CONSORZIO PER IL NUCLEO DI INDUSTRIALIZZAZIONE CAMPOBASSO-BOIANO/SOCIETA' GASDOTTI DEL MEZZOGIORNO (Conclusion of full phase investigation)
PRESS RELEASE
The Italian Competition Authority closed its investigation, which was initiated in November 1996, and ruled that Southern Italy Gas Transmission Company (Società Gasdotti del Mezzogiorno) engaged in conduct that violated Section 3 of Law no. 287/90. The company in fact had refused the Consortium for the Industrialization of the Campobasso-Boiano area (Consorzio per il nucleo di industrializzazione Campobasso-Boiano) the connection to its own pipeline, over the period July 1995-April 1997. Considering the seriousness of the infringement, the Authority ordered Southern Italy Gas Transmission Company to pay a fine of
247 million lira.
Southern Italy Gas Transmission Company (SGM), which is controlled by Edison Gas, deals with the natural gas transportation and distribution in the Lazio, Molise, Campania and Puglie regions, where the firm owns and operates a gas pipeline extended to nearly 600 km.
The Consortium joins 14 companies and works to promote industrial development in the Campobasso area. The Consortium had built a natural gas transportation pipeline serving its industrial area and had contracted for the running of such pipeline with Molise Gestioni.
The Authority considered SGM's conduct very serious on the ground that it was aimed at impeding entry of a direct competitor (Molise Gestioni) into the market of the management of the pipeline and at extending even to such a market the dominant position hold in the upstream market of the supply of natural gas.
SGM had firstly said that its refusal to connection was due to "an institutional and regulation framework" consisting in the agreement concluded between the main natural gas supplier, SNAM (a Eni Group company which owns 96 per cent of the national transportation network supplying high pressure natural gas) and the distributors associations. Such an agreement prevented intermediaries from directly serving industrial users, except for special derogations (and at a price fixed by another agreement).
During the inquiry, SGM modified its conduct and, through new proposals made to the Consortium, recognized a new role of buyer serving industrial users. This kind of buyer, by centralizing its demand, was able to obtain from the supplier prices lower than those each user would have paid for natural gas consumption.
In the perspective of the development of a different functioning of the natural gas market, which should be ensured by a EEC Directive in the near future, the recognition of an intermediary business, acting between the natural gas transportation and the distribution to industrial users, would contribute to promote competition, to the advantage of consumers.