Esso Italiana Wins Regulatory Approval of Its Undertakings; Cartel Proceedings Conclude

December 20, 2007

On December 20, 2007, the Italian Competition Authority closed its investigation into an alleged cartel among a number of Italian oil companies, including Esso Italiana S.r.l., the Italian subsidiary of the ExxonMobil group. The Authority found that the oil companies did not infringe Article 81 EC and held that Esso and the other oil companies addressed its concerns by offering certain commitments, leaving no grounds for further action.

In its January 18, 2007 decision initiating an investigation, the Authority stated that it had reasons to believe that the oil companies colluding to fix recommended fuel prices. The Authority alleged that the oil companies carried out their strategy by communicating their national recommended prices through public press releases and specialized trade publications.

In April 2007, Esso and the other oil companies submitted commitments aimed at eliminating the anticompetitive behavior alleged by the Authority. In particular, Esso presented four commitments: (i) to interrupt all forms of communications to the press with respect to its recommended prices; (ii) to abandon its national recommended price system and move to a provincial recommended price mechanism to decrease the level of transparency in the market and make it more difficult for its competitors to understand Esso’s recommended prices; (iii) to make available for third parties a part of the capacity of its logistic terminal in Naples; and (iv) to stimulate consumers to purchase fuel through self-service by increasing the difference between its recommended prices applied on the retail sale of fuel through self-service pumps and those charged on full-service pumps.

Esso was the only party to the investigation to have its entire set of commitments, in their original form, accepted and made binding by the Authority. The Authority rejected as manifestly unfounded at least one of the commitments presented by each of the other seven parties, and the other oil companies, save one, had to introduce amendments to their initial commitments to meet some of the concerns expressed during the market test carried out by the Authority.