On June 7, 2021, the Milan Court of Appeal (the “Court of Appeal”) declared inadmissible an appeal brought by Irideos S.p.A. (“Irideos”; formerly, Enter S.r.l., “Enter”) against a Court of Milan judgment that had entirely dismissed a follow-on damages action against Telecom Italia S.p.A. (“TIM”) for alleged abuse of dominance in the provision of wholesale access services found by the Italian Competition Authority (the “ICA”) in 2013, on the ground that the appeal did not have a reasonable chance of being upheld, pursuant to Articles 348-bis and ter of the Italian Code of Civil Procedure (the “CCP”).
In order to provide electronic communications services to final customers, other authorized operators (“OAOs”) normally need access to TIM’s fixed network. When OAOs acquire new customers, they send TIM a request to activate the wholesale access services needed to provide users with retail electronic communications services. This process can either have: (a) a positive outcome, leading to the provision of the retail service to final customers; or (b) a negative outcome, when TIM communicates the presence of one of the circumstances provided for by sector- specific regulation, which prevent the activation of wholesale access services.
In a decision dated May 9, 2013, in the A428 case (the “A428 Decision”), the ICA stated that, in the period 2009-2011, TIM had abused its dominant position by communicating an unjustifiably high number of refusals to activate wholesale access services (“KOs”), in order to hinder the expansion of competitors in the markets for voice telephony services and broadband internet access. In particular, the ICA found that the procedures for the provision of wholesale access services to competitors and to TIM’s commercial divisions were different. In the ICA’s view, the differences between external and internal procedures were not as such unlawful, but they had resulted, de facto, in higher percentages of KOs for competitors compared to TIM’s commercial divisions.
In 2017, Enter brought a follow-on action against TIM, claiming that it had been harmed by the above-mentioned conduct. The OAO alleged that TIM had communicated to it an unjustifiably high number of KOs, and asked the Court of Milan to award damages amounting to around €1.9 million. In particular, Enter maintained that the excessively high number of KOs communicated by TIM had resulted in a loss of customers and an increase in the costs sustained by the OAO to submit the requests for activation.
TIM argued, inter alia, that a statistical analysis did not demonstrate a negative impact of the contested conduct on the OAO concerned, as Enter had actually activated, in percentage terms, more customers than TIM’s internal commercial divisions. TIM also argued that Enter had not adequately alleged and proved any refusals to activate wholesale access services that was not justified by the circumstances provided for by sector-specific regulation. Accordingly, there was no evidence of the damage allegedly suffered and a causal link between such damage and the alleged conduct.
In a judgment dated December 18, 2019, the Court of Milan rejected Enter’s request and ordered it to reimburse the costs of the proceedings.
In the Court’s view, the claimant had not adequately established that: (a) it was actually harmed by the conduct fined by the A428 Decision; and (b) there was a causal link between such conduct and the alleged harm. The Court found that, in civil proceedings, the statistical analysis of the percentage of refusals to activate communicated to Enter – which in any case did not provide clear evidence of discriminatory treatment – is not sufficient to demonstrate the alleged wrongdoing, as it can only constitute circumstantial evidence or reinforce and confirm further evidence. In the case at hand, the available evidence showed that Enter regularly checked whether the refusals to activate communicated by TIM were actually justified by the circumstances provided for by sector-specific regulation. As the claimant had not alleged which KOs, or groups of KOs, were in its view unlawful or unjustified, the Court held that Enter had not met its burden of alleging and proving to have suffered damages as a result of the contested conduct.
Following a merger by acquisition with Enter, Irideos challenged the judgment on multiple grounds, which essentially focused on errors allegedly committed by the Court of Milan in the interpretation and application of the principles on standard of proof. TIM contested that the appeal was inadmissible pursuant to Article 348-bis of the CCP, as it did not have a reasonable chance of being upheld, and in any case should have been dismissed on the merits. In particular, TIM argued, inter alia, that (i) none of Irideos’s grounds of appeal was capable of overturning the judgment of first instance, insofar as they merely focused on the burden of proof, while the Milan Court had found that the action was also vitiated by serious shortcomings in the allegation of the facts upon which the claim was based; (ii) in any case, the Milan Court had correctly interpreted and applied the principles on the burden of proof.
The decision of the Milan Court of Appeal
In decision No. 1880 of June 7, 2021, the Court of Appeal stated that Irideos’s appeal was inadmissible under Articles 348-bis and ter of the CCP, because it did not have a reasonable chance of being upheld, and ordered the appellant to reimburse the costs of the proceedings.
The Court of Appeal stated that, in order to obtain a compensation for the damages allegedly suffered, the plaintiff has to allege and prove an anticompetitive conduct (at least characterized by negligence) and a causal nexus between the contested conduct and the alleged damage.
The Court acknowledged that, in private antitrust actions, the burden of proof on the plaintiff may be relieved to ensure an effective protection of the victims, when there is information asymmetry between the parties in their access to evidence.
However, in the case at hand, the Court of Appeal held that Enter had not satisfied the burden of alleging the elements of non-contractual liability.
The Court noted that there was no asymmetry in access to evidence capable of justifying a derogation from the general principles on the burden of allegation and proof. Enter itself had acknowledged that it had access to the relevant information, as it could verify whether the KOs communicated by TIM were justified (including by contacting final customers, in case of problems relating to them). Therefore, Enter could have provided the court with circumstantial evidence of allegedly unlawful KOs communicated by TIM, by identifying the KOs it considered not justified by the circumstances provided for by sector- specific regulation, or by indicating the criteria to identify such KOs.
Thus, the Court of Appeal confirmed that a mere statistical analysis of the percentage of KOs communicated by TIM to Enter was not sufficient to satisfy the burden of allegation and proof on the plaintiff. Furthermore, the Court held that the decision of the Court of Milan to dismiss Enter’s request for an expert report was correct, as the request was exploratory and aimed at curing the deficiencies in the allegation of the relevant facts through the use of alleged statistical evidence.
For the abovementioned reasons, the court concluded that the appeal did not have any reasonable likelihood of being upheld, and declared it inadmissible pursuant to Articles 348-bis and ter of the CCP.
The case at hand is part of a series of follow-on actions based on the A428 Decision. The findings of the Court in this case could have important implications for the other ongoing cases based on the A428 Decision as well as, more generally, for the assessment of antitrust damages claims in follow-on actions.
 Milan Court of Appeal, Judgment No. 1880 of June 7, 2021.
 Court of Milan, Judgment No. 11772 of December 18, 2019.
 ICA Decision No. 24339 of May 9, 2013, Case A428, Wind-Fastweb/Condotte Telecom Italia. The decision was subsequently upheld by the TAR Lazio (Judgment No. 4801/2014) and the Council of State (Judgment No. 2479/2015).
 Court of Milan, Judgment No. 11772.