On January 26, 2022, the Council of State confirmed on appeal the annulment by the TAR Lazio[1] of a decision in which the ICA found that Società Iniziative Editoriali S.p.A. (“SIE”), the publisher of L’Adige, the main daily newspaper in the area of Trento, abused its dominant position in the daily newspaper market in that geographic area (the “Decision”).[2] As already held by the lower court, the Council of State took the view that the ICA failed to meet the standard of proof required for establishing that a dominant undertaking’s refusal to license its intellectual property rights (“IPRs”) may amount to a violation of Article 102 TFEU.[3]

The Decision

The ICA’s investigation followed a complaint filed by Euregio S.r.l. GmbH (“Euregio”), a company active in the downstream local market for daily media monitoring services, which provided customers with a customized press review of selected news. Euregio reported that SIE was abusing its dominant position by refusing to license the editorial content of L’Adige to companies providing daily press reviews in the area of Trento. In the course of the proceedings, the ICA adopted two decisions imposing interim measures: initially, ordering SIE to issue the requested licenses on fair, reasonable and non-discriminatory (“FRAND”) conditions to any operator requesting the use of the content of L’Adige;[4] and, subsequently, (due to SIE’s and Euregio’s failure to reach such an agreement) directly setting those conditions.[5] At the end of the investigation, the ICA found that SIE had abused its dominant position, and imposed on the company a fine of approximately €1,000. It also reiterated its order on SIE to license on FRAND terms, to any operator requesting it, the right to use the content of its newspaper.

The Tar Lazio judgment

The TAR Lazio found that SIE’s application for annulment was well-founded.

First, the Court referred to the established principle under which – when assessing the abusive nature of a refusal to grant a license for IPRs – it is necessary to carry out a careful balancing exercise between the need to protect competition and the opposing need to safeguard IPRs, in order to avoid undermining undertakings’ incentives to invest and innovate.[6]

The TAR Lazio referred to the “essential facilities doctrine” (“EFD”) developed over time by the EC and the EU Court of Justice.[7] The Court held that the Decision did not adequately establish the first two conditions vis-à-vis SIE’s refusal, i.e., the essential nature of the input refused and the innovative nature of the product that Euregio wanted to offer.

In relation to the first condition, the TAR Lazio took the view that the ICA only established the “usefulness” of the content of L’Adige for the production of a local press review. However, the ICA should have established instead that that input was absolutely indispensable and objectively non-duplicable, which in the Court’s view were ruled out in practice by the fact that – following the refusal – some public tenders for press review services were awarded to undertakings whose offer did not include the content of L’Adige, even if certain unsuccessful bidders would have offered access to that content. Furthermore, the TAR Lazio objected to the fact that the ICA failed to investigate into the views of providers of local press review services other than the complainant.

In relation to the second condition, the TAR Lazio found that the ICA also failed to adequately demonstrate that Euregio’s press review qualified as a “new” product, since it was not clear from the Decision to what extent the press review would differ from other similar products already available on the market.

As a consequence, the TAR Lazio concluded that the Decision did not comply with the EFD and annulled it.

The Council of State judgment

On appeal, the Council of State fully confirmed the lower court’s ruling. While generally upholding the TAR Lazio’s statement of reasons, the Council of State noted that the survey carried out by the ICA among the customers of another local press review publisher, with a view to assessing the indispensable nature of L’Adige’s content, was based on suggestive questions (i.e., whether the presence in the press review of L’Adige’s content was seen as essential, and why) and thus unreliable. In addition, the Council of State, like the TAR Lazio, criticized the ICA’s failure to carry out a survey among the other providers of local press reviews, given that those operators would in principle be affected by SIE’s refusal and, thus, their point of view was relevant to establish whether L’Adige’s content was indispensable.

[1]      TAR Lazio, Judgment of January 16, 2020, No. 503 (see Cleary Gottlieb, Italian Competition Law Newsletter, January 2020, available at: https://www. clearygottlieb.com/-/media/files/italian-comp-reports/italiancompetitionlawnewsletterjanuary2020pd-pdf.pdf).

[2]      Decision of December 12, 2017, No. 26907, Case A503 – Società iniziative editoriali/Servizi di rassegna stampa nella provincia di Trento.

[3]      Council of State, Judgment of January 26, 2022, No. 528.

[4]      Decision of February 7, 2017, No. 26412.

[5]      Decision of March 22, 2017, No. 26498.

[6]      In this regard, the Court quoted European Commission, Guidance on the Commission’s enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings, in OJ C 45 of February 24, 2009, pp. 7-20.

[7]      Under the EFD, the following cumulative conditions must be met for a refusal to license IPRs by a dominant undertaking to be characterized as abusive: (i) the refusal must relate to a product that is indispensable to carry out a business activity on a secondary market; (ii) the refusal must prevent the entry on the market of a new product or service not offered by the IPRs owner, and for which there is a potential consumer demand; (iii) the refusal must not be justified; and (iv) the refusal must be such as to exclude any competition on a secondary market (see, e.g., Case C-418/01, IMS Health, EU:C:2004:257, § 52, quoted by the TAR Lazio).