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Addressing barriers to entry, exit and a level playing field

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This presentation by Andrea Minuto Rizzo was made at the workshop on Competition in Publicly Funded Markets (28 February 2019). Find out more at http://www.oecd.org/daf/competition/workshop-on-competition-in-publicly-funded-markets.htm

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Addressing barriers to entry, exit and a level playing field

  1. 1. “Addressing barriers to entry, exit and a level playing field” OECD Workshop on “Competition in Publicly Funded Markets” Paris, 28 February 2019 11 Andrea Minuto Rizzo Italian Competition Authority The views expressed are personal and do not necessarily reflect those of the AGCM
  2. 2. The role of advocacy • Moving from the observation that competition (for the market) in the Italian regional rail services has not developed (Regions almost always award the service directly), AGCM - as Comisión Nacional de los Mercados y la Competencia (CNMC) - has extensivily used its broad set of advocacy powers: • non-binding opinions on existing and draft regulation (art. 21 and 22 of Law n. 287/90) • Joint opinion among AGCM/ART (Transport’s Regulator)/ANAC (Anti-Corruption Authority) concerning the direct award of regional rail services (Opinion AS1441/2017) • challenge before administrative Court acts which restrict competition (art. 21-bis): it is a two steps process where AGCM, firstly, delivers a reasoned opinion to the concerned administration and, then, should the administration fail to comply, AGCM may lodge an appeal before the competent administrative Court • AGCM has challenged recent direct awards of rail services: AS1358/2016 Piedmont Region - AS1443/2017 Sardinia Region - AS1519/2018 Liguria Region - AS1545/2018 Lazio • First Instance Administrative Court of Sardinia (Judgement 682/2018) has submitted to the European Court of Justice (ECJ) a reference for a preliminary ruling on the interpretation of articles 7.2 and 7.4 of EU Regulation 1370/2007 on public passenger transport services by rail and by road
  3. 3. The EU framework Regulation 1370/2007 on public passenger transport services by rail and by road • For rail passenger transport services, the default option should be to award public services contracts on the basis of a competitive tendering procedure (art. 5.3) • even if, unless prohibited by national Law, contracting authorities may decide to award directly public service contracts (art. 5.6) • The choice to derogate from competitive tenders in favor of direct awards is, however, subject to specific informational and motivational requirements: • each contracting authority shall ensure that, at least one year before the tender or the direct award, some specific minimum information is published (art. 7.2): the type of award envisaged, the services and areas potentially covered by the award… • within one year from granting a direct award, the contracting authority shall make public some specific information (art. 7.3): duration of contract, description of services and of the parameters of financial compensation, quality targets, conditions relating to essential assets.. • when requested by an interested party, a contracting authority shall forward to it the reasons for its decision for directly awarding a public service contract (art. 7.4)
  4. 4. How should these EU requirements be interpreted? AGCM’s reasoned opinion to the Sardinia Region (AS1443/2017) • These obligations should not be interpreted in a formal way, but inferring their intended aim from the Regulation itself and also on the basis of the general principles of competition, transparency, non discrimination and equal treatment that characterize the TFEU • Informational requirements • Recital 29: “With a view to the award of public service contracts (…) the competent authorities should take the necessary measures to advertise (..) so as to enable potential public service operators to react” • The aim is not to advertise the procedure in itself, but to allow participation from interested operators (consequently providing them information on: demand, human resources, rolling stock..) • Motivational requirements • The aim is not only to justify the reasons behind the decision of the contracting authority to award directly a contract, but is extended to the one to compare, when present, the bids from other operators interested in the procedure with the one of the directly chosen service provider
  5. 5. The request for a preliminary ruling • Request for a preliminary ruling from the Tribunale Amministrativo Regionale per la Sardegna (Italy) lodged on 6 August 2018 (Autorità Garante della Concorrenza e del Mercato v Regione autonoma della Sardegna - Case C-515/18) • Questions referred • “Must Article 7(2) of Regulation (EC) No 1370/2007 1 of 23 October 2007 be interpreted as meaning that the competent authority which intends directly to award a contract must take the necessary steps to publish or communicate to all operators potentially interested in operating the service the information necessary to allow such operators to submit a serious and reasonable offer?” • “Must Article 7(4) of Regulation (EC) No 1370/2007 of 23 October 2007 be interpreted as meaning that, before directly awarding the contract, the competent authority must carry out a comparative assessment of all bids to operate the service which may have been received following publication of the prior information notice under that Article 7(4)?”
  6. 6. 2. Enforcement of competition law Thank you andrea.minutorizzo@agcm.it

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