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Monday, July 22, 2024 | Back issues
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Court adviser eyes clarifying EU antitrust laws in Italy electricity dispute

A former state monopoly, such as the Italian energy giant Enel, cannot be allowed to benefit unfairly from its past position as the only game in town, according to an adviser to the EU’s high court.

(CN) — The European Union's top court should use a dispute over the opening of Italy's retail electricity market – long the domain of a state monopoly – as an opportunity to clarify key aspects of the bloc's antitrust laws, a court adviser said on Thursday.

The European Court of Justice, the EU's highest court based in Luxembourg, has before it a complaint that Italian energy giant Enel is unfairly keeping out competitors during a new phase of liberalization of the Italian electricity market. Competitors complain that Enel has an unfair advantage because it has a monopoly on customer information after years of being the country's electricity supplier.

While suggesting Enel may be in violation of the EU's antitrust laws, Athanasios Rantos, an advocate general at the Court of Justice, said the court should use this case to establish parameters to clarify what constitutes fair and unfair practices by dominant players, such as Enel.

Enel is an Italian multinational company partly owned by the Italian government. It has a monopoly on electricity production and is the country's dominant distributor of electricity.

But the company has been accused of keeping new businesses from entering the market, which has been gradually liberalized since the 1990s.

As part of opening up the market to competitors, Enel was forced to break up its monopoly on electricity supply and let competitors gain access to electricity production and distribution infrastructures.

Italian antitrust authorities found Enel unfairly used its dominant position by getting customers to stay with the company. The company faces a 27.5 million euro fine (about $30.4 million).

Enel appealed that fine to the Council of State, a high court over administrative matters, and that court asked the EU court for legal guidance.

In particular, Rantos said this case presents the Luxembourg court with an opportunity to lay down rules over what constitutes misuse of databases and customer data. He also said the case allows the court to determine what is and isn't abusive conduct by companies such as Enel which “inherit” customers, infrastructure and brands from when they were a state monopoly. In an apparent setback for Enel, Rantos said EU antitrust law applies to the misuse of customer databases.

“The present case will allow the court to crystallize its recent case law,” Rantos said, referring to a number of past decisions by the high court.

His advisory opinion was not available in English. Advocates general study cases pending before the EU court and provide the court's judges with nonbinding legal opinions. As a rule of thumb, their legal opinions and arguments are adopted by the court, though not always.

In anticompetitive disputes, Rantos said the court “has shown to be open to a less formal approach in assessing the abusive nature of conduct” by looking not only at the “legal characteristics” of a company's conduct but also the “economic context.”

Rantos said that while companies such as Enel obviously must try to keep their customers during phases of liberalization, they cannot exploit advantages they gained as a legal monopoly that would “have the effect of excluding new competitors that are considered equally efficient.”

In this case, Rantos said the question is whether Enel's competitors could get the information on potential customers that Enel had “in an economically viable manner.”

Courthouse News reporter Cain Burdeau is based in the European Union.

Follow @cainburdeau
Categories / Energy, Government, International, Law

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