The Italian Competition Authority launched an investigation into agreements between nine oil companies in January 2007. At its meeting on 20 December 2007 the Authority accepted undertakings by the oil companies and stated that as a result of these undertakings the market will be more competitive and easier to access for new entrants.
The Competition Authority launched the investigation after the companies were alleged to have exchanged information about fuel prices in service stations across Italy. The original complaint came from the National Association of Artisans and Small and Medium Transport Businesses which suspected an anti-competitive agreement after fuel prices rose in parallel. The nine companies originally investigated were ENI, Esso Italiana, Kuwait Petroleum Italia, Shell Italia, Tamoil Italia, Total Italia, Erg Petroli, IP and Api.
The Authority’s early investigations revealed that fuel retailing is a relatively uncompetitive market in Italy. One of the reasons for this is the wide range of opportunities available for the sharing of information. Firstly the Ministry of Economic Development itself publishes the base recommended prices of each oil company on its website, using criteria defined by the Oil Market Monitoring Unit within the Ministry. Secondly, the oil companies also publish their base recommended prices in the press and publish their other price differentials in at least one specialist magazine. This means that each oil company can easily monitor all its competitors’ pricing strategies.
Eight of the oil companies were considered in the final investigation. They proposed a number of commitments which they would make to prevent the anti-competitive activities in the future. These undertakings were accepted by the Competition Authority as they would make the market more competitive and prevent similar agreements being possible in the future.
The companies all agreed to cease publishing their recommended prices and other differentials as the Competition Authority found this practice to be an exchange of information conducive to parallel pricing. Each company also agreed to structural changes in the market as a whole in order to make it more competitive and allow new distributors into the industry. Some of these changes include implementing lower fuel prices at self-service petrol stations and allowing supermarkets and other third parties to enter the market by giving access to logistical facilities and products. In addition, the Authority approved a submission to be made to the Italian Government to call for the distribution network to be liberalised, which would also give better access to new market entrants.
Source: Autorità Garante della Concorrenza e del Mercato, Press Releases, dated 23/01/07and 20/12/07, available at http://www.agcm.it/eng/index.htm