The Italian Competition Authority fines oil companies €315 million for market-sharing and collusion in tendering for the sale of fuel to airlines.

ANTITRUST FINES SIX OIL COMPANIES €315.4M OVER ARRANGEMENT IN AIRPORT FUEL SUPPLIES

The Italian Competition Authority, at its meeting on 15 June 2006, decided to conclude the investigation into a number of oil companies over their anti-competitive arrangement in supplying airports with jet fuel. The Authority fined the companies a total of Euro 315.4 million after concluding that the purpose and effect of the arrangement was to divide up the market and bar the entry of new operators, including airlines intending to provide their own supplies. Specifically, the companies ENI, Esso, Kuwait, Shell, Shell Italia Aviazione (which replaced Shell on 1 December 2004), Tamoil and Total carried on an intense and continuous exchange of information, including by way of their jointly-held companies Hub S.r.l., Par S.r.l., Ram S.r.l., Rai S.r.l (previously Raf S.r.l.), Disma S.p.A. and Seram S.p.A which store fuel and refuel aeroplanes. The companies also coordinated their tendering strategies for refuelling contracts and made common cause to counteract any attempts to change the makeup of the market. All this resulted in poorer economic conditions for the airlines.

The Authority’s decision obliges these companies to desist from this conduct and allow third parties access to the jet fuel market. In addition, ENI, Esso and Kuwait in the case of Hub and Par, Shell IAV, Tamoil and Total in the case of Rai and ENI, Esso, Kuwait, Shell IAV and Total in the case of Disma and Seram must take steps to eliminate joint shareholdings by oil companies in these common businesses. Such steps must be carried out by 30 June 2008.

In the meantime, they must adopt a new business model for these firms which eliminates their function as vehicles for the exchange of information amongst the owner companies.

The decision takes into account Total’s undertaking, which was also seen as an extenuating factor in determining the amount of the fine, to allow Alitalia to manage its own refuelling, even if only at the Fiumicino airport. In the Authority’s view, this measure must be made permanent.

The fines decided on by the Authority are as follows:
§ ENI: Euro 117,000,000
§ ESSO: Euro 66,690,000
§ KUWAIT: Euro 46,800,000
§ SHELL: Euro 53,320,000 and SHELL IAV: Euro 3,140,000
§ TAMOIL: Euro 19,620,000
§ TOTAL: Euro 8,860,000