An extract from The Public Competition Enforcement Review, 12th Edition

Antitrust: restrictive agreements and dominance

i Significant cases

The TAR Lazio quashes two ICA decisions concerning an alleged parallel network of anticompetitive vertical agreements between taxi companies and drivers active in Rome and Milan

In a judgment of 29 April 2019, the TAR Lazio upheld the appeals of five taxi companies against the ICA's decisions on alleged vertical restraints.

The ICA had found that the presence of non-compete obligations in the companies' bylaws and contracts with affiliated drivers amounted to a vertical restriction. However, the ICA did not prove that taxi companies and drivers shared a 'common interest', which, in the TAR Lazio's view, is a key element in the assessment of vertical agreements.

The TAR Lazio also pointed out some shortcomings in the ICA's market definition. First, the ICA did not engage in any empirical analysis before concluding that services provided by taxi companies were substitutable with those offered by mobile apps. Moreover, the ICA did not take into due account that the market for taxi management services is characterised by a double source of demand, from both passengers and taxi drivers.

Finally, the ICA acknowledged that the agreements did not amount to by object restrictions of competition and failed to assess the actual anticompetitive effects on competition of the relevant contractual clauses.

The TAR Lazio found that the ICA's decisions were inconsistent. This is because, on the one hand, the ICA found that taxi drivers participated in the infringement, while on the other hand they were also harmed by it. In this respect, the judgments of the TAR Lazio seem difficult to reconcile with a well-established principle of EU case-law, according to which a company that participated in an anticompetitive agreement might well be harmed by that same agreement too.

The TAR Lazio reviews the ICA's decisions on alleged abuses of dominant position in the retail supply of electricity

On 17 October 2019, the TAR Lazio annulled the ICA's decisions that had fined Enel and Acea for abuse of dominant position in the local markets for retail electricity supply. The two undertakings are active both in the enhanced protection service (EPS, a regulated tariff regime reserved for domestic clients and small businesses) and in the supply of electricity at market prices (or 'deregulated market').

In the ICA's view, Enel and Acea leveraged their position in EPS to foreclose competitors active in the deregulated market. In particular, Enel and Acea collected EPS customers' consent to be contacted for commercial purposes, and then used the lists of these customers to advertise their services in the deregulated segment of the market. According to the ICA, the contested practices aimed at cross-selling deregulated services to Acea and Enel's EPS customers, in order to retain those customers after the imminent abolition of the EPS regime. The strategy would in turn foreclose electricity suppliers competing in the deregulated market with no customer base in the EPS segment.

With reference to Acea's appeal, the TAR Lazio overturned the ICA's assessment. The judges noted that Acea made no significant use of its lists of EPS customers in promoting its offering in the deregulated market. The ICA's reasoning was based on mere presumptions and did not adequately demonstrate the existence of a causal link between the conduct and the alleged infringement.

Regarding Enel's appeal, the TAR Lazio overturned the ICA's calculation of the fine, particularly with respect to the duration of the infringement and the quantification of the relevant turnover. However, the TAR Lazio rejected the grounds of appeal concerning the alleged abuse.

ii Trends, developments and strategiesICA imposes symbolic fine on a railway operator for an abuse of dominance leading to an improvement in the network in terms of technological innovation

On 31 July 2019, the ICA closed its investigation into Ferrovie dello Stato SpA (FS), Rete Ferroviaria Italiana SpA (RFI) and Trenitalia SpA (Trenitalia) for an alleged abuse in the markets of rail infrastructure management and regional rail passenger transportation services in the Veneto region.

In the ICA's view, the parties leveraged their monopoly in the upstream market for the management, maintenance and development of the rail network to obtain from the Veneto region an exclusive contract for the downstream provision of regional rail services without any public tender.

The ICA found out that the direct award was the result of RFI's obligation to carry out an electrification of the network that RFI would not have otherwise carried out.

However, the ICA only imposed a symbolic fine of €1,000 on the parties because it concluded that the conduct would, 'in any case, lead to an improvement in the network in terms of technological innovation'.

iii Outlook

In 2019, the ICA initiated proceedings for alleged infringements of Article 102 TFEU affecting the sectors of recycling of plastic packaging and pharmaceuticals. The ICA has also opened proceedings against Amazon for allegedly discriminating between sellers using Amazon's own logistics services and those relying on third-party services.

Furthermore, the ICA is investigating Google for allegedly refusing to integrate certain apps into Android Auto (a function of Android smartphones allowing the use of apps on a vehicle's embedded screen).