On January 26, 2022, the Council of State[1] upheld a TAR Lazio judgment rejecting an application brought by Società Green Network S.p.A. (“GN”)[2] for annulment of an ICA decision concerning an alleged violation of Article 102 TFEU (the “Decision”).[3]

In 2017 the ICA, after receiving several complaints by electricity retail operators (including GN), decided to investigate into possible abusive conduct by multinational energy group Enel in certain local electricity retail markets. Among other things, the investigation concerned the “win-back” campaigns allegedly carried out by Enel Energia (“EE”), Enel’s subsidiary active in the retail market, targeting customers who had switched to competitors active on the deregulated market, such as GN.

In the Decision, which it adopted in 2018, the ICA fined Enel over €93 million for allegedly abusing its dominant position. The ICA asserted that – by leveraging on assets owned because of its nature as a vertically-integrated operator (active in both the distribution and the retail supply of electricity) and former monopolist – Enel had engaged in exclusionary conduct against its competitors in the deregulated retail market, with a view to unlawfully favoring EE. However, the ICA dropped the initial allegations concerning the alleged win-back campaigns, stating that there was no sufficient evidence supporting a finding of violation.

After the TAR Lazio dismissed GN’s application for annulment of the Decision, GN appealed to the Council of State, challenging specifically, inter alia, the part of the lower court’s judgment approving the ICA’s decision to drop the initial allegations on EE’s win-back conduct. GN, therefore, requested that the Council of State set aside the TAR Lazio’s ruling and refer the case back to the ICA, ordering it to re-open the investigation with a view to assessing more thoroughly the evidence put forward by GN and, possibly, acquiring further evidence.

The Council of State, first, held that, in light of the discretionary nature of the ICA’s investigative power and the fact that GN’s request presupposed that the need for the ICA to carry out further investigation activities had been duly established, there was no basis for issuing an order to the ICA to take action with a view to protecting GN’s interests, according to the appellant’s claims.

Secondly, the Council of State examined GN’s ground of appeal concerning the illegality of the alleged win-back conduct. In this regard, the Court held that the assessment carried out by the ICA was not vitiated by lack of adequate investigation or procedural errors, as shown, in particular, by the long duration of its investigation (two years) and the fact that GN was actively involved in it. In this context, the evidence gathered by the ICA on EE’s alleged win-back campaigns (which included a number of requests for information to the relevant operators, some of which were indicated by GN itself) was not sufficient to demonstrate that GN’s ground was well-founded, especially in relation to the alleged existence of a strategy pursued by the Enel group against the appellant.

Finally, the Council of State noted that a decision on the need for the ICA to investigate further into the matter, as requested by GN, fell outside the scope of its jurisdiction, since the Court’s scrutiny was limited to assessing the proportionate and adequate nature of the investigation already carried out by the ICA.

[1]      Council of State, Judgment of January 26, 2022, No. 538.

[2]      TAR Lazio, Judgment of October 17, 2019, No. 11955.

[3]      Decision of December 20, 2018, No. 27494, Case A511 – Enel/Condotte anticoncorrenziali nel mercato della vendita di energia elettrica (see Cleary Gottlieb, Italian Competition Law Newsletter, January-February 2019, available at: https://www.clearygottlieb.com/-/media/files/italian-comp-reports/italiancompetitionlawn ewsletterjanuaryfebruary2019pd-pdf.pdf).