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Business SMS services, sanctions totalling 10 million Euro imposed on Telecom Italia and Vodafone for abuse of dominant position


PRESS RELEASE


On 13 December 2017, the Italian Competition Authority (“ICA”) concluded two separate investigations, one on Vodafone Italia S.p.A. and another on Telecom Italia S.p.A. and its subsidiary TELECOM Italia Sparkle S.p.A., in connection to distinct abuses of dominant position in the market of wholesale SMS termination services on operator’s own network, with effects on the retail market of mass SMS services for businesses.

In particular, the ICA verified that Vodafone Italia S.p.A. abused its dominant position by implementing internal/external discriminatory conducts, both technical and economic, resulting in a margin squeeze to the detriment of competitors in the downstream market that acquires the SMS termination to the Vodafone Italia mobile network. Vodafone Italia’s conduct is addressed to Operators in decade 43 and affects infrastructure competition.

In the case of Telecom Italia S.p.A., the ICA verified that, availing itself of Telecom Italia Sparkle S.p.A.’s assistance, the operator abused its dominant position by implementing a margin squeeze against an equally efficient competitor in the downstream market that acquires the SMS termination to the TIM mobile network.

In both cases the operators, dominant in their respective upstream SMS termination markets on operators’ own networks and vertically integrated, applied tariffs on both the upstream and downstream market of mass SMS services which make the potential margin for competitors in the retail market insufficient to cover specific costs for providing services to end customers. Such conduct is likely to compromise the competitive ability of competitors operating in this market.

Given the seriousness of the conduct, the ICA therefore decided to impose administrative pecuniary sanctions on Vodafone Italia S.p.A. and Telecom Italia S.p.A in the amount of € 5,843,814 and € 3,717,988 respectively. The relevant inspections were carried out by ICA in collaboration with the Special Antitrust Unit of Guardia di Finanza.

Rome, 28 December 2017