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SEA - AIRPORT CHARGES


PRESS RELEASE



PRESS RELEASE

ANTITRUST AUTHORITY FINES SEA EURO 1,549,900 OVER ABUSE OF ITS DOMINANT POSITION


The company overcharged for access to infrastructure for refuelling and catering and in sub-letting office space to freight operators.


The Italian Competition Authority, at its meeting on 26 November 2008, decided that SEA abused the dominant position it enjoys through holding exclusive management licences until 2041 for the Malpensa and Linate airports, and fined the company a total of Euro 1,549,000.

Specifically, the Authority decided upon the following:

- a fine of Euro 770,000 (seven hundred and seventy thousand) for abuse of a dominant position in making inequitable and excessive charges for the provision of refuelling infrastructure;

- a fine of Euro 185,000 (one hundred and eighty-five thousand) for abuse of a dominant position in making inequitable and excessive charges for the provision of common and individual catering infrastructure;

- a fine of Euro 594,000 (five hundred and ninety-four thousand) for abuse of a dominant position in making inequitable and excessive charges for the provision of office space for cargo handlers.

The investigation was launched on 14 December 2006 following receipt of a number of complaints from IBAR – Italian Board Airlines Representatives - and from numerous freight handlers operating out of the Milanese airports run by SEA; the complaints centred around allegedly abusive conduct by SEA.

The abuses punished by fines had to do with the following:

1) provision of common and individual refuelling infrastructure

The results of the investigation show that the “airport fee” applied by SEA was never related to the costs sustained by the management company for providing the service, even including a return on the capital employed, but was set at a much higher level. More specifically, SEA's charges seem to have been at least 55% higher than the economic value of the service provided. In the Authority's view, SEA's conduct constitutes an instance of inequitable and excessive charges being levied by a company enjoying a dominant position and thus the conduct was held to be abusive. Such abuse by SEA lasted from 2004 until 1 January 2006.

2) provision of common and individual catering infrastructure

The charges made by SEA for access to infrastructure for catering services were found to be far above - indeed three times - the economic value of the service provided. This, too, the Authority deemed to be an instance of inequitable and excessive charges being levied by a company enjoying a dominant position. The abuse lasted  from 2004 until 1 January 2006.

3) provision of common and individual infrastructure for cargo handling activities

SEA charged independent freight handlers sub-letting rents that were about double those charged by “cargo handling companies” which are presumed to be the benchmark for the economic value of the service in question. This abuse by SEA lasted at least from January 2002, when certified management accounting became available as a result of the provisions CIPE's Resolution no. 86/2000, until July 2008.

In determining the fines, the Authority considered the fact that SEA ended the abuses of its own accord to be an extenuating circumstance.

On the other hand, the Authority found insufficient evidence in its investigation to prove overcharging for use of centralized infrastructure. The results of the investigation further showed that the fee charged to security operators for additional security services (so-called “profiling”) was not excessive.


Rome, 15 December 2008