Punch down on sanctions for the monopoly of the seas between Sicily and Calabria. The Council of State completely overturned the ruling of the Lazio Regional Administrative Court last September, canceling the maxi-fine of over 3.7 million euros that the Antitrust had inflicted on the Caronte & Tourist company at the end of March 2022.
The accusation made by the Competition and Market Authority (AGCM) was serious: abuse of a dominant position for having applied “unjustifiably burdensome prices” to the detriment of the hundreds of thousands of passengers who cross the Strait of Messina every year with their cars in tow. But for the judges at Palazzo Spada, the Antitrust reconstruction does not stand up: the investigation would present fundamental “gaps” that invalidate its outcome.
Last September, the Lazio Regional Administrative Court paved the way for the Antitrust by rejecting the shipping company’s formal appeals. The first instance administrative judges had highlighted how, «based on the current situation of the Calabria-Sicily landing places», the route market was not «freely accessible» due to a strong saturation of the ports and the high demand. A context of “congestion” which, according to the TAR, legitimized the Antitrust’s crackdown on the price lists applied by the ferry giant.
Now comes the second degree judicial counterattack which cancels everything and even condemns the Antitrust to pay the legal costs for both levels of judgement. Reviewing the rules that regulate the abuse of a dominant position, the Council of State established that the AGCM’s assessment “is affected by investigative gaps in relation to the actual competitive nature or otherwise of the reference market”. In essence, according to Palazzo Spada, the Authority did not investigate sufficiently to demonstrate whether the market was truly devoid of competition or whether there were self-correction dynamics precluded to the company. «The Authority – we read in the sentence – should have proceeded with a more accurate examination of the structure and characteristics of the market, which was not sufficiently carried out in this case».
The administrative judges accepted four grounds of appeal
In the sentence, the administrative judges accepted four grounds of appeal presented by the shipping company, identifying as many flaws in the Antitrust provision.
The first concerns the failure by the Competition and Market Authority to demonstrate the effective closure of the Strait market and the presence of real barriers to entry for other operators. In fact, a direct public competitor operates on the Strait – not a simple follower, as claimed in the Antitrust provision – which applies tariffs slightly lower than those of the private carrier. Any high prices – the judges clarify – would on the other hand have had to attract new competitors.
In the second point, the Council of State also criticizes the use, in the final provision, of a study by the Ministry of Infrastructure used for a purpose other than that communicated during the investigation, which caused a violation of the company’s right of defence. From an economic point of view, the judges then deemed the methodology with which the Antitrust had reconstructed the relationship between the company’s revenues and costs to be unreliable, based on an assumption – the presumed relevance of freight traffic on the Villa San Giovanni-Rada San Francesco route – not confirmed by the data contained in the same provision. Finally, the fourth point accepted is also decisive, i.e. the preliminary phase of the investigation, which lasted 855 days, defined as unreasonable and such as to have concretely damaged the company’s ability to reconstruct the accounting data requested by the Authority years later.
The Council of State thus ruled in favor of the shipping company – defended by the panel composed of lawyers Fabio Cintioli, Mario Siragusa and David Astorre – annulling the contested provisions and condemning the AGCM to pay the costs of both levels of judgement.
Caronte & Tourist: “For years we have been accused of being monopolists, an unfounded accusation”
“We welcome the ruling of the Council of State with satisfaction. We have always placed trust in the judiciary at every level of judgment, certain of our good work which has more than sixty years of experience and responsibility towards the communities of the Strait”. And again: “For years we have been accused of being monopolists, an unfounded accusation which we hope now, with the evidence and arguments gathered in court, can finally be dismissed” declares the company. “C&T has always paid great attention to the prices charged for the Strait crossing service – concludes the note – tariffs which have guaranteed the economic sustainability of a connection which historically ensures frequent, rapid, punctual journeys, 24 hours a day and in all weather and sea conditions, even in periods in which low traffic does not make the service economical. We have essentially chosen to guarantee customers the certainty of being able to ferry every day and at any time of the year”