'Move It Or Lose It!': Port Pilotage Service And Challenges For Competition

Author:Mr Franco Rossi
Profession:Nctm Studio Legale

In this number of our newsletter, we begin a reflection on port pilotage which, for its operational relevance, has been the subject of great attention, both from the national case-law and the European Union, and by the Authority for Competition and Market ("AGCM"), in view of a necessary and continuous opening of the market to competition.

Port pilotage falls within the so-called technical-and-nautical services as regulated by Article 14 of Italian Law No. 84/94 and therein defined as general-interest services whose organisation lies with the competence of the Maritime Authority in agreement with the Port System Authority.

Due to its relevance in port operations, pilotage has been given a big deal of attention, on the one hand, by both Italian and EU case law and, on the other, by the Italian Antitrust Authority ("Autorità Garante della Concorrenza e del Mercato", with a view to meeting the general need to constantly foster market competition.

In its note No. 5415/19971, issued as a result of a Survey in the Area of Port Services, the Italian Antitrust Authority highlighted a few critical issues in the pilotage market, which stand as an obstacle to the enhancement of competition in the sector.

Indeed, despite directly contributing to the achievement of high navigation-safety standards, pilotage service cannot justify any "a priori restriction on the number of operators". Indeed, according to the Authority, opening to competition does not prevent achieving economic efficiency in the provision of such services, while at the same time allowing safety protection.

In this respect, it should be noted that the restrictions on competition arising from navigation-safety needs do not always involve the satisfaction of proportionality requirements but as a matter of fact, more or less intentionally, such restrictions end up giving regulatory coverage to certain monopolistic positions2, which should only be allowed when there is no other way to ensure safety.

Moreover, any unreasonably-high cost in port services, favoured by a monopolistic context, would encourage a shift of maritime transport traffic towards other transport modes such as road transport, involving more adverse effects from an environmental and safety perspective.

At the same time, the self-handling of technical-and-nautical services might involve problems in terms of the breakeven point for operators carrying out such business as their principal business and incurring universal service...

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