Economic Regulation and Antitrust Intervention : Experiences in Gas, Electricity, and Railways in Italy

The global experience with economic regulation shows that many industries which are subjected to economic regulation are characterised by persistent monopolistic features in at least some of the industry segments. Under such conditions, one or a few firms generally retain a monopolistic or dominant position within industry segments, that allows them to exert considerable influence also in those other segments of the industry which are opened to competitive pressures. Special issues arise, then, concerning the role played by both regulatory authorities and antitrust authorities in industries which are only partially opened to competitive pressure while retaining, in some segments, monopolistic traits, and how these authorities complement with each other in steering the behaviour of firms. These issues are discussed here on the basis of evidence provided by the experience with economic regulation in the gas, electricity, and railways industries in Italy. On the whole, the joint action of the sectoral regulator and the antitrust authority plays an important role to ensure that competition is preserved in the segments of the infrastructure industries where (legal or economic) barriers to entry are lowered by sanctioning collusive practices and that the firms which operate in the more monopolistic segments of the industry do not abuse of their dominant position for blocking the development of competition in the more competitive ones