On June 7, 2019, the TAR Lazio rejected the appeal filed by Società Cooperativa Taxi Torino (“Taxi Torino”) against the interim measures adopted by the ICA on November 29, 2018, in an investigation concerning an alleged abuse in the market for taxi demand management services in Turin.
On November 29, 2018, the ICA imposed interim measures on Taxi Torino, the firm managing radio taxi services in Turin, in the context of an investigation for a possible abuse of dominant position in the market for taxi demand management services in Turin. The ICA opened the investigation following a complaint by MyTaxi, a company that manages a mobile app connecting taxi drivers and consumers. MyTaxi’s complaint concerned a clause of Taxi Torino’s by-laws, which imposed a non- compete obligation on taxi drivers participating in Taxi Torino’s network.
The ICA found that the clause (i) had been introduced in Taxi Torino’s by-laws right before the launch of MyTaxi’s app in Turin, and (ii) had led to the exclusion of several taxi drivers from Taxi Torino’s network. According to the ICA, the clause hindered entry by open platforms (such as the MyTaxi app) on the relevant market, and was neither indispensable for the functioning of Taxi Torino’s network nor proportionate.
In the ICA’s view, the conditions for the adoption of interim measures were met, given that: (i) there was prima facie evidence of an infringement and its effect on competition; and (ii) the practice gave rise to a risk of serious and irreparable damage to competition, as the non-compete clause applied to around 90 per cent of taxi drivers active in Turin, and an increasing number of drivers had already discontinued the use of the MyTaxi app.
In light of these circumstances, the ICA ordered Taxi Torino to cease the application of the non- compete clause pending a final decision on the alleged abuse.
The judgment of the TAR Lazio
The TAR Lazio first set out the legal standard applicable to the judicial review of interim measures. When reviewing these measures, a court is not under an obligation to verify whether the ICA gathered conclusive evidence on the violation of competition law, but must rather limit its assessment to verifying whether there are elements from which it can be inferred, with a sufficient degree of reliability, that an anticompetitive behavior is taking place.
On the merits of the case, the TAR Lazio held that: (i) taxi demand management services offered through apps, phone or radio constitute a single relevant market from an antitrust perspective; (ii) the amendment to Taxi Torino’s by-laws, which imposed the non-compete obligation on taxi drivers participating in Taxi Torino’s network, was aimed at limiting competition; (iii) the interim measures issued by the ICA were reasonable and well grounded. These issues are discussed below.
- Taxi demand management services offered through apps, phone or radio constitute a single (local) market
According to Taxi Torino, the ICA had mistakenly held that taxi demand management services offered through apps, phone or radio constitute a single relevant market. Indeed, the apps that allow users to book taxis have features (such as geo-localization and the possibility to pay through the app) that make them irreplaceable by the more traditional means of booking taxis, such as phone and radio.
Moreover, Taxi Torino argued that the ICA was also wrong in considering that the market for taxi demand management services offered through apps is a purely local market (comprising only the municipality of Turin). Instead, this market should be considered at least national (if not European).
The TAR Lazio took the view that the ICA was right in defining a single product market for taxi demand management services offered through apps, phone or radio. The TAR Lazio agreed with Taxi Torino that some features of apps could actually be relevant in the user’s experience, and held that these aspects should be further explored by the ICA in the pending investigation. However, the TAR Lazio concluded that users still consider taxi demand management services offered through apps and those offered through phone or radio as substitutes, and may well switch from one to the other in case one of the two is not available or difficult to use. The TAR Lazio also noted that, at the same time, the means used to book taxi services has no relevance for taxi drivers, given that the only relevant aspect from their perspective is the provision of the service to the end user, regardless of how the taxi is booked and paid.
As to the relevant geographic market, the TAR Lazio upheld the ICA’s view that the market was limited to the municipality of Turin. Indeed, even though MyTaxi operates at a national level and the service it provides is homogeneous in the whole of Italy, the TAR Lazio agreed that the relevant geographic area to be considered for the purposes of the proceedings is the municipality of Turin, where MyTaxi and Taxi Torino compete.
The non-compete obligation in Taxi Torino’s by-laws
Taxi Torino argued that the non-compete obligation in its by-laws did not prevent other players from entering the market. According to Taxi Torino, this obligation was introduced in the context of a broader review of the by-laws, which was necessary after Taxi Torino entered into an exclusive dealing agreement with the platform Move Plus. According to the applicant, the amendment to the by-laws was justified by the need to protect Taxi Torino from the risk of free-riding on the investments carried out by Taxi Torino’s members.
The TAR Lazio held that the amendment to Taxi Torino’s by-laws did not take place in the context of a broader review of the by-laws made necessary by the exclusive dealing agreement with the platform Move Plus. Documentary evidence showed Taxi Torino’s intent to react to the behavior of certain taxi drivers, who had joined the MyTaxi app. As a consequence, the TAR Lazio agreed with the ICA’s view that the contested clause was introduced in the by-laws precisely to eliminate or reduce competition.
In light of the above, the TAR Lazio concluded that (i) the evidence gathered by the ICA was sufficient to adopt interim measures, and (ii) the interim suspension of the non-compete obligation in Taxi Torino’s by-laws was required to prevent an irreparable harm to competition in the market concerned.
The interim measures adopted by the ICA were reasonable and well grounded
In its last ground of appeal, Taxi Torino argued that the interim measures adopted by the ICA were unjustified and disproportionate. In particular, as to the condition of a prima facie case ( fumus boni iuris), Taxi Torino argued that the evidence gathered by the ICA was insufficient even to prove the “mere probability” of an alleged violation of competition law. As to the urgency (periculum in mora), Taxi Torino argued that there was no actual risk of exclusionary effects. According to the applicant, this was proved by the fact that new operators had recently entered the market and there was no serious risk of economic losses for MyTaxi.
The TAR Lazio took the view that the interim measures adopted by the ICA were reasonable and well grounded. According to the TAR Lazio, the conditions to issue interim measures were met, since the ICA demonstrated the probability of an exclusionary strategy through documentary evidence showing the applicant’s intent to react to the behavior of certain taxi drivers, who had joined the MyTaxi platform. Moreover, Taxi Torino had not proved to the requisite legal standard that, due to the interim measures, it could suffer greater harm than the competitive harm the ICA wanted to prevent. Finally, in the TAR Lazio’s view, the interim measures were proportionate, as they did not jeopardize the efficient operation of Taxi Torino.
 TAR Lazio, judgment No. 7463/2019; ICA decision of November 29, 2018, No. 27434, A521, Attività di intermediazione della domanda di servizi taxi nel comune di Torino.