The Italian Competition Authority levies a very small competition fines on a refusal of supply practice in the daily newspapers market
The decision of the Italian Competition Authority (ICA) in the SIE case is about the application of the essential facilities doctrine in the daily
newspaper sector, relating to the interaction between intellectual property
rights and competition[1].
The ICA took the view that access to the copyrighted contents of a daily
newspaper published by the dominant firm was considered as an essential input
for a firm providing news review services. Refusing access to such items then
constituted an abusive conduct.
The facts
of the case
Società Iniziative Editoriali Spa (SIE) was the publisher of the daily
newspapers ‘L’Adige’. Euregio Srl GmbH (Euregio) provided media intelligence services
under the brand name of Infojuice. More precisely, Euregio reviewed the news
published on the local press to clients in the province of Trento (PAT), among
which, in particular, those published on ‘L’Adige’. Until the end of December
2016 ‘L’Adige’ was included in the Repertorio Promopress (RP) system. The RP system
managed on behalf of the publishers that joined it the rights to reproduce
articles published on dailies and periodicals. The RP system offered to
undertakings providing news review services licences for the use the articles
protected by copyright. In September 2016 SIE sent a letter to the customers of
Euregio to inform them that starting from January 2017 it would withdraw from
the RP system and that the right to use the articles published on ‘L’Adige’
would directly managed by SIE. Later, the agents of SIE contacted the customers
of Euregio to introduce the SIE news service review to them. Euregio’s customers
questioned the capability of this firm to provide the news review service.
Euregio reacted by fruitlessly trying to obtain from SIE the necessary
copyright licence to use the news published on the daily ‘L’Adige’ for its
media intelligence services.
By a complaint lodged with the ICA on 29 November 2016, Euregio reported
the conduct of SIE to the ICA that opened an antitrust investigation against
the latter on the basis of Article 3 of the Italian Competition Act no.
287/1990, which corresponds to Article 102 TFEU.
In addition to start an antitrust investigation, the ICA also opened a
procedure pursuant to Article 14-bis of the Italian Competition Act no.
287/1990 to impose interim measures on SIE. The ICA believed that the statutory
conditions (the fumus boni iuris and the periculum in mora) for
the adoption of such measures were met in SIE.
First, there was a prima facie case that SIE carried out a foreclosing conduct
that might significantly restrain competition in the downstream market for
media intelligence services. Second, the conduct of SIE under scrutiny might
had such a negative impact on competition since January 2017. Therefore, in
absence of a regulatory intervention of the ICA, market competition would
suffer from a serious and irreparable damage.
Hence, on 25 January 2017 the ICA adopted an ad-interim decision
ordering SIE to grant licences to the contents of ‘L’Adige’ consistent with the
FRAND conditions. As the parties failed to agree on the terms of the licence,
on 22 March 2017 the ICA made a further ad-interim decision by which it laid
down the terms of the copyright licence required by Euregio. SIE complied with
the ICA decision by granting Euregio the licence in question within the
deadline set by the ICA.
The
decision of the ICA
The ICA identified the relevant product markets in the market for the
daily newspapers in the PAT and in the downstream market for the provision of
news review services in the PAT. SIE had a dominant position in the upstream
market where ‘L’Adige’ had a 63,6% share. The ICA considered the access to the
articles published in the daily newspaper as an essential facility for the
undertakings providing news review services. As showed by the ICA enquiry,
Euregio’s customers considered the review of the news published on ‘L’Adige’ as
an indispensable component of the media intelligence services to which they
subscribed.
The ICA believed that SIE decision to deny Euregio access, it had
previously granted, to the copyrighted items constituted an unjustified refusal
to supply. All the objective justification grounds submitted by SIE were
dismissed by the ICA. Next, the ICA considered whether refusal to supply an
intangible item such as a copyright licence could be considered as a
competition infringement. To this end, the ICA employed the three-limb test
developed by the European Commission and EU judges as for refusal to licence
intellectual property focusing, in particular, on the requirement that the
refusal prevents the appearance of a new product[2].
The ICA concluded that the SIE conducts met all these requirements and amounted
to an anticompetitive refusal to supply. The conducts in question would lead to
a new product, the bespoken new reviews offered by Euregio, to leave the market
notwithstanding a strong demand for it. As in the market there were not
competing or similar services, acting in this way SIE would harm the customers
of Euregio that would face the lessening or the disappearance of competition
among suppliers of media intelligence services. Moreover, the ICA also pointed
out that the foreclosing conduct aimed at Euregio was closely linked to the SIE
decision to enter into the downstream market for the provision of news review
service as reflected by the partnership agreement SIE concluded with Volocom in
June 2016.
Lastly, the ICA imposed on SIE a very tenuous competition fine of about
€ 1,000.00, bearing the limited competition impact of the abusive conduct. The
conduct was carried only over the space of a couple of months and SIE promptly implemented
the ad-interim measures adopted by the ICA.
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