21 May 2015

Italy’s Consiglio di Stato confirms Telecom Italia's abuse of dominant position

On Friday 15 May 2015, the Consiglio di Stato, Italy’s highest appeals court upheld a fine in excess of €100 million against former monopolist, Telecom Italia. The fine had been imposed on Telecom Italia by the Italian Competition Authority (AGCM) two years ago for abuse of dominance in Italy’s wholesale broadband network.

In its 2013 decision, the AGCM originally imposed an €88 million fine as Telecom Italia wilfully obstructed rivals’ access to a high number of fixed broadband and telephone infrastructure services (across several markets where phone and broadband providers attempted to compete against the incumbent). The remaining €15 million fine was imposed due to Telecom Italia’s aggressive discounting policy with regard to fixed telephone network costs, which in turn had resulted in competitors’ marginalisation and exclusion from the relevant markets.

Telecom Italia had attempted to address the concerns of the AGCM in 2011 by providing a set of remedies, but the AGCM had not considered them as being suitable, under the current circumstances. As such, the AGCM finalised its investigation and imposed the €100 million fine. Telecom Italia unsuccessfully tried to overturn the decision first before the Administrative Tribunal of Lazio, and then before the Consiglio di Stato.

This is by no means the first time Telecom Italia has received fines from the AGCM. Moreover, proceedings in the telecoms space, and in particular targeting Telecom Italia’s conduct, have not yet come to an end.

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