On October 4, 2021, the Italian Supreme Court (the “Supreme Court”)[1] confirmed a judgment of the Florence Court of Appeal, which had upheld the damages claim of Pace Strade s.r.l. (“Pace Strade”) against Toscana Energia S.p.A. (“Toscana Energia”).

Background

The ICA Decision

In 2007, the Italian Competition Authority (the “ICA”) opened proceedings against Toscana Energia for an alleged abuse of a dominant position in the market for gas distribution and the related market for the design and construction of civil and industrial engineering facilities in private subdivided lots.[2]

The investigation was opened following a complaint submitted by Pace Strade, a company active in the construction of civil and industrial engineering facilities. Pace Strade claimed that Toscana Energia was limiting competition in the market for the design and construction of civil and industrial engineering facilities in private subdivided lots, by tying the services it provided as a monopolist (i.e., connecting private gas networks to the existing public grid) to those provided in competition with other operators, such as Pace Strade (namely, the services concerning the laying of natural gas pipelines on private subdivided lots).[3]

In its decision to open proceedings, the ICA asserted that Toscana Energia’s alleged conduct could amount to an abuse of dominance. In particular, Toscana Energia was allegedly exploiting its alleged position as a monopolist in the gas distribution market to prevent competition in the adjacent market for the design and construction of civil and industrial engineering facilities in private subdivided lots, with particular reference to the laying of natural gas pipelines.

During the investigation, Toscana Energia submitted a proposal for commitments, comprising: (i) adopting an Employee Orientation Circular, intended to draw the employees’ attention to the fact that Toscana Energia did not have any exclusivity for the laying of natural gas pipelines in private subdivided lots, as well as to clarify the rules, conditions and costs for connecting pipelines of newly-urbanized areas to the existing public grid; (ii) adopting and publishing online a Regulation for the Subdivisions, which summarized for the public the same principles and operating rules as the Employee Orientation Circular; (iii) granting operators interested in building gas distribution pipelines in private subdivided lots the right to ask Toscana Energia for a prior technical opinion on the characteristics of the project to be executed, which would be issued free of charge within two months from the request; and (iv) sending to the above-mentioned operators, within the same two-months period, certain useful information, such as a price list of the services provided by Toscana Energia as a monopolist, as well as detailed information on the safety standards to be complied with.

In a commitment decision issued in October 2008 (the “ICA Decision”), the ICA found that the commitments were suitable to remedy its initial competitive concerns.[4]

The claim for damages

In 2010, Pace Strade brought claims for damages against Toscana Energia, seeking compensation for the damage caused by the alleged abuse of dominance investigated by the ICA.

Pace Strade argued that the defendant had abused its dominant position in the 2005-2008 period. In particular, Pace Trade asserted that, in a number of private subdivided lots located within several municipalities in the Tuscany region, Toscana Energia had refused to carry out the services it was entrusted with as a monopolist (assistance, connection to the existing public grid and testing activities), unless it had also been appointed to build the entire gas pipeline (i.e., also the natural gas pipelines on the private subdivided lot).

The Florence Court of Appeal, on September 12, 2016, ascertained the contested conduct and the ensuing damage allegedly suffered by Pace Strade, and awarded the plaintiff €389,217.71 in damages.

The judgment of the Supreme Court

On appeal, the Supreme Court fully upheld the Florence Court of Appeal’s ruling.

In its appeal, Toscana Energia claimed that the Florence Court of Appeal had erroneously attributed evidentiary value to the ICA’s Decision, which had merely accepted Toscana Energia’s commitments proposal, without finding any infringement. Accordingly, the Court had wrongly relied on the findings of the ICA Decision to prove the existence of an abuse of dominant position, instead of carrying out a fresh assessment in this regard.

The Supreme Court rejected this ground of appeal. First, it recalled a previous ruling in which the Supreme Court itself had clarified that, when deciding on claims for damages which follow the adoption of commitment decisions by the ICA, civil courts can base their assessment on the findings contained in the statement of objections issued by the ICA during the proceedings, as well as on the evidence collected during the investigation. This is without prejudice to the fact that the ICA’s findings do not constitute privileged evidence and can always be rebutted by the parties.[5]

In addition, while noting that an ICA commitment decision does not ascertain whether there has been (or continues to be) an antitrust infringement, the Supreme Court noted that, according to the recent ruling of the Court of Justice of the European Union (the “CJEU”) in Gasorba,[6] both the principle of sincere cooperation laid down in Article 4(3) of the Treaty on the European Union and the objective of applying EU competition law effectively and uniformly require national courts to take into account the preliminary assessment carried out by the European Commission and regard it as an indication, if not prima facie evidence, of the anticompetitive nature of the conduct at stake.

In light of the above, the Supreme Court concluded that, in the case of follow-on actions for damages, when the proceedings before the ICA have been closed with a commitment decision, civil courts must take into account the evidence acquired during the ICA’s investigation, as well as the ICA’s preliminary assessment, with regard to the market position of the firm concerned and its alleged unlawful conduct. This information may be used as an indication, if not prima facie evidence, of the anticompetitive nature of the conduct concerned.

[1]      Supreme Court, Order of October 4, 2021, No. 26869.

[2]      Florence Court of Appeal, Judgment of September 12, 2016, No. 1470.

[3]      ICA, Decision of December 5, 2007, No. 17676, Case A397, Pace Strade/Toscana Gas.

[4]      ICA, Decision of October 30, 2008, No. 19046, Case A397, Pace Strade/Toscana Gas.

[5]      Supreme Court, Judgment of February 27, 2020, No. 5381. On this judgment, see Cleary Gottlieb, Italian Competition Law Newsletter, February 2020, available at: https://www.clearygottlieb.com/-/media/files/italian-comp-reports/italian-competition-law-newsletter-february-2020-pdf.pdf.

[6]      CJEU, Judgment of November 23, 2017, Case C-547/16, Gasorba and Others.