Antitrust bites - Newsletter

Excessive pricing: ICA finds an abuse of dominant position in the market for ferry services

With decision of 29 March 2022, published in the Bulletin no. 14 of 19 April 2022, the Italian Competition Authority (ICA) found an abuse of dominant position by Caronte & Tourist S.p.A. (C&T), in breach of Article 3, lett. a), law no. 287/90. The infringement relates to the imposition of excessive prices for ferry services for passengers with cars. In light of the abuse, a fine of slightly more than EUR3.7 million has been imposed on C&T.

The ICA found that C&T held a dominant position in the market for transport by ferry of passengers – with or without vehicles – and goods for routes between the harbours of the city of Messina area from the city of Villa San Giovanni. The dominant position was ascertained after having assessed the market share of C&T and having taken into account further elements indicating C&T’s economic strength (for example its qualification as “historic operator” offering services of connection through the Stretto di Messina; the availability of a broad fleet).

The ICA based its finding of the abuse on the application of the “two-fold” standard of proof, which has been developed since the United Brands ruling (case C-27/76) and which aims to find the disproportionate amount of tariffs with regards to the costs to be borne (excessiveness) and to the economic value of the service provided (iniquity).

As far as the assessment of the excessiveness was concerned, the ICA deployed several tests (corresponding to different allocations of costs) and each of them highlighted the relevant disproportion between C&T revenues and costs while offering ferry services. The ICA applied a cost-plus methodology, adding to the relevant costs an amount corresponding to the remuneration of the invested capital.

As far as the iniquity standpoint was concerned, the ICA found it to be true, in particular after having carried out a comparison with international benchmarks (it was found that C&T applied substantially higher tariffs compared to the operators active on similar routes, despite offering a lower quality service).

After the investigations, the ICA found no proof of the existence of further potential discriminatory abuse regarding setting the same price irrespective of the number of passengers of the vehicle to be boarded on the ferry (the behaviour was deemed a general practice within the sector).

Private antitrust enforcement and order to disclose evidence: According to AG Szpunar it might in principle regard documents that must be created ex novo

On 7 April 2022, Advocate General (AG) Szpunar delivered his opinion in the preliminary case C-163/21. The judgement involves the interpretation of Article 5, para. 1, of Directive 2014/104/EU (the Directive), to clarify whether, as far as actions for antitrust damages are concerned, national courts can order a party to disclose documents that must be created ex novo (for instance, by compiling or classifying information, knowledge or data).

In particular, during the main proceedings, the applicants requested the access to information purportedly necessary to determine the damages allegedly suffered, the collection of which would have involved the duty for the defendants to draw up a document on an ad hoc basis.

The AG noted that the situations of “pre-trial discovery” might, in principle, fall within the scope of the Directive. Furthermore, Article 5 of the Directive would have been applicable to the main proceedings ratione temporis, representing a procedural provision which should be applied to actions filed after 26 December 2014.

On the merits, the AG held that a textual interpretation of the Directive would not preclude the admissibility of an order to disclose documents to be created ex novo.

According to the AG, the same conclusion could be suggested by a systematic interpretation of Article 5. The Directive gives relevance to the “scope and cost of disclosure” to determine its proportionality, thus inherently confirming that it may sometimes be necessary to perform tasks which go beyond the “mere communication of objects containing information.”

Last but not least, as far as a teleological interpretation was concerned, the AG considered that it should suggest a rebalancing of the information asymmetry between the parties. In particular, the exclusion from the outset of the possibility of requesting the disclosure of documents that must be created ex novo could create an insurmountable barrier to the application of antitrust rules in private enforcement.

Accordingly, the AG proposed to the Court of Justice to answer the preliminary question by interpreting Article 5 of the Directive as meaning that it also allows to order the disclosure of evidence when the documents involved in the request must be created ex novo, by “compiling or classifying information, knowledge or data” which are held by the addressee of the disclosure order. It is the duty of the national courts to guarantee that the disclosure is limited to what is relevant, proportionate and necessary (for instance, appointing an expert to carry out the compiling of the information involved in the disclosure order).

Exceptions to the consumer’s right of withdrawal from distance and off-premises contracts: clarifications by the Court of Justice

The Court of Justice decision of 31 March 2022 concerns the case of a consumer who purchased online tickets for a concert from a provider of ticket agency services. The concert was later cancelled because of restrictions adopted in the context of the pandemic. Since the consumer was not satisfied with the voucher sent by the provider, issued by the concert organiser and correspondent to the purchase price, they requested the provider of ticketing agency services to reimburse them for the voucher.

Article 9 of Directive 2011/83/EU on consumer rights provides for a period of 14 days within which the consumer can withdraw from distance and off-premises contracts without giving any reasons nor paying different costs than those provided for in the same Directive. This is without prejudice to the exceptions provided for by Article 16. Letter l) of Article 16 and excludes the right of withdrawal in case of a provision of services concerning leisure activities if the contract provides for a specific date or period of performance.

The German Court before which the consumer brought the action requested whether the exception set out in Article 16, lett. l) of the Directive could also apply if the tickets for access to leisure activities are not sold by the organiser of the activity, but by an intermediary, as in the case at issue.

The Court – to which the preliminary ruling was referred – points out that the exception set out in Article 16, lett. l) of the Directive aims at protecting the organisers of leisure activities, such as cultural or sport events, from the risk associated with the setting aside of some capacity which, if a right of withdrawal were exercised, they may find difficult to use.

The Court has therefore answered positively to the preliminary ruling, within the limit in which the economic risk associated with the exercise of the right of withdrawal would fall upon the organiser of the leisure activities at issue.

Concentrations and abuse of dominant position: Regional Administrative Tribunal of Lazio rules

With decision of 24 March 2022, no. 3334, the Regional Administrative Tribunal of Lazio annulled the decision by means of which ICA ascertained an abuse of dominant position realized also by means of various concentrations, through which an undertaking, deemed dominant in the market of ticketing services for light music events, acquired control of four of the main national promoters.

The Regional Administrative Tribunal stated that the decision, in the part where it found that the concentrations were expression of the undertaking’s exclusionary strategy, was flawed above all due to a lack of investigation. This was because the ICA did not adequately take into consideration the undertaking’s defensive arguments aiming at demonstrating that the main objective of the concentrations was to face the expansion of the main competitor vertically integrated in the ticketing and promoting sectors and therefore were not expression of an exclusionary strategy.

The Regional Administrative Tribunal also deemed that the individuation of an abuse of dominant position as per Article 102 TFEU in a set of concentrations is contrary to the euro-unitary law pertaining to concentrations, since Article 21 of Regulation no. 139/2004 “expressly” excludes “the applicability of Article 101 and 102 Tfeu to concentrations”. The only tools through which the authorities may intervene in relation to concentrations, according to the Regional Administrative Tribunal, are those provided for by Regulation no. 139/2004 (prohibition to implement the operation and clearance with conditions), since the authorities are not allowed to “overlook the use of the control mechanism provided for by the mentioned Regulation and intervene through the application of Article 102 Tfeu”.

If, in theory, the concentrations could be evaluated by ICA pursuant to different standards than those provided for by Regulation no. 139/2004 – the Regional Administrative Tribunal continues – the protection system delineated by such law also in the interest of the undertakings would be compromised.

ICA starts a proceedings for an alleged cartel between distributors of automotive fuel

With decision of 29 March 2022, the ICA has opened an investigation into 12 operators active in the distribution of automotive fuel in the extra-customs area of Livigno to verify the existence of a potential anticompetitive agreement infringing Article 2 of Law no. 287/90.

The proceedings follows a report transmitted to ICA in December 2021 by the Special Antitrust Team of the Finance Guard.

The evidence brought to the attention of the Authority, which include documents gathered in the context of a criminal proceedings, would have shown a parallelism of the prices of gasoline and fuel applied by all the distributors active in the territory of the Municipality, even if owned by different undertakings and affiliated to different oil companies, with at most casual and unimportant price variations.

The evidence acquired in the context of the criminal proceedings would include exchange of e-mails that would attest an express agreement on prices.

In the press release of 5 April 2022, the Authority stressed that such proceedings has no links with the increases of fuel prices in the national territory, which as well were the subject of a recent in-depth analysis by the Authority.