Telecom Italia, Italy’s largest telecoms operator, has been fined €103.8m "for having abused its dominant position in network infrastructure".

The fine was handed down by the Italian Antitrust Authority on Friday. "In two separate episodes, Telecom Italia abused its dominant position in managing wholesale access services to local and broadband networks, obstructing competitors' expansion in the market for voice telecommunication services and broadband internet access", it said in a statement.

The authority determined that Telecom Italia abused its dominant position by committing two separate infringements of Article 102 of the Treaty on the Functioning of the European Union:

  • denying wholesale network infrastructure access and broadband access to its competitors; and
  • offering anti-competitive discounts to its business clients, thereby squeezing its rivals' margins.

The infringements took place between 2009 and 2011.

In relation to the first infringement, the authority found that Telecom Italia had unfairly refused a number of requests for activation of wholesale services from other operators. According to the authority, Telecom Italia treated requests coming from other operators in a discriminatory manner compared with those originating from its internal divisions, thereby obstructing competitors' access to its infrastructure and making service access activations significantly more difficult.

As to the second infringement, the authority found that Telecom Italia's discount policy was unfair and harmed competition in the market for retail access to the public telephone network at a fixed location for non-residential customers. According to the authority, Telecom Italia aggressively discounted its pricing for large business clients to the extent that it would have prevented equally efficient competitors from operating in a profitable manner.

The authority opened an in-depth investigation and raided Telecom Italia's offices in June 2010 after receiving complaints from Wind and Fastweb. It published and market-tested undertakings offered by Telecom Italia and eventually rejected them.

The authority imposed two separate fines totaling €103.794 million (about 0.3% of Telecom Italia's total turnover in 2011). In determining the fines, the authority took into account Telecom Italia's recidivism as an aggravating circumstance, and its cooperation and recent financial losses as mitigating circumstances.

The company was also warned against repeating such behaviour in future.

The company issued a statement declaring that other operators have always been assured of equal treatment regarding network access, in accordance with current legislation.

This case demonstrates the authority's continued focus on the Italian telecommunications market, with Telecom Italia facing a difficult challenge to protect its declining market position.