Record fine of 173.3 million euros against Apple and Amazon annulled by Italian administrative judges because the investigation was too prolonged

On 3 October 2022, the Lazio Regional Administrative Court (“TAR Lazio”) annulled a decision issued by the Italian Competition Authority (“AGCM”) back in November 2021, by which the AGCM had fined Apple and Amazon for a total amount of 173.3 million euros.

As we had previously reported here, the AGCM considered that Apple and Amazon had entered into a distribution agreement in violation of Article 101 of the TFUE. More specifically, Apple and Amazon had reserved the sale of the Apple and Beats products on the Amazon.it marketplace to a list of specifically named operators (included amongst the so-called “Apple Premium Resellers”).

The AGCM regarded this as a competition violation both by object and by effect, as it determined both a reduction of the distributors admitted on the Amazon platform – regardless of any qualitative and not-discriminatory criteria – and a reduction in sales of the Apple products.

Apple and Amazon appealed the AGCM decision, both on substantive and procedural grounds. However, the TAR Lazio did not consider any of the substantive arguments as it annulled the AGCM decision by upholding the procedural grounds of appeal in their entirety.

In particular, the TAR Lazio has concluded that the AGCM:

• had breached the time limit for initiating antitrust proceedings “in contrast with the need of efficiency of administrative proceedings and of legal certainty for the company under scrutiny”. Indeed, the AGCM had received a complaint against the Amazon and Apple distribution agreement already in February 2019, but it only officially opened the relative antitrust proceeding in July 2020. According to the TAR Lazio, the 17-month time lapse in between cannot be justified by the complexity of the proceeding at stake, as the AGCM began to carry out its pre-investigation activities only in June 2020;
• had violated the defendants’ rights of defence by granting Apple and Amazon a time limit for submitting their defences equal to the statutory minimum (i.e. 30 days), eventually extended to 45 days, whilst in similar proceedings the defensive term assigned by the AGCM greatly exceeded 100 days. Furthermore, access to the economic data gathered by the AGCM during its analysis was granted to the parties only after 24 days from the beginning of the timeframe. In the TAR Lazio’s opinion, such limited amount of time to analyse the data, prepare and submit the defences was not only in breach of the parties’ rights of defence, but also disproportionate given the complexity of the proceeding and unjustified compared to the overall duration of the proceeding itself.

By confirming a settled administrative case law approach, the TAR Lazio assessed the compatibility of AGCM's behaviour in the light of the general principles set out in Article 6 ECHR and Article 41 of the EU Charter of Fundamental Rights, which are essential parameters for the administrative judges in ascertaining the legitimacy of antitrust enforcement.

In this sense, it has been confirmed that even the pre-investigation phase must be concluded in a reasonably congruous timeframe, considering the complexity of the case and, therefore, taking into account the time required to formulate the challenge. Equally, the time limits granted for the parties' defences must be such as to ensure the effective exercise of the right to be heard.

This application of supranational legal sources could also be of interest for other EU jurisdictions.

The TAR Lazio judgment is available here (in Italian only)

For more information, please contact Lucia Antonazzi or Chiara Horgan and visit our Competition & EU homepage.