On 2 October 2023, the Italian Competition Authority (“ICA”) announced the launch of an antitrust proceeding against the national consortium for the management, collection and treatment of waste mineral oils (“CONOU”) for alleged abuse of its dominant position in the related Italian market. Under Italian law, CONOU represents the only subject empowered to carry out its activities and thus operates in a regime of legal monopoly.

The new proceeding represents the third Article 102 proceeding launched by the ICA against national environmental consortia in the last 2 years, confirming the ICA’s increasing interest in supporting green objectives through its investigations.

With respect to the CONOU investigation, according to the ICA, the relevant market for the processing of waste mineral oils can be broken down into the three following subsectors:

1. the market for the collection of waste mineral oils, which is strictly related to the extended producer responsibility (“EPR”) obligation. Both producers and importers of waste mineral oils are required by said obligations to finance the CONOU activities of collection and recycling start-up of the oils that the consortium carries out on their behalf;
2. the market for the regeneration process of waste mineral oils in order to enable their subsequent re-use. In this sub-market, the only waste oil regeneration plants are the two companies officially recognised by CONOU to carry out the relevant regeneration activities; and
3. the market for the sale of regenerated oils to third companies, who use the regenerated oils to produce new blended mineral oils or in specific industrial sectors (such as rubber and bitumen). The companies active on the offering side of this sub-market are, again, the two regeneration plants recognised by CONOU.

Against the described relevant market, the ICA has identified several instances of abusive conduct allegedly put in place by CONOU. 

In the first instance, CONOU has allegedly hindered the access of two new regeneration plants (one of which has already been authorised to carry out the regeneration activities by the competent national administrative authorities) to the oils collected by the consortium members. It is also alleged to have done so by means of “sham litigation” - the authorisation granted to the second plant is currently being challenged by CONOU in front of the administrative judges.

Secondly, CONOU has not recognised the regeneration fee for the activities carried out by the regeneration plants that have not been granted access to the collected oils of the consortium. 

In one specific case, CONOU also did not recognise the payment of a collection fee on the volumes of waste oils processed by one of the two new regeneration plants not admitted to the consortium.

In the ICA’s preliminary view, such conduct pursues exclusive and discriminatory objectives, in violation of Article 102 – letters b) and c) of the TFEU, as they seem aimed at strengthening the market share of the two regenerating companies that are recognised by CONOU. Such intent may be the consequence of the corporate structure of CONOU itself, which is highly influenced by the presence of these two recognised regeneration companies.

The above-described exclusive behaviour – in the ICA’s opinion – may have negative effects both for: 

• the non-admitted regeneration companies, for whom CONOU represents the only subject authorised by law to decide on the disbursement of the regeneration and collection fees, without the possibility to appeal a negative position issued by the consortium in front of third parties; and
• for consumers, considering that the two non-recognised regeneration companies have “proximity” characteristics with potential environmental benefits, which may ultimately result in lowering the price of the environmental contributions due to the consortium and, consequently, the price of lubricating oils. 

The proceeding is due to be closed by 30 November 2024. 

The ICA decision (in Italian only) is available at the following link. 

For more information, please contact Federico Marini Balestra, Lucia Antonazzi and Chiara Horgan 

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