The Italian Constitutional Court will adjudicate the immunization of the Alitalia-AirOne/CAI concentration from merger control
The story is well known. The Italian Government enacted the decree 134/2008 with a view to immunize from merger control, which would have been almost certainly resulted in a prohibition decision, the Alitalia-AirOne/CAI concentration, necessary to rescue the ailing Italian flag carrier. The decree restrained the regulatory powers the Italian Competition Authority (ICA) with regard to the concentration to the effect that it could only impose on the merging parties behavioural remedies to avert the risk of unfair pricing and contractual terms as it did by the decision taken in December 2008.
One competitor of the merging parties impugned the decision before the regional administrative court of Lazio (Tar Lazio). All the pleas submitted by the applicant have been dismissed by the Tar Lazio except for that relating to the alleged infringement of Articles 3 and 41 of the Italian Constitution. Finding for the applicant, the Tar Lazio says that the decree 134/2008 may have discriminated against competitors of the merging parties by applying a more favourable treatment to the latter. They have been able to implement the concentration without being subject to the ICA merger control with the ensuing risk of the merger being banned for being anticompetitive. So, the merging parties have improved their market position at the detriment of rivals. Such different treatment may amount to a violation of the principle of non discrimination. Moreover, the decree does not enlist any general interest of constitutional relevance that can be balanced against the public good of competition, also of constitutional relevance, so to justify the restriction of competition brought about by the contested measure. The decree refers to concentrations pursuing general interests. However, it fails to clarify which such general interests are. Moreover, it does not explain why such general interests should tramp over competition and cannot be pursued through alternative measures which are non-discriminating and competition law-compliant.
In sum, in the view of the Tar Lazio the decree appears to infringe Articles 3 and 41of Constitution. These articles lay down the principles of non discrimination and the principle of free economic initiative also encompassing the protection of competition, respectively. Therefore, the Tar Lazio stays proceedings and refers to the Italian Constitutional Court the question whether the decree breaches Articles 3 and 41 of Constitution (decision of 27 May 2009, case 1223/09, Meridiana/AGCM, ). If it does so, the ICA decision on the concentration will be quashed. In the meantime, pending the procedure before the Constitutional Court, the new Alitalia will be comfortably enjoying its quasi-monopoly on the Italian market for air transport.
One competitor of the merging parties impugned the decision before the regional administrative court of Lazio (Tar Lazio). All the pleas submitted by the applicant have been dismissed by the Tar Lazio except for that relating to the alleged infringement of Articles 3 and 41 of the Italian Constitution. Finding for the applicant, the Tar Lazio says that the decree 134/2008 may have discriminated against competitors of the merging parties by applying a more favourable treatment to the latter. They have been able to implement the concentration without being subject to the ICA merger control with the ensuing risk of the merger being banned for being anticompetitive. So, the merging parties have improved their market position at the detriment of rivals. Such different treatment may amount to a violation of the principle of non discrimination. Moreover, the decree does not enlist any general interest of constitutional relevance that can be balanced against the public good of competition, also of constitutional relevance, so to justify the restriction of competition brought about by the contested measure. The decree refers to concentrations pursuing general interests. However, it fails to clarify which such general interests are. Moreover, it does not explain why such general interests should tramp over competition and cannot be pursued through alternative measures which are non-discriminating and competition law-compliant.
In sum, in the view of the Tar Lazio the decree appears to infringe Articles 3 and 41of Constitution. These articles lay down the principles of non discrimination and the principle of free economic initiative also encompassing the protection of competition, respectively. Therefore, the Tar Lazio stays proceedings and refers to the Italian Constitutional Court the question whether the decree breaches Articles 3 and 41 of Constitution (decision of 27 May 2009, case 1223/09, Meridiana/AGCM, ). If it does so, the ICA decision on the concentration will be quashed. In the meantime, pending the procedure before the Constitutional Court, the new Alitalia will be comfortably enjoying its quasi-monopoly on the Italian market for air transport.
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