The Italian Competition Authority fines seven undertakings for cartelizing the market for road barriers through a joint venture


By the decision made on 28 September 2012 (CaseI723 Barriere Stradali) the Italian Competition Authority (ICA) fined seven undertakings, Metalmeccanica Fracasso, Industria Meccanica Varricchio, Tubosider, Car Segnaletica Stradale, San Marco, Ilva Pali Dalmine Industriale and Steam Generators for breaching Article 101 TFEU. The anticompetitive practice affected the market for motorways and road barriers. The competition infringement found in Barriere Stradali was a collusive tendering which was based on sophisticated mechanism to rotate order among colluders combined with indirect information exchange via a trade association.
The anticompetitive practice had effects nationwide. It lasted from May 2003 until 2007 and the participants to it accounted for the 95% share of the relevant  market. The parties carried out a single complex anti-competitive practice the object of which was to fix prices and share markets, removing uncertainties as for the commercial policies of the parties .
The vehicle through which the parties implemented the cartel was the joint-venture, Consorzio Manufatti Stradali Metallici (Comast), which, incidentally, went into liquidation when the enforcement authorities found out the cartel. Comcast was the vehicle through which the parties exchanged commercially sensitive information instrumental in the implementation of the collusion. More precisely, data regarding calls for  tender and related prices freely circulated among the parties. Moreover the cartel was equipped with sufficiently strong deterrent mechanisms to secure the party compliance with the collusion as reflected by the fact that the practice lasted for four years.
The parties shaped a complex arrangement to set the shares of market to be allocated to each of them. The parties that were not entitled to win a contract according to the above system for the allocation of market shares had to offer higher prices than those of the designated winner.
The cartel had as effect to crystallize the market shares of the parties to the detriment of competitors, which, according to the ICA, amounted to a serious competition infringement. Neither attenuating nor aggravating factors were found in this case. Then, the ICA imposed on the parties fines ranging from a maximum of € 11.865,216,55 to Marcegaglia to a minimum of € 33.174,10 to Ilva Pali Dalmine Industries.
It may be worth noting that the small amount of the fine imposed on Ilva Pali Dalmine Industries can be explained by noting that the latter explicitly withdrew from the cartel in 2006 by sending a formal letter to Comcast. In that regard Barriere Stradali is a beneficial reminder of the need for a cartelist that intends to leave the cartel to take positive action to publicly distance itself from the collusion. Ilva Pali Dalmine Industries did so and saw it competition liabilities accordingly reduced.
Finally, the fine imposed on San Marco was reduced considering that this undertaking went into bankruptcy, though the ICA did not formally apply the inability-to-pay doctrine.

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