The Italian Competition Authority, at its meeting on 3 August 2007, decided to fine Telecom Italia (previously TIM) €20 million and Wind €2 million for two separate abuses of a dominant position in their respective wholesale markets for termination services on their networks, in violation of Article 82 of the EC Treaty.

Telecom Italia and Wind Telecomunicazioni must immediately discontinue the demonstrated conduct and advise the Authority within 90 days of the steps taken to remedy the offence.

On the other hand, in the Authority's view there is insufficient evidence to prove a collectively dominant position of mobile operators in the wholesale market for access services to mobile network infrastructure, as was  alleged at the beginning of the investigation.

The Antitrust Authority also noted recent positive competition-oriented changes in the wholesale market for access with the arrival in Italy of virtual mobile operators.

As to the contravention established in the case of Telecom Italia and Wind, the Authority found that the two companies had imposed discriminatory practices on their competitors, by applying to their own commercial divisions technical and/or economic conditions for termination of fixed line-mobile calls on their networks that were more favourable than those offered to other operators.

The discriminatory conduct by the two mobile operators, who also have licences to supply fixed network telephone services, was intended to exclude competitors both from wholesale termination services and from the related retail market for F-M voice services for business customers.

The seriousness of these abuses is confirmed by their practical impact on the markets concerned: by hindering the resale of termination at the wholesale level, TIM and Wind eliminated any alternative wholesale supply of termination for their competitors and thus prevented other operators from formulating retail F-M products for business customers in competition with their own.

These are serious offences, considering also their duration: from 1999 until the present in the case of TIM, and from 2001 until the present in the case of WIND.

In the Authority's view, Telecom's improper conduct is more serious than Wind's because at a Group level it is a dominant operator not only in the upstream market of termination services on its network, but also in the downstream market of fixed-mobile services to business users: Telecom took advantage of this particular characteristic to preserve and strengthen its own position of dominance. In establishing the amounts of the fines, then, the Authority took into account the different characteristics of the operators, and in particular the pre-eminence of the Telecom group in all communications markets in Italy, including that of business F-M telephony, compared with the position of Wind: despite being the second operator in the market, Wind has a much lower market share than that of the Telecom group.

Moreover, the fine imposed on Telecom was increased because the company had already been the subject of a number of findings regarding its dominant position.

Rome, 03 August 2007