AGCM

PRESS RELEASE

POSTAL SERVICES: ANTITRUST AUTHORITY, POSTE HAS ABUSED ITS DOMINANT POSITION AS REGARDS EXEMPTION FROM VAT. WITHIN 180 DAYS POSTE MUST APPLY VAT TO INDIVIDUALLY-NEGOTIATED POSTAL SERVICES SO AS NOT TO DISCRIMINATE AGAINST COMPETITORS. BEHAVIOUR OBSERVED NEVERTHELESS NOT SUBJECT TO PENALTIES: COMPANY ACTED ACCORDING TO NATIONAL LEGISLATION IN CONFLICT WITH EUROPEAN LAW.

The Authority disapplies national legislation in conflict with relevant Community rules and case-law.

One hundred and eighty days to apply VAT to liberalised postal services and cease abusing its dominant position with which competitors have been discriminated against: the time that the Autorità Garante della Concorrenza e del Mercato has given at the end of the investigation launched on 06^th March 2012. In a meeting on 27^th March 2013, the Antitrust Authority established that Poste, in not applying VAT to those services which, although part of its universal service, are negotiated individually, has abused its dominant position in violation of European legislation. This behaviour has enabled Poste to formulate offers designed to exclude competitors from the markets concerned, as they have not been able to respond with competitive offers, given that the currently applicable VAT rate is of 21 percent.

In keeping with the case-law of the European Court of Justice, however, the Authority has not imposed penalties on Poste, as exemption from VAT is provided for by a national law, which is in conflict with European legislation. The Authority has therefore disapplied the Italian law in order to ascertain its abuse of dominant position and oblige Poste to cease abusing it.

The key elements of the Antitrust Authority’s measures are summarised below.

SERVICES AFFECTED BY THE APPLICATION OF VAT

Postal services forming part of the universal, and not reserved service, and which could therefore theoretically be provided by companies other than Poste Italiane and to which the concessionary company must apply VAT, include posta massiva (bulk mail), posta raccomandata (registered mail), posta assicurata (certified mail), and Posta Target (direct-mail advertising). These services are negotiated individually by Poste with different prices not only on the basis of the volume of mail and speed of service but also on the basis of combined offers. In each of these sectors Poste is the dominant operator and is able to exploit the synergies which the utilisation of a single, integrated network provides.

CONFLICT BETWEEN ITALIAN AND COMMUNITY LEGISLATION

Under Italian law, “the services of the universal postal service, in addition to sales of goods and the supply of services accessory thereto, supplied by subjects obliged to ensure that they are performed” are exempt from VAT. Under Community law, in contrast, exemption regards operations “provided by public postal services and the supply of goods incidental thereto”. The verdict of the European Court of Justice of 23^rd April 2009 (Case C 357/07) subsequently specified that “exemption is not to apply to specific services dissociable from the service of public interest, including services which meet special needs of economic operators” and that “exemption is not to apply to the supply of services or the sale of goods incidental thereto for which the terms have been individually negotiated”.

The behaviour of Poste, in the Antitrust Authority’s view, has therefore been justified by a mandatory national law which provided for exemption from VAT for services supplied as part of Poste’s universal postal service, without excluding services for which the terms have been individually negotiated. This legislation, nevertheless, was in conflict with Community law and with Article 102 of the Treaty prohibiting the abuse of dominant market position.

DISAPPLICATION BY THE AUTHORITY

The decision of the European Court of Justice of 09^th September 2003 (Case C-198/01) laid down that, in the event of behaviour on the part of enterprises in contrast with the prohibition against abuse of dominant position which is imposed or encouraged by a national law which legitimates or reinforces the effects thereof, the national competition authority is obliged to disapply the national law in order to enable an antitrust violation to be ascertained.

The obligation to disapply an Italian law which is in conflict with European legislation on the part of the institutions of a Member State has been recognised by Italian constitutional and administrative law.

Rome, 23^rd April 2013