Eni Obtains Dramatic Reduction of €290 Million Fine Imposed by Italian Competition Authority for Alleged Abuse of Dominance Relating to Delay in Expansion of Trans Tunisian Pipeline
December 20, 2010
A Cleary Gottlieb team obtained a 93% reduction of the €290-million fine imposed on Eni in 2006 by the Italian Competition Authority for an alleged abuse of dominance in connection with the delay in the expansion of the Trans Tunisian Pipeline, which allows the import of Algerian gas into Italy. This was the highest fine ever imposed by the ICA on a single company.
By means of a judgment published on December 20, 2010, the Council of State, i.e., Italy's supreme administrative court, drastically reduced the fine at stake, setting it at €20.4 million. The judgment puts an end to a long and complex saga with Cleary Gottlieb defending Eni since the outset of the administrative proceedings before the ICA.
Following the appeals lodged by Eni and its subsidiary Trans Tunisian Pipeline Company against the ICA's infringement decision, in 2007, the TAR Latium, i.e., the first instance administrative court competent for reviewing the ICA's decisions, had quashed the decision to what concerned the imposition of the fine. The first instance court deemed that the ICA had failed to adequately state the reasons why the alleged violation should be qualified as a very serious infringement (within the meaning of the 1998 Commission's fining guidelines), also in light of the arguments set forth by Eni as to the fact that the alleged abusive conduct could not be considered a clear-cut abuse. The TAR Latium thus concluded that the ICA should re-determine the amount of the fine. Both Eni (and TTPC) and the ICA appealed the TAR Latium's judgment before the Council of State. Pending the Council of State's decision, in May 2010, the ICA opened proceedings aimed at re-determining the fine in order to comply with the TAR Latium's judgment.
In its judgment, the Council of State, while rejecting the ICA's appeal, upheld Eni's arguments that the alleged abuse could be at most qualified as a serious infringement, not a very serious one, acknowledging the absence of any intentional plan by Eni to exclude competitors. The Council of State also considered that the fact that, in the context of the proceedings before the ICA, Eni had undertaken to carry out the planned expansion and that it subsequently timely completed it, justified a reduction of the amount of the fine well in excess of that granted by the ICA in its decision. The re-determination of the fine provided for in the Council of State's judgment renders moot the above-mentioned proceedings opened by the ICA in May 2010.