The PublicCompetitionEnforcement

Review

Law Business Research

Third Edition

Editor

Shaun Goodman

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LawBusinessResearch

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ISBN 978-1-907606-16-8

The Public CompetitionEnforcement Review

Reproduced with permission from Law Business Research.

This article was first published in The Public Competition EnforcementReview - Third Edition,

(published in June 2011 – editor Shaun Goodman).

For further information please email Adam.Sargent@lbresearch.com

THIRD EDITION

The Public Competition Enforcement

Review

Third Edition

EditorShaun Goodman

Law Business Research Ltd

PuBLiShER Gideon Roberton

BuSinESS dEvELoPmEnT manaGER

adam Sargent

maRkETinG manaGERS nick Barette, hannah Thwaites

maRkETinG aSSiSTanT

Robin andrews

EdiToRiaL aSSiSTanT Lydia Gerges

PRoduCTion manaGER

adam myers

PRoduCTion EdiToR davet hyland

SuBEdiToRS

Sarah morgan, Caroline Rawson

EdiToR-in-ChiEf Callum Campbell

manaGinG diRECToR

Richard davey

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i

aCknoWLEdGEmEnTS

The publisher acknowledges and thanks the following law firms for their learned assistance throughout the preparation of this book:

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STiBBE BRuSSELS

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vouGa & oLmEdo LaW fiRm

zhonG Lun LaW fiRm

acknowledgements

iii

Editor’s Preface .................................................................................................ix Shaun Goodman

Chapter 1 Argentina ................................................................................. 1Alfredo O’Farrell and Miguel del Pino

Chapter 2 Australia ................................................................................ 14Zaven Mardirossian

Chapter 3 Austria ................................................................................... 34Franz Urlesberger and Anastasios Xeniadis

Chapter 4 Belarus ................................................................................... 50Tatiana Ignatovskaya and Yana Chirko

Chapter 5 Belgium ................................................................................. 58Hendrik Viaene and Delphine Gillet

Chapter 6 Brazil ..................................................................................... 7�André Marques Gilberto, Natália Oliveira Felix and Natali de Vicente Santos

Chapter 7 Bulgaria ................................................................................. 8�Christoph Haid and Mariya Papazova

Chapter 8 Canada ................................................................................... 90Randy Hughes, Donald Houston, Oliver Borgers and Michele Siu

Chapter 9 Chile .................................................................................... 110Sander van der Voorde and Benjamín Mordoj

Chapter 10 China ................................................................................... 1�0Wu Peng, Michael Z P Gu and Xue Yi

Chapter 11 Croatia ................................................................................. 137Christoph Haid

Chapter 12 Cyprus ................................................................................. 148Stephanos Mavrokefalos

ConTEnTS

Contents

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Chapter 13 Czech Republic ................................................................... 154Martin Nedelka and Mario Vogl

Chapter 14 Denmark ............................................................................. 161Henrik Peytz and Katrine Lapp

Chapter 15 European Union .................................................................. 173Shaun Goodman and Sarah Jordan

Chapter 16 France .................................................................................. 197Mélanie Thill-Tayara and Marta Giner Asins

Chapter 17 Germany .............................................................................. �1�Silke Heinz and Anna Rolova

Chapter 18 Greece .................................................................................. ��5Emmanuel Dryllerakis

Chapter 19 Hungary .............................................................................. �33Miklós Molnár and Christoph Haid

Chapter 20 India .................................................................................... �46Manas Kumar Chaudhuri

Chapter 21 Ireland ................................................................................. �57Pat O’Brien and Fiona McKeever

Chapter 22 Italy ...................................................................................... �70marco d’ostuni and kostandin Peçi

Chapter 23 Japan .................................................................................... �79Kozo Kawai, Futaba Hirano and Tomoyuki Numata

Chapter 24 Korea ................................................................................... �95hyung Sam Park

Chapter 25 Luxembourg ........................................................................ 306Léon Gloden

Chapter 26 Mexico ................................................................................. 317Octavio Olivo Villa

Chapter 27 Norway ................................................................................ 330Christian Bjørtuft Ellingsen and Tage Brigt A Skoghøy

Chapter 28 Paraguay .............................................................................. 34�Julia Schmidt, Jose Ignacio Olmedo and Fernando Gadea

Contents

v

Chapter 29 Poland.................................................................................. 349Dariusz Tokarczuk and Szymon Chwaliński

Chapter 30 Portugal ............................................................................... 359Frederico Pereira Coutinho and Rita Leandro Vasconcelos

Chapter 31 Romania .............................................................................. 369Franz Urlesberger and Mihai Radulescu

Chapter 32 Russia .................................................................................. 381Ilia Rachkov and Tatiana Galakhova

Chapter 33 Serbia ................................................................................... 394Srđana Petronijević and Christoph Haid

Chapter 34 Singapore ............................................................................. 408Kala Anandarajah

Chapter 35 Slovakia ............................................................................... 4��Martin Nedelka and Mario Vogl

Chapter 36 Slovenia ............................................................................... 4�9Christoph Haid and Vid Kobe

Chapter 37 Spain .................................................................................... 44�Juan Jiménez-Laiglesia, Arantzazu Ruiz, Luis Sotelo and Ceyhun Pehlivan

Chapter 38 Switzerland .......................................................................... 457Alessandro Celli, Boris Wenger and Nicolas Diebold

Chapter 39 Taiwan ................................................................................. 468Stephen Wu, Rebecca Hsiao and Wei-Han Wu

Chapter 40 Ukraine ................................................................................ 486Franz Urlesberger and Pavel Grushko

Chapter 41 United Kingdom ................................................................. 494Shaun Goodman and Annabel Borg

Chapter 42 United States ....................................................................... 509Ian Conner

Chapter 43 Uruguay ............................................................................... 5�0Leonardo Melos

Chapter 44 Venezuela ............................................................................. 530José H Frías

Contents

vi

Appendix 1 aBouT ThE auThoRS .................................................. 539

Appendix 2 ConTRiBuTinG LaW fiRmS’ ConTaCT dETaiLS .. 563

ix

Editor’s prEfacE

While 2010 largely represented a return to ‘business as usual’ for the Us and EU authorities following the challenges of 2009 in responding to the financial crisis, the year also saw the arrival of a number of new players on the antitrust enforcement stage.

foremost among this new breed is the competition commission of india (‘cci’), which took rein of its functions in March 2009, charged with investigating all trade-related competition disputes in india. in its first decision, adopted in december 2010, the cci rejected a complaint that banks and home finance companies in india had acted anti-competitively by imposing prepayment penalties on borrowers switching lenders to obtain improved rates or facilities. The decision displays an admirable confidence for a new regulator, choosing to adopt as its first decision not only a finding of non-infringement, but also one that has apparently attracted the ire of the banking regulator, the reserve Bank of india. With a compendium of ongoing cases across a diverse range of sectors including cement, glass, sugar, air transport and oil, the cci looks set to assert its authority from the outset.

More established, but no less active, is russia’s federal antimonopoly service (‘fas’). according to recent statistics published by the fas, the authority initiated a staggering 5,437 competition cases during the first six months of 2010, including 1,289 cases related to abuse of a dominant market position, 277 cartel cases, 2,907 cases of anti-competitive actions by public authorities and 427 cases of unfair competition. Notable among the fas’s early successes was its decision of december 2010 finding that three companies engaged in the production and wholesaling of power-generating coal had infringed the competition act by participating in anti-competitive agreements aimed at fixing prices for power-generating coal and allocating the market among themselves. criminal proceedings have also been initiated in the same case by the Ministry of the interior. The case is notable as the first occasion on which the fas has investigated

Editor’s Preface

x

and proved a cartel existed in close cooperation with the Ministry, and on the basis of materials and information obtained through investigative activities, including court-sanctioned interception of telephone communications.

Not to be outdone, during the last week of 2010, two of china’s antitrust enforcement agencies, namely the National development and reform commission (‘Ndrc’) and the state administration for industry and commerce (‘saic’) respectively issued the long-awaited rules implementing the anti-monopoly Law of the prc (‘aML’). These new rules clarify key areas of the agencies’ antitrust enforcement practice, in particular, the constituent elements of monopoly agreements and abuse of dominance, and the defensive justifications potentially available to undertakings. The rules also provide practical guidance on investigative procedures, the leniency programme and delegation of investigation powers, and address certain key concerns. The new rules, which came into force on 1 february 2011, represent a significant milestone in the effective enforcement of the aML.

These developments confirm the increasingly global nature of public antitrust enforcement, and reinforce the importance of cooperation and convergence at all levels, both public and private.

as ever, i would like to thank all of the contributors for their support and cooperation in the preparation of this review, and the publishing team at Law Business research for their encouragement and enthusiasm.

Shaun GoodmanKirkland & Ellis international LLpLondonJune 2011

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Chapter 22

ItalyMarco D’Ostuni and Kostandin Peçi*

* Marco D’Ostuni is a partner and Kostandin Peçi an associate at Cleary Gottlieb Steen &HamiltonllP.

I OvervIew

articles2and3oftheItalianCompetitionact(lawNo.287/90)prohibit,respectively,restrictiveagreementsandabusesofdominantposition.Theseprovisionsareanalogoustoarticles101and102ofthetreatyontheFunctioningoftheEuropeanUnion(‘tFEU’).Nationalcompetitionrulesapplyinresidualcases,whentheinfringementsdonotaffecttradeamongMemberStates.

BothEuropeanandnationalcompetitionrulesareenforcedinItalybytheItalianCompetitionauthority(‘aGCM’).TheaGCMisanindependentinstitutionthatwasestablishedin1990bytheItalianCompetitionact.Itconsistsoftheauthority(i.e.,acollegialbodywithdecision-makingpowers,whosemembersareappointedjointlybythePresidentsoftheItalianChamberofDeputiesandSenate),andtheauthority’sstaff(i.e.,the officers conducing the investigations). The aGCM’s enforcement powers includethepowerto:requestinformationtoundertakings;conductdawnraids(exclusively)attheundertakings’premises,adoptinterimmeasures;renderbindingthecommitmentsproposedbyundertakingsunderinvestigation;andimposefinesuptotenpercentoftheundertaking’sturnoverduringthepreviousfinancialyear.ThefinaldecisionsoftheaGCM may be appealed before the Italian Regional administrative Court for lazio(‘taRlazio’).Finally,theaGCMadoptsanannualreport,normallybymid-Juneofeachyear,whereitsummarisesitsenforcementactivitiesduringthepreviousyear.

TheaGCMalsoplaysanimportantroleinincreasingantitrustadvocacyinItaly.Inparticular,theaGCMmaynotifytheItalianParliament,thePrimeMinisterand/orotheradministrativegoverningbodiesofdistortionsofcompetitioncausedbylegislationorotheradministrativeprovisions.

In2007,theaGCMhasbeenentrustedwiththetaskofenforcingtherulesontheprohibitionofunfaircommercialpractices.

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II CArTeLS

i Enforcementofanti-cartelrules

In2010,thetheaGCMadoptedeightdecisionsunderarticle101tFEU.Infourcases,theinfringementswereconsideredveryseriousandfineswereimposed;inthreecases,theaGCMacceptedthecommitmentsproposedbythepartiesinvolved,whileinonlyonecasediditchoosetoadoptanon-infringementdecision.TheaGCMalsoissuedoneinfringementdecisionpursuanttoarticle2oftheItalianCompetitionact.

InDomestic LPG Cartel,theaGCMfoundthat,between1995and2005,threeleadingItaliancompanies,activeintheItalianretailmarketofliquefiedpetroleumgas(‘lPG’)fordomesticuse,hadenteredintoanagreementcontrarytoarticle101tFEU.Inparticular,accordingtotheaGCM,thecompanieshadagreedtoaligntheirpricelists, soas toreducethe impactoffluctuations inthe internationalpricebenchmarksfor raw materials and to keep lPG prices higher. The investigation showed that thecompanies’ topmanagementhadregularlymet inordertodetermineconcertedpriceadjustmentsandmonitorthecartelenforcement.TheaGCM’scaseheavilyreliedonaleniencyapplicationfiledbyacartelparticipant,whichwasgrantedfullimmunityfromfines.However,aGCMalsocarriedoutananalysisshowingthattheparallelvariationofthepricelistscouldonlybeexplainedbytheexistenceofacartel.

InCosmetic Products, theaGCMfoundthat,between2000and2007, severalcosmetic manufacturers and the national trade association for branded consumerproductshadenteredintoasingleandcomplexagreementaimedatexchangingsensitiveinformationandcoordinatingcommercialstrategiesinrelationtoretailers.Inparticular,informationconcerningfuturepriceincreases,rebatesandcontractualconditionsappliedto retailers was principally exchanged during trade association meetings and throughdistribution channels set up by the trade association. according to the aGCM, theexchangeofinformationreducedeachmanufacturer’suncertaintyastothecommercialstrategiesofitscompetitors,thusallowingforcoordinatedpriceincreases.TheaGCMheldthatthecoordinationhadactuallyledtoapriceincreaseabovetheinflationrate.The proceedings were initiated after a leniency application was filed by one of themanufacturers.

In MasterCard, the aGCM fined MasterCard and eight banks (which werelicenseesandmembersoftheMasterCardcircuit)forstipulating:a ahorizontalagreementaimedatdefiningmultilateral transactions’ interchange

feesappliedtodomesticcardpayments(‘DomesticMIF’);andb verticalagreementsallowingthebankstopassontheDomesticMIFtomerchants

and,thus,tofinalconsumers.

according to the aGCM, the MasterCard circuit qualified as an association ofundertakings, because the member banks participated directly and indirectly in itsgovernancebodies.Thus,thejointsettingoftheDomesticMIFamountedtoarestrictiveagreementunderarticle101tFEU,withoutanyeconomicjustification.TheaGCMalsoheld that the restrictionof competitionwas further strengthenedby the verticalagreements entered into individually by MasterCard and its licensee banks, becausetheseagreementsallowedbankstotransferuniformlytheDomesticMIFtomerchants,aswellastoincludeclauses inthecontractswiththelatterencouragingthediffusion

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ofMasterCardcards.asaresult,theaGCMconcludedthattheagreementsdistortedcompetition among acquiring banks, potentially increased merchants’ costs whenacceptingpaymentcardsand,ultimately,raisedconsumerprices.However,onappealbyseveralparties,taRlaziosuspendedthisdecision.

InGeologist Fees,aGCMfound that thenational associationofgeologistshadinfringedarticle101tFEU,byadoptingrulesthatinduceditsmemberstoapplytheminimumfeesrecommendedbytheassociationfortheirservices.ThecasefollowedtheaGCM2009marketinvestigationoncompetitionintheprofessionalconsultantssectorandshowstheaGCM’scommitmenttochallengingthoseprofessionalassociationruleswhichcouldhindertheliberalisationprocessstartedin2006.

InTranscoop Bus,adoptedpursuanttoarticle2oftheItalianCompetitionact,theaGCMfoundthatseveralby-lawsoftranscoopBus,aconsortiumofundertakingsspecialised in transport services for physically-challenged persons in Reggio Emilia,restricted competition. according to the aGCM, the exclusivity and non-competeclauses, aswell as theclause regulatingwithdrawal fromtheconsortium,deprived itsmembersofthepossibilitytoexittheconsortiumandindependentlymarkettheirowntransportservicesincompetitionwithtranscoopBus.

ii FirstcasesontheapplicationoftheItalianleniencynotice

IntheDomestic LPG CartelandCosmetic Productsdecisions,theaGCMformallyappliedforthefirsttimethe2007Italianleniencynotice.Thesecasesconfirmtheeffectivenessofleniencyprogrammesindetectingandcombatinghard-corerestrictions.

InDomestic LPG Cartel,theleniencyapplicationfiledbyoneofthecompaniesinvolved allowed the aGCM to extend the scope of its initial proceedings frominfringementsthatallegedlytookplaceintheregionalmarketofSardiniatohard-corerestrictionstakingplaceatthenationallevel.Moreover,theoralstatementsprovidedbyemployeesoftheleniencyapplicantturnedouttobecrucialforthecase,asthemembersof the cartel had been careful to eliminate any written record of their meetings andarrangements.Due to the absenceof any ‘smokingguns’, theaGCMcarriedout itsownanalysisonparallelismoftheconductsofthecartelmembersinordertoprovetheeventsallegedbytheapplicant.Thispurportedlyreducedthebenefits,intermsoftimeandresourcesspentforbuildingthecasebytheaGCM,whichnormallyderivefromtheleniencyapplication.However,thisreducedbenefitwasoffsetbythefactthatitwouldhavebeenextremelydifficultfortheaGCMtobuildasoundcasewithoutaleniencyapplication.

UnliketheDomestic LPG Carteldecision, inCosmetic Products theproceedingswereinitiatedinthewakeofaleniencyapplicationfiledbyoneofthemembersofthecartel,whichwasgrantedfullimmunityandsupportedbyapplicationsfiledbytwoothercompanies,whichreceivedfinereductions.Therefore,thiscaserepresentsaclearexampleofthebenefitsthatboththeaGCMandtheapplicantscouldderivefromtheleniencymechanisms.

Thesecasesshedlightonanumberofissuesrelatedtotheapplicationofthe2007Italianleniencynotice.

First,itisnowclearthattheaGCMmayrefuse,ex officio,accesstoaleniencyapplicant’s oral statements. In particular, in Cosmetic Products, without a previous

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confidentialityrequestfromtheleniencyapplicant,theaGCMrefusedtomakeaccessiblepartofthelatter’soralstatementstotheotherpartiestotheproceedings,becausetheinformationcontainedthereineitherexceededthescopeof its investigationorwas inanyeventirrelevant.TheaGCMdecisionwasupheldbyItalianadministrativejudges,who recognised that, as a general principle, the aGCM may decide ex officio whichdocumentsinthecasefileareconfidential.

The Cosmetic Products decision also reveals the aGCM’s current willingnessto grant more generous fine reductions than those envisaged by the 2007 leniencyapplicationnotice,inordertorewardfullcooperationfromthecompaniesinvolved.Inparticular,theaGCMfurtherreducedthefineleviedonthethirdleniencyapplicant,whohadalreadybenefitedfroma40percentreductionpursuanttothe2007Italianleniencynotice,becausethecompanyhadreportedaspectsoftheinfringementinwhichithadnotparticipateddirectly.

III ABUSe OF DOMINANT POSITION

i Theenforcementoftheprovisionsprohibitingabuseofdominantposition

In2010,theaGCMadopted13decisionsunderarticle102tFEU.Inonlyonecasedidtheauthorityissueaninfringementdecisionandimposeafineagainsttheundertakingbeing investigated. In twocases, it closedproceedings initiated in compliancewith ataRlaziodecision,becauseinthemeantimethelatterhadbeenreversedbytheItalianSupreme administrative Court. In the remaining 10 cases, the aGCM accepted thecommitmentsproposedbythepartiesinvolved.TheaGCMalsoclosedbycommitmentdecisiononecaseofpossibleabuseunderarticle3oftheItalianCompetitionact.

Theonlycase inwhichtheaGCMissuedafulldecision(Plasterboard market)concernedtheadoptionbySaint-GobainPPCItaliaSpa(‘Saint-Gobain’)ofastrategyaimedathinderingentranceofanewcompetitor(Fassa)inthemarketforplasterboardproductioninthecentre/northofItaly.Specifically,aGCMheldthatSaint-GobainhadabuseditsdominantpositionintheplasterboardmarketbyintentionallyinterferinginthenegotiationsbetweenFassaandtheownersoflandwhereFassaplannedtobuilditsproductionplants.accordingtoaGCM,Saint-Gobainhadfalselyshowed interest inthesamepropertiesonlytodisruptnegotiationsbetweenFassaandthelandowners,hadactuallypurchasedonepieceoflandonlytosubtractittoFassaandhadinducedseveralneighbouringfarmerswithpreemptionrightsonthelandtoinitiatelegalactionsaimedatimpedingtheacquisitionofthesamelandbyFassa.

ii IncreaseofItalianadministrativecourts’scrutinyonAGCMcommitmentdecisions

2010statisticsconfirmtheaGCM’stendencytoclosethegreatmajorityofitsproceedings,especiallyarticle102tFEUcases,bymeansofcommitmentdecisions.ThistrendhascapturedtheattentionofItalianadministrativecourts,whichafteraperiodofdeference,haverecentlystartedtoscrutinisetheaGCM’scommitmentdecisionsmoreindepth.

InLega Calcio,theaGCMhadacceptedthecommitmentsproposedbytheItalianleagueoffootballclubswithrespecttocertainfeaturesofthecentralisedmarketingoftheSerieaandSerieBchampionshiptVbroadcastingrights,whichhadraisedcompetitive

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concerns.However,onappealbyaconsumerassociation,taRlazioannulledtheaGCMdecisionbothonproceduralandsubstantivegrounds.Inparticular,taRlazioheldthat,bynotpublishingonitswebsitethefinalamendmentsmadebylegaCalcioinresponsetothemarkettestresultsonitsinitialsetofcommitments,theaGCMhadviolatedthenotice on commitments procedure adopted by the aGCM itself pursuant to article14-teroflawNo.287/90.ThetaRlazio’sreasoningdistinguishedbetweenancillarypost-markettestamendments,whichallegedlydonotneedtoundergoanewmarkettest,andmaterialpost-markettestamendments,inrelationtowhichtheaGCMisobligedtorunanewmarkettest.Onsubstantivegrounds,taRlazioheldthatthecommitmentsproposedbylegaCalcioweremanifestlynotable tosatisfy thecompetitiveconcernsraisedintheaGCMdecisiontoinitiateproceedingsagainstlegaCalcio.asamatterof general principle,taR lazio maintained that the commitments proposed by thepartiesshouldalwaysaddresstheinitialcompetitiveconcernsraisedbytheaGCM,incompliancewiththeprincipleofproportionality.Indeed,inits2009Motorway Assistance Services decisions,taRlaziohad alreadyobserved that commitments shouldnot gobeyondwhatisnecessarytoremedysuchconcerns,inordertoneutraliseanyriskthattheaGCM,throughitscommitmentdecisions,exceedsitspowersandactslikeamarketregulator.

InMasterCard,theItalianadministrativejudgesannulledforthefirsttimeadecisionbytheaGCMrejectingcommitments.TheaGCMhadrefusedasetofcommitmentswhereby MasterCard would adopt certain actions (basically a reduction in domesticinterchangefees)onlyuntil theGeneralCourt issuedadecision intheMasterCard v. European Commission case. according to the aGCM, these commitments were notacceptablebecausetheyweremerelytemporary,notsupportedbyanyseriouseconomicanalysis(particularlyastothelevelofproposedfees)andsubjecttoMasterCard’sunilateralright of withdrawal under certain conditions. Shortly thereafter,taR lazio partiallyannulledtheaGCM’sdecision.Inparticular,thecourtfoundthatthetemporarynatureofthecommitmentswasobjectivelyjustified,becausetheoutcomeoftheMasterCard v. Commissioncasewouldlikelyhaveanimpactonthematter.Furthermore,taRlazioheldthattheaGCMhadbeenwronginrejectingMasterCard’sproposalwithoutevenrequestingMasterCardtoexplaintheeconomicrationaleofthecommitments.Ontheotherhand,theadministrativejudgesupheldtheaGCM’sargumentthatMasterCard’srightofwithdrawalwouldruncountertotheverynatureofthecommitmentmechanism,becauseitallowedthecommittedpartytounilaterallyavoiditsobligations.

Iv SeCTOrAL COMPeTITION: MArKeT INveSTIGATIONS AND reGULATeD INDUSTrIeS

i Marketinvestigations

In2010,theaGCMinitiatedamarketinvestigationontheaudio-visualsectoraimedat identifying any obstacles that might hamper the development of competition. Inparticular, the aGCM stated that the audio-visual sector currently faces importanttechnological progress with a ‘rich pro-competitive potential’ (for example, theintroductionofdigitalterrestrialbroadcastingandtheconvergencebetweenthetelevisionand telecommunication industries).Therefore, themarket investigationwill focuson

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competitiveobstacles–connectedforexampletothepropertynatureofplatforms,theusageofcloseddecoders,aswellasonpossibleexclusionaryeffectsrelatedtosoftwareapplicationsortosearchengines–particularlyinpay-for-contentservices.

The aGCM had raised concerns on the development of competition in theaudio-visualsectorintworecentproceedingsinitiatedunderarticle102tFEU,namelySky/Conto TV andGoogle.InSky/Conto TV,theaGCMintendedtoverifywhetherthetechnicalandeconomicconditionsofferedbySkytoContotV(apay-tVbroadcaster)for access to Sky’s satellite platform were defined in a non-transparent and non-discriminatorymanner.Initsfinaldecision,theaGCMacceptedcommitmentsofferedbySkyItaliaSrl(‘Sky’),heldthatitsconcernswerefullyaddressedandclosedthecasewithoutanyfindingsofinfringement.

In Google, theaGCMalso accepted the commitments offeredbyGoogle andclosedthecasewithoutanyfindingof infringement.Initsfinaldecision,theaGCMheldthat itsconcerns(relatingtovariousaspectsoftherelationshipsbetweenGoogleandItalianpublishers)werefullyaddressedbythecommitments.

ii Significantcases

EnergyIn2010,theaGCMclosed,bycommitmentdecision,twoproceedingsinitiatedinthewakeofamarketsurveybytheItalianenergyregulator,whichindicatedananomalousfluctuation of electricity prices in the Sicilian macro-area of the electricity wholesalemarket.InEnel,anarticle102tFEUcase,theaGCMallegedthatEnel(theItalianelectricity incumbent owning 50 per cent of the power generation capacity installedin Sicily) withheld the capacity of its Sicilian power plants with the aim of creatingsupplyshortagessothatitcouldsethigherpricestothedetrimentofconsumers.Similarconcernswereraised inEdipower tolling agreement,anarticle101tFEUcaseagainstfour electricity producers that co-owned a pivotal Sicilian power plant managed bytheir jointly-controlledcompanyEdipower.Inparticular, theaGCMallegedthattheproducers had colluded to implement a contract for the supply of fuel to Edipowerinexchangefortheenergyproduced(i.e.,‘tollingagreement’approvedbytheaGCMin a previous decision) with the aim of withholding the plant’s capacity in order toraise electricityprices. Inboth cases, theparties offered commitments that addressedtheconcernsraisedbytheaGCM,which,inturn,closedbothproceedingswithoutanyfindingofinfringement.

IntheSorgenia v. Hera,Sorgenia v. Acea,Sorgenia v. Italgas,Sorgenia v. A2AandSorgenia v. Iride cases, the aGCM accepted the commitments submitted by severalItaliangasandelectricitydistributorsinordertoremedyconcernsregardingapossibleabuseof their respectivedominantpositions in the localmarkets for thedistributionof gas and electricity. The proceedings were prompted by several complaints filed bySorgenia,anewcomerintheretailcommercialisationofgasandelectricitytoresidentialclientsandsmallbusinesses.Initsdecisionstoinitiateproceedings,theaGCMnoticedthat, according to Sorgenia, the distribution companies obstructed the completionof the procedures necessary for the switch of final clients from their historical retailcompaniestoSorgenia.TheaGCMallegedthatthisconductwasputinplacetohinder

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theentranceofSorgeniaintheretailmarketsand,thus,weakenitsabilitytocompetewiththesubsidiariesofthedistributioncompaniesactiveintheretailmarkets.

TelecommunicationsOn 13 May 2010, the aGCM, following a complaint filed by Fastweb, launchedan investigation to determine whethertelecom Italia Spa (‘telecom’) has abused itsdominantpositionbyrefusingtoprovideitscompetitorswithcertaininformationandwholesaleservicespossiblynecessarytoformulatecompetitivetechnicalandeconomicoffersfornon-residentialcustomers.

On23June2010,theaGCM,followingcomplaintsfiledbyFastwebandWIND,initiatedaninvestigationpursuanttoarticle102tFEU,inordertoinvestigatewhethertelecomhad:a deliberatelyhinderedordelayedactivationofwholesaleservicesrequestedbyits

competitors;andb pursued a discriminatory discount policy in relation to customers located in

areaswhere competitors canaccess thenetwork’s local loop throughwholesaleunbundling services, by offering retail prices so low that they could not bematchedbycompetitors.

Bothproceedingsarestillpending.

RailwaysOn15December2010,aGCM,followingacomplaintfiledbyarenawaysSpa(anonstate-ownedcompanyactive inthenationalrailwaypassengertransport, ‘arenaways’),launchedaninvestigationontherailwaycompanyFerroviedelloStatoSpa(‘FS’)anditscontrolledcompanyReteFerroviariaItalianaSpa(i.e., theItalianrailwaynetworkmanager,‘RFI’)todeterminewhethertheyabusedmarketdominancebyobstructingtheentryofarenawaysintheItalianpassengertransportsector.

Theproceedingsarestillpending.

v STATe AID

i Preferentialtariffsforthesupplyofelectricitytoenergy-intensiveconsumers

On1July2010,theGeneralCourtrejectedanappealbroughtbyThyssenKruppacciaiSpeciali terni Spa (‘acciai terni’) against a 2007 EU Commission decision whichfoundthattheextensionofthepreferentialtariffsforthesupplyofelectricitytoacciaiterni,grantedin2005until2010byItalytotheappellant,amountedtounlawfulaidincompatible with the common market. accordingly, the Commission ordered therecoveryoftheaid.

as background information, the disputed aid represented the extension of aninitial measure granting a preferential tariff for 30 years to three companies (part oftheformerlystate-ownedterniGroup)inordertocompensateforthenationalisationofthegroup’spowerplantin1962.Theinitialmeasurewasfirstextendedintheearly1990ssimultaneouslywiththerenewalofthepowerplantconcessionstoelectricityself-producers.at that time, themeasure,whichextended thepreferential tariffs toterni

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until2001andforesawaphaseoutin2007,wasnotifiedtotheCommissionwiththelatterraisingnoobjections.However,thedisputed2005extensionwasnotnotifiedtotheEUCommission.

Themainsubstantivepleabroughtbytheappellantwasthatthedisputedmeasuredidnotconstitutestateaidduetoitscompensatorynature.Inparticular,acciaiternibaseditsargumentsonadynamicinterpretationoftheItalianlegislationthat,accordingtotheappellant,directlyconnectedthegrantofthepreferentialtariffstotherenewalofthepowerplantconcessionstotheotherself-producers(in1999,theItalianlegislaturepostponed the expiry of concessions until 31 December 2010, and, shortly after theadoptionofthedisputedmeasure,until2020).Thus,accordingtotheappellant,itdidnotderiveanyadvantagefromthemeasure.

However,theGeneralCourtrejectedthisargument,inter alia,onthefollowinggrounds:a Itwas clear from the initialmeasure that the1960s legislaturedidnot intend

toconnectthegrantofthepreferentialtarifftotherenewalofthepowerplantconcessions.

b ThefactthatthefirstextensionofthepreferentialtariffswasnotifiedtotheEUCommissionshowedtheinexistenceoftheallegedautomaticrelationshipbetweenthepreferentialtariffsandtherenewaloftheconcessions.

c Thenon-existenceofsucharelationshipwasalsoevidencedbythefactthattheextensionofthepreferentialtariffswasadoptedsixyearsafterthe1999renewaloftheconcessionsandwasnotextendedtotheactualdurationforeseenuntil2020bythesecondrenewalintroducedimmediatelyafterthedisputedmeasure.

d as admitted by the Italian authorities during the proceedings, the aim of theextensionofthepreferentialtariffswasthatofincreasingthecompetitivenessofacciaiterniinordertoavoidthedelocalisationofitsproduction.

accaiterniappealedthedecisionandtheappealispendingbeforetheCourtofJustice.

v CONCLUSIONS

In lightof the facts supra, the following trends arediscernible inpublic competitionenforcementinItaly:a The increasing use of the 2007 Italian leniency Notice in the aGCM’s fight

againsthard-corecartels,expectedtocontinueinthefuture,alsoinlightofthewillingnessoftheaGCMtograntfurtherfinereductionstoapplicantsinadditiontothoseenvisagedinthenotice.

b The statistics supra confirm the tendency of the aGCM towards closing casesbycommitmentdecisions; even thoughcommitmentdecisions areundeniablyimportantforbothundertakingsandtheaGCM,anexcessiverelianceonsuchdecisionsmightgiverisetothefollowingshortcomings:

• poordevelopmentof lawandlessdetectionof infringements;bothnecessaryfactorsforenhancingdeterrenceeffectsofprivatecompetitionlitigation;

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• excessive reliance on the complainant’s allegations and, thus, lack ofpre-investigation activities aimed at ascertaining the basis of the complaintsfiled;and

• theriskthattheaGCM,byrenderingbindingthecommitmentsproposedbythecompaniesunderinvestigationwithoutathoroughevaluationofhowtheyareconnectedtothecompetitiveconcernsraisedbytheauthority,exceedsitspowersandactslikeamarketregulator.

c administrative courtshave increased their scrutiny in relation to theaGCM’scommitmentdecisionswithintheirpowertoreview.Basicallyjudgeshavecalledfor amore sound identificationof competitive concerns, thus for an in-depthanalysisofthecase,necessaryforevaluatingthesuitabilityandproportionalityofthecommitmentsproposedbythecompaniesunderinvestigation;suchconcernsraised by administrative courts may induce the aGCM to modify its currentapproachtocommitmentdecisions.

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Appendix 1

About the Authors

MArco D’ostuni

Cleary Gottlieb Steen & Hamilton LLPMarco D’ostuni is a partner at Cleary Gottlieb steen & hamilton LLP, resident in the rome office. his practice focuses on antitrust, telecommunications, media and energy law. he has represented clients before the eu Commission and the Italian Antitrust Authority in antitrust investigations and merger filings; in proceedings before the Italian Communication Authority and the Italian energy Authority; and in arbitration and litigation before civil and administrative courts involving complex antitrust or sector regulation issues. Mr D’ostuni is distinguished as a leading lawyer in Competition/European Law and in TMT: Telecommunications by Chambers europe. he co-authored several publications on antitrust matters. he graduated with honours from Naples university Law school and holds LLMs both from the Collège d’europe (bruges) and from the Columbia university school of Law, as well as a PhD in competition law from the university of Perugia, Italy. Mr D’ostuni has been a member of the Naples bar since 2001, and of the New York bar since 2003.

KostAnDin Peçi

Cleary Gottlieb Steen & Hamilton LLPKostandin Peçi is an associate at Cleary Gottlieb steen & hamilton LLP, resident in the rome office. his practice focuses on different aspects of eu law and competition law, including cartels, anti-competitive agreements and practices, abuse of dominant position and merger control. he graduated, cum laude, from the university of bologna and obtained an LLM from the Collège d’europe (bruges). Mr Peçi has been a member of the rome bar since 2010 and of the Albanian National bar Association since 2006.

About the Authors

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cleAry Gottlieb steen & HAMilton llP

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