GSM DEALER NETWORK CONSTITUTION (Conclusion of the investigation)
PRESS RELEASE
The Italian Competition Authority has concluded its investigation, which was initiated on the basis of
numerous complaints against Telecom Italia Mobile (TIM) on alleged restrictions imposed by TIM with its exclusive distribution system for GSM service subscriptions.
In the course of the proceeding, the Authority found that TIM's conduct constitutes a violation of section 3 of Law. no. 287/90 (abuses). TIM was found guilty by the Authority of using an exclusive distribution system of its own GSM service subscriptions and of implementing an anticompetitive mechanism for ensuring dealer loyalty. In addition, the Authority pointed out that TIM subordinated the stipulation of the Dealer Tacs contract to the acceptance, on behalf of the dealer, of the condition of exclusive distribution, as set out by the GSM contract.
Furthermore, the Authority noted that the Dealer GSM contract undersigned by TIM and the dealers violates section 2 of Law no. 287/90 (agreements) and, as such, it rejected the request for an exemption on prohibition of restrictive agreements, which was filed by TIM in compliance with section 4 of Law no. 287/90.
The investigation was aimed at ascertaining if TIM's imposition on dealers not to sell GSM subscriptions provided for by the second carrier, Omnitel, could violate Law no. 287/90.
During the proceeding, the Authority found that TIM holds a dominant position in the GSM mobile telephone market. This finding was based on two considerations: a) TIM holds a particularly high share of subscriptions; b) it is able to wield substantial monopoly power by leveraging its legal monopoly position in the contiguous analogic TACS market.