The duty to invest in the development of infrastructures: Some considerations on two parallel stories

Pietro Merlino and Gianluca Faella

Mercato Concorrenza Regole, 2012, issue 2, 297-324

Abstract: In Eni/TTpc and Eni, the Italian Competition Authority and the Commission, respectively,held that the Italian incumbent had underinvested in the development of certain pipelines used for the international transport of gas towards Italy, with the aim of hindering competitors' access and of protecting its profits in the downstream Italian sale markets. However, the two cases were based on different and, to a certain extent, contradictory reasonings. The Authority held that the Ttpc pipeline was not an essential facility and that Eni was not under a duty to invest in its development. Nonetheless, it found that the Italian incumbent had committed an abuse of dominance on the basis of the innovative theory of unlawful interference of the parent company in the conduct of its subsidiary. While dramatically reducing the fine imposed by the Authority, the Council of State has essentially upheld the Authority's substantive reasoning. Conversely, the Commission relied on the essential facility doctrine, but applied the principles established by Eu courts' case law in a questionable manner. The two investigations resulted in an important change of the strategic positioning of the Italian incumbent. This result was achieved by stretching the principles developed by the Eu courts' case law, thereby putting into question, once again, the fragile balance between the protection of competition and the safeguarding of firms' incentives to invest.

Keywords: antitrust; abuse of dominance; refusal to deal; obligation to invest (search for similar items in EconPapers)
Date: 2012
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