Italy: the Council of State annuls the decision of the Italian Antitrust Authority concerning a bid rigging case in the public transport insurance services sector

Written on 20 Mar 2017

On 7 March 2017, the Council of State – confirming the judgement of the court of first instance – finally overturned the Italian Antitrust Authority’s (IAA) decision that Generali Italia S.p.A. and UnipolSai Assicurazioni S.p.A. had entered into an anti-competitive agreement in relation to tenders to provide insurance services to the public transport sector.

The IAA’s findings

In March 2015, the IAA had ascertained that, between 2010 and 2014, Generali and UnipolSai (two leading national insurance companies) coordinated their behaviour in 58 tenders called by public transport companies throughout Italy. They did so either by not participating in the calls for bids (in 39 cases) or by participating only in those calls where they were already the incumbent insurer (19 cases).

According to the IAA, such parallel behaviour allowed Generali and UnipolSai to retain their position supplying insurance services, without competing with other insurers on the market. All the tenders under consideration were, in fact, finally awarded to the incumbent insurer through the negotiated procedure with public transport companies. Because the public transport companies were legally obliged to insure their vehicles they were, thus, forced to extend or renew their insurances with the existing two companies.

In the IAA’s view, the parallel behaviour was facilitated by contacts and exchanges of information between the parties through an ad hoc working group on public transport set up by ANIA (the Italian insurance companies’ association). Moreover, ANIA had adopted a circular providing a restrictive interpretation of the law concerning the insurance companies’ obligation to contract, which, according to the IAA, supported the conduct of parties not to participate in the calls for tenders.

The IAA held this was in violation of Article 101 of the TFEU, and, consequently, imposed fines of € 17 million to UnipolSai and of € 12 million to Generali.

The Council of State’s decision

In line with the judgments of the Court of first instance, on 7 March 2017 the Council of State found, in essence, that the IAA did not comply with the rules governing the burden of proof in cases of alleged violation of Article 101 of the TFEU.

In particular, the IAA failed to prove that the contact between the parties (within the context of ANIA’s working group and through the interpretative circular) was unlawful.

Therefore, according to settled case law on the burden of proof, in the absence of any significant external evidence, it is for the IAA to prove that the parallels ism in the behaviours of the parties on the market was the result of the an infringement, and could not be logically explained in an alternative way.

According to the Council of State, the IAA did not provide such proof, whereas the parties provided many arguments on possible alternative logical explanations based on the specific characteristics of the market.

In particular, the Court found that the fact that the other insurance companies – which were not parties to the proceedings and which represented a large share of the market – did not participate in the calls for tenders concerned showed that the decision of the parties not to take part in the bids could be due to the low profitability of the sector, rather than being the result of an unlawful collusion between the two companies.

On this basis, the Council of State annulled the IAA’s decision in its entirety.