Telecom Italia and Wind fined for abuse of dominant position in fixed line-mobile calls

30 October 2007

Eutimio Monaco

The Italian Competition Authority has fined Telecom Italia €20 million and Wind Telecommunicazioni €2 million for separate abuses of their dominant positions, contrary to Article 82 of the EC Treaty. The companies each hold dominant positions within the markets for termination services on their networks.

On 3 August 2007, the Italian Competition Authority found Telecom Italia and Wind had abused their dominant position in breach of Article 82 of the EC Treaty. Vodafone had also been investigated in the proceedings, but the Authority didn’t take any action against Vodafone since it offered commitments in order to meet the Authority’s concerns on the level of competition in the relevant market. The Authority made such commitments binding to Vodafone and concluded the proceedings on 24 May 2007 stating that there were no longer any grounds for its action.

The relevant market concerned termination services on their networks. The mobile network operators had imposed discriminatory practices on their competitors by giving their own commercial divisions conditions for termination of fixed line-mobile calls on their networks that were more favourable than those they gave to other operators. In doing this, the companies prevented their competitors from using alternative termination packages or developing competing systems of their own. The companies have been ordered to discontinue the conduct immediately and advise the Competition Authority within 90 days of the steps taken to remedy the offences.

The companies have also been fined for their actions. Telecom Italia’s fine of €20 million is much greater than Wind’s fine of €2 million due to a number of factors:

  • Telecom Italia’s abuse of its dominant position has continued since 1999, compared to 2001 in Wind’s case;

  • Telecom Italia has a very strong dominant position in a number of markets in the telecommunications sector, at both retail and wholesale levels;

  • Telecom Italia also has a history of abuse of its dominant position in various market sectors. The company has been the subject of previous investigations into abuse of its dominant position. It was fined in 2001 and again in 2004 when the fine totalled €152 million. In these cases the company was found to have abused its dominant positions in the market for the supply of local network transmission capacity and the fixed network telecommunications services market respectively. The high fine on this most recent occasion therefore reflects the repeated breaches of Article 82 of the EU Treaty and Article 3 of the Italian competition Law no. 287/90.

The investigation into the anti-competitive activities of the companies also considered whether there was a dominant position held collectively by the mobile operators in relation to access to the mobile network infrastructure. Despite the fact that the Authority found that the market was not competitive enough, it stated that there was not enough evidence to demonstrate that a dominant position existed, particularly in light of the changes that have recently been made within the Italian market with the introduction of virtual mobile operators.

Source: Autorità Garante della Concorrenza e del Mercato, Press Releases, dated 3 August 2007, available at http://www.agcm.it/eng/index.htm