PRESS RELEASE

ENERGY: ANTITRUST AUTHORITY TO INVESTIGATE ITALGAS FOR POSSIBLE ABUSE OF DOMINANT POSITION

The company refused to provide information needed by the Municipalities of Rome and Todi to prepare calls to tender for the assignment of gas distribution services, and the investigation shall determine whether this obstruction of competition represents an abuse of dominant position

In a meeting on 13th October 2010, the Autorità Garante della Concorrenza e del Mercato decided to launch an investigation to determine whether Italgas abused its dominant position by obstructing the preparation of calls to tender for the assignment of gas distribution services by the Municipalities of Rome and Todi.
The measure was adopted on the basis of reports these two local entities submitted to the Antitrust Authority, and the company itself was notified during the course of special inspections conducted in collaboration with the Guardia di Finanza’s (Italian Tax Police) Special Unit for Market Protection. The specific charge is that Italgas - the current gas distribution concessionaire whose contract expired in December 2009 - delayed or refused to furnish information required by these authorities to prepare calls to tender for awarding the next service contract.
According to the Antitrust Authority, the preparation of calls to tender represents a critical moment for ensuring the development of competition in the gas distribution market, which is characterized by natural monopolistic conditions. This is why it is essential for local entities to be able to define procedures that promote the broadest possible participation and prevent the current monopolist from enjoying an undue competitive advantage: anything less would discourage potential competitors.   
In addition to its critical impact during the preparation of calls for tender, furthermore, the information possessed by the exiting monopolist can also influence the "overall quality level" of the bids being presented by competitors in response to the call for tender. It is readily apparent that the exiting concessionaire could easily formulate more competitive offers by exploiting informational asymmetry relative to other companies, a factor of particular relevance in this case given the highly technical nature of the contract bids. The conduct of Italgas, furthermore, could very well exert exclusory effects that are especially significant for competition in the gas distribution markets for two additional reasons: first of all, this is the first time a call to tender has been used to assign this particular service contract and, secondly, Rome represents Italy's largest municipality, endowing it with exceptional strategic and economic importance from the perspective of competing operators.
The investigation shall be concluded by 15th December 2011.


Rome, 20th October 2010