The Italian Competition Authority to investigate into abusive conducts of major ferry operators concerning the Sardinia links
The recent consolidation process in the Italian
maritime transport sector have changed the competition landscape of the market.
First, the merger between Tirrenia and Compagnia Italiana di Navigazione (CIN)[1]
and the subsequent acquisition of CIN and by Moby Onorato Partecipazioni (OP)[2],
both conditionally cleared by the Italian Competition Authority (ICA), led to
the concentration of a substantive market power on in the hands of Moby and CIN
lessening the market competition. In essence, Moby and CIN, both of which are
now controlled by OP, enjoy a very strong market positon being almost the only ferry
operators in many maritime links between Sardinia and Continental Italy. Their position
has been recently challenged by Grimaldi when decided to relaunched its
Civitavecchia-Porto Torres link and entering the Livorno-Olbia and
Civitavecchia-Olbia routes.
Unsurprisingly, the commercial policies of Moby and
CIN attracted the attention of the ICA. In the past the ICA has considered
whether Moby and CIN, together with other competitors, have cartelized the
markets for the ferry links between Sardinia and Continental Italy by fixing
prices and allocating market shares. The initial infringement decision of the
ICA[3]
was, however, reversed by the Council of State[4].
By a decision made on 6 April 2016 in the Case A487, Compagnia Italiana di Navigazione-Trasporto
marittimo delle merci da/per la Sardegna[5], the ICA has opened an Article 102 TFEU
investigation against CIN and Moby. The ICA focused on the allegedly abusive
conducts of Moby and CIN as reported in the complaints lodged by customers, TI
and NLL, and Grimaldi. The ICA identified the relevant markets affected by the abusive
conducts in the following bundles of links for the transportation of goods by
sea: i) the bundle of links connecting Northern Sardinia with Northern Italy;
ii) the bundle of links connecting Northern Sardinia with Central Italy; and
iii) the bundle of links connecting Southern Sardinia with Central Italy. Each
of the above bundle of links was a distinct relevant market in which OP,
through Moby and CIN, held a dominant position due to high markets shares and
weak actual and potential competition pressure from rivals. Grimaldi only
recently strengthened its presence on some of the above links, while other
competitors operated those routes only during the summer period. Considering
that collectively Moby and CIN had an 87% share of the market, the position of
OP was close to that of a monopoly.
TI and NLL complained that, for several times Moby and
CIN refused to load trailers and other vehicles, though they had paid for the
fares and there was still was available capacity on the decks of the ferries of
the dominant firms. TI also complained that CIN had terminated the commercial
agreement concluded with it only seven months earlier and later Moby
communicated its intention to apply less favourable commercial conditions. Similarly,
NLL reported that CIN and Moby unilaterally amended their commercial agreements
with NLL in a unfavourable manner for the complainant. That occurred after that
NLL communicated to Moby and CIN that it entered into a commercial agreement
with Grimaldi, with a view to obtain from them more favourable conditions.
Grimaldi contended that the above conducts of Moby and CIN were a boycott
against it and a retaliation against TI and NLL for their decisions to deal
also with Grimaldi.
The ICA believed that the refusal to supply and the discriminatory
conducts carried out by Moby and CIN against TI and NLL were part of a
foreclosing strategy aimed at Grimaldi, which was the only reliable competitor
for the dominant firms. Moreover, the contested conducts may have a signaling
effects with regard to the haulers considering to shift part or all their
transport needs to Grimaldi. Moby and CIN, in retaliation for their dealing
with Grimaldi, applied to TI and NLL less favourable commercial terms than
those that they applied to the shippers that did not use the Grimaldi ferries.
That might put off the other shippers from concluding commercial agreement with
Grimaldi. Similarly, the conducts of Moby and CIN should also discourage
Grimaldi and other ferry operators from entering the relevant markets.
The question arising now is whether Article 102 TFEU would
be an effective tool to regulate the abuse of the quasi monopoly power acquired
by OP and their subsidiaries CIN and Moby through the consummation of the above
mergers.
[1] Michele Giannino, The Italian Competition Authority clears a merger between two
major ferry companies by imposing a set of behavioural remedies (Compagnia
Italiana di Navigazione, Tirrenia), 21 June 2012, e-Competitions
Bulletin June 2012, Art. N° 48228.
[2] Michele Giannino, The Italian Competition Authority conditionally clears a merger
between two major ferry operators (Onorato Partcipazioni-Newco / Moby-Compagnia
Italiana di Navigazione), 10 December 2015, e-Competitions
Bulletin December 2015, Art. N° 78304.
[3] Michele Giannino, The Italian Competition Authority penalizes four ferry operators
for fixing fares for Sardinia-Continental maritime routes (Sardinia Ferry
Fares), 11 June 2013, e-Competitions Bulletin June 2013, Art. N°
54257.
[4] Michele Giannino, The Italian Council of State says that major ferry companies did
not agree to increase fares for the Sardinia-Continental Italy maritime links
(Sardinia Ferries Fares), 4 September 2015, e-Competitions
Bulletin September 2015, Art. N° 75696.
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