Competition Law in Italy The first 20 years of law and practice

the dominant firm has a reasonable likelihood of recouping the losses it suffered by
predation. 455
456
In Diano/Tourist Ferry Boat-Caronte Shipping-Navigazione Generale Italiana, a
landmark decision as regards predatory pricing, the Competition Authority modified its
approach for assessing this type of conduct by dominant firms by applying recent American
economic theories. Instead of relying on average variable costs, as it did in cases such as
Tekal, 457 the Competition Authority focused on long-run and short-run average incremental
costs. More precisely, Diano/Tourist Ferry Boat-Caronte Shipping-Navigazione Generale
Italiana provides the following principles: (i) a price is predatory if it is lower than the
short-run average incremental cost; (ii) a price is not predatory if it is higher than the longrun
average incremental cost; and (iii) if a price falls between the two costs, the assessment
of whether it is predatory will include the competitive context of the dominant firm’s
behavior, and, in particular, evidence of the intent to eliminate a competitor. 458
Ultimately,
the Competition Authority found that the dominant firms charged prices below both their
short-run and long-run incremental costs, and that the prices were therefore predatory.
459
In Mercato del calcestruzzo cellulare autoclavato, the company RDB was fined for
predatory pricing conduct implemented on the market for autoclaved cellular concrete. 460 In
particular, the Competition Authority found that RDB’s price strategy had the purpose to
force its competitor Italgasbeton to exit the market. Recalling the well-established case law
of the EU Courts, 461
the Competition Authority carried out an economic analysis to ascertain
the relation between the prices adopted by RDB, the average avoidable costs, and the
average total costs. The Competition Authority found that (i) a substantial number of sales
were made at prices below the average total costs, and (ii) RDB’s strategy could not be
deemed as a general commercial policy since predatory pricing offers were more frequent in
those geographic areas where a significant number of Italgasbeton’s clients were located.
455
Brook Group v. Brown & Williamson Tobacco, 509 U.S. 940 (1993).
456
Diano/Tourist Ferry Boat-Caronte Shipping-Navigazione Generale Italiana, 17 Apr. 2002, n. A267,
Bulletin 16/2002. The Competition Authority found that Tourist Ferry Boat and Caronte abused
their dominant position on the ferry boat routes between Calabria and Messina (Sicily) by charging
predatory prices in order to hinder access to the market by their competitor Diano, which had just
entered that market.
457
Tekal/Italcementi, 9 Feb. 1995, n. A76, Bulletin 6/1995.
458
Diano/Tourist Ferry Boat-Caronte Shipping-Navigazione Generale Italiana, 17 Apr. 2002, n. A267,
Bulletin 16/2002, 144.
459
Mercato del calcestruzzo cellulare autoclavato, 24 Oct. 2007, n. A372, Bulletin 40/2007.
460
Mercato del calcestruzzo cellulare autoclavato, 24 Oct. 2007, n. A372, Bulletin 40/2007. Autoclaved
cellular concrete is a building material known as gasbeton and is deemed to be a strategic product for
effective competition in the coming years since it enables relevant energy savings. In the same
decision, the Competition Authority also fined RDB (together with Wella International) for a
violation of Article 101 TFEU on the same market. The fine relating to the abuse of dominant
position was upheld by the TAR in Xella International GmbH and Others v. Autorità Garante della
Concorrenza e del Mercato, 26 June 2008, n. 6213 (Trib. ammin. reg.).
461
Case C-62/86, AKZO Chemie BV v. Commission, 1991 E.C.R. I-3359; Case T-340/03, France
Télécom S.A. v. Commission, 2007 E.C.R. II-107.
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