Enel Group in 75% Fine Reduction

September 7, 2012

A Cleary Gottlieb team in Rome successfully represented Enel Energia (“EE”), which is a subsidiary of Enel S.p.A., the former national incumbent in the supply of electricity and one of the major natural gas suppliers in Italy, in its appeal of a ruling by the Administrative Tribunal of Lazio related to a decision issued by the Italian Competition Authority (“ICA”), which had fined Enel S.p.A. and EE for unfair commercial practices.

The contested ICA decision levied a total fine of €1,200,000 against Enel S.p.A. and EE for three distinct unfair commercial practices, allegedly consisting of: (i) the transition of customers from the regulated market to the free market of electricity, without the customers’ consent; (ii) the activation of natural gas supplies, which were not requested by customers; and (iii) misleading advertising campaigns of the aforementioned electricity and natural gas supplies.

In 2009, Cleary Gottlieb obtained a favorable ruling from the Administrative Tribunal of Lazio, annulling the part of the ICA’s decision which ascertained the existence of the third unfair commercial practice listed above. Accordingly, the Administrative Tribunal of Lazio quashed the € 200,000 fine imposed by the ICA for such conduct and found that Enel S.p.A. was not liable of any wrongdoing, insofar as by Enel S.p.A. had only been charged with the third commercial practice. In its judgment of September 7, 2012, the Council of State further drastically reduced the remaining fines imposed on EE (from €1,000,000 to €300,000), upholding Cleary Gottlieb’s arguments that the disputed violations were of limited gravity and duration.