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Antitrust: Rassegna di tutta la giurisprudenza amministrativa nel trimestre Luglio – Settembre 2013

Pubblichiamo di seguito il contributo di Carlo Edoardo Cazzato apparso su Concurrences il 10 ottobre 2013. L’articolo, nell’ambito della rassegna trimestrale di giurisprudenza amministrativa antitrust svolta per la Rivista, analizza la sentenza del TAR Lazio Sez. I, n. 7826 del 2 August 2013,che ha annullato la decisione dell’AGCM n. 23639 del 6 June 2012 in materia di abuso di posizione dominante nel mercato della grande distribuzione.

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Italian antitrust administrative case law. Overview of all decisions from July to September 2013 (sole contribution)

1. Premise – This work is the only contribution of a project (hereinafter, the “Project”) aimed to offer a general, quarterly overview of all the decisions of Italian administrative courts, which involve the Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato, hereinafter, the “AGCM”).

Specifically, the reference is to those decisions related to proceedings concerning only anticompetitive agreements and abuses of dominant position in which the AGCM was party (as either plaintiff or respondent). With this purpose the Project will take into account all the decisions of the TAR Latium (the Italian Regional Administrative Court of first instance, hereinafter the “TAR”)[1] and of the Consiglio di Stato (the Italian Administrative Court of second instance, hereinafter the “CdS”)[2] in the second quarter taken into consideration, from the start of July to the end of September 2013 (hereinafter, the “Quarter”)[3].

As far as we know, the Quarter under discussion saw the AGCM involved in twelve TAR decisions[4]. Among them, nine are related to unfair commercial practices[5], one case concerns mergers[6] and one the right to access documents during an antitrust proceeding[7]. In light of the above, they will not be taken into account for the purpose of the Project under consideration, which will focus solely on the remaining one case.

In the same manner, as far as we know, during the Quarter the AGCM was involved in only one decision issued by the CdS[8]. However, it concerns a case of unfair commercial practice so it will not be taken into consideration[9]. Finally, the Project this time will not examine in depth any decision of the CdS.

In light of the above, the present work will examine only one decision – TAR Latium, Sec. I, 2 August 2013, No. 7826 (hereinafter, the “Judgement”) -, highlighting the aspects of interest.

2. The Judgement – The Judgement concerns a judicial proceeding started through the action brought by Coop Estense Società cooperativa a r.l. (hereinafter, the “Coop Estense”) against the AGCM and the Municipalities of Modena and Vignola (two Italian cities in the Province of Modena, in the north of Italy), aimed to annul the AGCM’s decision No. 23639 issued on 6 June 2012 at the end of the proceeding No. A/437 (hereinafter, the “Decision”)[10].

It appears useful to recreate the framework in which the Decision under discussion was adopted by the AGCM.

On 23 February 2011, the AGCM decided to launch two distinct (but related) investigations to determine whether Coop Estense and Unicoop Tirreno Società Cooperativa a r.l. (hereinafter, the Unicoop)[11], respectively, abused their dominant positions in the mass retail markets in the Provinces of Modena and Livorno (hereinafter, the “Proceeding A/437” and the “Proceeding A437/B”, respectively[12]).

The investigations were brought under article 14, paragraph 1, of Law No. 287 of 10 October 1990 (hereinafter, the “Italian Competition Law”)[13] in response to press reports and information that as a consequence the AGCM requested from Esselunga S.p.A. (hereinafter, the “Esselunga”). They were aimed to ascertain whether the two cooperatives enacted two distinct abuses of dominant position designed to stop the entrance or expansion of the competitor Esselunga in the markets of reference, infringing article 3 of the above-mentioned Italian Competition Law[14]. In the AGCM’s view, the alleged abuses would consist of behaviour intended to block the purchase or use of designated commercial zones in order to prevent the competitor from opening sales outlets.

Both parties were notified of the measures during the course of various inspections conducted by AGCM officials with the assistance of the Market Protection Unit of the Guardia di Finanza (Italian Tax Police).

2.1. Proceeding A/437B was closed, ascertaining that there was not sufficient evidence to establish the existence of an abuse of dominant position by Unicoop Tirreno[15].

On the contrary, Proceeding A437 – the only one concerning the Judgement – was closed ascertaining that Coop Estense abused its dominant position in the market for supermarkets and superstore markets in the Province of Modena by seriously delaying, if not outright blocking, the entry or expansion of Esselunga in the same Province.

Specifically, the investigation revealed that Coop Estense implemented a unitary, on-going and repetitious strategy from 2001 to 2009. Specifically, according to the Decision Coop Estense systematically meddled in its competitor’s efforts to open new grocery sales points in areas with potential as commercial locations that were already at its disposal, particularly in the Municipalities of Modena and of Vignola, also intervening instrumentally in the administrative procedures under way after they were initiated by Esselunga to obtain the necessary permits. In the AGCM’s view, this strategy was embedded in a market context that is already characterized by the low availability of suitable areas for commercial locations and sizeable administrative barriers to entry.

Concluding its investigation, the AGCM ascertained that the above said conducts enabled Coop Estense to maintain and even strengthen its dominant position in the related markets with continued growth in its market shares, which reached 66% of the superstore market and 47% of the supermarket in the Province of Modena in 2011. Furthermore, by impeding an efficient competitor from entering the market, Coop Estense damaged consumer interests in the form of higher prices and/or less selection.

As a consequence, the AGCM issued that Coop Estense had to unblock the standoff that was created and had to promote initiatives to enable its competitor to initiate commercial activities within six months.

In addition, the AGCM imposed a fine of € 4,6 million euro on Coop Estense. In order to calculate the sanction under discussion, the AGCM took into account the gravity of the infringement under discussion. However, the final amount of the imposed fine was reduced in light of the practices that Coop Estense was employing to make it easier for its competitors to access the market.

At the request of the interested party, the AGCM authorized Coop Estense to pay the fine in instalments, taking into account the state of natural disaster in which the concerned territory was at the time of the Judgment due to the earthquake which struck the Province of Modena in 2012.

2.2. Coop Estense challenged the Decision on the basis of the following grounds:

(i) First of all, it contested its dominant position in the concerned markets on the basis of both factual and legal arguments (§ 1.); specifically, in the Coop Estense’s view, the AGCM would take into consideration that, in spite of its market share, Coop Estense was subject to high competitive pressures by its competitors;

(ii) Secondly, according to the Coop Estense, the AGCM would not demonstrate the existence of the sanctioned abuses. Specifically, the causal link between exclusionary effects and related conducts would not be highlighted (§ 2.);

(iii) Thirdly, in the Coop Estense’s view, the AGCM would not correctly single out the alleged anticompetitive conducts (§ 3.);

(iv) Fourthly, the alleged infringements would be statute-barred (§ 4.);

(v) Fifthly, the warning to adjust would be in contrast with the freedom of the undertaking and of the Municipalities. In addition it would be unjustified, disproportionate and not reasoned (§ 5.);

(vi) Finally, Coop Estense censured the final amount of the imposed sanction. Specifically, the AGCM would not prove the alleged gravity of the concerned infringements. In addition, it would not take into account that the conducts under discussion would be finished in 2005 (§ 6.).

On these bases, Coop Estense asked the TAR Latium either to annul the Decision or alternatively to reduce the imposed fine.

It seems useful to highlight that on 1 September 2012 the Court accepted the interlocutory request of Coop Estense aimed to suspend execution of the Decision[16].

2.2. The TAR Latium through the Judgement under discussion decided to annul the Decision.

Nonetheless, the criticalities attributed to the Decision by the Court do not concern the ascertained dominant position of Coop Estense. Indeed, the Judgment considers the iter on the basis of which the AGCM ascertained the dominant position under discussion to be logical and coherent.

Specifically, to this regard the TAR Latium excluded any methodological criticism, remembering that with reference to abuse cases (differently from anticompetitive agreement cases) the singling out of the involved markets “is a prius”, a constitutive element of the concerned hypothesis of abuse[17] (§ 3.1).

According to the TAR, the AGCM accurately singled out the concerned markets. Indeed, the AGCM correctly emphasized its case law regarding the mass retail markets. As known, on the basis of several criteria (e.g. dimension of the concerned market; kind of products offered; parking lot) there are three product markets: the first one concerning the superette and generally small supermarkets; the second one regarding supermarkets; the last one concerning superstore markets and large supermarkets[18].

In this context, taking into account the dimension of Esselunga’s sales outlets, the AGCM correctly singled out that the markets involved in the Coop Estense’s abusive conducts were the last two mentioned product markets. In the same manner, the Judgment agreed the geographical dimension of the above said markets as described by the AGCM and consisting in the province of Modena (§ 3.2.).

The dominant position of Coop Estense was determined by the AGCM on the basis of several indexes. Specifically, in the AGCM’s view it depended on the owned relevant market share (60/66% and 40/47% with reference to superstore markets and supermarkets, respectively), the market shares of its competitors, the existence of administrative barriers to open sales outlets (e.g. the limited availability of area able to be used for commercial purposes) and the reputation and the historical presence of Coop Estense in the province of Modena.

In this perspective, according to the Judgment the Decision properly singled out the relevant markets involved in Coop Estense’s conducts. Specifically, the AGCM did not take into account only Coop Estense’s market share (as affirmed by Coop Estense in its appeal) but pursuant to the Communication from the Commission — Guidance on the Commission’s enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings[19] correctly assessed the competitive pressures of its competitors (§ 3.3.). Specifically, in the Decision the AGCM appropriately highlighted that Esselunga could exercise said competitive pressure only in those areas where it operates. Residually, the evidence offered by the investigation proved that Coop Estense’s price policy was not conditioned by the market presence of Esselunga.

2.3. The Decision was annulled by the Judgment in light of the evidence of the anticompetitive conducts offered by the AGCM.

With reference to the municipality of Modena, the Decision explained that the zone under discussion was divided in three sub areas owned by Esselunga, a third undertaking and the same Municipality, respectively.

Under the regional legal framework, the Municipality subordinated the urbanization and the requalification of the entire zone to an agreement (known as “Piano particolareggiato”) among the owners of the involved sub areas.

In this context, in the Decision’s view Coop Estense’s abuse would consist in buying (paying an exorbitant price) from the third undertaking a sub area following that Esselunga bought its part and that the Municipality decided to subordinate the use of the entire zone to an agreement among the owners. This conduct would be aimed to impact on the decision concerning the urbanization and the requalification of the concerned area. Successively, Coop Estense would obstruct the achievement of the said agreement, blocking the rehabilitation of the same area.

However, according to the Judgment, the investigation did not give evidence that the purchase of the sub area by Coop Estense was only aimed to block the agreement and the urbanization and the requalification of the entire zone. Specifically, the AGCM did not prove that the said agreement was not achieved only due to Coop Estense’s conduct.

To the contrary, the case law concerning the specific Piano particolareggiato[20] explained that it was not approved by the Municipality on the basis of three different reasons: (i) the negative opinion of the AUSL/ARPA (the local Italian health entity); (ii) the negative opinion of the local building committee; (iii) and finally the subsequent variation of the structure of ownership following the purchase of a sub area by Coop Estense.

On this basis, the conduct of Coop Estense was not the only reason which obstructed the achievement of the concerned agreement. In light the above, the AGCM did not prove the link between the Coop Estense’s conduct and the exclusion of Esselunga. It did not give evidence that, achieving the Piano particolareggiato, in spite of the said negative opinions it would be approved by the Municipality of Modena. In light of that the Decision was be considered not reasoned by the Court.

According to the AGCM, as occurred in the Municipality of Modena, it was strictly linked to what happened in Vignola.

Pursuant to the Decision, following the impasse in Modena caused by the alleged opposition to the agreement, Esselunga took into consideration an area in the Municipality of Vignola.

Achieved under the same procedure the essential agreement with the owner of this second area, the day before the scheduled authorization of the Municipality of Vignola, Coop sent a letter to the Municipality in order to explain its interest in the same area and improve its sales outlet already operative in the related zone. In light of this, the Municipality suspended any decisions concerning Esselunga’s proposal with the aim to assess possible different solutions. Finally, the area under discussion was bought by Coop Estense, remaining unused.

The Judgment censured the above said reconstruction of facts.

According to the TAR it is reasonable that without the intervention of Coop Estense Esselunga would be authorized to open the new sales outlet. However, as explained in the same Decision, the administrative iter under discussion was structurally aimed to allow third parties to participate to the administrative proceeding. In this perspective, the conduct of Coop Estense was functional to this, taking into account that Coop Estense explained its interest in obtaining a solution similar and not identical to that concerning Esselunga (§ 6.1.).

In addition the Decision supposes that without the conduct of Coop Estense Esselunga would obtain the area in the Municipality of Vignola. On the contrary, the evidence offered by the investigation (specifically the audition of the same Municipality) proved that having obtained the authorization by the Municipality under discussion Esselunga would ask the Province of Modena for a second (and discretional) authorization to realize a larger sales outlet.

In light of the above, the TAR accepted the related ground of Coop Estense, censuring the Decision on the basis of the absence of reasoning and of a complete enquiry and in light of the said distortion of relevant facts.

3. Conclusions – It is not easy to comment on a sentence when it annuls the administrative decision on the basis of a distortion of the facts involved.

In this perspective, it seems useful to highlight that Proceeding A/437B – which had the same legal basis but completely different factual premises – was concluded without any ascertainment on the basis of the absence of objective and univocal elements able to prove the investigative hypothesis. Specifically, in that case the conduct of Esselunga was not deemed to be as a valid and well-timed proposal.

On a legal basis, the Judgement merits evidence taking into account that it wholly confirmed the conclusions of the AGCM concerning the relevant markets. In this perspective, the Decision applied to a case of alleged abuse the consolidated case law of the AGCM concerning merger cases and founded on the mentioned C3037 – Schemaventuno-Promodes/Gruppo GS case. Indeed, as we known, before Proceedings A437 and A437B this point of view was rarely expressed with reference to cases, which were not related to mergers[21].

More generally, the Judgment confirms the trend of the previous Quarter and the tactful relationship, which recently exists between AGCM and administrative judges.


[1] All the related decisions are available at

http://www.giustizia-amministrativa.it/WEBY2K/frmRicercaSentenza.asp

[2] All the related decisions are available at

http://www.giustizia-amministrativa.it/webcds/frmRicercaSentenza.asp

[3] The first contribution concerning all the decisions from April to June 2013 was divided into four submission, published as follows: C.E. Cazzato, The Italian Regional Administrative Court of First Instance orders the Competition Authority to recalculate fines imposed in a price fixing case in the land based international shipping sector (Agility Logistics, Albini & Pitigliani), 11 avril 2013, Bulletin e-Competitions September 2013-II, Art. N° 54771; C.E. Cazzato, The Italian Regional Administrative Court of First Instance partially annuls the Competition Authority in a public procurement case (2iGas Infrastruttura, E.ON Rete, Linea Distribuzione), 7 mai 2013, Bulletin e-Competitions September 2013-II, Art. N° 54772; C.E. Cazzato, The Italian Regional Administrative Court of First Instance clarifies the calculation of interests in case of delay in the payment of antitrust fines (Jotun Italia), 10 juin 2013, Bulletin e-Competitions September 2013-II, Art. N° 54773; C.E. Cazzato, The Italian Supreme Administrative Court confirms the NCA’s decision imposing a fine against construction materials company for abusing its behavior by aiming to exclude competitor’s entry into the plasterboard market (Saint Gobain), 21 mai 2013, Bulletin e-Competitions September 2013-II, Art. N° 54778.

[4] The powers of AGCM were involved in an administrative judgement also in the following case: TAR Latium, Sec. III-Quarter, 10 September 2013, No. 8182. However, it is essential to highlight that in this case the AGCM was not party before the Italian Administrative Court of First Instance.

[5].TAR Latium, Sec. I, 4 July 2013, No. 6596; TAR Latium, Sec. I, 18 July 2013, No. 7273; TAR Latium, Sec. I, 18 July 2013, No. 7275; TAR Latium, Sec. I, 22 July 2013, No. 7442; TAR Latium, Sec. I, 22 July 2013, No. 7460; TAR Latium, Sec. I, 22 July 2013, No. 7463; TAR Latium, Sec. I, 22 July 2013, No. 7464; TAR Latium, Sec. I, 5 August 2013, No. 7837; TAR Latium, Sec. I, 17 September 2013, No. 8313.

[6]. TAR Latium, Sec. I, 4 July 2013, No. 6618.

[7]. TAR Latium, Sec. I, 17 September 2013, No. 8309.

[8] CdS, Sec. VI,. 5 August 2013, No. 4085.

[9] Also before the CdS the AGCM’s powers were involved in additional following three cases: CdS, Sec. VI, 31 July 2013, No. 4034; CdS, Sec. III, 16 September 2013, No. 4574; CdS, Sec. III, 17 September 2013, No. 4582. However, in these proceedings the AGCM was not party so that they will not be taken into consideration with the aim of the Project.

[10] AGCM, A437 – Esselunga/Coop Estense, Decision No. 23639 of 6 June 2012, in Boll. Uff., No. 24/2012.

[11] Both members of the Coop Italia consortium along with seven other large cooperatives.

[12] AGCM, A437 – Esselunga/Coop Estense, Decision of 23 February 2011, No. 23149, in Boll. Uff., No. 8/2011 and AGCM, Esselunga/Unicoop Tirreno-Unicoop Firenze, Decision of 23 February 2011, No. 22150, in Boll. Uff., No. 8/2011, respectively.

[13] Article 14 of Italian Competition Law: “1. In the event of an alleged infringement of sections 2 or 3 the Authority shall notify the undertakings and entities concerned that an investigation is being opened. The owners or legal representatives of such undertakings or entities may submit representations in person or through a special attorney by the deadline set at the moment of notification, and may make submissions and opinions at any stage during the course of the investigation, as well as further representations before the investigations are completed.

2. The Authority may, at any stage in the investigation, request undertakings, entities and individuals to supply any information in their possession and exhibit any documents of relevance to the investigation; it may conduct inspections of the undertaking’s books and records and make copies of them, availing itself of the cooperation of other government agencies where necessary; it may produce expert reports and economic and statistical analyses, and consult experts on any matter of relevance to the investigation.

3. Any information or data regarding the undertakings under investigation by the Authority are wholly confidential and may not be divulged even to other government departments.

4. In the exercise of their functions, officials of the Authority shall be considered ‘public officials’. They are sworn to secrecy.

5. The Authority may fine anyone who refuses or fails to provide the information or exhibit the documents referred to in subsection (2) without justification, in an amount up to 50 million lire, which is increased up to 100 million lire in the event that they submit untruthful information or documents, in addition to any other penalties provided by current legislation”.

[14] Article 3 of Italian Competition Law: “1. The abuse by one or more undertakings of a dominant position within the domestic market or in a substantial part of it is prohibited. It is also prohibited:

a) directly or indirectly to impose unfair purchase or selling prices or other unfair contractual conditions;

b) to limit or restrict production, market outlets or market access, investment, technical development or technological progress;

c) to apply to other trading partners objectively dissimilar conditions for equivalent transactions, thereby placing them at an unjustifiable competitive disadvantage;

d) to make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts”.

[15] AGCM, A437B – Esselunga/Unicoop Tirreno-Unicoop Firenze, Decision of 6 June 2012, No. 23640, in Boll. Uff., No. 24/12.

[16] See TAR Latium, Sec. I, order of 1 September 2012, No. 3047.

[17] See, ex multis, CdS, Sec. VI, 10 March 2006, No. 1271; TAR Latium, Sec. I, 18 October 2012, No. 8614.

[18] See, ex multis, AGCM, C3037 – Schemaventuno-Promodes/Gruppo GS, Decision of 18 June 1998, No. 6113, in Boll. Uff., No. 25/98; AGCM, C6861 – Nume/Integra, Decision of 20 April 2005, No. 14243, in Boll. Uff., No. 16/2005; AGCM, C8094 – LIDL Italia/Rami d’azienda, Decision of 10 May 2007, No. 16809, in Boll. Uff., No. 19/2007; AGCM, C10653 – Eurospin Lazio/15 Rami di azienda, Decision of 13 October 2010, No. 21724, in Boll. Uff., No. 40/2010; AGCM, C11105 – Esselunga-Talvera-Quadrilatero/8 Punti Vendita (Livorno), Decision of 7 September 2011, No. 22765, in Boll. Uff., No. 37/2011; AGCM, C11472 – Pac 2000 A/Tredici rami di azienda di Billa, Decision of 14 February 2012, No. 23315, in Boll. Uff., No. 7/2012; AGCM, C11805 – DÌ PER DÌ/5 rami di azienda di Coop Adriatica, Decision of 31 October 2012, No. 24036, in Boll. Uff., No. 44/2012.

[19] 2009/C 45/02.

[20] See TAR Bologna, Sec. I, 6 November 2009, No. 2280. The appeal before the CdS is now pending.

[21] As we known, the only case is AGCM, I417 – Selea/Ordine dei Farmacisti, Decision of 14 February 2002, No. 10418, in Boll. Uff., No. 8/2002.