Articles
27/05/2020
Shipping and Logistics

Is the Lazio Regional Administrative Court right in considering antitrust laws not applicable to Port System Authorities?

We are returning to an issue of particular importance for Italian ports and their users: can Port System Authorities (“PSAs“) be considered as undertakings in order to be subject to antitrust laws, or can they not?

In a recent case concerning the increase in port surcharge, the Regional Administrative Court of Lazio (“TAR Lazio”)[11] has analyzed the applicability of antitrust laws to PSAs: in particular, in the case at hand, two concessionaires in the port of Fiumicino had challenged the legitimacy of the aforesaid increase in port surcharge (demanded by the PSA in order to support the costs of the construction of a new commercial port and a new wharf in the ports of Civitavecchia and Fiumicino),
maintaining – among other reasons – the abuse of the dominant position by the PSA and the consequent breach of the rules on competition.

The TAR Lazio, in examining the matter, stated that PSAs are qualified as non-economic public bodies within the meaning of Article 6(5) of Law No 84/1994, and pointed out as well that they:

  • may not carry out, either directly or through investee companies, port operations and activities closely related thereto;
  • may, however, regulate the performance of activities and services of common interest and useful for the most effective performance of the functions assigned to them, in collaboration with the Regions, local authorities and public administrations; and furthermore,
  • may hold minority shareholdings in initiatives aimed at promoting logistic and intermodal connections, functional to the development of the port system.

Accordingly, the TAR Lazio[12] has held that PSAs have a role as a «public body (significantly) “without economic interests”, required to carry out – not economic-entrepreneurial activities but – regulatory functions on the services and operations taking place in the port (or ports) within its sphere of competence, for the best fruition of the port infrastructure by all the users and for the optimal development of the port system under its control». For all of the above, the TAR Lazio has ruled that «the very prerequisite for the applicability of the principles and the rules to protect competition, that is a competitive economic relationship between entrepreneurial subjects operating in the same market segment, is no longer valid».

So, the TAR Lazio decided that antitrust laws are not applicable to PSAs, considering that a “public body without economic interests” cannot be considered an undertaking for the purposes of antitrust law.

However, this approach is in stark contrast – as we have seen also in our previous articles on the subject[13] – with the approach of the European Union, which does not consider the formal classification of a body, but rather deems it necessary to consider the activities concretely carried out by the same.

The EU Court of Justice has made it clear on several occasions that “the concept of an undertaking covers any entity engaged in an economic activity, regardless of its legal status and the way in which it is financed, and that any activity consisting in offering goods and services on a given market is an economic activity[14].

Moreover, “the fact that, for the exercise of part of its activities, an entity is vested with public powers does not, in itself, prevent it from being classified as an undertaking for the purposes of Community competition law in respect of the remainder of its economic activities (…). The classification as an activity falling within the exercise of public powers or as an economic activity must be carried out separately for each activity exercised by a given entity[15].

Therefore, under EU law, it is necessary to ascertain whether the activity of the body can be defined as an ‘economic activity’, given the irrelevance of its classification as public body provided by each national legislation.

Nevertheless, it is worth noting that the Port System Authorities carry out economic activities and, therefore, can be classified as undertakings according to the established guidance of the European Commission.

Indeed, the European Commission has repeatedly stated that “the commercial exploitation of port infrastructures and the construction of similar infrastructures for the purposes of commercial exploitation constitute economic activities” and more precisely it was considered that Port System Authorities exercise economic activity because “they grant concessions or authorizations (use of an asset in exchange for the payment of a fee) to (generally) private companies for the commercial use of the asset (basic port infrastructure) and the provision of services (e.g. loading, unloading, pilotage, towing) to shipping companies[16].

In the light of the above, the repercussions are evident that one or the other approach may have on Port System Authorities and, above all, consequently, also on the approach to the relations that said Body has with its concessionaires.

Moreover, it must be said that national and European law are not on the “same level” so that national Courts are unlikely to be able to avoid having to consider the prevailing EU framework [which, in the meantime, appears increasingly “firm” with regard to the classification of PSAs as undertakings (all the more so since this aspect is exactly the basis from which the European Commission’s request (with regard to Italy) concerning the taxation of PSAs originated)][17].

In conclusion, the importance of the correct classifications of PSAs as undertakings for the purposes of antitrust laws is particularly important as it may confirm, inter alia, the applicability of antitrust laws to concessionaire relations and, therefore, also the right of concessionaires not to be discriminated against (and to claim damages), given that PSAs clearly occupy a dominant position, being ex lege monopolists in the management of State-owned areas.

Given the importance of this issue, we will continue to monitor developments in case-law.

 

[11] See TAR Lazio, Third Division, 6 March 2020, No. 3030.
[12] See TAR Lazio, Third Division, 6 March 2020, No. 3030.
[13] See. Shipping & Transport Bulletin June-July 2019.
[14] See ECJ, case C-35/96, Commission/Italy, par. 36.
[15] Decision of the Court of Justice of the European Union of 1 July 2008, Case C-49/07, MOTOE v Hellenic State, paragraph 25.
[16] Ex multis see decision of the European Commission “State aid SA.38399 (2018/E) – Taxation of Ports in Italy”. For a comment on the case see Shipping & Transport Bulletin June-July 2018.
[17] For a comment on the case see Shipping & Transport Bulletin June-July 2018.

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