Italy: The New Parameters For Evaluating Applications For Concessions Laid Down By The Italian Ministry Of Infrastructures And Transports: "The Capacity To Ensure The Widest Access Conditions To Terminals For Users And Operators Concerned"

Let's continue our analysis of the important circular No. 187 issued by the Italian Ministry of Infrastructures and Transports ("MIT") published in the Official Gazette of the Italian Republic on 5 February 2018.

This circular has laid down some specific parameters that the Italian Port System Authorities ("PSAs") must take into account when comparing applications for the renewal and/or issuance of concessions pursuant to Article 18 of Law No. 84/94.

In the last issue of our newsletter we commented the first of such parameters, which refers to the level of consistency of the above-mentioned applications with the National strategic plan for ports and logistics and with the other national planning instruments in force in the sector.

So, let's examine the second criterion set out in the said MIT circular:

"the capacity to ensure the widest access conditions to terminals for users and operators concerned".

The MIT circular provides that, in case of competing applications submitted pursuant to Article 18 of Law No. 84/94, the PSAs have to award those requests – and therefore the business plans filed with the above-mentioned applications – that are able to guarantee the widest access conditions to port facilities to users and operators concerned.

In these terms, the granting of concession for maritime State-owned properties would appear to play a central role to help the increase of competitiveness of the so-called "sea system" (that it is to be considered as an active instrument of economic-commercial policy in support of the country's production system)1.

The criterion under examination would be apparently linked to the so-called essential facility doctrine, whose rationale consists in avoiding that a company "takes advantage" of its market power to hinder competition through economically unjustifiable or unreasonable behaviours2.

The theory has been developed in relation to access to public utility facilities that can be hardly replicated – such as port facilities – for which there was a need for multiple access by several operators in order to ensure the plurality of the offer on the market of reference.

In this regard, in fact, it should be noted how the theory of the essential facility has mainly evolved in the legal framework of the U.S. antitrust case law and, subsequently, in the European- and domestic-based one³. All this in order to ascertain whether and when the refusal of a company to contract with others with respect to the access to its facilities is a possible index of a market monopolization strategy (which is sanctionable).

In light of the above, port facilities could be (but not always actually are) classified as essential facilities (often because of the existence of a natural monopoly within a port area). Therefore, in such situations, it could be argued that there is a dominant position of the terminal operator that owns the essential facility and refuses to allow third parties' access thereto, without prejudice to the existence of specific objective conditions / reasons justifying this refusal.

Hence, if on the one hand the criterion in question is important for the reasons outlined above, on the other hand one should also strike a blow for terminal operators. Firstly, it should be noted that not all terminal companies can be considered owners of an essential facility, given that such "classification" depends on various concrete circumstances (reference is firstly made to the operating context and the relevant market in which a given port terminal is located).

Secondly, it should also be noted that even the PSAs have the duty to actually create the prerequisites for the widest possible access to port facilities through the programming of activities and above all the effective implementation of the infrastructural interventions and works necessary for this purpose (consider, for example, road and rail links but also dredges). Therefore, apparently, PSAs should guarantee – at source – the conditions for the widest possible access to port facilities, in the interest, in particular, of the economic fabric that gravitates around each port.

We will continue our analysis of the MIT circular in the next issue, exploring the evaluation parameter under letter c) which, we reveal it in advance, will focus on the nature and relevance of the infrastructural and superstructural investments proposed by the user.

Footnotes

1 The scenario outlined above is further enriched with the provision of the Italian Transport Regulation Authority ("TRA"), published on 31 May 2018, which approved a scheme of measures meant to regulate the access to port facilities, in a fair and non-discriminatory way¹. All this, with the further goal of contributing to an increasingly efficient management of port areas, also in terms of costs, for users and companies interested in accessing it.

2 Indeed, the expression "essential facility" refers to "a facility (whether material, such as an energy distribution network [e.g. a port terminal], or virtual, as a software), a plant, or anyway a resource legitimately held by a company, whose use by other companies is necessary for them to operate in a different (usually downstream) sector from the one in which the company that owns the asset operates (and regardless of the fact that the company that owns the essential facility operates or intends to operate also in that sector)" [See «IP Law Handbook» by Adriano Vanzetti and Vincenzo Di Cataldo, Giuffrè Editore, seventh edition, 2012, pag. 636].

3 In particular, such concept has found its own definition both in Article 102 TFEU, which prohibits a dominant company from abusing its market position, and at domestic level, whose principles have merged the Law No. 287/90.

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