On July 12, 2021, the Regional Administrative Tribunal for Latium (the “TAR Lazio”) annulled the overall €228 million fines imposed by the ICA on Fastweb S.p.A. (“Fastweb”), Telecom Italia S.p.A. (“TIM”), Vodafone Italia S.p.A. (“Vodafone”) and Wind Tre S.p.A. (“Wind Tre”; collectively, the “Operators”) for an alleged cartel aimed at coordinating pricing strategies in the transition from a 28-day to a monthly billing period (so-called repricing).
Starting in 2015, the Operators informed their customers that the renewal and billing of telephone communication services would be carried out on a four-week basis (i.e., every 28 days), as opposed to on a monthly basis, as before. This switch (which led to an 8.6% annual price increase) triggered a number of complaints from consumer associations, which argued that it was designed to conceal price increases in phone fees.
In March 2017, the Italian Communications Authority (“AGCom”) issued a resolution, requiring: (i) the billing period for landline telecommunications services to be brought back to one month; and (ii) the billing period for mobile telecommunications services to be no shorter than 28 days. The Operators initially maintained the 28-day invoicing system for mobile phone services.
Subsequently, Article 19-quinquiesdecies of Law Decree No. 148/2017 (as converted into Law No. 172/2017) established invoicing periods of one month (or multiples of a month) for television network operators, telecom operators, and providers of services of electronic communications.
Against this background, at the beginning of 2018 the Operators sent simultaneous communications to their customers, informing them that – in compliance with Law No. 172/2017 – their phone services would from then on be invoiced on a 30-day basis instead of on a 28-day basis. The consequent transition from 13 to 12 annual invoices would entail an 8.6% increase in monthly fees, although the annual price for the services would remain unchanged.
At the beginning of 2018 the ICA opened an investigation into the Operators’ practices (the “Investigation”) and, in April 2018, adopted on its own motion an interim measure, ordering the Operators: (i) to suspend, pending the Investigation, any coordination concerning repricing; and (ii) to define the terms of their offers independently of each other (the “Interim Measure”).
At the end of the Investigation, the ICA found that the Operators – also facilitated by the relevant trade association (Asstel) – unlawfully coordinated their conduct in the context of the implementation of Law No. 172/2017. In particular, in the ICA’s view, their allegedly collusive conduct included: (i) the adoption of identical repricing in the transition to monthly billing; and (ii) the simultaneous communications sent by the Operators to their customers to inform them of the upcoming changes in invoicing. According to the ICA, the alleged conduct amounted to a single, complex and continuous secret collusive scheme aimed at preserving the existing price level and preventing customer mobility, thereby freezing the Operators’ respective market shares and limiting competition.
The ICA noted that, following the implementation of Law No. 172/2017, the Operators were required to issue monthly invoices, but were free to determine whether and how to reprice the services offered to customers. However, the ICA found that, despite several alternative options being available, the Operators intentionally opted for the same strategy, by applying an identical monthly increase of 8.6%. In light of this “ focal point” of the anticompetitive coordination, the ICA deemed that the remaining divergences in the amendments to the content of the Operators’ offers (by which, for example, TIM and Wind Tre increased the content of their offers, whereas Fastweb and Vodafone did not) could not call into question the existence of collusion.
In imposing the overall €228 million fines, the ICA took into account the fact that the effects of the cartel had been avoided by the application of the Interim Measure, which led to a differentiated reduction in the prices applied by the Operators prior to the completion of the repricing. In addition, the ICA took into account the specific nature of the conduct within the context of the landline and mobile telecommunications markets, as well as the competitive conditions, in terms of both prices and the technological investments necessary to ensure the development of these markets. Accordingly, the ICA deemed it appropriate to depart from the general methodology for the setting of fines, as set out in its Fining Guidelines, and reduced all fines imposed on the Operators by 70%.
The TAR Lazio rulings
The TAR Lazio totally annulled the Decision, finding that the ICA failed to meet the standard of proof required to establish anticompetitive conduct.
First, the TAR Lazio found that the ICA based its conclusions on unsuitable evidence. In particular, most of the internal documents relied upon by the ICA fell outside the temporal scope of the Investigation (dating back to a time prior to the start date of the alleged cartel, as established by the ICA itself). Accordingly, these documents could not be used in support of the ICA’s findings against the Operators. Also, with regard to the remaining documents used in support of the Decision, the TAR Lazio held that they did not include any reference to “repricing”, which in the ICA’s view was the “ focal point” of the alleged collusion. Accordingly, the Court held that the ICA failed to carry out an adequate investigation.
Secondly, the TAR Lazio held that the Decision lacked serious, precise and conclusive elements in support of the ICA’s allegations, and failed to prove that the alleged collusion was the only possible explanation for the Operators’ behavior. In this regard, the Court found that the Operators had provided an alternative plausible explanation for their meetings and exchanges of information, i.e., that they were necessary in order to understand how to comply with the regulatory change, in addition to being the mere expression of the right of any economic operator to adapt intelligently to the existing and anticipated conduct of competitors.
The TAR Lazio found that this explanation was also supported by the opinion provided by AGCom during the Investigation (the “Opinion”). In the Court’s view, although the Decision extensively quoted the Opinion, the ICA did not actually give adequate weight to the AGCom’s views in assessing the lawfulness of the Operators’ conduct. Indeed, according to the Opinion, the repricing was a direct consequence of the first transition from a monthly to a four-week billing, rather than the result of the subsequent transition back to monthly billing that occurred after the entry into force of Law No. 172/2017. Accordingly, such repricing was related to a period falling outside the scope of the
Investigation, and could not be the basis for the Decision’s theory of harm. Moreover, the TAR Lazio referred to the AGCom’s view that price is not the only factor guiding consumers’ choice to migrate to a competing telecom operator. Other relevant elements are the price level of comparable offers, as well as non-pricing elements such as the services included in the offer. Accordingly, in the Court’s view, the Opinion established that the alleged anticompetitive purpose of the collusion, as established by the ICA – namely, the purported goal of limiting consumers’ mobility – was groundless.
Thirdly, the TAR Lazio referred to the AGCom’s view that in complex regulated markets, such as the electronic communications one, contacts and interactions among operators may often be necessary, e.g., in the context of technical panels aimed at understanding how to implement regulatory provisions. In this regard, according to the Opinion, the entry into force of the new legislation was an incentive for the Operators, as part of the same industry, to establish lawful contacts with each other. Accordingly, the Court noted that the Opinion supported the alternative explanation put forward by the Operators, which the ICA had wrongly disregarded.
Finally, the TAR Lazio noted that, notwithstanding the fact that the ICA had classified the Operators’ conduct as a restriction of competition by object (and, accordingly, deemed it unnecessary to examine its anticompetitive effects), the Opinion made clear that the transition to monthly billing did not have any effects with regard to consumers’ mobility.
 See ICA Decision of January 28, 2020, No. 28102, Case I820, Fatturazione mensile con rimodulazione tariffaria (the “Decision”), and TAR Lazio Judgments Nos. 8233, 8236, 8239 and 8240 of July 12, 2021. For a report of the Decision, see Cleary Gottlieb, Italian Competition Law Newsletter, January 2020.
 For the sake of completeness, please note that in 2016 the ICA fined TIM, Wind and Vodafone for breach of Articles 20, 24 and 25 of the Italian Consumer Code. The ICA found the unilateral reduction of the billing period from 30 to 28 days to be an aggressive practice, since it was likely to limit the consumers’ freedom of choice and their right of withdrawal, thus resulting in an economic burden for all consumers who did not agree with this change (see ICA Decision of July 27, 2016, No. 26134, Case PS10246, Telecom-Rimodulazione piani tariffari 28 giorni; ICA Decision of July 27, 2016, No. 26135, Case PS10247, Wind-Rimodulazione piani tariffari 28 giorni; and ICA Decision of December 21, 2016, No. 26307, Case PS10497, Vodafone-Rimodulazione tariffaria da 30 a 28 giorni).
 See AGCom Resolution No. 121/17/CONS of March 15, 2017.
 See ICA Decision of April 11, 2018, No. 27112.
 See Guidelines on the method of setting pecuniary administrative fines pursuant to Article 15(1) of Law No. 287/90, §34.