Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE  
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel,   BELGIË  
 
Tel: +32 229 -91111. Fax: +32 229 -64301. E -mail: COMP -MERGER -REGISTRY@ec.europa.eu .  EUROPEAN COMMISSION  
Brussels, 13.10.2022  
C(2022 ) 7435  final  
PUBLIC VERSION  
 
 ENI S.p.A.  
Piazzale Enrico Mattei , 1 
00144 Rome  
Italy 
 
 SNAM S.p.A.  
Piazza Santa Barbara, 7  
20097 San Donato Milanese (MI)  
Italy 
Subject : Case M. 10619 - SNAM / ENI / JV  
Commission decision pursuant to Article 6(1)(b) of Council Regulation 
No 139/20041 and Article 57 of the Agreement on the European Economic 
Area2 
Dear Sir or Madam,  
(1) On 8 September 2022 , the European Commission received notification  of a 
proposed concentration pursuant to Article 4 of the Merger Regulation by which 
Snam S.p.A. (‘SNAM’, Italy) and ENI S.p.A. (‘ENI’ , Italy) will acquire within the 
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the ‘Merger Regulation ’). With effect from 1 December 2009,  the Treaty on 
the Fun ctioning of the European Union ( ‘TFEU ’) has introduced certain changes, such as the 
replacement of  ‘Community ’ by ‘Union ’ and ‘common market ’ by ‘internal market ’. The 
terminology of the TFEU will be used throughout this decision.  
2  OJ L 1, 3.1.1994, p. 3  (the ‘EEA Agreement’).  
In the published version of this decision, 
some information has been omitted 
pursuant to Article 17(2) of Council 
Regulation (EC) No 139/2004 concerning 
non-disclosure of business secrets and other  
confidential information. The omissions are 
shown thus […] . Where possible the 
information omitted has been replaced by 
ranges of figures or a general description.  
 
 
2 meaning of Article 3(1)(b) and 3(4) of the Merger Regulation  joint control of a 
joint venture (‘ JV’, Italy) by way of purchase of shares  (‘the Transaction’).3 SNAM  
and ENI  are designated hereinafter as the ‘Notifying Parties ’ to the Transaction.  
1. THE PARTIES  
1.1. SNAM  
(2) SNAM is the holding company of the SNAM group, which controls Snam Rete 
Gas S.p .A., the main gas transmission system operator (‘TSO’) in Italy, and it 
controls  several companies active in the gas transmission, regasification, and 
storage markets in various EU countries, including infrastructures that are used to 
import gas into Italy .  
(3) SNAM is indirectly controlled by Cassa Depositi e Prestiti S.p.A. (‘CDP’)4, which 
is controlled by the Italian Government (namely, the Italian Ministry of Economy 
and Finance, ‘MEF’).  
1.2. ENI 
(4) ENI is part of the ENI group that is active across the entire oil  and gas value chain. 
ENI controls entities that operate gas import pipelines into Italy and entities that 
manage transportation rights.  
(5) ENI’s main shareholders are CDP (25.96%) and MEF (4.37%). Nevertheless,  for 
the following reasons the Commission consi ders that  ENI is a separate economic 
unit from CDP  and MEF  with an independent power of decision , and therefore not 
controlled by  CDP or  MEF .5 
(6) ENI is a listed company with an independent board of directors, which 
autonomously determines ENI’s business plan  and its strategies.6 
(7) ENI’s board of directors currently includes 9 members. According to ENI’s 
bylaws, 7 out of the 9 members of the board must be independent directors (within 
the meaning of the Italian law and Corporate Governance Code), i.e. 7 out of 9  
board members are not connected to ENI, MEF or CDP in a way that can influence 
their independence of judgement. All shareholders holding more than 0.5% of 
ENI’s share capital are entitled to submit their own list of proposed directors and 
ENI’s directors are appointed under a list voting mechanism whereby ENI’s 
shareholders can vote their preferred list. CDP and MEF have the majority 
necessary to jointly vote the winning list. 6 members are selected from the winning 
                                                 
3  Publication in the Official Journal of the European Union No C 351 , 14.9.2022, p. 11.  
4  See Italian Competition Authority decision of 8 August 2012, C11695 Cassa Depositi e 
Prestiti/SNAM.  
5  The independence of ENI from CDP (and  MEF) was previously confirmed both by the Commission 
(M.9809 - ENI REWIND/CDP EQUITY/CIRCULARIT JV ; AT.39315 – ENI) and by the Italian 
Competition Authority ( C11695 – Cassa Depositi e Prestiti / SNAM , which related to the acquisition 
of SNAM by CDP, and t hus the unbundling of SNAM from ENI ). ENI confirms that there have been 
no changes in its corporate structure since the adoption of the above decisions, which could impact 
the assessment on whether  ENI and CDP  and MEF  are separate undertakings for merger c ontrol 
purposes.  
6  See Form CO, paragraph 57.  
 
 
3 list. Out of these 6 directors, 4 must b e independent within the meaning of the  
applicable  Italian  securities  law. 
(8) In particular, under Articles 147 and 148 par. 3 of the Italian Legislative Decree no. 
58/1998, a person may not be deemed independent if they have a relationship with 
the sharehold er, the companies controlled by the shareholder, the companies the 
shareholder is controlled by and those companies subject to common control as 
with the shareholder. A person is further not deemed independent if they are  related 
to the shareholder’s direc tors in a way that could influence that person’s 
independence of judgment.7  
(9) It follows that 4 out of 6 directors, which might be appointed jointly by CDP and 
MEF, cannot be connected to either CDP or MEF in any way, such as being under 
an employment agree ment or being otherwise remunerated by such entities, or 
maintain any other relationship of an economic or professional nature with such 
entities, which might impair their independence.8  
(10) The other 3 directors  also need to be independent within the meaning  of the Italian 
securities law, and  are appointed from lists submitted by other shareholders of ENI . 
It follows that 7 out of 9 directors of ENI have no dependence on any of ENI’s 
shareholders.  
(11) Further, there are no flows of sensitive information between ENI and CDP or MEF, 
as the latter only receive the  business  information that is available to all other 
shareholders of ENI , and therefore do not benefit from any preferential treatment . 
1.3. JV 
(12) The JV  will constitute a new company established under the Italian laws, to which 
ENI will confer its  shareholdings currently held  in various entities , which (a) own 
and/or operate in a coordinated way the Tunisian and offshore  sections of the gas 
import pipeli ne on the Algeria -Italy route (‘Transmediterranean Pipeline’), and (b) 
provide ancillary services to the activities of transporting natural gas through the 
Transmediterranean Pipeline.  
(13) The Transmediterranean Pipeline comprises the following interconnected  sections:  
(a) Section located in the Tunisian territory  (‘Transtunisian section’ ): this section 
is owned by SOTUGAT, a company controlled by the Tunisian State  (and 
which is not part of the Transaction ). It extends 370 kilometres across 
Tunisia from where it  connects with the Enrico Mattei pipeline in Al geria9 to 
its connection at the Tunisian coast with the submarine  pipeline. 
Transportation rights over this section are held by Trans Tunisian Pipeline 
Company S.p.A. (‘TTPC’), which is currently solely contro lled (and 100% 
owned) by ENI. Operation and maintenance activities over the pipeline are 
performed by Sergaz S.A. (‘Sergaz’), in which ENI holds sole control. 
                                                 
7  See Form CO, footnote 17.  
8  See Form CO, paragraph 57.  
9  The Enrico Mattei pipeline that runs from the natural gas production fields located in the Algerian 
desert is owned by Sonatrach (which is cont rolled by the Algerian State) and is not part of the 
Transaction . 
 
 
4 Scogat S.A. (‘Scogat’), which is solely controlled by ENI, is responsible for 
projects such as pi peline widening.  
(b) Offshore section in the Sicily channel  (‘Offshore section’ ): this section links 
the Tunisian coast with Sicily (at one of the entry points to the Italian 
transmission system). It is owned by Trans Mediterranean Pipeline Company 
(‘TMPC’), which is jointly controlled by ENI (which owns 50% of TMPC ) 
and Sonatrach (the national state -owned oil and gas company in Algeria 
which owns the remaining 50%). Transportation rights over this section are 
managed by Transmed S.p.A. (‘Transmed’), which is jointly controlled by 
ENI and Sonatrach. Operation and maintenance activities over the pipeline 
are performed by Mariconsult S.p.A. (‘Mariconsult’), which is also jointly 
controlled by ENI and Sonatrach. Samco S.a.g.l. (‘Samco’), which is jointly 
controlle d by ENI and Sonatrach , is tasked with administrative services.  
(14) […]. 
(15) Figure 1 presents an illustration of the location of the Transtunisian  and Offshore 
sections of the Transmediterranean Pipeline . 
Figure 1: Transmediterranean  Pipeline  
 
2. THE TRANSACTION  
(16) The controlling stakes held by ENI in the relevant entities  (the ‘Businesses’)  are: 
(a) TTPC  –  100% , TTPC in turn owns 0.05% of Scogat’s share capital;  
(b) Sergaz  –  66.1% ; 
(c) Scogat  –  99.8% ; 
(d) TMPC  –  50%, TMPC in turn owns 90% of Samco’s s hare capital;  
(e) Transmed  –  50%;  
(f) Mariconsult –  50%;  
(g) Samco – 5%, in addition to TMPC’s 90% share.    

 
 
5 (17) Pursuant to a sale and purchase agreement (‘SPA’) signed on 27 November 2021, 
first ENI will transfer to the JV all of its interests constituting the Business es, and 
then SNAM will acquire 49.9% of the JV.  
2.1. The JV will be jointly controlled by SNAM and ENI  
(18) The JV’s board of directors will consist of four members (including the chair of the 
board and the CEO), two of which will be designated by ENI and tw o by SNAM. 
The chair  of the board shall initially be appointed by SNAM and the CEO by ENI 
(this will rotate  for both  every three years), and neither will have casting votes. 
Board decisions on reserved matters of strategic importance (including approval of  
the JV’s annual budget and business plan) shall be adopted with the favourable 
vote of all  the JV’s directors.10 SNAM and ENI will therefore have joint control of 
the JV.  
2.2. The JV is a full -function joint venture  
(19) The companies that will be managed by ENI and  SNAM through the JV constitute 
a single business that  is already pre -Transaction  performing , and  will continue to  
be performing on a lasting basis , all the functions of an autonomous undertaking 
operating in the market  as gas transmission pipelines . In pa rticular, the JV will  
have sufficient resources to operate independently on a market since it: 
(a) independently own s and/or operate s the relevant pipeline  sections , 
(b) has the permits, resources, personnel, rights and assets needed to carry out its 
functions independently from its parents,  
(c) has an independent management dedicated to its day -to-day operations, 
namely, a Board of Directors and a Managing Director , 
(d) has secure financial resources through the contracts with the end -users so that 
they cond uct their business activity independently from their parents.   
(20) ENI mainly acts as a client of TTPC and TMPC  and it pays the same tariff for 
using TTPC and TMPC as the […] third-party shippers (i.e. companies that buy 
and sell gas and arrange for its transp ortation)  that have long -term agreements with 
TTPC and TMPC . As will be further explained  in (85) et seq.  below, all transport 
capacity of the Transmediterranean P ipeline is made available to customers 
through public procedures on a “first -come, first served” basis via the PRISMA 
European Capacity Platform, in line with European best practices.  This also applies 
to ENI.  Any agreement between the JV and ENI  has so fa r been, and  will continue 
post-Transaction to  be, at arms’ length and on the basis of prevailing market terms 
at the time.   
(21) The Businesses are economically independent from their parents with regards to 
sales and purchases. They have  entered into long -term agreements with […] third-
party shippers ; in 2020 these agreements  cover ed a capacity of approximately […] 
billion cubic metres (‘ bcm’) per year (out of the pipeline’s  technical capacity of 
35.4 bcm) . These third -party agreements have been entered into at market 
conditions following the procedure described in (81). The Businesses currently set 
                                                 
10  The Shareholders Agreement provides mechanisms for resolving deadlocks […]. 
 
 
6 […] their own pri cing strategy (tariffs) under the aforementioned procedure . The 
Businesses therefore have (and the JV will continue to have) their own presence on 
the market for gas import infrastructure, with activities that go beyond one specific 
function of its parents .11  
(22) Furthermore, the Businesses currently have, and the JV will continue to have , 
sufficient resources to operate independently on the market.  
(23) In particular, TTPC and TMPC have the permits, resources, personnel, rights and 
assets needed to carry out the o peration of the Transmediterranean Pipeline 
independently from their parents. TTPC and TMPC have an independent 
management dedicated to their day -to-day operations, namely, a Board of Directors 
and a Managing Director. In addition, TTPC and TMPC have a ded icated 
commercial unit in charge of the day -to-day business concerning the management 
of the capacity rights of the two sections of the Transmediterranean Pipeline, 
including the organisation of the capacity allocation procedures.12 
(24) The JV will continue to have i ts dedicated companies (Sergaz and Scogat for the 
Transtunisian section; Mariconsult and Samco for the Offshore section) offering  
the JV all required operation, maintenance and other technical activities, as well as 
administrative and investments ser vices.13 
(25) Moreover, t he Businesses  currently have hundreds of  their own employees (with 
only a very limited number of the employees being seconded by ENI)  and the JV 
will continue to  have its own resources and operative structure with managers and 
staff, including dedicated commercial, technical, financial and administrative 
units.14 
(26) Finally, t he Articles of Association provides that the JV will have a duration until 
2100.  
(27) Therefore, t he JV will be a full -function joint venture.  
3. UNION  DIMENSION  
(28) The undertakings concerned have a combined aggregate world -wide turnover of 
more than EUR 5 000 million  [in 2021, SNAM/CDP: [more than EUR 5  000] 
million; ENI : [more than EUR 5  000] million]15. Each of them has a  Union -wide 
turnover in excess of EUR 250 million  [in 2021, SNAM/CDP: EUR [more than 
EUR 250]  million; ENI : EUR [more than 250]  million] , but they do not achieve 
more than two -thirds of their aggregate U nion-wide turnover within one and the  
same Member State. The notified operation therefore has a U nion dimension.  
                                                 
11  Form CO, paragraph 91.  
12  Form CO, paragraph 89.  
13  Ibid.  
14  Form CO, paragraphs 89 and 96.  
15  Turnover calculated in accordance with Article 5 of the Merger Regulation . 
 
 
7 4. RELEVANT MARKETS  
4.1. Introduction  
(29) Natural gas originates in oilfields or natural gas fields. After being processed and 
purified at a treatment plant, natural gas can be supplied either  in gaseous form 
through pipelines or in liquid form, as  liquefied natural gas  (‘LNG ’). When 
supplied as LNG, natural gas is converted into liquid form in a liquefaction plant, 
transported in specially -designed LNG tankers and then delivered for regasification 
at a receiving terminal (‘regasification terminal’) at the point of destination o r used 
directly as LNG for certain specific applications. Once regasified, LNG is 
transported in the pipeline network where it is mixed with  natural gas imported 
through international pipelines . It is then distributed and supplied to end customers.  
(30) In the previous decisional practice of the Commission,16 gas markets have been 
segmented into (i) the production and exploration for natural gas, (ii) gas wholesale 
supply, (iii) gas transmission (via high pressure systems), (iv) gas distribution (via 
low pressure  systems), (v) gas storage, (vi) gas trading, (vii) gas supply to end 
customers17 and (viii) the market for infrastructure for gas imports.  
(31) SNAM  and ENI18 are active in the market for infrastructure for gas imports into 
Italy. SNAM  controls (i) the Trans Aus tria Gas (‘TAG’) pipeline (jointly with Gas 
Connect Austria) , which allows import of Russian gas and of gas available at the 
Central European Gas Hub (‘CEGH’) in Austria  into Italy , (ii) two currently -
operating LNG regasification terminals in Italy (the OL T offshore regasification 
terminal, with its entry point at Livorno, which is jointly controlled with First 
Sentier Investors (‘ FSI’), and the Panigaglia regasification terminal, with its entry 
point at Panigaglia,  which is solely controlled by SNAM ), and two planned LNG 
vessels in Italy19 (Golar Tundra (which can also operate as an LNG regasification 
and storage terminal) and BW Singapore  (FRSU 2)), which SNAM will solely 
control  and which are expected to enter into operation in 2023 and 2024 
respectively . ENI currently solely controls the undertakings operating the 
Transtunisian section, and jointly controls with Sonatrach the undertaking 
operating the Offshore section of the Transmediterranean Pipeline.20   
(32) In addition, SNAM is present in the gas transmi ssion via high pressure system  
market in Italy, as it operates the Italian gas transmission network. As the TSO, 
SNAM controls the interconnection points where import pipelines , including the 
Transmediterranean Pipeline,  and LNG terminals interconnect with th e Italian 
transmission system.  
                                                 
16  Cases M.10139 DESFA/COPELOUZOU/DEPA/GASLOG/BTG/GASTRADE ; M.9641 
SNAM/FSI/OLT; M.3440 ENI/EDP/GDP; M.3294 EXXONMOBIL/BEB; M.3293 Shell/BEB; 
M.4180 Gaz de France/Suez; M.3868 DONG/Elsam/Ene rgi E.  
17  This market can be further subdivided according to different types of users (big and industrial, small 
and medium enterprises, households, etc.).  
18  The Notifying Parties submit that Sonatrach, with the exception of its co -controlling participati ons in 
TMPC, Transmed and Marioconsult, has no other activities in the relevant markets.  
19  SNAM ’s plans to increase its LNG activity  are a response to the reduction of gas imports from 
Russia . 
20  ENI also has joint control (with National Oil Corporation) of the Greenstream pipeline, which allows 
the import of Libyan gas into Italy but which  is not part of the Transaction . 
 
 
8 4.2. Product market definition  
4.2.1.  Infrastructure for gas imports  
(33) In previous decisions, the Commission considered the question whether the market 
for gas import infrastructure could be sub -segmented between (i) regasification 
services for the import of LNG  (i.e. for the import of gas in liquefied form)  and (ii) 
international pipelines  (i.e. for the import of gas in gaseous form) .21 The 
Commission ultimately left open the exact market definition.22  
(34) The Notifying Parties submit th at international  pipelines constitute a separate 
product market from regasification terminals.23  
(35) The results of the market investigation conducted in the present case were 
inconclusive on whether regasification terminals and pipelines are substitutable.  
(36) With regard to demand -side substitutability, t he responses of customers were split, 
with a slight majority of those who provided a definite answer not considering the 
two types of gas import infrastructure as substitutable.24 A majority of  customers 
who pro vided a definite answer submitted that the differences in the regulatory and 
operational aspects between  regasification terminals  and international pipelines  
affect  their substitutability  from the demand side .25 Respondents pointed 
specifically to the fact that, although both types of infrastructures ultimately deliver 
the same gas molecule to the market, they have different transport structure s and 
logistics, whose associated risks differ accordingly. Thus, the decision to import 
gas in gaseous form  via international  pipelines or  as LNG  that requires 
regasification  is part of the initial economic assessment of gas importers,  and is a 
choice  made for the long term. Gas importers can  therefore no t switch between 
pipelines and regasification terminals in a  cost- and time -efficient  manner  due to 
the fact that the choice of the gas import infrastructure is defined by the upstream 
gas or LNG supply contract.26 Further, the market investigation indicated that, 
while all customers import gas  in gaseous form  through  international  pipelines, less 
than half also import gas  in liquefied form  through regasification terminals.27    
(37) Moreover, the results of the market investigation indicate that there is no 
substitution on the supply side between the provision of regasifica tion services 
through LNG terminals and the provision of gas transport services through 
international pipelines in Italy. In fact, apart from SNAM, no other operator of a 
                                                 
21  The Commission has in previous decisions ( Cases M.9641 SNAM/FSI/OL ; M.10139 
DESFA/C OPELOUZOU/DEPA/GASLOG/BTG/GASTRADE ) concluded that underground gas 
storage represented a separate market  the market for gas import infrastructure . In the present case, the 
Notifying Parties (Form CO, paragraph  159) and the vast majority of respondents to t he market 
investigation confirmed that they consider gas storage to be a separate market from gas import 
infrastructure  (see replies to question 17, Questionnaire 1 to customers and question 20, 
Questionnaire 2 to competitors). While SNAM is active in gas storage, neither ENI nor the JV will 
be, and therefore gas storage will not be dealt with further in this decision.  
22  Cases M.10139 DESFA/COPELOUZOU/DEPA/GASLOG/BTG/GASTRADE, paragraph  36; 
M.9641 SNAM/FSI/OLT, paragraph  23.  
23  See Form CO, paragraph s 162 et seq.  
24  See replies to question 6, Questionnaire 1 to customers.  
25  See replies to question 9, Questionnaire 1 to customers.  
26  See replies to questions 5, 6.1, 7, 9.1, Questionnaire 1 to customers.  
27  See replies to question 2 of Questionnaire 1  to customers.  
 
 
9 gas import infrastructure offers both regasification services through LNG terminals 
and gas transport services through international pipelines.28 
(38) The Commission considers that, for the purposes of this decision, it may be left 
open whether  international  pipelines and regasification terminals belong to the 
same relevant product market or bel ong to separate product markets, as the 
Transaction does not lead to serious doubts as to its compatibility with the internal 
market, regardless of the market definition adopted.  The Commission will assess 
the Transaction both in the context of an overall market for gas import 
infrastructure, comprising gas pipelines and LNG terminals, as well as in the 
narrowest potential market for gas pipelines.29 
4.2.2.  Gas transmission  
(39) The transmission of natural gas consists of physical gas transportation services via 
high-pressure pipelines to gas wholesale suppliers that aim to resell their gas either 
to other gas wholesalers, to distributors, or to large industrial customers that are 
directly connected to the gas transmission network.  
(40) In its decisional practice, the Commiss ion has consistently considered  networks for  
gas transmission each as separate product markets (and thus  natural monopolies ).30 
The Notifying Parties do not challenge this conclusion.31 
(41) The results of the market investigation confirm that the conclusions rea ched by the 
Commission in its previous practice are still valid for Italy today.32 The 
Commission therefore considers that gas networks for the transmission of gas are 
natural monopolies and each of them constitute a distinct product market . 
4.3. Geographic mark et definition  
4.3.1.  Infrastructure for gas imports  
(42) In a recent  decision  referring to Italy , the Commission considered that the market 
for infrastructure for gas imports, comprising both international pipelines and LNG 
regasification terminals, was national in sc ope.33 In a more recent decision referring 
to Greece, the Commission  ultimately left open whether the geographic scope was 
national or wider.34 
(43) The Notifying Parties submit that the Transmediterranean Pipeline is not a 
substitute for other gas import infrastructures into Italy, and constitutes therefore a 
                                                 
28  See replies to question 1, Questionnaire 2 to competitors.  
29  A potential separate market for LNG regasification terminals would not be affected by the 
Transaction, as ENI is not active and the JV will not be active on this market.  
30  Cases M.10139 DESFA/COPELOUZOU/DEPA/GASLOG/BTG/GASTRADE, paragraph 39; 
M.9641 SNAM/FSI/OLT, paragraph 29; M.6984 EPH/ STREDOSLOVENSKA ENERGETIKA, 
paragraph 25; M.3696 E.ON/MOL, recital 97.  
31  See Form CO, paragraph  172.  
32  See replies to question 19 of Que stionnaire 1 to customers and question 16 of Questionnaire 2 to 
competitors.  
33  M.9641 SNAM/FSI/OLT, paragraph 36.  
34  Cases M.10139 DESFA/COPELOUZOU/DEPA/GASLOG/BTG/GASTRADE, paragraphs 47 – 49.   
See also M.5649 RREEF FUND/ ENDESA/ UFG/ SAGGAS, paragraphs  16-18; M.8771 
Total/Engie, paragraphs 35 -37. 
 
 
10 separate market  also geographically , namely the market for the import of Algerian 
gas into It aly.35  
(44) In particular, the Notifying Parties submit that for a gas shipper  (i.e. the actual 
customer of infrastructure for gas imports) , different sources of gas are not always 
interchangeable, due to the different supply conditions applied (e.g. short -term 
supplies from spot markets v ersus long-term contracts with production fields). Gas 
shippers are influenced by which gas producer they have contracts with, and f or a 
gas shipper having a long -term contract with the Algerian gas producer, a pipeline 
connect ing Algeria to Italy is thus the only option for the import of such gas to 
Italy. According to the Parties, the geographic scope of the market should therefore 
encompass the import route from Algeria to Italy. Since the Transmediterranean 
Pipeline is curre ntly the only pipeline serving the import route from Algeria to 
Italy, the Parties consider it a monopoly.36   
(45) The results of the market investigation with regard to the substitutability between 
different pipelines, connecting the Italian transmission grid with different sources 
of gas, are open to interpretation.  
(46) On the one hand, a  clear majority of both customers and competitors  submitted that 
different pipelines are generally not interchangeable.37 Some of th e customers  
replied that there could be some in terchangeability between different pipelines 
connecting the Italian transmission grid with different spot markets in Europe, but 
the same would not apply when considering pipelines connected to gas production 
sites, such as the Transmediterranean Pipeline.38  
(47) As TAP, the operator of the Trans Adriatic pipeline, connecting Italy with Caspian 
natural  gas, noted “ [i]n relation to whether gas sourced from different sources is 
interchangeable for shippers of natural gas into Italy, TAP has no opinion. TAP 
does no t assess other infrastructures as competitors, and does not adapt its offer on 
the basis of the other infrastructures offers. TAP focuses on the marketing of its 
own capacities and its own regulatory framework ”.39 
(48) Respondents noted that the lack of interchangeability  from the demand side  is 
mainly linked to the fact that different pipelines are connected to different sources 
of gas  (i.e. specific gas production fields) . Supply contracts with production fields 
are in turn usually long -term. As a resul t, the ability  of gas importers  to switch 
import infrastructure is linked to the existence and the duration of  their upstream  
gas supply  contracts.40 These upstream gas supply contracts are also gas - or LNG -
specific, which also defines the use of either pip elines or LNG terminals  for the 
import into Italy .41  
                                                 
35  See Form CO, paragraph 163 et seq.   
36  Ibid.  
37  See question replies to question 10 of Questionnaire 1 to customers; replies to question 8 of 
Questionnaire 2 to competitors.  
38  See question replies to ques tion 10 of Questionnaire 1 to customers.  
39  Minutes of DG COMP call with TAP, 24.05.2022.  
40  See replies to question 10.1 of Questionnaire 1 to customers.  
41  See replies to question 5 of Questionnaire 1 to customers.  
 
 
11 (49) From the perspective of the supply -side, substitutability between pipelines is 
limited by the fact that usually there will be only one pipeline connecting a gas 
production field with the Italian transmis sion network. In fact, the 
Transmediterranean Pipeline is the only infrastructure allowing for the import of 
natural gas (in gaseous form) originating from the Algerian gas production fields, 
into Italy.42 
(50) On the other hand , the majority of both customers a nd competitors also replied that 
in their view the Transmediterranean Pipeline is in fact competing with other gas 
import infrastructures for customers ,43 which seems to be in contradiction with 
their view  that different pipelines are in general not interchangeable.    
(51) Taking the overall feedback into account, the Commission interprets the responses 
of the participants to the market investigation as follows:  
(a) It is clear  from the overall responses that, once  a gas shipper has entered into 
a gas -supply contract with a specific source of gas (which will be gas - or 
LNG -specific), the available infrastructures for importing this gas into Italy 
are defined. Where  there is only a single pipeline connecting Italy to  the 
specific source of gas, there can be no competition among the various 
pipelines from that point on.44  
(b) One customer  explained in this regard  that, when deciding to conclude a new 
gas-supply cont ract with a source of gas, they consider all relevant factors, 
such as gas price, logistic costs to bring gas to Italy, the flexibility of the 
supply contract, reliability of the gas source etc. At this moment, the relevant 
sources of gas and, as an extension, the relevant infrastructures are in 
competition  with other sources and their infrastructure s.45  
(c) However, the feedback from the market investigation suggests that the choice 
of the import infrastructure plays only a minor role in the choice of the gas -
supply contract in the upstream market. When asked to rank their criteria in 
deciding where to source gas from, customers ranked the price of the natural 
gas as the most important factor, followed by the features of the gas supply 
agreement, reliability of supplier and lastly the transportation tariffs and th e 
need for portfolio diversification.46  
(52) The Commission therefore understands that competition primarily takes place in 
the upstream market for the gas supply, and that  the gas import infrastructure  only 
plays a second ary role in the decision to source gas from one source or the other .  
(53) In any case, and given the ambiguity of the feedback from the market investigation,  
the Commission considers that the question whether the Transmediterranean 
Pipeline is to be regarded as a natural monopoly can be left open , as the 
Transaction does not raise concerns regardless of the precise market delineation . 
For the purposes of this decision the Commission will  conduct the assessment 
                                                 
42  See Form CO, paragraph 163.  
43  See replies to question 30 of Questionnaire 1 to customers; replies to question 28 of Questionnaire 2 
to competitors.  
44  LNG terminals, on the contrary, not being linked to the geographic location of the source of gas, can 
still compete after the conclusi on of the LNG -supply contract . 
45  See replies to question 1 of Questionnaire 1 to customers.  
46  See replies to question 12 of Questionnaire 1 to customers . 
 
 
12 under the most conservative basis , considering that the Transmediterranean 
Pipeline  does not constitute  a monopoly  and will consider a market covering other 
import infrastructures as well, whether both regasification terminals and 
international pipelines, or international pipelines alone .47 
(54) With respect to the geographic scope of the mark et comprising all gas import 
infrastructures in Italy, the results of the market investigation confirmed that there 
are no reasons for the Commission  to depart from the findings in its past decisions 
according to which the market for import infrastructure in Italy being national. The 
clear majority of all respondents replied that the Italian transmission network has 
no bottlenecks, allowing for gas to reach any part of the network, regardless of the 
entry point. The clear majority of all respondents also co nfirmed that gas imported 
in Italy is typically consumed within Italy and is not re -exported to other countries. 
Therefore, for the purpose of this decision, the Commission  will conduct its 
assessment on the basis  that the market for gas import infrastruct ure is national , 
covering import infrastructures  (whether all import infrastructures or only 
international pipelines)  that are connected to the Italian transmission network .48 
4.3.2.  Gas transmission  
(55) In its past decisional practice, the Commission has generally co nsidered the market 
for gas transmission to be national, although noting that the region covered by the 
physical infrastructure grid constitutes the narrowest possible delineation of the 
geographic market.49 
(56) A majority of the respondents who expressed an op inion  in the market 
investigation confirmed that the Commission’s decisional practice of considering 
the market for gas transmission systems as being national, covering the physical 
infrastructure grid, is still valid for Italy today .50 
(57) The Commission there fore considers the market for gas transmission to be national 
in scope, in line with its decisional practice.  
                                                 
47  If the Transmediterranean Pipeline were considered a monopoly, the Transaction would not give rise 
to any horizontal overlaps with SNAM’s activities in the operation of other gas import infrastructure. 
As regards the non -horizontal effects vis -à-vis SNAM’s activities in the operation of the Italian gas 
transmission system, there would be no conceiv able input, customer or rival foreclosure scenario, 
since both non -horizontally linked markets would constitute monopolies.  
48  This includes pipelines, which, although being used for gas imports into Italy, are physically located 
within the territory of on e or more countries other than Italy.  
49  Cases M.10139 DESFA/COPELOUZOU/DEPA/GASLOG/BTG/GASTRADE, paragraph  52; 
M.9641 SNAM/FSI/OLT, paragraph 40; M.6984 EPH/ STREDOSLOVENSKA ENERGETIKA, 
paragraph 25; M.3696 E.ON/MOL, recital 126  
50  See replies to questio n 23 of Questionnaire  1 to customers and question 20  of Questionnaire 2 to 
competitors.  
 
 
13 5. COMPETITIVE ASSESSMEN T 
5.1. Affected markets  
(58) As outlined in (31) above , both SNAM and the JV (currently through ENI)51 are 
active on the market for gas import infrastructure and the possible sub -segment for 
international pipelines in Italy.  
(59) Moreover, as des cribed in (32), SNAM is active in Italy in the gas transmission 
market. Customers of international pipelines  (i.e. gas shippers) , once their gas loa ds 
have reached the Italian transmission network,  need transmission services to 
deliver the commodity to their customers.  Therefore, gas transmission and gas 
import infrastructures are neighbouring markets, since customers buy the 
respective services seque ntially .   
(60) In addition, gas import infrastructures need to be interconnected  to the national gas 
transmission  system . Such interconnection requires the construction of an 
interconnection point in the gas transmission network, which is carried out by the 
operator of the gas transmission system.  Subsequently, gas import infrastructure 
require access to the transmission system on a rolling basis.  Therefore, the gas 
transmission market (downstream ) is vertically linked to  the market for 
infrastructure for gas imports and its possible sub -segments  (upstream) .  
(61) The Transaction would lead to the following horizontally  affected potential 
markets: (i) overall market for gas import infrastructure in Italy; and (ii) 
international  gas pipelines in Italy.  The Transaction would lead to the following 
vertically  affected potential markets  (i) between the market for gas import 
infrastructure (upstream) and  the market for gas transmission in Italy 
(downstream) , and (ii) between  the marke t for international pipelines  (upstream)  
and the market for gas transmission in Italy (downstream) . The Transaction would 
further lead to the following non -horizontally (conglomerate) affected markets: (i) 
between the market for gas import infrastructure a nd the market for gas 
transmission in Italy, and (ii) between the market for international pipelines and the 
market for gas transmission in Italy. The Commission will assess whether the 
Transaction could lead to competition concerns with respect to these r elationships 
in sections 5.2 – 5.4 below.  
5.2. Horizontal non -coordinated effects in the market for infrastructure for gas 
imports  
5.2.1.  Analytical framework  
(62) Under Article 2(2) and 2(3) of the Merger Regulation, the Commission must assess 
whether a proposed concentra tion would significantly impede effective competition 
in the internal market or in a substantial part of it, in particular through the creation 
or strengthening of a dominant position.  
                                                 
51  Apart from the JV, ENI also has joint control over the Greenstream pipeline connecting Italy with 
Libya. However, as the Transaction will not result in SNAM and ENI combining their resources 
outside the JV, Greenstream does not affect the assessment of the horizontal unilateral effects of 
SNAM’s acquisition of joint control in the Transmediterranean Pipeline. Greenstream will therefore 
be considered in the context of horizontal coordinated effects only.  
 
 
14 (63) In this respect, a merger may entail horizontal and/or non -horizontal e ffects. 
Horizontal effects are those deriving from a concentration where the undertakings 
concerned are actual or potential competitors of each other in one or more of the 
relevant markets concerned. Non -horizontal effects are those deriving from a 
concent ration where the undertakings concerned are active in different relevant 
markets.  
(64) The Commission appraises horizontal effects in accordance with the guidance set 
out in the relevant notice, that is to say the  Horizontal Merger Guidelines.52 The 
Horizontal M erger Guidelines distinguish between two main ways in which 
mergers between actual or potential competitors on the same relevant market may 
significantly impede effective competition, namely non -coordi nated and 
coordinated effects.  
(65) The Horizontal Merger Gu idelines list a number of factors which may influence 
whether or not significant horizontal non -coordinated effects are likely to result 
from a merger, such as the large market shares of the merging firms, the fact that 
the merging firms are close competit ors, the limited possibilities for customers to 
switch suppliers, and the fact that the merger would eliminate an important 
competitive force. That list of factors applies equally, regardless of whether a 
merger would create or strengthen a dominant positi on, or would otherwise 
significantly impede effective competition due to non -coordinated effects. 
Furthermore, not all of these factors need to be present to make significant non -
coordinated effects likely and  it is not an exhaustive list.53 Finally, the Ho rizontal 
Merger Guidelines describe a number of factors, which could counteract the 
harmful effects of the merger on competition, including the buyer power, entry and 
efficiencies.  
5.2.2.  Market shares  
(66) Tables 1 and 2 below show market shares for the overall marke t for gas import 
infrastructure (comprising both pipelines and LNG terminals), based on the 
infrastructures’ technical capacity (Table 1 , based on million cubic metres (‘mcm’)  
per day (‘mcm/d’) ) and volume of actual gas injected into the Italian gas 
transm ission network (Table 2 , based on mcm ). The Tables are for the period 2018 
– 2021 . They  therefore  do not include SNAM’s two planned LNG vessels (Golar 
Tundr a and BW Singapore  (FRSU 2) ) and other future changes; such changes are 
discussed in (69).   
(67) Tables 3 and 4 below show market shares for the narrower potential market for gas 
pipelines excluding LNG terminals, based on the infrastructures’ technical capacity 
(Table 3) and volume of actual gas injected into the Italian gas transmission 
network (Table 4).  
                                                 
52  Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of 
concentrations between undertakings ( ‘Horizontal Merger Guidelines ’), OJ C 31, 05.02.2004.  
53  Horizontal Merger Guide lines, paragraph 26.  


 
 
17  
(69) There are several scenarios that mig ht affect the market shares in the market for gas 
import infrastructure in Italy in the coming years.  First, as noted in (31), as a 
response to the reduction of gas imports from Russia, SNAM plans to increase its 
LNG activity, with acquisitions of two LNG vessels: (i) Golar Tundra, which is 
forecast to cover [0-10]%  of Italian gas demand at least for the 2023 -2029 period 
(under the assumption that  there are no gas imports from Russia  and domestic  
demand  and supply from non -Russian gas sources  is stable ); and (ii) BW Singapore  
(FRSU 2), which is planned to  enter into operation in 2024 with the same capacity 
as Golar Tundra. Second, in a scenario where, due to current geopolitical events, 
gas imports from Russia would reduce significantly, the TAG pipeline could run 
empty and be completely unused for import purposes. La stly, depending on the 
demand in the market, the TAP pipeline may be expanded progressively during the 
next 5 years, up to a doubling of its capacity. If all 3 points were to happen in the 
future, SNAM’s total market share would decrease to [40-50]% in ter ms of 
technical capacity in 2027 (excluding the capacity of TAG, which in this case 
would remain unutilised).  
(70) Tables 3 and 4 below relate  to the possible sub -segment for gas pipelines in Italy  
for the period 2018 – 2021. They show that  the combined market shares of SNAM 
and the JV  could be even higher  than the market for gas import infrastructure in 
Italy, ranging from [60-70]% to [80-90]%. In the coming years these shares will be 
lower if the capacity of the TAP pipeline expands and us e of the TAG pipeline  is 
reduc ed. 


 
 
20 discrimination, and which prevents SNAM from exercising any form of market 
power.58 
(74) SNAM is bound by third -party access ( ‘TPA’) rules. Article 32 of EU Directive 
2009 /73/EC (the ‘Third Gas Directive ’) provides for regulated TPA to gas 
transmission systems and import infrastructure “ based on tariffs, applicable to all 
eligible customers, including supply undertakings, and applied objectively and 
without discrimination b etween system users ”. It also mandates that access to the 
transmission system may only be refused in very limited instances (e.g. lack of 
capacity). In the case of refusal, the operator  must provide ‘duly substantiated 
reasons ’. The procedures and  codes for the TAG  pipeline  and the OLT and 
Panigaglia LNG terminals, as approved by E -Control and ARERA, all include TPA 
rules .59 
(75) TPA must be provided unde r pre -defined regulated tariffs . The regime of allowed 
revenues, in particular,  is set out in  EU Regulation (E U) 2017/460, establishing a 
network code on harmonised transmission tariff structures for gas, and includes 
rules on the application of a reference price methodology, the calculation of reserve 
prices for standardised capacity products, as well as publicat ion and consultation 
requirements . 
(76) In practice, the national regulator sets the allowed revenue of each  import  
infrastructure. When setting the allowed revenue of an infrastructure, the regulator 
considers the infrastructure’s operational expenses and capital expenditure costs  
that that infrastructure is entitled to recover based on  the applicable rules.60 
(77) Subseque ntly, the infrastructure’s tariffs are calculated in order to recover the 
allowed revenues, according to the tariff methodology defined by the regulator, 
which considers , among other  things,  the capacity booking forecasts for each 
infrastructure. The tarif fs are then paid by users of such infrastructure acco rding to 
their actual bookings.  
(78) As the actual revenues made by an import infrastructure might ultimately differ 
from the allowed ones, the infrastructure’s tariffs of the subsequent year are 
adapted in o rder to balance any under - or over -performance of the infrastructure in 
the previous year . 
(79) The regime of allowed revenues applies as described above to both OLT and 
Panigaglia LNG terminals.61 
(80) With reference to TAG, a n adaptation of the transmission tariffs  in the following 
year would only take place in case TAG were to exceed its allowed revenues. The 
difference w ith TAG is that a recuperation  of any revenues below the allowed 
revenues is not foreseen. In other words, with respect to TAG there is only a cap  in 
                                                 
58  See Form CO, paragraphs 243 – 245; paragraph 303 e t seq.  
59  See Form CO, paragraphs 309 – 312; 324 – 329, and the “Procedure for the access to the TAG gas 
transmission system and gas transmission services ” and the OLT and GNL Italia “ Regasification 
Codes ”. 
60  See Form CO. paragraph 276  - 278.  
61  See Form  CO, paragraph 280.  
 
 
21 respect to the maximum allowed revenues, while there is no guaranteed minimum 
revenue.62 
The regime applicable to the Transmediterranean Pipeline  
(81) EU regulation of gas markets is  only applicable to the (portion of) infrastructures 
located within the EU. Most of the Transmediterranean Pipeline is located outside 
the EU, with the exception of the portion of the Offshore Section  that is located 
within the Italian territorial sea.  
(82) The portion of the TMPC located within the EU (i.e., in the Italian territoria l sea) 
has been granted an exemption until May 2030 by the Italian Ministry of Economic 
Development under Article 49(a) of the Third Gas Directive.63 This exemption was 
based among other things  on the concern that applying a stringent regulatory 
regime on only the part of the Offshore section that lies within the Italian territorial 
sea “ would entail a double regulatory regime to the same [Transmediterranean] 
pipeline, with risks of interference  in the techn ical management (proper technical 
functioning requires the pipeline to be operated in its entirety) and in the 
commercial management (the existing transmission contracts for the pipeline do 
not provide for a split and would have to be amended accordingly ).”64 
(83) As a result, the Transmediterranean Pipeline is not subject to TPA rules or 
regulated tariffs.65 
(84) Nonetheless, the Notifying Parties submit that the methodology applied to allocate 
capacity on the Transmediterranean Pipeline is in line with t he European  best 
practices on transparency and non -discriminatory capacity allocation 
management.66 
(85) In particular, from 2019 onwards, gas transport capacity via the 
Transmediterranean Pipeline has been made available to market players through 
public procedu res on a “first come, first served” basis. All the available capacity is 
offered through the PRISMA European Capacity Platform67, in line with European  
best practices.68  
(86) As regards the tariffs applied for the Transmediterranean Pipeline, these are 
calculat ed based on a formula which is described in the contract a user will 
conclude with each section of the pipeline.69 The amount of the tariff depends 
                                                 
62  See Form CO, paragraph 281.  
63  As modified by Directive (EU) 2019/692 of the European Parliament and of the Council of April 17, 
2019 .  
64  See Form CO, paragraph 417.  
65  Form CO, paragraph 375.  
66  Ibid.  
67  PRISMA is a European gas  capacity platform, offeri ng to transmission and storage system operators a 
single place to market their capacity products.  
68  Form CO, paragraph 377. In practice, a user will have to book capacity for the Transtunisian section 
through PRISMA, and then req uest the respective capacity in the Offshore Section. The capacity 
booking of the Offshore Section is thus synchronised with the Transtunisian Section.  
69  Although the process for capacity booking is synchronised  between the Transtunisian and the 
Offshore  Sections, u sers still need to conclude separate contracts for  each of the T ranst unisian 
Section and the Offshore Section , with separate transportation tariffs.  
 
 
22 exclusively on the capacity booked, and varies according to the duration of the 
contract  (multiannual, annual  or less than annual) with the cost for long -term 
contracts typically being less than the cost for short -term contracts. Each time a 
user acquires a new capacity product, a transportation tariff applies for the whole 
duration of the relevant transportation  agreement, which is not subject to 
renegotiation. The conditions and tariffs apply indistinctively to all users, […].70 
Restrictions in the SPA agreement  
(87) Lastly , the Notifying Parties submit that the involvement  of SNAM in the JV will 
not affect the incentives of the JV to increase the tariffs for the Transmediterranean 
Pipeline. […].71 
5.2.4.  The Commission’s assessment  
(88) The market shares in the market for gas import infrastructure into Italy, including 
the possible sub -segment of gas pipelines, are set out in Tables 1 – 4 above.  
(89) The market shares of SNAM and the JV in the overall market for gas import 
infrastructure into Italy will range from [60-70]% to [70-80]%, depending on 
whether market  shares are calculated on the basis of the infrastructure’s technical 
capacity or actual volumes of gas imported. The increment that will result from the 
Transaction will range from [20-30]% to [20-30]%.  
(90) The market shares for SNAM and the JV in the possib le sub -segment for gas 
pipelines used for gas import into Italy will range from [60-70]% to [80-90]%. The 
increment that will result from the Transaction will range from [30-40]% to [30-
40]%.  
(91) Despite market shares being high, the Commission considers that  the Transaction 
does not raise serious doubts as to its compatibility with the internal market with 
regard to horizontal non -coordinated effects . 
(92) In particular, the Commission has identified two potential  scenarios, by which the 
Transaction could lead to a significant impediment to effective competition, as a 
result of horizontal non -coordinated effects : 
(a) SNAM could increase the tariffs for use of, or limit the access to its other gas 
import infrastructures in Italy, so as to make additional profits, while 
recapturing some of any diverting gas shippers through the 
Transmediterranean Pipeline  (assessed in Section 5.2.4.1  below);  
(b) SNAM could increase the  tariff for use of , or limit the access to  the 
Transmediterranean Pipeline, so as to make additional profits, while 
recapturing some of any diverting gas shippers shipping gas to Italy through 
the other gas import infrastructure it controls in Italy  (asses sed in Section 
5.2.4.2  below).  
(93) The Commission does not consider the above theories of harm as plausible, for the 
reasons set out below.  
                                                 
70  Form CO, paragraph 399 et seq.  
71  Form CO, paragraph 469.  
 
 
23 Lack of clo seness of competition between the Transmediterranean Pipeline and the 
other gas import infrastructures in Italy  
(94) As a general remark applying to both potential horizontal theories of harm, the 
Commission notes that, on the basis of its considerations set ou t in recitals  (45) - 
(52) above, the Tr ansmediterranean Pipeline is no t a close substitute for any other 
import infrastructure used to import gas into Italy.  
(95) As mentioned in (46) above, a clear majority of gas shippers  replied that the 
Transmediterranean Pipeline  is not substitutable with other gas import 
infrastructure in Italy.  
(96) Substitution between the Transmediter ranean Pipeline  and other gas import 
infrastructures in Italy is significantly limited by the existence of the upstream gas 
supply contract of the gas shipper . Such gas supply contracts will be gas - or LNG -
specific,72 limiting the gas shipper ’s choice to im port through  pipelines or LNG 
terminals respectively. Further, the geographic location of the source of the gas 
also defines the available infrastructure for its impor t into Italy. For a gas shipper  
having a contract for the sourcing of gas (in gaseous for m) from the Algerian gas 
production fields, the Transmediterranean Pipeline is the only available 
infrastructure for the import of such gas into Italy. Moreover, gas shippers  sourcing 
gas from Algeria typically have long -term gas supply contracts with Alge rian 
producers, and also corresponding long -term contracts with the Transmediterranean 
Pipeline with a typical duration of […],73 which further limits t he ability of such 
gas shippers  to switch to another import infrastructure. As a gas shipper submitted 
“[p]ipelines in Italy connected to production sites require long terms contract 
which are binding for all the contractual period and cannot be terminated in 
advance /switched in order to use other pipelines.”74 
(97) Even for the gas shipper  who is not bound by an existing gas supply contract  and 
who wishes to enter into a new gas supply contract considering  its available options 
in terms of gas sources, the available infrastructure for the import of such gas into 
Italy cannot be considered t o be closely  competing. As mentioned in (51) above, 
the relevant factors t hat will weigh in the gas shipp ers’ decision as to where to 
source gas fro m will primarily be the price of the natural gas, followed by the 
features of the gas supply agreement and the reliability of the gas supplier. The 
tariffs for the transportation of the gas to the point of destination, or other crite ria, 
are deemed by gas shippers  as less important. It follows that the gas shippers’  
decision  on the geographic origin of the gas it will source  will be driven mainly by 
the elements of the upstream market for the gas wholesale supply, with the 
elements relating to the gas impor t infrastructure only playing a limited role.  
(98) This is also evidenced by the limited incidence  of the gas transportation cost , 
compared to the price of the commodity. Table 5 below provides a  comparison per 
infrastructure between the average cost of gas  of the respective gas source  and the 
average cost for transport  of the gas  up to the entry p oint of the Italian gas network  
in megawatt hours (MWh) .  
                                                 
72  Supra, (36).  
73  Form CO, paragraph 468.  
74  See replies to question 10.1, Questionnaire 1 to customers.  

 
 
25 5.2.4.1.  SNAM does not have the ability or the incentives to increase tariffs  in or 
limit access to  TAG pipeline, or OLT and Panigaglia LNG terminals  
(103)  Regarding the first leg of this first  of the two scenarios outlined in (92) above , the 
Commission considers that SNAM would  have neither the ability nor the incentive  
to increase the tariffs of its TAG pipeline or OLT and Panigaglia LNG terminals in 
order to make additional profits by the increased tariffs, while recapturing part of 
the diverging users through the Transmediterranean Pipeline.  
Ability of SNAM to i ncrease tariffs in  TAG, OLT or Panigaglia  
(104)  First, e ven if the Transmediterranean Pipeline were to be  considered to be 
competing closely with the other gas import infrastructure in Italy,  SNAM would  
be prevented by sectoral regulation from exercising  market power by increasing 
prices in the import infrastructure it controls, or by limiting access to their  capacity.  
(105)  As stated by the Notifying Parties  (see (73) - (80)), the gas import infrastructure 
currently controlled by SNAM in Italy (i.e. the TAG pipeline  and the  OLT and 
Panigaglia LNG terminals), are fully regulated with respect to the applicable tariffs 
and the non -discriminatory allocatio n of their capacity.  
(106)  The tariffs in SNAM’s current infrastructure connected to the Italian network are 
pre-defined on the basis of a calculation method  set by the relevant regulator, 
which SNAM cannot influence and which aims at generating pre -defined ret urns, 
i.e. the allowed revenues. In other words, it is the pre -defined allowed revenues of 
each infrastructure that will define the level  of the applicable tariffs, rather than the 
opposite. Should the application of the regulated tariffs lead to returns that exceed 
the allowed revenues  (e.g. due to higher utili sation than expected) , the excess will 
be rebate d in the subsequent year  and the  tariffs will be adjuste d accordingly  (see 
in this regard also the views of  the Notifying Parties  in (78)).  
(107)  A clear majority of both customers and  competitors responded that sectoral 
regulation with regard to tariffs of gas import infrastructure is effective in 
preventing operators of import infrastructure from influencing tariffs.77 As one gas 
shipper noted, “[t]he gas transmission tariffs are defin ed by EU regulations and 
approved by the Italian regulator. Therefore,  [the operator of the infrastructure ] 
does not have any capability to unilaterally increase tariffs”.78 Another gas shipper 
explained , “[d]ue to tariff regulation and other regulatory mea sures, the raising 
[of] prices above regulatory levels (…) are prevented ”.79  
(108)  ARERA, the Italian energy regulator, also expressed its confidence in the sectoral 
regulation’s efficacy in preventing SNAM from influencing tariffs in the import 
infrastructures it currently controls : “The tariffs applied to European pipelines, 
such as the TAG, are based on similar approaches applied by each Member State, 
i.e. an entry -exit system where the price for accessing the system is regulated based 
on general principles se t at European level. For the use of regasification plants, 
instead, the price paid depends on the regulatory regime in place; for some 
                                                 
77  See responses to question 29, Questionnaire 1 to customers; question 27, Questionnaire 2 to 
competitors.  
78  See responses to question 29.1, Questionnaire 1 to customers.  
79  See responses to question 29.1, Questionnaire 1 to customers.  
 
 
26 terminals, the price is a regulated tariff. (…) other terminals are instead exempted, 
and they can freely decide on the p rice to be paid by users (there is one example in 
Italy of a regasification plant being exempted).80 Altogether, ARERA considers the 
existing regulatory regime to be efficient in preventing SNAM from exercising 
market power” .81 
(109)  It follows that SNAM is not ab le to influence the tariffs in the TAG pipeline and 
OLT and Panigaglia LNG terminals. Even under the assumption that it could 
influence tariffs, this would ultimately have no effect in SNAM’s revenues from 
these infrastructures, as any earnings above the a llowed revenues would be rebated 
in the subsequent year.  
(110)  Second, a ssuming  to the contrary  that SNAM could increase tariffs in its currently 
controlled infrastructure in Italy, and benefit from such increased tariffs, SNAM 
would in any case not be in a pos ition to unilaterally do so with regard to  the TAG 
pipeline and OLT LNG terminal. This is because  SNAM only jointly controls  those 
infrastructure s with GCA and FSI respectively . The co -controlling parties of these 
infrastructures would be unlikely to align  with a strategy of SNAM to increase 
tariffs in the respective infrastructures,  in order to make additional profits by the 
increased tariffs while recapturing part of the diverging users through the 
Transmediterranean pipeline. This is because , unlike SNAM , GCA and FSI do not 
control other gas import infrastructures in Italy  and would  therefore  not be able to 
recapture any users diverging from the TAG pipeline or  the OLT LNG terminal 
due to the increased tariffs . It follows that such a strategy would be unp rofitable for 
GCA and FSI, who would have an incentive to oppose SNAM in pursuing such 
strategy.  
(111)  SNAM could also not apply this strategy in a profitable manner through its solely -
controlled Panigaglia LNG terminal alone, as this infrastructure accounts for only  
[0-10]% of the total import capacity into the Italian network, and only [0-10]% of 
the actual import volum es into Italy. The part of any diverging users from 
Panigaglia that SNAM would possibly recapture through the Transmediterranean 
pipeline would therefore be too insignificant to incentivise SNAM in pursuing such 
a strategy.  
Incentives of SNAM to increase t ariffs in  TAG, OLT or Panigaglia  
(112)  Even if this strategy were to be implemented successfully and diverting users from 
TAG, OLT and Panigaglia were recaptured by the Transmediterranean Pipeline, 
this would not translate into increased profits for SNAM, at lea st before 2029. As 
mentioned in (87), the SPA between the Notifying Parties with regard to the JV 
sets forth […]. SNAM will therefore have no incent ives to divert users from TAG, 
OLT or Panigaglia to the Transmediterranean Pipeline.  
(113)  Regarding the second leg of this first scenario, the Commission considers that 
SNAM would not  have the ability or the incentives  to limit the capacity of the TAG 
pipeline  and the OLT and Panigaglia LNG terminals that is made available to gas 
shippers, in order to divert such gas shippers to the Transmediterranean Pipeline, 
                                                 
80  This is neither OLT, nor the Panigaglia LNG terminal, to which regulated tariffs apply.  
81  Minutes of the call with ARERA, 23.05.2022.  
 
 
27 which is not subject to regulated tariffs and allowed revenues. The Commission, 
however, does not con sider the implementation of this strateg y to be  feasible, for 
the reasons set out in (114)  - (119)  below .  
Ability of SNAM to limit access to TAG, OLT and Panigaglia  
(114)  First, as explained in (74), TPA rules apply fully to the TAG pipeline and the OLT 
and the Panigaglia LNG terminals, which would prevent SNAM from 
implementing such a strategy. Accordingly, SNAM has to make available to 
market participants at all times the maximum capaci ty of all these infrastructures, 
under public, transparent and non -discriminatory allocation mechanism.82 In this 
regard, TAG offers its capacity through auctions on PRISMA, while the OLT and 
Panigaglia LNG terminals offer their capacity through auctions su pervised by 
ARERA.83 
(115)  A clear majority of both customers and competitors confirmed that sectoral 
regulation is sufficient in preventing SNAM from exercising market power by 
limiting access to the gas import infrastructure it controls.84 One gas shipper noted 
in this regard that it “ considers the Italian regulation to be effective in preventing 
TSO from exercising market power with respect to gas transmission tariffs and 
third party access ”. As noted in (107) , another gas shipper explained that “[d]ue to 
tariff regulation and other regulatory measures, (…) restricting access to 
pipelines/terminals [is] prevented”.85 As mentioned above, ARERA confirms the 
view that “the existing regulatory regime to be efficient in preventing SNAM from 
exercising market power.”86 
(116)  Second , the Transmed iterranean Pipeline  is not a close substitute, meaning that a 
limitation of access to  the TAG  pipeline , the OLT or the  Panigaglia  LNG terminals  
would not likely result in users of such infrastructure switching to the 
Transmed iterranean Pipeline . As explained in (96), a user of TAG, OLT,  or 
Panigaglia will not be able to switch to the Transmed iterranean Pipeline in order to 
import into Italy  the gas sourced through its pre -existing gas supply contracts with 
sources other than the Algeri an production fields.  Conversely , in order to use the 
Transmed iterranean Pipeline  for importing gas into Italy, a shipper must have a gas 
supply contract with the A lgerian production fields, which a user of TAG, OLT or 
Panigaglia does not necessarily have.   
(117)  Third , as explained in (110) , the co -controlling parties of TAG and OLT would 
have incentives to oppose to such a strategy of SNAM. SNAM could in turn not 
apply this strategy in a profitable manner through the Panigaglia  LNG terminal 
alone, due to this infrastructure’s  limited market share.  
 
 
                                                 
82  Form CO, paragraph 233.  
83  Form CO, paragraphs 310; 324 et seq.   
84  See responses to question 29, Questionnaire 1 to customers; question 27, Questionnaire 2 to 
competitors.  
85  See responses to question 29. 1, Questionnaire 1 to customers.  
86  Minutes of the call with ARERA, 23.05.2022.  
 
 
28 Incentives of SNAM to limit access to TAG, OLT and Panigaglia  
(118)  As explained in (112) , even if SNAM were successful in implementing such a 
strategy and divert users from TAG, OLT and Paniga glia to the 
Transmediterranean P ipeline, this would not translate into additional profits for 
SNAM, […]. 
(119)  On the basis of the foregoing, the Comm ission considers that SNAM neither  has 
the ability nor the incentives to increase tariffs in or limit access to the TAG 
pipeline, the OLT  LNG terminal  or the Panigaglia LNG terminal , in order to profit 
from the increased tariffs while recapturing part of any diverting users through the 
Transmediterranean Pipeline.  
5.2.4.2.  SNAM does not have the  ability or the  incentives to increase tariffs in  or 
reduce access to  the Transmediterranean Pipeline  
(120)  As stated by t he Notifying Parties  (see (81) - (83) above) , the Transmediterranean 
Pipeline is not subject to EU sectoral regulation with regard to tariffs. Nonetheless, 
the Commission does not consider that SNAM could engage in a strategy whereby 
it would increase tariffs in , or limi t access to , the Transmediterranean Pipeline in 
order to profit from the increased tariffs while recapturing any diverting users 
through TAG, OLT or the Panigaglia LNG terminal, for the following reasons . 
Ability of SNAM to increase tariffs in, or limit access to the Transmediterranean 
Pipeline  
(121)  First , as e xplained in  (116) , the Transmediterranean Pipeline is no t a close 
substitute to TAG, OLT or the Panigaglia LNG terminal. Users of the 
Transmediterranean Pipeline who would face increased tariffs or limited access to 
capacity would not be able to circumvent this by switching to another gas import 
infrastructure.  Even for gas shippers who have no pre -existing gas sup ply contract, 
and are considering entering into such contract with a gas supplier, the available 
import infrastructure for importing such gas into Italy will only play a minor role in 
choosing their gas supplier, as explained in (51) et seq . A strategy by which SNAM 
would seek to divert users of the Transmediterranean Pipeline to its other 
infrastructures in Italy would therefore not be feasible.  
(122)  Second,  an attempt by SNAM to increase tariffs or limit access to the 
Transmediterranean Pipeline would face resistance by the other, jointly controlling 
parties, who have divergin g interests. As  mentioned in (13), TTPC, who operates 
the Transtunisian Section will be jointly controlled by SNAM and ENI, while 
TMPC, who operates the Offshore section, will be jointly controlled by SNAM, 
ENI and Sonatrach.  ENI, being a gas shipper and the main user of the 
Transmediterranean Pipeline, would itself have to bear the  tariff increase . While 
the cost for ENI of any such increase would in part be offset by the share of any 
corresponding increase in profit that ENI  would receive, the fact that  ENI will hold 
only 25.05% of the shares in TMPC means that ENI’s net final position in case of a 
revenue increase on the Transmediterranean Pipeline would overall be a loss.87 
Although, hypothetically, ENI could reserve for its elf lower tariffs for the  use of 
                                                 
87  Form CO, paragraph 465.  
 
 
29 the Transmediterranean P ipeline,  given that th e Transmediterranean P ipeline is not 
subject to the EU regulatory regime,  ENI has already pre -Transaction  applied 
methodologies which are in line with the European best practice s on transparency 
and non -discriminatory capacity allocation. As explained in (85), since  2019 
capacity in the Transmediterranean P ipeline is made available to market players 
through public procedures on a “first come, first served” basis via the PRISMA 
platform. The Transaction will not likely change ENI’s incentives with regard to 
the tariffs appl ied for the Transmediterranean P ipeline, and  ENI wou ld not have an 
interest in endorsing a strategy to increase tariffs.  
(123)  For Sonatrach, being the national gas producer of Algeria,  a reduced utilis ation of 
the Transmediterranean Pipeline would mean a bottleneck in its sales of gas to 
Italian importers.  Sonat rach rather has an interest in maximising gas volumes 
shipped through the Transmediterranean Pipeline. As can be deduc ed from the 
comparison between the price of Algerian gas and the transport costs for gas 
through the Transmediterranean Pipeline in Table 5, Sonatrach has an interest in 
selling more gas quantities, rather than selling less at a higher cost of transport.  
Incentives of SNAM to  increase ta riffs in, or limit access to the 
Transmediterranean Pipeline  
(124)  First, as explained in (106) , SNAM would not make additional profits by 
recapturing any diverting users of the Transmediterranean Pipeline through TAG, 
OLT or the Panigaglia LNG terminal. As all three of these infrastruc tures are 
subject to allowed revenues, the increased revenues resulting from an increased 
utilisation of such infrastructure in one year would be offset by the adjustment of 
the tariffs in the subsequent year. SNAM would therefore have no incentives to 
divert users from the Transmediterranean Pipeline to the other gas import 
infrastructures it controls in Italy.  
(125)  Second , SNAM would not make any increased profits by the increase in the tariffs 
of the Transmediterranean Pipeline either, […].  
(126)  On the basis of the above, the Commission considers that SNAM neither has  the 
ability nor the incentives to increase tariffs in or limit access to the 
Transmediterranean Pipeline, in order to profit from the increased tariffs while 
recapturing part of any diverting users through the TAG pipeline, the OLT or 
Panigaglia LNG terminals . 
5.2.5.  Conclusion on horizontal non -coordinated effects  
(127)  Based on the foregoing, the Commission considers that the Transaction does not 
raise serious doubts as to its compatibility with the internal m arket with respect to 
horizontal non -coordinated effects in the market for infrastructure for gas imports 
into Italy, and its po ssible sub -segment for gas import pipelines.  
 
 
30 5.3. Horizontal coordinated effects in the market for infrastructure for gas 
imports  
(128)  SNAM and ENI are active and the JV will be active in the market for gas import 
infrastructures in Italy. There are no other markets where the JV and any of  the 
Notifying Parties remain active.88 There is also no other market where SNAM, the 
JV and Sonatrach w ill be active. In this light, the possibility of the Transaction 
giving rise to coordinated effects between SNAM, ENI and the JV in the market for 
gas import infrastructure in Italy is assessed below.  
5.3.1.  Analytical framework  
(129)  As set out in the Horizontal Merge r Guidelines,89 concentrations may significantly 
impede effective competition by creating or strengthening a dominant position by 
changing the nature of competition in such a way that firms would significantly be 
more likely to coordinate and raise prices or otherwise harm effective competition. 
In such a case, the merger would (a) increase the likelihood that firms are able to 
coordinate successfully, or (b) make existing coordination easier, more stable or 
more effective, either by making the coordination  more robust or by permitting 
firms to coordinate on even higher prices, for example by facilitating the detection 
of deviation, limiting the ability and incentives of some market players to deviate 
and allowing more efficient retaliation.90 In complex econ omic environments, for 
example with differentiated products, coordinating firms may find ways to reach 
the terms of coordination: establishing a small number of reference pricing points, 
or a fixed relationship between base prices and a number of other pri ces (prices 
moving in parallel). Market transparency through publicly available key 
information or, for example, by information exchanged through structural links 
between competitors may further facilitate coordination.91 In addition, structural 
links such as cross -shareholding or participation in joint ventures may also help in 
aligning incentives among the coordinating firms.92 
(130)  To find coordinated effects , evidence is needed that the horizontal merger changes 
the nature of competition in such a way that fir ms that previously were not 
coordinating their behaviour are now significantly more likely to coordinate and 
raise prices or otherwise harm effective competition. A merger may also make 
coordination easier, more stable or more effective for firms that were  coordinating 
prior to the merger.  
(131)  According to the Horizontal Merger Guidelines, coordination is more likely to 
emerge if competitors can easily arrive at a common perception as to how the 
coordination should work.93 Generally, the less complex and more st able the 
economic environment, the easier it is for the firms to reach a common 
understanding on the terms of coordination.94  
                                                 
88  […]; see Form CO, paragraph 134.  
89  Horizontal Merger Guidelines, paragraphs 22, 39 et seq.  
90  Horizontal Merger Guidelines, paragraph 42.  
91  Horizontal Merger Guidelines, paragraph 47.  
92  Horizontal Merger Guidelines, paragraph 48 .  
93  Horizontal Merger Guidelines, paragraph 43.  
94  Horizontal Merger Guidelines, paragraph 44.  
 
 
31 5.3.2.  The Notifying Parties’ view  
(132)  The Notifying Parties submit that the Transaction will not give rise to coordinated 
effects because: (i) there is limited substitutability (if any) between the 
transmission services offered in the market; (ii) the Transaction would not 
significantly alter the existing degree of transparency on the market; (iii) the 
sectoral regulation prevents the possibility that the Transaction might create the 
conditions for coordination in the transmission or regasification service market; 
and (iv) in the current scenar io there is a high spare capacity in each and all 
transmission and regasification systems.95 
5.3.3.  The Commission’s assessment  
(133)  As regards the overall market for infrastructure for gas imports in Italy, the 
Commission considers that the Transaction will not lead to an economic 
environment that will favour coordination between SNAM, the JV and ENI.  
(134)  First , as explained in (102) , the Commission considers that competition between 
the various import infrastructures in Italy is limited, in the sense that the import 
infrastructure constitutes a minor factor in the gas shippers’ decision on the 
geographic location of their source of g as, which neither SNAM, the JV or ENI can 
influence. Any coordination between SNAM, the JV and ENI would have a limited 
impact on the behaviour of gas shippers, who decide on the geographic origin of 
their sources of gas supply based primarily on the facto rs of the upstream market 
for gas supply (i.e. price of the commodity, features of the gas supply contract, 
reliability of the gas supplier), rather than on the cost of transportation of the gas 
into Italy, or other factors. In this respect, the Transactio n will have limited impact 
on the nature of competition between SNAM, the JV and ENI in the market for gas 
import infrastructures in Italy and would not make a coordination between them 
more likely.  
(135)  Second, even under the assumption that there is signific ant competition between 
the different gas import infrastructures in Italy, a number of operators, with 
different market shares and different infrastructure s (pipelines and regasification 
terminals), will remain active in the market. Currently, apart from S NAM and ENI, 
there are other operators of gas import infrastructure in Italy, namely TAP 
operating the TAP pipeline, FluxSwiss  and SwissGas  jointly operating the 
Transitgas pipeline,  ExxonMobil and Qatar Petroleum jointly operating the 
Adriatic LNG termina l, and Plinovodi operating the Slovenian gas network, which 
is connected to the Italian network.  Those infrastructures together account for 
around 30% of the overall import capacity to the Italian network . Even if only 
considering the international pipelin es in Italy, excluding regasification terminals, 
the TAP and Transitgas pipelines and the interconnection point with the Slovenian 
gas network account for 28% of the overall import capacity to the Italian network.  
The significant number of different gas im port infrastructure operators in Italy and 
their respective capacities will render coordination between SNAM, the JV and 
ENI unlikely .  
                                                 
95  Form CO, paragraph 483.  
 
 
32 (136)  Table 1 and Table 2, the different operators  of gas import infrastructure  are also 
highly asymmetrical in terms of market shares and capacities. Furthermore, as 
indicated by Table 5, there is significant difference in the cost of transport among 
the various gas import infrastructures. Such asymmetry in the market for gas 
import infrastructure would render coordination be tween the competitors 
unlikely.96 The Transaction will therefore not change the nature of competition and 
the competitors would remain differentiated, implying a limited risk of increased 
coordination.  
(137)  Fourth , the current situation with the reduced imports of natural gas from Russia 
and the reallocation of the sources of gas supplies for Europe and Italy creates a 
new dynamic environment in the market for gas import infrastructure . LNG and 
non-Russian gas supply sources have gained importance, and so have th e 
respective gas import infrastructures which can be used for their import. This is 
likely to substantially reallocate the market shares for gas import infrastructures in 
Italy in the coming years (at least as far as volumes of actual flows are concerned).  
Such a dynamic economic environment, in turn, does not favour coordination.97  
(138)  Fifth , a number of recent and new entries of considerable value are identified in the 
market for infrastructure of gas imports. The TAP pipeline only entered into 
operation in December 2020 , and is expected  to expand  its capacity up to a double 
in the coming  5 years.  Furthermore, as a response to the reduction of gas imports 
from Russia, SNAM plans to increase its LNG activity by entering into operation 
two new LNG terminals in 2 023 and 2024 respectively.98 The Adriatic LNG 
terminal can also increase its capacity from 8 bcm to 9 bcm without further 
investments needed, and up to 11 bcm in case of further investments.99 Depending 
on the possible further reductions of gas imports from Russia, the TAG pipeline 
could see a significant reduction in its utilis ation and even run completely empty. 
There are also new potential  import infrastructures  being explored  that have gaine d 
in relevance in the context of the current geopolitical events , in particular the 
Eastmed/IGI Poseidon pipeline100  
(139)  A clear majority of both customers and competitors indeed expect new gas import 
infrastructures to be set up in Italy  in the following two t o five years .101 One gas 
shipper noted in this regard that “[t]he international geopolitical situation is 
imposing European nations to search for new gas supplies. This in order to 
overcome their demand as well as to effectively diversify their portfolio. Th e 
consequence of this is the setting up of new gas import infrastructure in Italy 
too”.102 It follows that such volatility with regard to market participants would 
generally not allow for sustainable coordination between competitors.103 
                                                 
96  See Horizontal Merger Guidelines, paragraph 48.  
97  See Horizontal Merger Guidelines, paragraph 45.  
98  Supra, (31).  
99  Form CO, paragraph 431.  
100  Form CO, paragraph 431. The EastMed pipeline (a joint venture between EDISON S.p.A. and DEPA 
International Projects AS ) is currently in the design phase and a ims to connect Italy with the 
Levantine Basin located in the Eastern Mediterranean .  
101  See replies to question 32 , Questionnaire  1 to customers; question 30, Questionnaire 2 to competitors.  
102  See replies to question 3 2.1, Questionnaire  1 to customers . 
103  See Horizontal Merger Guidelines, paragraph 45 .  
 
 
33 (140)  Lastly , as explained in (106) , tariffs applied in the TAG pipeline, the OLT and the 
Panigaglia LNG terminals are extensively regulated and the allocation of the 
respective capacity is subject to TPA rules. It is therefore unlikely that these 
infrastructures can be part of a wider coor dination between SNAM, the JV and ENI 
with regard to increasing tariffs or limiting access to the available capacity.  
(141)  There would  thus only potentially be scope for coordination  between  the non -
regulated infrastructure operated by SNAM, the JV and ENI, na mely  the 
Transmediterranean and Greenstream  pipelines . However,  the Transaction will lead 
to a reduction of ENI’s controlling stake  in the Transmediterranean Pipeline . Pre-
Transaction ENI jointly  controls the Greenstream pipeline (with National Oil 
Corpora tion) and the Offshore s ection of the Transmediterranean Pipeline  (with 
Sonatrach ), while it solely controls the Transtunisian section. T he Transaction will 
result in  the entry of SNAM as an additio nal jointly controlling party  in the 
operation of the Tran smedi terranean pipeline , who is not active on the same 
markets as ENI and Sonatrach, and therefore has diverging interests.  Therefore, the 
Transaction renders coordination between  the Transmediterranean  and 
Green stream  pipelines  less likely than before.  
(142)  Apart from the likelihood of coordination to emerge in a market, the Commission 
also assesses whether such coordination would be sustainable and successful in 
attaining the expected outcome.  
(143)  Coordination is not sustainable unless the consequences of deviati on are 
sufficiently severe to convince coordinating firms that it is in their best interest to 
adhere to the terms of coordination (i.e. deterrent mechanisms).104 
(144)  In the present case, no credible deterrent mechanism could be applied by either 
SNAM, the JV or ENI, with the aim of preventing deviation from coordination. As 
mentioned in (140) , the regulated infrastructure s in Italy currently controlled by 
SNAM  have no option but to provide their services under the regulated tariffs and 
in accordance with TPA rules. Furthermore, the existing transparency  in the 
market, which results from sectoral regulation, would make any attempt of a 
competitor to apply such deterrent m echanisms visible to ARERA , who is in 
charge of supervising the market and enforcing adherence to regulation.  As regards 
the non -regulated infrastr ucture of the Notifying  Parties, namely the 
Transmediterranean and Greenstream pipelines, as mentioned in (141) , the 
Transaction will reduce the li kelihood of coordination, due to the entrance of 
SNAM as an additional jointly controlling party in the Transmediterranean 
Pipeline, and the reduction of ENI’s influence over the Transmediterranean 
Pipeline.  
(145)  Coordination is also not effective in attaining  the expected outcome by the 
coordinating competitors, if actions of non -coordinating firms are able to 
jeopardi se such outcome.105 
(146)  As mentioned  in (135)  above, apart from the Notifying Parties, there are currently 4  
other  undertakings active in gas import infrastructure in Italy, with TAP having 
                                                 
104  See Horizontal Merger Guidelines, paragraphs 52 . 
105  See Horizontal Merger Guidelines, paragraph 56.  
 
 
34 entered into operation only in December 2020 , and further entries being expected 
in the next two to five years. These  other undertakings, and additionally any new 
entrants with  the capacity that will be brought by them will be sufficient to offset 
any attempt by SNAM, the JV and ENI to coordinate with the aim of increasing 
tariffs, reducing capacities or redu cing innovation.  
5.3.4.  Conclusion on horizontal coordinated effects  
(147)  In light of the above considerations, the Commission considers that the Transaction 
does not raise serious doubts as to its compatibility with the internal market with 
respect to horizontal coor dinated effects in the market for gas import infrastructure 
in Italy.  
5.4. Non-horizontal effects  
(148)  First,  gas import infrastructures need to be interconnected to the national gas 
transmission system , which  requires the construction of an interconnection point in  
the gas transmission network, which is carried out by the operator of the gas 
transmission system. Subsequently,  operators of  gas import infrastructure s require 
access to the transmission system on a rolling basis. Therefore, the Transaction 
will, from th e perspective of operators of gas import infrastructures and the 
operator of gas transmission networks,  bring about a vertical relationship in Italy 
between the upstream market for infrastructure for gas imports (and its possible 
sub-segment for internatio nal gas pipelines), where SNAM and ENI are both active 
and the JV will be active, and the downstream market for gas transmission, where 
SNAM has a natural monopoly.  
(149)  Furthermore, customers of international pipelines (i.e. gas shippers), once their gas 
loads  have reached the Italian transmission network, need transmission services to 
deliver the commodity to their customers. Since customers sequentially buy the 
services of gas import infrastructures and  the services of  gas transmission 
networks, those are con sidered neighbouring markets.  Therefore, the Transaction 
will, from the perspective of gas shippers,  bring about a conglomerate relationship 
in Italy between the market for infrastructure for gas imports (and its possible sub -
segment for international gas pipelines), where SNAM and ENI are both active and 
the JV will be active, and the market for gas transmission in Italy, where SNAM 
has a natural monopoly.  
5.4.1.  Analytical framework  
(150)  The legal test for the assessment of non -horizontal effects of a merger is set o ut in 
the Merger Regulation and the Commission’s Guidelines on the assessment of non -
horizontal mergers under the Council Regulation on the control of concentrations 
between undertakings (‘ Non-horizontal Merger Guidelines’ ).106  
(151)  Non-horizontal effects can be  distinguished between vertical and conglomerate 
effects.107 
                                                 
106  OJ C 265, 18.10.2008, p. 6.  
107  Non-horizontal Merger Guidelines, Sections IV. and V.  
 
 
35 (152)  According to the Non -horizontal Merger Guidelines, foreclosure effects  in a 
vertical scenario  may occur where actual or potential rivals’ access to supplies  (i.e. 
input foreclosure)  or markets  (i.e. customer foreclosure)  is hampered or eliminated 
as a result of the merger, thereby reducing these companies’ ability and/or 
incentive to compete.108  
(153)  In assessing the likelihood of an anticompetitive input foreclosure scenario, the 
Commission examines , whether the merged entity would have, post -merger, the 
ability to substantially foreclose access to inputs, whether it would have the 
incentive to do so, and whether a foreclosure strategy would have a significant 
detrimental effect on competition downst ream.109 Those conditions are 
cumulative.110 
(154)  Similarly, i n assessing the likelihood of an anticompetitive customer foreclosure 
scenario, the Commission examines whether the merged entity would have the 
ability to foreclose access to downstream markets by reduc ing its purchases from 
its upstream rivals, whether it would have the incentive to reduce its purchases 
upstream, and whether a foreclosure strategy would have a significant detrimental 
effect on consumers in the downstream market.111 Those conditions are 
cumulative.112 
(155)  Foreclosure effects may also occur  in a conglomerate scenario,  where the 
combination of products in related markets may confer on the merged entity the 
ability and incentive to leverage a strong market position from one market to 
another by mean s of tying or bundling or other exclusionary practices , thereby 
foreclosing its rivals  in any of those markets .113 
(156)  In assessing the likelihood of an anticompetitive rival foreclosure scenario in 
relation to conglomerate effects, the Commission examines, firs t, whether the 
merged entity would have, post -merger, the ability to foreclose its rivals, second, 
whether it would have the economic incentive to do so, and third, whether a 
foreclosure strategy would have a significant detrimental effect on competition.114 
5.4.2.  The Notifying Parties’ view  
(157)  The Notifying Parties submit that there is no risk of foreclosure as a result of this 
Transaction because, apart from the period of the construction of a new entry point 
in the national gas transmission system, in order to conn ect a new import 
infrastructure, the operator of the import infrastructure is not a customer of SNAM 
in its capacity as the Italian TSO. The Notifying Parties further submit that access 
to the Italian gas transmission network is strictly regulated, which e liminates the 
risk of discrimination and foreclosure.115 
                                                 
108  Non-horizontal Merger Guidelines, paragraph 18.  
109  Non-horizontal Merger Guidelines, paragraph 32.  
110  See Judgement of the General Court in case T-370/17 – KPN v Commission, paragraph 119.  
111  Non-horizontal Merger Guidelines, paragraph 59.  
112  See Judgement  of the General Court in case T-370/17 – KPN v Commission, paragraph 119.  
113  Non-horizontal Merger Guidelines, paragraph 93.  
114  Non-horizontal Merger Guidelines, paragraph 94.  
115  Form CO, paragraphs 504 et seq.   
 
 
36 5.4.3.  The Commission’s assessment  
(158)  The Commission notes that the vertical effects in the affected markets are not 
adequately represented through the classic schemes of input and customer 
foreclosure  in the Co mmission’s Guidelines on Non -Horizontal Mergers116 because 
SNAM as the operator of the gas transmission system in the downstream market is 
in fact not a customer of the gas import infrastructure in the upstream market , and 
neither are operators of gas import  infrastructures suppliers of a service to SNAM 
as the operator of the gas transmission system . Rather, i t is the gas shipper who is 
the customer of both the gas import infrastructure and the gas transmission system , 
who are in turn each supplies shippers with their respective service . Therefore,  (i) 
operators of gas import infrastructure cannot conceivably foreclose inputs for a gas 
transmission system operator (as in the case of Italy all gas import infrastructure is 
connected to the transmission  system of SNAM)  and (ii) SNAM could not 
foreclose operators of gas import infrastructure, by not purchasing their services . 
(159)  The Commission  has instead identified two possible scenarios by which the 
Transaction could bring about a significant impediment to  effective competition :  
a) SNAM could restrict access to the Italian gas transmission system by competing 
gas import infrastructure providers in the upstream , in order to favour its own 
import infrastructures ; alternatively, SNAM could increase prices or deg rade 
quality at the interconnection points of comp eting gas import infrastructure with 
the Italian gas transmission network, in order to favour its own gas import 
infrastructure.  
b) SNAM could strategically limit investments in the Italian gas transmission 
system, in order to limit the interconnection of  new competing gas import 
infrastructures, and thus limit competition to its own gas import infrastructure.  
(160)  The Commission has further identified one relevant conglomerate scenario, that 
give rise to a signifi cant impediment to effective competition : 
a) Vis-à-vis gas shippers, SNAM could make access to the Italian gas transmission 
network conditional upon importing gas through its own import infrastructure, 
so as to foreclose its rivals on the market for gas impor t infrastructure.  
(161)  The Commission does not consider the aforementioned vertical and conglomerate 
theories of harm as plausible, for the reasons set out below.  
A. Vertical effects  
a. SNAM cou ld hypothetically increase transmission  tariffs, restrict access or 
degrade quality at the various entry points of the Italian transmission system, 
to which competing gas import infrastructures are connected.  
(162)  Gas transmission is subject to national legislation117 monitored by ARERA in order 
to guarantee all users of the network the freedom of access on equal terms to the 
                                                 
116  See Guidelines on Non -Horizontal Mergers , paragraphs 31 et seq,: 58 et seq.  
117  Letta Decree (Legislative Decree No. 164/2000).  
 
 
37 transmission network, as well as impartiality and neutrality of the respective 
service.  
(163)  In communications held with the Commission, ARERA expressed its confidence in 
the effecti ve implementation of such legislation.  With regard to the transmission 
tariffs applied by SNAM as the TSO of the Italian transmission network, ARERA 
submitted that “[t]here is a European Regulation - Commission Regulation (EU) 
2017/460 of 16 March 2017 - containing the principles for setting the tariff to 
access the system, including possible specific algorithms to be applied by 
regulatory authorities. The tariffs be ing fully regulated, there is no possibility for 
SNAM to exercise any kind of market power that impacts on the price for gas 
transmission. In a given point, the tariff is the same for any user.”  118 Likewise, the 
clear majority of all respondents in the mark et investigation submitted that sectoral 
regulation for gas transmission is effective to prevent SNAM from exercising 
market power on the downstream gas transmission market.119 More precisely, the 
clear majority of both customers and competitors replied that  they did not consider 
it likely that SNAM would post -Transaction increase the entry tariffs at the entry 
points of competing gas import infrastructure, since SNAM would be constrained 
by sectoral regulation.120 One competitor noted that “(…) the regulations  and the 
controls currently in force would prevent SNAM to implement such measures ”.121   
(164)  Likewise, ARERA was clear in that SNAM has no possibility  to influence the 
allocation of capacity in the Italian gas transmission system, so as to favour one 
import inf rastructure over the other: “All the European TSOs participate in the 
PRISMA platform, which means that the allocation of capacity is made by the 
central platform, not directly by SNAM. SNAM does not allocate nor influence the 
entry -exit capacity allocatio n. There is no way for SNAM to allocate more capacity 
to an entry point owned by itself compared to an entry point owned by a 
competitor. Preferential allocation is not possible as it is a market -based 
system”.122 This was also confirmed by the clear majorit y of both customers and 
competitors, who submitted that SNAM will post -Transaction not likely reduce the 
capacity at the entry points of competing gas import infrastructure.123 One 
customer noted in this regard “ [w]e don’t see any reason for SNAM to reduce 
Italian entry capacity and consider the Italian regulation to be effective in 
preventing SNAM from exercising market power with respect to availability of 
existing technical/commercial transmission capacities ”.124 TAP, an operator of a 
competing gas import in frastructure noted in the same manner that “the regulatory 
framework, including ARERA’s supervision powers, safeguards shippers - who 
wish to benefit from TAP’s transmission activities in the Italian network – from any 
potential discriminatory behaviour”.125 
(165)  Lastly, SNAM will not have the ability to degrade the quality of services at the 
entry points of competing gas import infrastructure. In fact, investments into the 
                                                 
118  See Minutes of the call between DG COMP and ARERA, 23.05.2022.  
119  See replies to question 34, Questionnaire 1 to customers; question 32, Questionnaire 2 to competitors.  
120  See replies to question 35, Questionnaire 1 to customers; question 33, Questionnaire 2 to competitors.  
121  See replies to question 35.1, Questionnaire 1 to customers.  
122  See Minutes of the call between DG COMP and ARERA, 23.05.2022.  
123  See replies to question 37, Questionnaire 1 to customers; question 35, Questionnaire 2 to competitors.  
124  See replies to question 37.1, Questionnaire 1 to c ustomers.  
125  See Minutes of the call between DG COMP and TAP, 24.05.2022.  
 
 
38 gas transmission network are set out by the Ten Year Development Plan (‘TYDP’), 
which is de veloped by SNAM and updated each year based on a regulated 
procedure. In particular, each year SNAM submits an updated TYDP to public 
consultation, where stakeholders, including SNAM’s competitors, may provide 
their feedback on the investment proposals. Af ter assessing the outcome of the 
consultation, SNAM submits the TYDP to ARERA for approval. ARERA, taking 
into consideration the results of the public consultation, may require modifications 
to the TYDP, particularly in relation to the inclusion or removal  of proposed 
investments.126 As ARERA confirmed, “[i]n this procedure, it is very difficult for 
SNAM to exert influence, as all the stakeholders are participating. Furthermore, 
ARERA has the power to intervene to recalibrate an investment but ARERA has 
never  done this.”127 The clear majority of both customers and competitors again 
responded that they considered it unlikely that SNAM would post -Transaction 
degrade quality at the entry points of competing infrastructure.128 One customer 
noted that “[w]e don’t see a ny reason for SNAM to reduce service quality at 
Italian entry points and consider the Italian regulation to be effective in preventing 
SNAM from exercising market power with respect to service quality of existing gas 
transmission capacities”.129 
(166)  The Commissi on therefore considers that SNAM would have no ability to restrict 
the provision of gas transmission services to upstream gas import infrastructure 
providers  by any means . 
(167)  Absent the ability to foreclose competing import infrastructures from access to the 
Italian gas transmission network, it is not necessary to assess whether SNAM 
would have had the incentives to do so. However, the Commission notes that 
SNAM is already pre -Transaction vertically integrated as it is active in the  market 
for gas import infra structure in the upstream, where it currently has a market share 
ranging from [30-40]% - [40-50]% depending on the market delineation, and in the 
operation of the Italian gas transmission network in the downstream, where it has 
the natural monopoly. The Co mmission therefore considers that the addition of the 
operation of the Transmediterranean Pipeline into SNAM’s activities will not 
change the incentives of SNAM to engage into a foreclosure strategy against its 
competitors in the market for gas import infr astructure.  
(168)  In fact, as discussed in (87), even in case such a strategy would lead to an increased 
utilisation of the Transmediterranean Pipeline, SNAM would not make additional 
profits from it, […].  
(169)  With regard to the other gas import infrastructure currently controlled by SNAM, 
the vertical relationship is pre -existing and SNAM’s incentives will not change 
from the Transaction. In any case, given the fact that such infrastructures are 
subject to allowed revenues,130 a foreclosure strategy by SNAM aiming to increase 
the utilisation of such infrastructures would not translate into increased revenues 
for SNAM.  
                                                 
126  Form CO, paragraph 523.  
127  See Minutes of the call between DG COMP and ARERA, 23.05.2022.  
128  See replies to question 39, Questionnaire 1 to customers; question 37, Questionnaire 2 to competitors  
129  See replies to question 39.1, Questionnaire 1 to customers.  
130  Supra, (75) 
 
 
39 b. SNAM could strategically limit investments in the Italian gas transmission 
system to limit interconnection of new competing gas import infrastructures 
and thus limit competition to its own gas import infrastructure.  
(170)  The Commission also considers this scen ario not plausible, because  SNAM has no 
discretion on whether to undertake or reject investments in the Italian gas 
transmission network with respect to interconnection of competing projects.131 As 
explained in (165)  such investments are undertaken under the TYDP, which 
SNAM has to develop on the basis of a transparent and regulated procedure, taking 
into account the public consultation with stakeholder s, while ARERA has the 
power to require modifications to the TYDP.  
(171)  As submitted by ARERA, “[t]he so -called ‘Ten -Year Network Development Plan’ 
is planned by the TSO and takes into account the need of transmission capacity in 
the future. Commission Regulat ion (EU) 2017/459 of 16 March 2017 sets up a 
specific procedure (“Incremental capacity process”) for creating new or 
additional capacity at an entry or exit point, divided into a binding phase and a 
non-binding phase, where market participants express thei r interest for entry 
capacity. Only in case of sufficient capacity demand, the permission for a new 
entry point will be granted by the authorities. In this procedure, it is very difficult 
for SNAM to exert influence, as all the stakeholders are participati ng. 
Furthermore, ARERA has the power to intervene to recalibrate an investment but 
ARERA has never done this.”132 
(172)  Moreover, a majority of customers and a clear majority of competitors submitted 
that SNAM would post -Transaction not likely limit investments on  the 
transmission system, in order to refuse the interconnection of new, competing 
infrastructures.133 
(173)  The Commission therefore considers that SNAM does not have the ability to 
strategically limit investments in the transmission network so as to prevent new,  
competing infrastructures from being connected to the network.  
(174)  Absent the ability, the re is no need for the  Commission to assess the incentives of 
SNAM to engage in a strategy whereby it would limit investments into the Italian 
gas transmission network, in order to prevent new, competing infrastructures from 
being connected to the network. However, as explained in (167) , the Commission 
does nonetheless not consider that the Transaction would change S NAM’s 
incentives in this regard. This is because  SNAM is already pre -Transaction 
vertically integrated with significant market shares in both markets for gas import 
infrastructure in the upstream , while SNAM would not benefit from an increased 
utilisation of either the Transmediterranean Pipeline or its currently controlled gas 
import infrastructures , as explained in (167) .   
B. Conglomerate effects  
(175)  As mentioned in (149) , in order to transport gas from a specific source into Italy, 
gas shi ppers need to sequentially book capacity at both the import infrastructure 
                                                 
131  Form CO, paragraph 520.  
132  See Minutes of the call between DG COMP and ARERA, 23.05.2022.  
133  See replies to question 41, Questionnaire 1 to customers; question 39, Questionnaire 2 to competitors  
 
 
40 and the Italian gas transmission network. SNAM could therefore in theory  make 
access to the gas transmission network conditional on using its own infrastructure 
for the import of th e gas into Italy.  
(176)  For the same reasons discussed in (162)  et seq. , SNAM will not have the ability to 
limit access to the Italian gas transmission system to any user and in any way. It 
follows that SNAM will also not  have the ability to make access to the gas 
transmission system conditional on using a specific gas import  infrastructure , as 
this would amount to a limitation of access to the transmissions system . As 
explained in (162)  et seq ., both ARERA and the respo ndents to the Commission’s 
market investigation confirmed that the sectoral regulation is effective in 
preventing SNAM from limiting access to the Italian gas transmission system. The 
Commission therefore considers that SNAM lacks the ability to make acces s to the 
Italian gas transmission network conditional on using its own gas import 
infrastructure.  
(177)  Absent the ability of SNAM to make access to the Italian transmission network 
conditional upon using its own infrastructure for the import of gas, the Commis sion 
does not have to assess SNAM’s incentives. However, similarly with (167) , the 
Commission does nonetheless not consider that the Transaction wo uld change 
SNAM ’s incentives in this regard. This is because  SNAM is already pre -
Transaction active, with significant market shares, in both neighbouring markets 
for gas import  infrastructure in the upstream, while SNAM would not benefit from 
an increased utilization of either the Transmediterranean Pipeline or its currently 
controlled gas import infrastructures, as explained in  (167) .   
5.4.4.  Conclusion o n non -horizontal effect s 
(178)  In light of the above considerations, the Commission considers that the Transaction 
does not raise serious doubts as to its compatibility with the internal market with 
respect to non -horizontal effects in the markets for gas import  infrastructure in the 
upstream (where SNAM, ENI and the JV are active) and gas transmission in the 
downstream.  
6. CONCLUSION  
(179)  For the above reasons, the European Commission has decided not to oppose the 
notified operation and to declare it compatible with the  internal market and with the 
EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the 
Merger Regulation and Article 57 of the EEA Agreement.   
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Executive Vice-President  
 
 
 
41