AGCM

On 25 February 2020, the Authority closed the investigation A514, finding that TIM had implemented an anti-competitive strategy to hinder the competitive development of ultra-wideband network infrastructure investments.

Competition in the telecommunications sector is apparent nowadays, even more than in terms of prices and tariffs, in terms of service quality, investment and innovation.

With this in mind, the Authority considered it necessary to punish TIM's behaviour aimed at delaying the development of fiber in its most innovative form, i.e. FTTH (Fiber To The Home), in the areas with the greatest need.

The so-called "white" areas, i.e. those areas where, in the absence of public subsidies, private investments in innovative infrastructure would not take place.

In particular, TIM's behaviour was found to have been aimed at preserving its market power in the supply of fixed network access services and telecommunications services to end customers.

TIM hindered the entry of other competitors, preventing both market developments based on infrastructural competition and competition in the market for retail services to end customers.

The Authority found that TIM hindered the holding of tenders, announced under the Government's National Ultra-Wideband Strategy, to support investments in ultra-wideband network infrastructure in the most disadvantaged areas of the national territory (so-called white areas).

In particular, TIM approved an unprofitable change to its coverage plans for these areas in the course of the tenders and, at the same time, launched legal initiatives instrumentally aimed at delaying the public biddings.

This behaviour appears to be particularly serious as the aforementioned delays are having an effect in an overall situation where Italy is already structurally behind, by as much as 18 percentage points, other European economies in terms of FTTH coverage.

In fact, it is penultimate, followed only by Greece.

When the anti-competition strategy was launched at the end of 2016, only about 18% of real estate units were covered by a fiber-optic network, below the EU average of 22%. This gap did not narrow in the following two years, when the coverage percentages increased to 23% for Italy and 29% for the EU respectively. Even more evident is the performance gap recorded in terms of penetration rate among users. In December 2016, less than 3% of fixed broadband lines active in Italy supported download speeds of more than 100Mbps, whereas the EU average was already 17%. The figures, at the end of 2018, were 18% and 30% respectively.

TIM has also carried out a restructuring of its offer for access services to the fiber-optic network, valid throughout the entire national territory, aimed at making this market less contestable by pre-empting other operators,  in particular by lowering the prices of certain services below costs. TIM has launched promotional retail offers, some of which were suitable to contractually bind the customer for an excessively long period of time.

The Authority imposed a fine of around 116 million euro, taking into consideration the need to guarantee the necessary deterrence against possible future anticompetitive behaviour and the need for the fine not to be unjustifiably harsh.

On this last point, amongst other things, TIM's behaviour during the final phase of the investigation was taken into account, as the operator ensured that its promotional offers could be replicated by its competitors.

On the other hand, the evidence on record did not confirm that  the abusive strategy had been carried out also via the use of privileged information concerning customers of alternative operators in the retail market. 

In fact, the evidence showed that the phenomenon of malpractice was not attributable in the overall complex strategic design planned and implemented by TIM, instead demonstrated a rather strong concern within TIM with respect to the phenomenon in question.

At the same time, TIM did not appear to be responsible either for any inertia with respect to the phenomenon, considering the numerous initiatives implemented by TIM with the aim of limiting the risk of instrumental use of information on network activities.

In view of the serious difficulties that the Italian production system is facing, as a result of the extraordinary COVID-19 epidemic emergency, as well as its high amount of the fine, the Authority has set the deadline for the payment of the fine on 1 October 2020.

Rome, 6 March 2020