The Italian antitrust authority targets an abusive conduct in the gas natural market


The Italian antitrust authority targets an abusive conduct in the gas natural market

By a decision made on 12 March 2019[1], the Italian Competition Authority (ICA) opened an antitrust enquiry against the current holders of the concessions for the provision of distribution services for natural gas in the area of Genoa. The conducts of the incumbents allegedly interfered with the tender competition called for by the municipality of Genoa to award a new concession for the distribution of natural gas

The facts of the case
Ireti, Italgas Reti and 2I Rete Gas are the current providers of the services for the distribution of natural gas in the territorial ambit named ATEM Genova 1 that encompasses 24 municipalities in the metropolitan area of Genoa. According to the relevant regulatory framework, the Municipality of Genoa (MoG), as contracting authority, had to launch a competitive tender procedure for the award of the new concession contracts for the distribution of natural gas by 2017.
The MoG reported to the ICA that since February 2018 it required several times Ireti, Italgas Reti and 2I Rete Gas to furnish the information indicated in Ministerial Decree no. 226/2011. More specifically, the said information concerned the characteristics of the distribution networks of each incumbent and the interactive cartography of these networks. For the MoG these data were necessary to prepare the tender notice to launch the competitive procedure to award the new concessions. The incumbents, however, did not reply to MoG or provide insufficient information.  

The decision of the Italian Competition Authority
Every concession holder has a legal monopoly in the area covered by the awarded concession. Hence, the ICA identified a relevant market in each of the concessions in force and each of those markets was dominated by the incumbent. The ICA took the position that the dominant undertakings appeared to refuse to provide the MoG with the required information. The ICA also indicated that the required pieces of information were clearly needed by the contracting authority to prepare the notice for the incoming competitive procedure for the award of the new concessions. Further, the ICA was of the view that the reasons adduced by the incumbents for withholding the data or lately furnishing them were ill-grounded. These negative conducts continued for all the 2018 year. In this way, the incumbents succeeded in preserving their dominant positions in the relevant markets frustrating the efforts of the contracting authorities to organize a competitive procedure to select new the service providers. Though it had required the information in question more than a year ago, the MoG have not yet issued the tender notice because of the conducts of the incumbents. Then, the ICA made the preliminary finding that the above reported conducts of the incumbents may constitute an abuse of their dominant position and opened an in-depth Article 102 TFEU investigation against the incumbents.

Conclusion
The theory of competition harm envisaged by the ICA is that the dominant firms delayed the organization of a competitive procedure through which to entrust the concessions for the distribution of natural gas currently held by the dominant firms. These dilatory tactics consisted of withholding the data in the possession of the incumbents which were needed by the contracting authorities to start the competitive procedure, and namely to the tender notice. It may be worth noting that, according to the decisional practice of the ICA these practices constitute abusive conducts breaching Article 102 TFEU[2].   
    




[1] Autorità Garante della Concorrenza e del Mercato (Italian Competition Authority), decision no. 27585 of 12 March 2019, Case A527, Comune di Genova/Distribuzione Gas Naturale, in Bullettin n. 12 of 25 March 2019, www.agcm.it.  
[2] See among many, Autorità Garante della Concorrenza e del Mercato (Italian Competition Authority), decision no. 23396 of 14 March 2012, Case A433, Affidamento del servizio di gestione integrata dei rifiuti solidi urbani nel Comune di Messina in Bullettin n. 13 of 16 April 2012, www.agcm.it.

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