Poste Italiane fined over €20 million for abuse in bulk mail delivery market

On 15 January 2018, the Italian Competition Authority ("AGCM") announced that it had imposed a fine of over €20 million on Poste Italiane ("PI"), the incumbent provider of postal services in Italy, for abusing its dominant position in the bulk mail delivery market in Italy. 

The bulk mail delivery market comprises the mail delivery service typically used by business clients (e.g. banks, insurance and telephone companies etc.) to send large volumes of communications to customers (such as statements of account, notices, bills etc.). Demand in this market is made up of both business clients (the final customers) and other postal operators competing with PI. The AGCM assessed that PI holds a dominant position in both the upstream and downstream markets for bulk mail delivery. 

The AGCM found that PI sought to prevent its competitors from entering the downstream market for deliveries of bulk mail in rural areas – where only PI had the infrastructure to deliver the mail – by charging them wholesale prices for bulk mail delivery services that were higher than the retail price it offered to its business customers for the same service. As a consequence, PI was able to apply terms and conditions to its final customers which could not be matched by competitors in the downstream bulk mail delivery market, even if they were equally as efficient as PI. The AGCM concluded that this conduct resulted in a margin squeeze that prevented competition in the relevant market.

In addition, the AGCM found that PI implemented a strategy to keep and win customers back from its competitors through a scheme of loyalty rebates and other incentives (exclusivity and/or target rebates) which were conditional on customers placing all or a substantial part of their needs of bulk mailings through PI.

When assessing PI's conduct, the AGCM took into account case law and other relevant precedents from both EU Courts and other National Competition Authorities. For example, it made reference to the Bundeskartellamt's decision in the Deutsche-Post case when considering PI's justifications concerning its alleged margin squeeze. Moreover, since PI based its defence on the recent Intel ruling by the Court of Justice of the European Union, the AGCM performed a detailed assessment of the possible efficiencies adduced by PI and also applied the as-efficient competitor test in order to include in its decision an economic analysis of both conducts. 

PI has already announced that it will challenge the AGCM decision.

With thanks to Giulia Carnazza of Ashurst for her contribution.