Abuse of a dominant position in the electricity market - the Italian Supreme Administrative Court referred several questions relating to Article 102 TFEU to the Court of Justice

By Federico Marini Balestra, Lucia Antonazzi

09-2020

On 20 July, the Italian Supreme Administrative Court (Consiglio di Stato, CDS) referred to the Court of Justice (CJ) several questions concerning the interpretation and application of Article 102 TFEU.

In the context of the dispute following the Italian Competition Authority's decision to impose a fine of over 93 million euro on the Enel Group for abusing its dominant position by leveraging assets held as a vertically integrated operator (which we have already commented here), the CDS has deemed it appropriate to seek guidance from the CJ to resolve its interpretative doubts regarding Article 102 TFEU.

Having analysed the constitutive elements of the abusive conduct as well as the most relevant case law, the CDS deemed it necessary to clarify its uncertainty regarding the definition found in Article 102 and the insufficiency of the traditional distinction of the behaviours of dominant firms in two categories: exploitation and interference with the competitive process.

In particular, considering that the Treaty provision (as well as the national provisions transposing it) deliberately leaves the concept of "abuse by one or more undertakings of a dominant position on the market" undefined, the CDS has submitted the questions summarised below to the CJ.

The first doubt concerns the concept of "abusive exploitation" and, in particular, whether such conduct can be completely lawful per yet still qualified as "abusive" only because of its (potentially) restrictive effects in the relevant market, or whether this conduct must also be characterized by a specific element of objective unlawfulness.

In addition, the CDS believes that the application of Article 102 TFEU depends on the exact identification of the legal basis of the offence. It therefore considers it appropriate to seek clarification on the nature of the economic effect censured by the prohibition under Article 102 TFEU.

Furthermore, the CDS intends to clarify whether there is an abuse in the event of a mere attempt to prevent the level of competition already existing, or its development from remaining in the relevant market, and therefore whether an act likely to affect competitors to an operator in a dominant position is sufficient per to ascertain a violation and to apply the penalties foreseen. If so, the Court is requested to clarify whether the sanctioned undertaking may produce evidence that the contested conduct was not in practice harmful and, if so, how the Authority may rebut this defence.

Finally, from another point of view, the CDS submitted two further questions to the Court, which it considered essential for the application of Article 102 TFEU: a) whether the abuse of a dominant position should be assessed only for its effects (even if only potential) on the market, without regard to the subjective motives of the agent; (b) whether, in the case of a dominant position involving a number of undertakings of the same group, membership in the group is alone sufficient to presume that the undertakings not engaging in the abusive conduct also participated in the abuse, or if it is necessary to provide evidence, even indirect, of concrete coordination among the undertakings of the group in a dominant position, in particular in order to demonstrate the involvement of the parent company.

For more information please find the Court’s decision in Italian here.

For more information please contact Federico Marini Balestra or Lucia Antonazzi.

 
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