The recent well-known events concerning the Genoese ports[1] have dramatically brought to the forefront the theme of the so-called “prohibition of double concession” set forth by Article 18, paragraph 7, of the Italian Port Law[2].
Authoritative experts in the field have made their contribution to the discussion and, in said context, someone also quoted – albeit inaccurately – a paper on the subject that we drafted in December 2017[3].
The emergency that we are all experiencing, particularly in the transport sector, must not prevent us from tying up the loose ends of the discussion, first of all by highlighting one point, which we believe to be of paramount importance in this interesting debate, that, in our opinion, has remained under the radar until now.
For the sake of clarity, let’s begin by reading again the provision at hand:
“In each port, the concessionaire of a State-owned area has to carry out directly the activity for which the concession was granted, is prevented from being at the same time a concessionaire for another State-owned area in the same port, unless the activity for which any new concession is applied for is different from that of the concessions already existing in the same State-owned area, and may not carry out port activities in areas other than those granted under concession. At the reasoned request
of the concessionaire, the granting authority may entrust other port undertakings, authorised pursuant to Article 16, with the exercise of certain activities included in the operating cycle”.
The provision, besides laying down that a concessionaire must carry out directly the activity for which the concession has been granted, essentially provides for a twofold prohibition:
Our focus here is on the first of the two prohibitions, which - as mentioned above - is referred to as the “prohibition of double concession”.
The wording of the provision is objectively clear. So, from a “formal” standpoint, the prohibition of double concession would not be breached only if different activities were carried out in the two areas granted under concession within the same port.
This is the so-called principle or criterion of specialisation.
We have no interpretative or applicative issues with regard to said principle of specialization of trafficking.
Instead, case-law has made logistical and geographic considerations, reaching the conclusion that the prohibition of double concession is not breached– not only in the (undisputed) event of specialization – but also when the two concessions concern contiguous State-owned areas[4] (given that evidently, if this were the case, in the end there would be only a single concession area).
In what we would call “extreme” cases, the evolution of case-law has even gone so far as to consider that the prohibition is not breached whenever a dominant position is not created to the detriment of competition (as might also be the case, for example, if the same undertaking were allowed to enjoy “exceptionally large spaces[5]” in a given port).
With respect to this latter case-law approach, we should make a very concrete consideration: if the legislator wanted to permit the overlapping of two concessions for the same activity, in the same port, to the same entity, it would have made it explicit in the rule being commented here (as he made explicit the principle of specialization).
But the wording of the rule leaves no room for interpretation. It is a total prohibition. Let’s make an example: if a rule sets at 130km/h the maximum speed limit on motorways, that is the limit, even if a Formula 1 driver breaches it. There is no question of the ability of such a driver to drive safely even beyond said limit, but legal certainty requires that the prohibition is nevertheless to be deemed to have been breached.
Likewise, we could say that today a double concession in the same port to a sole beneficial owner (except in the case of specialization) is prohibited regardless of whether or not it is likely to harm competition.
This approach has been confirmed by the Italian Antitrust Authority (AGCM), which Indeed, although recognizing the rule as functional to the protection of competition and, in particular, aimed at preventing abuses of dominant position[6], has neither verified the potential impairment of competition nor carried out particular market analyses[7], limiting itself to pointing out that the prohibition of double concession is breached every time a subject - even through the intervention of third parties - controls two distinct State-owned areas, destined to port operations and/or services, in which the same activities are carried out[8].
So, let’s get to the point that we wanted to stress.
In our opinion, the current debate has not properly highlighted an aspect that we believe to be essential to the issue: who is to benefit from this rule, which we all agree is aimed at protecting competition? There can only be one answer: the rule is in favour of the users of the port and therefore, first and foremost, of shipowners.
The reasons may seem even trivial. Indeed, it is undisputed that - in general[9] - (fair) competition between enterprises supports the entrepreneurial spirit and efficiency, ensures greater possibilities of choice on the part of consumers (meaning here the users of the port), favours the reduction of prices, the raising of services quality and therefore also a greater rate of innovation (all this, in the end, with a consequent increase in attractiveness and competitiveness also of the port where
competition is correctly promoted).
After all, this was the approach that our legislator had clearly in mind from the outset. Indeed, in the preparatory works for the Italian Port Law, it is stated that “the port must, therefore, be open to more companies operating under arm's length conditions; a port policy aimed at containing costs and providing, at the same time, more and more articulated and complete services can only be achieved through continuous dialogue and competition”.
Case-law and the AGCM were on the same wavelength too, and recently confirmed in substance that the granting of several concessions to a single entity has as a possible direct consequence that of reducing operators and consequently limiting the offer, exposing port users to potential abuses.
The AGCM, in particular, had the opportunity to underline that any concerted activities between competing companies would lead to a de facto uniformity of the conditions of supply of services and therefore in practice to the elimination of competitive dynamics – in terms of choice by the consumers, but also in terms of quality and cost of services offered – with potential negative impacts on consumers/users.
So, the principle that evidently inspired the legislator in the drawing up of Article 18, paragraph, 7 of the Italian Port Law has been established, as well as the relevance of the provision that, in our opinion, has not been duly highlighted in the ongoing debate.
Given that ports represent a substantially closed market, characterised by huge barriers to access and a limited number of operators[10], it is necessary to avoid they becoming a place where competition is restricted through the concentration of port terminal undertakings (as well as, of course, as a result of any kind of abuse of a dominant position). This always bearing in mind that Article 18, paragraph 7, of the Italian Port Law aims to ensure competition certainly not in the interests of port undertakings, but of the users of the port (first and foremost of shipowners), who must have the possibility to choose between different offers of services within each port of call.
Said competition, as stated above, will also potentially increase – in the future – the attractiveness and competitiveness of the port where it is correctly ensured.
[1] Reference is made to the possible operation that could lead the PSA group to control not only the VTE container terminal in Prà, but also the Sech container terminal in Sampierdarena.
[2] Law No. 84 of 28/01/1994,
[3] Back again to the prohibition on controlling two terminals in a port under Article 18, paragraph 7, of the Italian Port Law.
[4] Incidentally, if we consider – for example – the operation concerning the VTE and SECH terminals, it is clear that we are referring to two terminals located in areas that are certainly not contiguous.
[5] See ruling no. 747/2012 of the Liguria Regional Administrative Court (TAR).
[6] It should be reminded that, however, Port System Authorities do not have a totally discretionary power to “manage” Article 18, paragraph 7, of Law No. 84/94, since their actions could be subsequently “censured” by the AGCM (which, in practical terms, may challenge, pursuant to Article 21-bis of Law No. 287/90, any actions adopted by a Port System Authority in breach of the principles set out in the regulations for the protection and promotion of competition).
[7] See, most recently, measure AS1618 of 09.09.2019 (Port System Authority of Messina - State concession for the management of a fuel station for boats in the port of Milazzo).
[8] The AGCM has carefully made it clear that the prohibition cannot be circumvented simply through formal contrivances. In very practical terms: it is not enough to see to it that the two concessions are formally (rectius: apparently) owned by two different companies, if they are controlled by a single entity and can therefore be related to a single centre of interest. Indeed, it should not be forgotten that abusive conduct may also derive from agreements restricting competition which would be clearly favoured by the fact that the two concessionaires belong to the same group (with the potential consequences, for example, also in terms of exchange of information as well as coordination of actions on the market). This is without prejudice to possible hypotheses of corporate segregation such as to exclude joint control of a terminal belonging to two separate companies, one or both of which already holding other concessions in the same port (exclusion ensured first and foremost, according to the AGCM, by the minority shareholder’s - already concessionaire – waiver of the right of veto on decisions concerning the submission of new applications for concessions or applications for the extension of existing concessions by the terminal in question).
[9] We are well aware that there are situations in which, for various reasons, the presence in the same port of different concessionaires carrying out the same activity in competition with each other would not be the solution that best suits the interests of port users. This is a fact that we certainly do not intend to deny and that case-law has properly considered (see ruling No. 747/2012 of TAR Liguria), clarifying as well in what terms and under what conditions such a scenario may be admissible.
[10] Although the range of users of the port is very wide.
