On December 20, 2018, the Italian Competition Authority (“ICA”) fined Enel, a multinational energy company active, among other things, in the distribution and sale of electricity in Italy, over €93 million for abusing its dominant position on certain local markets for the retail supply of electricity. On the same day, the ICA issued two decisions in parallel cases concerning similar allegations against two other companies.
In the local markets where Enel manages the distribution of electricity, Enel is also entrusted with providing (through its subsidiary Servizio Elettrico Nazionale, “SEN”) an enhanced protection service (“EPS”). The EPS is a regulated regime, reserved to domestic clients and small businesses that do not opt for offers at market prices, under which electricity is supplied at a tariff set by the sector regulator. In Italy, the EPS was initially scheduled to end in July 2019, following full liberalization of the electricity market, but the deadline was recently postponed to 2020. In addition, Enel is also active in the retail supply of electricity at market prices through its subsidiary Enel Energia (“EE”). The ICA concluded that Enel, by leveraging on assets owned because of its nature as a vertically integrated operator (i.e., active in both the distribution and the retail supply of electricity), engaged between January 2012 and May 2017 in exclusionary conduct against its competitors active in the deregulated market, with a view to unlawfully favoring EE. According to the ICA, Enel’s conduct had the ultimate objective of inducing its EPS customers to switch to Enel’s own supply offers at market prices, also in order to avoid losing those customers to competitors when the market would be fully liberalized.
Some aspects of the ICA’s reasoning deserve further analysis.
Enel’s dominant position.
The ICA identified two relevant markets, namely, the market for the distribution of electricity and the local markets for the retail supply of electricity. It then concluded that Enel, by holding a dominant position on the market for the distribution of electricity for the areas in which it held a distribution concession, had a position of “absolute strength” in the same areas with respect to the EPS. Interestingly, the ICA assessed Enel’s market shares in a selection of areas in which it provided the EPS, and inferred from this assessment that it was “reasonable to assume” that Enel held significantly high market shares in each local market (albeit not clearly identified) in which it provided the EPS.
The strategic and non-replicable assets.
The ICA found that Enel abused its dominant position by leveraging on certain assets, defined as both strategic in order to compete and impossible to replicate by non-vertically integrated competitors, namely, certain lists of customers’ contact details collected by SEN, chiefly among its own EPS customers. According to the ICA, EE used the lists (purchased from SEN every year through standard agreements applicable to all potential acquirers) to address targeted offers to SEN’s customers. This allegedly allowed EE to gain an unlawful advantage over its competitors in the deregulated market. According to the ICA, the contact details collected by SEN, compared to other lists available on the market, provided one additional (and strategic) information, i.e., that the customers included therein belonged to SEN’s EPS.
Interestingly, SEN offered the lists also to EE’s competitors (albeit only in part, as the customers were left the choice to grant consent to being contacted for commercial purposes either exclusively by the Enel group, or also by third parties). Moreover, the customers included in the lists accounted only for a very limited portion of energy clients and of SEN’s overall client database (and, in addition, the lists also included the contact details of energy users who were not SEN’s customers).
In the course of the investigation, the ICA dropped some of the initial allegations against Enel, namely those against: (i) alleged win-back campaigns carried out by EE to target customers who had switched to competitors active on the deregulated market; and (ii) alleged exploitation by Enel of the fact that some of its physical points of sale were shared by SEN’s and EE’s employees, which would have allegedly favored EE’s ability to acquire customers from SEN.
The discrimination against EE’s competitors.
According to the ICA, Enel abusively discriminated against EE’s competitors active only on the deregulated market by allowing customers (when collecting their consent to be contacted for the purposes of proposing commercial offers) to grant differentiated consent, i.e., either exclusively to companies that were part of the Enel group, or also to third parties (which could purchase the lists of contact details from Enel). Remarkably, the ICA limited itself to looking at the alleged advantage resulting to EE from the use of the lists, while not focusing on the existence of a “competitive disadvantage” for EE’s competitors stemming from the conduct at issue. This approach marks a departure from EU case law, which requires proof that the conduct “without objective justification, produces an actual or likely exclusionary effect, to the detriment of competition and, thereby, of consumers’ interests”.
The proof of exclusionary effects.
The ICA stated that the use of SEN’s lists of contact details by EE was “capable of excluding competitors” active only on the deregulated market, and that, accordingly, it did not deem it necessary to provide “evidence of the effects of the conduct”. The ICA asserted that the “empirical evidence” provided in the course of the proceedings (whose evidential value had been questioned by Enel) was merely intended “to put the market dynamics into context”. The ICA’s line of reasoning is not in accordance with the well- established EU case law by which competition authorities must prove that conduct is at least capable of having likely exclusionary effects. Even in the case of a by-object abuse (which, pursuant to the case law, does not include abusive discrimination) the EU courts require proof that the conduct is “by [its] very nature capable of foreclosing competitors” and require competition authorities to examine all evidence submitted by the undertaking concerned supporting the conclusion that its conduct was not capable of restricting competition.
The Enel decision highlights the ICA’s current focus on the upcoming liberalization of electricity and gas markets in Italy. It is reasonable to expect that, pending the full liberalization, the ICA will continue to look closely at the behavior of companies active in these markets, as also shown by the publication, in September 2018, of a handbook aimed at providing guidance to customers in connection with the liberalization process.
 Enel/Condotte anticoncorrenziali nel mercato della vendita di energia elettrica (Case A511), ICA decision of December 20, 2018. The decision was published on January 8, 2019.
 A2A/Condotte anticoncorrenziali nel mercato della vendita di energia elettrica (Case A512) and Acea/Condotte anticoncorrenziali nel mercato della vendita di energia elettrica (Case A513), ICA decisions of December 20, 2018. In the A2A decision, the ICA closed proceedings without finding any infringement of Article 102 TFEU, while in the Acea decision it imposed a €16 million fine.
 Post Danmark I (Case C-209/10) EU:C:2012:172.
 Post Danmark I (Case C-209/10) EU:C:2012:172; Post Danmark II (Case C-23/14) EU:C:2015:651; and TeliaSonera (Case C-52/09) EU:C:2011:83.
 Intel I (Case T-286/09) EU:T:2014:547 and Intel II (Case C-413/14 P), EU:C:2017:632.