18 February 2016

The waste management sector is under close scrutiny by the Italian Competition Authority

The Italian Competition Authority (AGCM) is making full use of its powers in keeping a close eye on the waste management sector. The public enforcement activity in this sector has been complemented by a sector inquiry and lobbying before the Italian legislator. The AGCM’s intervention is likely to affect both the upstream market of waste collection, and the downstream market of recycling. It is also additional proof of the Authority’s willingness to closely monitor public spending; as shown also by the €110 million fine imposed last January on four companies that colluded to win tenders for public school cleaning services.

Last September, the AGCM accepted the commitments offered by CONAI and COREPLA and closed the proceedings looking into a possible abuse of a dominant position. The two companies were accused of preventing the entry of other players in the market for the management of special plastic packaging waste.

In August 2014, following numerous complaints received by market operators, the AGCM opened a sector inquiry focusing on the municipal waste management market. The inquiry intended to unveil potential issues connected to the monopolistic features of the market for the collection of solid urban waste. The inquiry was closed on 21 January 2016. The AGCM underlined the necessity to reform the system to increase competition in the market and proposed (i) to revise the tender process (e.g. by cutting the duration of the contracts down to five years, as they currently could last over 20 years, and linking in-house tenders to an efficiency benchmark); (ii) to redefine the areas for waste collection, to ensure efficiencies; (iii) to implement a centralized control model, entrusting for example, the Energy Regulator with supervisory and regulatory tasks; and lastly (iv) to reform the consortium system, which should evolve into a competitive model to ensure that the "polluter pays."

Moreover, on 10 February 2016, the AGCM’s President addressed the Parliamentary Commission of Inquiry on illicit activities connected to the waste cycle, to underline the benefits of enhanced competition in the sector, for the economy and for environment protection purposes. Furthermore, fair competition in the market could contribute to the achievement of the environmental goals set by the EU.

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