AGCM

PRESS RELEASE

Italy-Great Britain, dialogue on competition
Competition Authority Chairman Pitruzzella:
“New laws needed to put an end to protectionism”

To open the market up to competition, “lawmakers will need to strive to put an end for good to a protectionist approach designed to protect the advantageous positions of incumbent operators”. In a talk given at the meeting on “Competition and Markets: the United Kingdom and Italy in the European Context” held at the British Embassy in Rome, the chairman of the Italian Competition Authority, Giovanni Pitruzzella, mentioned the main sectors in which – in his view – it is necessary to act in order to remove the “bottlenecks” which are the cause of the “backwardness of the national economic fabric and a significant obstacle to economic growth”.

In Italy, as Pitruzzella pointed out in an indirect reference to the recent controversy regarding “heroic entrepreneurs” stirred by certain comments made by the prime minister, the cost of starting up a business is six times higher than the European average, a figure confirmed by the fact that an international league table on ease of doing business, Italy ranks 56^th out of 189 nations.

For the Italian Competition Authority (AGCM), in keeping with the contents of its latest report to Parliament concerning the Annual Law on Competition, the sectors in need of liberalisation and administrative simplification are, first and foremost, energy, telecommunications, banking and services, particularly professional services. Otherwise, “alteration of the correct functioning of these markets risks translating into a sort of hidden tax”.

In the telecommunications sector, which was recently the subject of an inquiry conducted by the Competition Authority in conjunction with Agcom, Pitruzzella urged “effective demand-strengthening policies”, pointing out that in Italy only 56% of the population uses Internet regularly, compared with the European average of 72%, while 69% have home Internet access as against 79% in the EU and almost 100% in other countries. The Competition Authority’s chairman thus hopes for “tighter coordination of investments to date and infrastructure development plans on the part of the main national providers”. This would provide the opportunity to develop a national strategic programme which includes establishing interim targets.

With regard to the energy network, the AGCM chairman stressed “the need to reduce the overall duration of procedures for granting authorisations for priority infrastructure”, including through forms of prior consultation with the local populations involved on the French débat public model. However, with a view to a single energy market at the EU level, for Pitruzzella a nation’s policy in this area “must always be based on dialogue and seeking convergence of goals in a European context”.

With regard to the services market, the Competition Authority Chairman spoke of the “severely critical situation” which continues to prevent a concrete opening-up to competition, due to difficulty in fully implementing relevant Community and national legislation. “The service sector in Italy,” said Pitruzzella, “is liberalised,” yet the regulatory technique used, in the absence of implementation principles, means that the effect has not been fully achieved”. In the banking sector, in particular, access to credit on the part of Italian businesses is still more difficult than in the rest of Europe and interest rates remain higher, especially for smaller loans. “Our banks”, in the AGCM’s view, “apparently do not have sufficient incentives to compete in order to make loans”.

During the meeting at the British Embassy, Pitruzzella also touched upon the issue of restructuring Poste Italiane, the Italian postal service (“A radical intervention on the structure of the former monopoly is required”) as well as that of professional services, instancing the most recent measures on the Competition Authority’s part concerning the activity of lawyers and notaries. Finally, the Competition Authority Chairman concluded his talk by calling for a “further effort to straighten out legislation” for the rationalisation of public services (starting with local public transport) and public companies.

Rome, 01 December 2014