The Italian Competition Authority opens an Article 102 TFEU enquiry against the manager of Milan airports

Following an agreement concluded in 1961 with the manager of the airports of Milan, SEA, and renewed many times ATA was the holder of an exclusive concession to manage the centralized infrastructure at the airport of Milan of Linate (LIN). In particular, ATA was also the manager of the terminal for general aviation. SEA blamed ATA for failing to timely complete a number of facilities agreed in the latest concession agreement, though it did not terminate it. As Sapam, the company controlling ATA went into receivership, the receiver called for a competitive procedure to select to whom sell the 98% share capital of ATA. Cedicor, a Uruguay-based group, and SEA bid for ATA. The winning bid was that made by Cedicor. One day before the receiver officially communicated to the bidders the exit of the procedure in July 2013 SEA sent a letter to Cedicor and its advisor to communicate its intention to start proceedings to obtain the termination of the concession agreement. One month later, SEA communicated to ATA that the agreement was terminated inviting it to give back the facilities it was allowed to use under the agreement.
Cedicor reported the above facts to the Italian Competition Authority that decided to open an Article 102 TFEU investigation against SEA on 20 December 2013 (CaseA474, Cedicor/SEA).
SEA had a dominant position in the markets for the management and granting access to the centralized facilities at the Milan airports of LIN and Malpensa as holder of an exclusive concession to manage these airports on the basis. Though SEA had a 76% share in the market of the provision of handling services to commercial aviation through its subsidiary SEA Handling, it was not active in the in the market of the provision of handling services to general aviation. The ICA feared that with the contested conduct SEA was trying to leverage its economic power from the market of the provision of handling services to commercial aviation to the market of the provision of handling services to general aviation by impeding Cedicor from entering into it with the acquisition of ATA. To this end, SEA would have altered the competitive tender procedure to select the purchaser of ATA. Indeed, SEA had strategically terminated the concession agreement with ATA to impede its acquisition from Cedicor. Moreover, the SEA conduct did not make any sense from an economic viewpoint. First, it bid for ATA without raising the issue of  the validity of the agreement. Second, following the termination of the agreement, SEA would enter in the possession of the facilities used by ATA regardless of the exit of the competitive procedure. In other words, had the agreement vitiated why on earth did SEA bid for ATA?

In short, in Cedicor/SEA  a legal monopolist attempted to extend its market power from the dominated market to a contiguous one foreclosing a potential new entrant. Apparently, the abusive conduct consists of substantially nullifying a judicial procedure, by depriving  potential competitor of any interest in it. If the concession agreement between SEA and ATA is no more in force, Cedicor will have no interest in buying ATA, with the result that SEA can enter into the market for general aviation. 

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