Poste Italiane fined €23.1m by the Italian Competition Authority for exclusionary abuse of dominance

Published on 29th Mar 2018


The ICA has returned to the issue of loyalty rebates, just a few weeks after the fine imposed on Unilever.

The investigation was launched following a complaint filed by Nexive, Poste Italiane’s main competitor. The ICA found that Poste Italiane had abused its dominant position in the relevant markets for bulk mail delivery in Italy (at both wholesale and retail level), through several behaviours that amounted to a single exclusionary strategy against its competitors.

As a consequence, the ICA ordered Poste Italiane to cease the anticompetitive conduct and fined it a total of €23.1m.

The relevant markets and Poste Italiane's dominance

Bulk-mail delivery services are mail-delivery services used by business clients (e.g. banks, insurance, public utilities and telephone companies) to send large volumes of communications to their customers (such as statements of account, notices, bills etc.).

During the investigation, the ICA distinguished two separate relevant markets:

(i) at a wholesale level, the intermediate market for delivery services, where, in order to provide end-to-end  offers of services, postal operators require access to the incumbent's postal services (because they only hold a partial postal network in terms of geographic coverage and/or postal activities developed);

(ii) at a retail level, the final market for delivery services, where postal operators compete in order to provide the end-to-end service to final customers.

The ICA concluded that Poste Italiane holds a dominant position in both the wholesale and retail market for bulk mail delivery. It noted that Poste Italiane – a state-owned and vertically-integrated operator – is not only a full provider of postal and financial services in Italy, but also offers the “universal postal service” (a postal service that must guarantee affordable prices throughout the national territory for all users) under a license ex lege regime (until 2026).

This implies a de facto monopoly in the provision of postal services in the majority of extra-urban areas (EUAs), which are generally less developed and less densely populated areas where costs (and, consequently, prices) for delivering postal services are higher, so that an operator would find it unprofitable to provide services to them without State subsidies.

Poste Italiane is the only national operator to hold a widespread postal network throughout the Italian territory; it is therefore essential, for the activity of Poste Italiane’s competitors, that they have access to its facilities.

Poste Italiane also holds very high market shares (60% in 2016) in both relevant markets, exceeding the “attention threshold” of 40%, from an antitrust standpoint, as outlined by the European Commission.

Against this background, the ICA’s investigation was based on the following postal services:

(i) Posta Massiva, Poste Italiane’s service aimed at delivering ordinary correspondence and included within the universal postal service obligations; and

(ii) certified mail, an additional service (such as Poste Italiane’s Posta Time or Nexive’s Formula Certa) which provides different delivery certification for senders of ordinary correspondence, without the need for a recipient’s signature.

The ICA assessed that the two services were substitutable and although they qualified as vertically differentiated “products”, they did not imply a further sub-division of the product market.

The investigation and the sanctioned conduct

In its complaint, Nexive highlighted that in the geographical areas where it did not have its own postal distribution network (the EUAs, for example), it was forced to rely on Poste Italiane to deliver its business clients' or end-customers' correspondence.

At the end of a complex investigation, the ICA found that Poste Italiane's conduct constituted a single abusive strategy of an exclusionary nature, aimed at allowing it to offer a service that could not be replicated by competitors in the final market for bulk-mail delivery.

More specifically, Poste Italiane’s abusive conduct consisted of:

(i) a margin squeeze;

(ii) a technical non-replicability; and

(iii) a scheme of loyalty rebates and other incentives (exclusivity and/or target rebates).

In particular, the ICA considered the conduct under (i) to be abusive due to a permanent negative difference between prices charged by Poste Italiane to end-customers for its Posta Time service and those charged to competitors for its Posta Massiva service in the EUAs. In other words, according to the ICA, Poste Italiane applied, in the final market for bulk mail delivery (at retail level, to its customers), lower prices than those charged in the intermediate market for bulk delivery of ordinary correspondence (at wholesale level, to its competitors). Therefore, in this economic scenario, the ICA found that even a competitor "as efficient" as Poste Italiane would not be able to effectively respond to the incumbent’s offers without suffering losses.

With reference to the conduct under (ii), the ICA noted that Poste Italiane had intentionally denied competitors access to its Posta Time service, thus only guaranteeing them the provision of Posta Massiva service, i.e. the universal service. This meant that Poste Italiane's competitors, in relation to the offer of services provided to their final customers in the EUA, suffered a technical and qualitative gap, that could not be filled in any way, in comparison to the more convenient services offered by Poste Italiane.

Lastly, as to the conduct under (iii), the ICA deemed illegal Poste Italiane's strategy put into effect with the so-called “Bulk Plan”, aimed at keeping and winning customers back from its competitors. This strategy consisted of loyalty rebates for business customers, provided as part of its Posta Time service. The rebates were calculated on Poste Italiane's pricelists, provided that the customers reduced or eliminated their use of the same services provided by Poste Italiane’s competitors. The ICA found that the inclusion of exclusive clauses and target discounts amounted to abuse of Poste Italiane's dominant position with the intention of excluding its competitors from the relevant market.

After the conclusion of the investigation, Poste Italiane announced that it would challenge the ICA’s decision before the Italian Administrative Court of first instance (i.e. TAR Lazio). 


It is clear, both from this decision and the Unilever decision earlier this year, that the competition authorities will not hold back in imposing fines for abuse of dominance and resulting conduct that can be considered anti-competitive, particularly when that conduct takes the form of loyalty rebates and margin squeezing.

We will monitor the progress of the appeal.

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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