On September 7, 2021, the TAR Lazio rejected the applications brought by associations of undertakings Anica, Anec and Anec Lazio (jointly the “Applicants”),[1] representing the Italian film and audiovisual industry, for the annulment of a decision in which the ICA imposed an interim cease and desist order in proceedings concerning an alleged anticompetitive conduct in relation to free outdoor film screenings.[2]

Background

On June 17, 2020, the ICA opened proceedings against Anica, Anec and Anec Lazio, on the basis of various complaints filed by companies and associations organizing free outdoor film screenings in the summer season in Italy. The complainants claimed that the Applicants had engaged in a boycott and obstructive conduct, aimed at preventing them from obtaining the authorizations necessary for the outdoor display of movies.

According to the ICA, the Applicants adopted several decisions through which they oriented the business strategy of their members. Their conduct was allegedly aimed at preventing outdoor cinemas from obtaining films to be screened during the 2020 summer season. In this context, the ICA took the view that the Applicants should restore without delay the full freedom of the distribution companies and intermediaries to define their marketing strategy for providing films to free outdoor cinemas.

To this end, on July 8, 2020, the ICA adopted interim measures, ordering the Parties: (i) to immediately cease implementing the alleged boycott decision or agreement; and (ii) to revoke all communications and indications containing any form of influence and/or guidance on business strategy on films for their members.

The judgment of the TAR Lazio

The Applicants brought three separate actions seeking the annulment of the ICA decision, on the following grounds: (i) the lack of a proper definition of the relevant market; (ii) the wrong characterization of the Applicants as undertakings within the meaning of competition law; (iii) the wrongful analysis of their conduct; and (iv) the lack of clarity in the interim measures.

The TAR Lazio considered the three applications together and declared them unfounded.

The Court found, first, that the ICA had correctly defined the relevant market, including free cinemas in the film screening market, even though they belong to a particular segment thereof. Indeed, free cinemas offer the same product to the public, satisfying the same demand as the other undertakings in the film screening market, independently of the fact that they charge no prices to viewers.

Secondly, the TAR Lazio held that there was no doubt that free cinemas carry out an economic activity, albeit inspired by a different strategy compared to traditional paying cinemas, and are therefore undertakings.

Thirdly, the TAR Lazio held that the ICA’s assessment of the Applicants’ conduct was correct, since, even if their decisions were not binding, they had distorted competition in the film screening market by restricting the activity of free cinemas.

Finally, the Court noted that the ICA’s order being challenged was not indefinite in terms of duration, since it would remain effective only until the end of the ICA proceeding, and was not disproportionate in terms of what was required of the Applicants, i.e., that the distribution companies and intermediaries stop following the guidance they were given by the Applicants.

[1]      TAR Lazio, Judgment of September 7, 2021, No. 9524.

[2]      ICA Decision of July 8, 2020, No. 28286, Case I840, Ostacoli alle arene a titolo gratuito.