The Italian Competition Authority opens an investigation against the manager of the airport of Rome for excessive pricing

Following the receipt of a complaint lodged by a transport trade association, the Italian Competition Authority (ICA) has opened an investigation into an alleged abuse of manager of Rome airport of Fiumicino (FCO), Aeroporti di Roma (ADR) (Case A442, Associazione Nazionale Fornitori Trasporti-Assofort/ADR).

The relevant market for the ICA investigation was the market for access to the facilities of exclusive or common use for carrying commercial activities at FCO. ADR had a dominant position in this market as it hold a concession for the management of the airport. At FCO Demontis Holding (DMH) carried out on behalf of Hertz the activity of renting cars to the customers had previously hired them at dedicated web sites (Advantage-rent-a-car). A shuttle bus service supplied by DMH collected customers at the air terminal and carried them to a parking lot located outside the FCO perimeter.

ADR informed DMH that in providing the Advantage-rent-a-car services the latter infringed the subletting agreement with ADR in many aspects and threatened to terminate this agreement. According to ADR, first DMH failed to pay the royalties generated by the Advantage-rent-a-car business. Second, this activity constituted an alternative to business conducted by Hertz at FCO, which entailed for ADR a loss of royalties it was entitled to under the agreement in force. Third ADR did not authorize DMH to operate the shuttle services.

The ICA feared that the above ADR conducts breached competition. In particular, the competition harm caused by such conducts was imposing unfair conditions for services ADR did not supplied. DMH carried out the renting activities outside the perimeter of FCO, thereby falling short the ADR jurisdiction and the same went for the shuttle bus. Therefore the ICA believed that the ADR conduct might be liable to impede or hinder the development of new low costs rent-a-car activities in the surroundings of FCO. On the one hand these activities were likely to increase consumer welfare through lower prices than those charged by competitors; on the other hand, however, they might have a negative effect for ADR as share of its revenue came from the royalties charged on rent-a-car- firms operating at FCO.

In other words, in Assofort/ADR the ICA has to consider whether ADR charged excessive prices on DHM for access to the airport facilities. To this end, it seems that the ICA will not rely on the traditional concept of the economic value of the service provided and the two-pronged United Brands excessive price test. Instead, it will focus on the question whether the royalties claimed by ADR amounted to unfair conditions. Interestingly, the ICA successfully applied the same methodology in an old investigation against ADR into groundhandling fees charged at FCO (Case A11, IBAR/Aereoporti di Roma). ADR levied a comprehensive fee for a number of services, though it effectively supplied to carriers only some of them. Then the ICA succeeded in establishing that such pricing policy amounted to imposing unfair contractual terms prohibited by competition law.

The deadline to conclude the investigation into the ADR conducts complained by Assofort is 3 May 2013.

Comments

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Car service from Rome airport to Positano
September 14, 2020 at 6:05 PM
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