices, is sadly very common in the Italian market.
However, it may be that the ICA has not adequately considered the characteristics of the market of insurance services for Public Transportation Companies which is an oligopolistic market with low profits. Any coordinated conducts among undertakings may be the results of prevailing economic characteristics rather than concerted practices aimed at limiting competition. Regardless, the ICA fine stands in the present case.