The current Italian legislation which states that the cost of road haulage services on behalf of third parties cannot be less that 'minimum costs' established by a body composed mainly of representatives of interested business operators, goes against European competition legislation and therefore should no longer be applied.

This is the conclusion which the fifth session of the European Court of Justice came to on 4th September 2014 (unified cases from C 184/13 to C 187/13, C 194/13, C 195/13 and C 208/13), as a result of the request for preliminary ruling set out by the Italian Administrative Court in January 2013.

The case originated from a series of complaints lodged before the Italian administrative judge calling for the annulment of acts by which the Osservatorio determined the minimum costs for road haulage activities according to Article 83-bis of Law Decree no. 112/2008. At the material time, in fact, the Osservatorio sulle attività di autotrasporto (a body composed of representatives of the State, haulage associations and associations of customers of transport services) was charged with fixing minimum costs in the event that no agreement was concluded.

After the initial opening up to a competitive system, the Italian supervision of road haulage services, which came under scrutiny from the Luxembourg judges, has become more rigid in recent years.

First, the legislative decree n. 286/2005, with a view to a regulated liberalization of the sector, had accepted the principle of unrestrained negotiation of prices, while also providing, to protect road safety, the invalidity of clauses in contracts of carriage that would lead to the terms and conditions in carrying out services contrary to the rules of road safety.

Following this, the legislative decree n. 112/2008, with the clear intention of increasing road safety, introduced a system of regulated prices, establishing that payment of road haulage services could not be less than the minimum costs set out by the Osservatorio, the body which for the majority is made up of representatives from the road haulage associations and customers.

The EU Court of Justice held that, given the composition of the Osservatorio and its lack of sufficiently-detailed legislative provisions necessary to guarantee actions in line with general public interests, the Osservatorio's decisions regarding 'minimum costs' equate to price-fixing between companies whose objective is to establish a minimum price, such as to restrict market competition.

The Luxembourg judges noted that the system devised by the Italian legislature in fact gave 'free rein' to the economic operators represented in the Osservatorio. Therefore, the decisions on prices adopted by the said body could not be regarded as an expression of public power, but amounted to decisions made by private parties (specifically, by an association of companies according to Article 101 TFEU, since the Osservatorio must be considered precisely that).

To this regard, the Court finds that the Osservatorio, composed for the most part of representatives of professional organizations and empowered to act in the exclusive interest of the profession, must be regarded as an association of undertakings subject directly to the rules of competition. In light of the above the Court observes that the fixing of minimum operating costs prevents undertakings from setting tariffs lower than those costs. Thus, by limiting market operators' freedom to determine the price of haulage services, the Italian legislation is capable of restricting competition in the internal market.

Another interesting aspect of the judgment is devoted to verifying the correct balance between the value of competition and that of road safety.

The Court called on the general principle that the pursuit of a legitimate public objective, such as road safety, may justify competitive restrictions only if the measures taken are appropriate and proportionate to achieving that purpose.

Also in this respect, the Court expressed a negative opinion on Italian law, which had not passed the proportionality test.

The Court, in fact, found that the minimum cost mechanism can be said to be only loosely related to the need to uphold road safety, as there is no connection between imposing a minimum price for the service and increased safety. In addition, according to the Court, it cannot be excluded that an operator complies with road safety also offering lower prices than those determined by the Observatory.

Finally, it was observed that both European legislation and national legislation already provide for specific measures, which are more effective and less restrictive, aimed at ensuring road safety, so that the minimum cost mechanism of the operation is unnecessary in any case, and is therefore a disproportionate measure.

Hence, the "rejection" of the system devised by art. 83-bis of Law Decree no. 112/2008

It should be noted that even before the intervention of the Court of Justice, the Italian antitrust authorities had, on several occasions, also raised concerns to parliament and government about the regulations relating to road transport activities, which were deemed detrimental to the principles of competition.

The Court's ruling does not only require an adjustment of the regulatory framework in the future, but is also likely to have an impact on the validity and effectiveness of road transport contracts concluded in the past, and on legal relationships that have ensued, where prices fixed by the Osservatorio have been applied, and not prices freely negotiated by the parties involved.

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