On 27 October 2020 the Italian Competition Authority ("AGCM") issued a EUR 27 million fine to the Italian Consortium for the Collection, Recycling and Recovery of Plastic Packaging (COREPLA) for abusing its dominant position in the Italian market for management of plastic waste services.
| what you need to know - key takeaways |
- Activity related to environmental sustainability has recently become an increasing focus of competition regulators around the world, including in Italy and the EU more widely, often forming part of broader environmental policy.
- The AGCM is increasingly applying interim measures in order to prevent the spread of anticompetitive practices and, ultimately, the exclusion of market operators.
|
The proceedings, opened on 30 April 2019, concerned the market for plastic waste management services in compliance with the Extended Producer Responsibility ("EPR") principle.
Pursuant to the EPR principle, as established by Article 221 of the Consolidated Act on Environment, manufacturers and users are responsible for the environmental management of waste deriving from the packaging they use/produce. To comply with these responsibilities, manufacturers must set up autonomous collective systems of waste management or adhere to an existing consortium, such as COREPLA. COREPLA, financed by each of its members, pays local authorities and sorting plants for collecting and processing domestic plastic waste and then auctions off the plastic waste to recyclers.
COREPLA has been for many years the sole consortium in charge of treating and disposing of plastic packaging waste, holding a de facto monopoly, until certain plastic bottles producers constituted CORIPET in 2016. To operate, CORIPET was granted a temporary license that, after two years, was supposed to lead to a permanent authorisation which, according to the AGCM, was not obtained because of the obstacles imposed by COREPLA.
The AGCM assessed that COREPLA abused its dominant position by:
- not removing, after CORIPET's entrance, the exclusivity clauses included in contracts with local authorities and sorting plants, in order to manage all the plastic packaging waste, including the one falling within CORIPET's quota;
- continuing to manage, even while incurring losses, packaging waste that should have been assigned to CORIPET in light of its temporary licence;
- refusing to enter into a transitional agreement with CORIPET in order to assign quotas for the waste management, which had become necessary due to the impossibility of signing an agreement directly with the local authorities; and
- auctioning off to recyclers waste that should have been assigned to CORIPET, the awards made by the latter having being annulled (since CORIPET could not actually collect those waste because of COREPLA's conduct).
The AGCM concluded that COREPLA implemented a complex strategy which successfully hindered CORIPET's activity and produced anticompetitive "signalling" effects deterring potential new autonomous waste management systems from entering the market.
When assessing the seriousness of the conduct, the AGCM stressed the innovative nature of the project carried out by CORIPET, which involved the management of waste packaging through automatic collectors (the so-called eco-compactors).
AGCM has stated that its intervention not only prevented a serious and irreparable harm to competition, but also contributed to the achievement of certain environmental goals linked to recycling and waste management as established by the Italian and European legislation and in compliance with the EPR principle.
Please also note that, from a procedural standpoint, this investigation provides an example of application of interim measures to antitrust proceedings, a trend that has been recently revived at both Italian and EU levels. In this case, pending the assessment of the anticompetitive nature of the conduct, the AGCM imposed on COREPLA different and very incisive interim measures, including the amendment of its contracts with local authorities and sorting plants and the temporary grant, upon request, to CORIPET of its quota of plastic packaging waste in all sorting plants, as calculated in light of the consumptions its members.
With thanks to Sabina Pacifico of Ashurst for her contribution.
