On July 27, 2020, the TAR Lazio delivered 15 judgments concerning the 2019 ICA decision, by which 19 companies were found liable for participating in a cartel aimed at rigging a tender procedure in the facility maintenance sector in Italy (the “Decision”).[1]
The TAR Lazio delivered two sets of rulings: on the one hand, it quashed the Decision with respect to three of the addressee companies;[2] on the other hand, with respect to the 12 other applicants, it upheld the finding of infringement, but ordered the ICA to re-determine the fines originally imposed on them.[3]
Background
On April 17, 2019, the ICA found that 19 companies allegedly participated in a cartel that affected the outcome of the so-called “Facility Management 4” tender procedure for the provision of cleaning and maintenance services for public offices throughout Italy. The said tender procedure, launched by Consip S.p.A. (the central purchasing agency owned by the Ministry for Economy and Finance), was divided into 18 geographical lots and had a total value of approximately €2.7 billion.
During the investigation, the ICA cooperated with public prosecutors in Rome, who were investigating the same conduct in connection with criminal proceedings, and relied on a leniency application submitted by one of the parties to the cartel.
The ICA found that the four main market players led a number of distinct temporary associations of undertakings – so-called ATIs (i.e. associazione temporanea di imprese) – that exchanged information about their bidding strategies during meetings, and through subcontracting and consortia. These exchanges were part of a concerted practice by which the ATIs submitted bids that never overlapped, according to a so-called “chessboard” pattern.
The ICA concluded that the infringement constituted a hardcore restriction of competition under Article 101 TFEU, and issued fines against the investigated companies of approximately €235 million in total.
Pursuant to Article 15 of Law No. 287/1990, the leniency applicant – C.N.S. Consorzio Nazionale Servizi Società Cooperativa (“CNS”) – was granted a 50% reduction in its fine. Ultimately, the ICA imposed no fine on Dussmann Service S.r.l. and its parent company Dussmann Service Holding GmbH, and Siram S.p.A. and its parent company Veolia Energies International SA, as it found that the evidence regarding these companies’ alleged involvement in the cartel was insufficient.
The judgments of the TAR Lazio
Annulment of the Decision vis-a-vis three applicants
The TAR Lazio quashed the Decision to the extent that it was addressed to Engie Energy Services International SA and Engie Servizi S.p.A. (together referred to as “Cofely”) and Consorzio Stabile Energie Locali S.c.a r.l. (“CSEL”).[4]
According to the TAR Lazio, there was no significant evidence supporting the claim that CSEL and Cofely had jointly (i.e. in the context of a special purpose-ATI) participated in the tender with collusive purposes; conversely, there were sufficient grounds to conclude that both companies intended to bid competitively and lawfully.
The Court held that the Decision was manifestly unfounded. The ICA mainly focused on the type, timing and effects of the concertation among the main “players” of the cartel, without sufficiently explaining how the Cofely-CSEL ATI was involved in the unlawful conduct and the companies’ alleged collusive intent. Moreover, all the economic and technical offers submitted by the Cofely-CSEL ATI were inherently aggressive and overlapped with the bids submitted by the cartelists.
Regarding the exogenous evidence relied upon by the ICA, the TAR Lazio concluded that the hand- written “pink post-it” of June 12, 2017, in which a manager of one of the alleged cartelists (i.e., Consorzio Nazionale Servizi Società Cooperativa – “CNS”) wrote the name of the attendees at an anticompetitive meeting, was insufficient to prove the involvement of Cofely and CSEL in the alleged cartel. In particular, there was no evidence of any kind of agreement between the Cofely-CSEL ATI and the participants to the alleged collusive agreement (i.e., Manital S.c.p.a., Manutencoop Facility Management S.p.A., Romeo Gestioni S.p.A. CNS and STI S.p.A.).
Reduction of the fines imposed on 12 of the Decision’s addressees
With respect to the remaining applications for annulment of the Decision, the TAR Lazio confirmed the ICA’s finding of an infringement of Article 101 TFEU. However, it ordered the ICA to re-determine the fines imposed on the companies.[5]
In particular, the TAR Lazio found that the endogenous and exogenous evidence relied upon by the ICA was of “absolute relevance and significance”. First, the ICA correctly found numerous anomalies in the bids submitted by the companies, which suggested the existence of a common strategy of participation in the tender procedure, with each party ranking first for the lot(s) attributed to that they were interested in. In addition, the ICA’s findings were based on documentary evidence (such as emails and documents seized at the companies’ premises), as well as on wire-tapping records retrieved in the parallel criminal proceedings. In this regard, the TAR Lazio reiterated the principle that wiretapping records that have been lawfully acquired in the context of a criminal investigation pursuant to the procedural rulzes concerning the gathering of evidence may be used by the ICA in antitrust proceedings.
However, the TAR Lazio was persuaded by the parties’ pleas concerning the determination of the percentages applied to the basic amount of the fines to reflect: (i) the gravity of the conduct, pursuant to Article 14 of Law No. 287/1990, and (ii) the so-called “entry fee”, pursuant to Article 17 of Law No. 287/1990. Regarding the gravity of the conduct, the ICA had found that the alleged cartel had the effect of eliminating competition in each lot of the FM4 tender. However, according to the TAR Lazio, the ICA did not adequately take into account the circumstance that the FM4 tender was suspended and, accordingly, the lots were not awarded to the bidders. Regarding the entry fee, the judges stated that the ICA did not sufficiently justify the application of an additional amount as a deterrent effect. In light of the above, the TAR Lazio urged the ICA to re-determine the amount of the fines.
In addition, in certain of its judgments partially annulling the Decision,[6] the TAR Lazio rejected the claim that the ICA did not correctly take into account the “single economic unity” doctrine, thus wrongly fining some companies which declared they were not involved in the bid-rigging strategy. Referring to settled case-law, the Court stated that, under competition rules, two or more parties can be considered as a single undertaking, despite having separate legal personality, on the basis of a number of elements such as a controlling interest, or economic, functional or organizational links.[7] In particular, there must be two factors for the existence of a single economic unit: (i) a position of control that a parent company exercises over other companies; and (ii) the effective decisive influence of the parent company over these companies, so that the companies concerned do not determine independently their own conduct on the market. In the present case, with regard to Gruppo STI (which includes STI S.p.A., Exitone S.p.A., Gestione Integrata S.r.l. and Finanziaria Bigotti S.p.A.), the TAR Lazio held that the ICA correctly identified a single undertaking since, inter alia: (i) the companies had the same headquarters; (ii) some individuals held key roles both in the parent company STI and in the subsidiaries; and (iii) the tender office for all these companies was located within the parent company.
In addition, the TAR Lazio upheld the finding of joint and several liability of Esperia S.p.A. for the payment of the fine imposed on Kuadra S.r.l., whose activities (including those subject to the ICA’s investigation) were transferred to Esperia, which did not take part in the collusive scheme. According to the Court, on the basis of the single economic unit principle, the person who constitutes the economic successor of the previous entity may be held liable for an antitrust infringement. Furthermore, this principle is not incompatible with the principle according to which liability for damage caused by infringement of competition rules is personal in nature, but aims to avoid that legal changes in the structure and identity of a company may allow it to go unpunished.
With specific reference to the leniency applicant, which challenged the ICA’s decision to merely grant a 50% reduction in the fine, instead of the non-imposition of the fine or, alternatively, the application of a merely symbolic fine, the TAR Lazio confirmed that CNS made a significant contribution to the investigation, but ultimately simply completed and strengthened the evidence already available to the ICA (such as documents or wiretapping records retrieved from the parallel criminal proceedings).[8] Accordingly, in light of the ICA Notice on the non-imposition and reduction of fines,[9] it concluded that the ICA correctly granted CNS a reduction in the fine instead of total immunity.
[1] ICA, Decision of April 17, 2019, No. 27646, Case I808 – Gara Consip FM4-Accordi tra i principali operatori del facility management.
[2] TAR Lazio, Judgment Nos. 8765, 8767 and 8768 of July 27, 2020.
[3] TAR Lazio, Judgment Nos. 8762, 8769-8772, 8774-8779 and 8781 of July 27, 2020.
[4] TAR Lazio, Judgment Nos. 8765, 8767 and 8768 of July 27, 2020.
[5] TAR Lazio, Judgment Nos. 8762, 8769-8772, 8774-8779 and 8781 of July 27, 2020.
[6] TAR Lazio, Judgment Nos. 8769, 8770, 8771 and 8772 of July 27, 2020.
[7] Court of Justice, Judgment of December 14, 2006, Confederación Española de Empresarios de Estaciones de Servicio v Compañía Española de Petróleos SA, Case C-217/05, §41.
[8] TAR Lazio, Judgment No. 8762 of July 27, 2020.
[9] ICA, Notice of September 9, 2013, on the non-imposition and reduction of fines, pursuant to Article 15 of Law No. 287/1990.