AGCM

The investigation is to determine whether, as a whole, Telecom's conduct in the markets for voice telephony for residential and non-residential users, and in the market for retail services in broadband internet access constitute a single improper strategy intended to thwart its competitors.

The investigation was launched following a number of complaints lodged by Fastweb and Wind about Telecom's aggressive commercial policy, including specific and particularly advantageous offers intended to win back customers who have gone over to the competition or who are in the process of changing supplier.

The privileged body of information in Telecom's possession represents a competitive advantage which cannot be matched by its competitors and could allow the company to construct profiles of customers to be recovered by making personalized proposals to them, sometimes based on their usage patterns.

In the Authority's view, while it is legitimate for the dominant operator to attempt to win back customers by way of universal promotions, i.e. those targeting the market as a whole, the promotion of selective offers to its own customers who are leaving or who have already moved to another operator may, on the other hand, constitute a form of abuse of a dominant position resulting in the exclusion of competitors.

The alleged intention to exclude competitors would seem to have been reinforced both by specific incentives for sales agents and, according to the complaints, by actions to disparage the other operators, thus increasing competitors' costs for retaining their customer base.

The proceeding must be completed by 31 December 2008.

Rome, 26 October 2007