On November 22, 2021, the Regional Administrative Court of Latium (the “TAR Lazio”) rejected the application for annulment, lodged by the Italian Consortium for the Collection, Recycling and Recovery of Plastic Packaging (“COREPLA”), against the decision by which the ICA fined COREPLA in an amount in excess of €27 million, under Article 102 TFEU, for abusing its dominance in the Italian market for plastic waste recycling services (the “Decision”).[1]

Background

Article 221 of the Italian Environment Act[2] established the principle of extended producer responsibility, under which manufacturers of plastic packaging are subject to significant financial penalties in case of non-compliance with their obligations of treatment and disposal of post-consumer products. Plastic packaging manufacturers may comply with their statutory obligations by participating in consortia that treat and recycle plastic waste.

COREPLA was the sole consortium operating in Italy for a number of years, until certain plastic manufacturers decided to establish another consortium, the Consorzio volontario per riciclo del PET (“CORIPET”). In 2018, the Italian Ministry of Environment granted CORIPET a temporary license subject to the achievement of certain targets in terms of effectiveness, efficiency and self-sufficiency necessary for the granting of a permanent authorization within two years’ time. Shortly thereafter, CORIPET complained to the ICA that COREPLA had engaged in practices aimed at making it impossible for CORIPET to meet the above-mentioned targets.

In 2019, the ICA opened an investigation into COREPLA’s alleged exclusionary practices. Eventually, the ICA found that: (i) COREPLA held a quasi-monopoly position in the relevant market even after CORIPET’s entrance; and (ii) COREPLA abused its significant market power, including by: enforcing exclusivity clauses in its contracts with local authorities and sorting plants; inducing the sorting plants to boycott an auction organized by CORIPET; continuing to manage the plastic waste of some of its members even if they had stopped paying their membership fees to COREPLA; and refusing to enter into an agreement with CORIPET that would have allowed CORIPET to manage part of the plastic waste in lieu of COREPLA. For these practices, the ICA imposed a €27,400,477 fine on COREPLA.

The TAR Lazio’s Ruling

The TAR Lazio entirely dismissed COREPLA’s application for annulment of the Decision.

COREPLA argued that the ICA’s conclusions were ill-founded because the applicable regulatory framework did not allow operators other than COREPLA to treat and recycle plastic waste without the consent of the local authority in charge of waste collection. The Court, however, disagreed with COREPLA’s interpretation of the regulatory framework. According to the TAR Lazio, the rules in force did not prevent consortia other than COREPLA from operating on the market. Nor could COREPLA’s conduct be justified on grounds that the regulatory framework was unclear.

Moreover, the TAR Lazio took the view that each of the practices sanctioned by the ICA was part of the same exclusionary strategy by which COREPLA sought to delay CORIPET’s market entry as long as possible, including by signaling to any potential competitors that COREPLA would vigorously fight any such entry attempt (by CORIPET or others).

Finally, the TAR Lazio also upheld the ICA’s calculation of COREPLA’s fine, which in its view complied with the ICA’s fining guidelines, in particular taking into account that COREPLA’s conduct was aimed at shielding a quasi- monopolistic position from competition and produced anticompetitive effects by delaying CORIPET’s entry in the market. Because of this, the TAR Lazio confirmed the ICA’s qualification of COREPLA’s conduct as a “very serious” infringement of competition law.


[1] TAR Lazio, Judgment No. 11997/2021, and ICA Decision of October 27, 2020, No. 28430, Case A531 – Riciclo imballaggi primari /condotte abusive COREPLA (as discussed in the November 2020 issue of this Newsletter, https://www.clearygottlieb.com/-/media/files/italian-comp-reports/italian-competition-law- newsletter-november-2020.pdf).

[2] Italian Legislative Decree of April 3, 2006, No. 152.