On November 29, 2019, the Council of State partially annulled[1] a judgment delivered by the TAR Lazio in 2018[2], which had upheld the ICA’s decision to impose on Holcim Italia S.p.A. (“Holcim”) a fine amounting to €2, 381,252 for participating in a price-fixing cartel concerning the Italian cement market.[3]

Holcim’s appeal and the judgment of the Council of State

In its appeal, Holcim argued that both the ICA and the TAR Lazio were wrong in assessing the following elements: (i) the geographic market definition, (ii) the existence of the cartel, and (iii) the quantification of the fine.

With respect to the geographic market definition, the Council of State held that even though some undertakings—such as Holcim—were active only in small areas of Italy, they were indeed “affected by competition in the other areas of the Country”. Therefore, the ICA was right in finding the geographical market national in scope.

With respect to Holcim’s participation in the cartel, the Council of State confirmed its case law and stated that, where the ICA finds evidence of unlawful contacts among rival market players aimed at restricting competition, the burden is on the accused undertakings of proving that their parallel behavior in the market can be explained in a way other than collusion. The Council of State sided with the TAR Lazio and confirmed the ICA’s finding that Holcim failed to provide a rational explanation of its conduct.

The Council of State, however, upheld Holcim’s appeal with regard to the quantification of the fine. The court found that Holcim’s business activity in 2015 was restricted to Northern Italy, in which it held only a 4.8% market share. Disregarding the “economic reality” in which Holcim operated, the ICA set a disproportionate amount when calculating the company’s fine. In addition, the Council of State held that the ICA failed properly to justify its decision not to accept Holcim’s commitments during the investigation. According to the Court, the ICA—because of its highly discretionary powers in this phase of the investigation—had to specifically state the reasons why it decided not to accept the commitments. The Court added in this respect that both the European Commission and the UK Competition and Markets Authority had accepted commitments in similar cases. This flaw—even though it did not affect the validity of the final decision—vitiated the ICA’s assessment of Holcim’s “overall behavior” and contributed to the wrongful quantification of the fine. For these reasons, the Council of State reduced Holcim’s fine by half.

[1]    Council of State, Judgment No. 8191 of November 29, 2019.

[2]   TAR Lazio, Judgment No. 8540 of July 30, 2018.

[3]   ICA Decision of July 25, 2017, No. 26705, Case I793, Aumento prezzi cemento. The ICA fined Holcim €2,381,252. The ICA also fined Italcementi S.p.A., Buzzi Unicem S.p.A., Colacem S.p.A., Cementir Italia S.p.A., Sacci S.p.A., Cementi Rossi S.p.A., Cementeria Aldo Barbetti S.p.A., Cementeria di Monselice S.p.A., CAL.ME. S.p.A., Cementi Moccia S.p.A., T.S.C. S.r.l., and AITEC. All of these companies applied for annulment of the ICA decision before the TAR Lazio – which fully upheld the ICA’s decision – and then appealed against the decision of the court of first instance before the Council of State. The latter reduced the fines imposed by the ICA on Italcementi S.p.A. (Judgment No. 7320 of December 31, 2018) and Cementi Rossi S.p.A. (Judgment No. 1551 of March 6, 2019), but confirmed the ICA decision with respect to Sacci S.p.A. (Judgment No. 1160 of February 19, 2019), Buzzi Unicem S.p.A. (Judgment No. 6973 of October 14, 2019), Cementir S.p.A. (Judgment No. 1883 of March 21, 2019), Cementi Moccia S.p.A. (Judgment No. 6974 of October 14, 2019), and CAL.ME. S.p.A. (Judgment No. 1900 of March 21, 2019). The Council of State has not yet issued a final judgment on Cementeria Aldo Barbetti S.p.A.’s and AITEC’s appeals.