The Unbundling Principle in Government-controlled Companies. Business Economics Analysis and Corporate Competitiveness Effects

The purpose of this paper is to investigate the so-called «non-structural» separation rule(also known as «Unbundling»), provided as an exception to the antitrust law, within themeaning of Article 6, paragraph 1, of Legislative Decree No. 175 of 19 August 2016 (knownas the «Madia» reform), in order to understand its effects on the business profitability ofpublic utilities companies in Italy. In particular, the analysis is based on the interpretation ofthe concepts of «competition» and «services of general economic interest (sgei)», as definedin the Community Economic Order and in the light of the business economics theory. Itdevelops and integrates the relevant theme of «structural separation», which concerns companiesoperating both in the sgei sector and on an economic free market segment. With regardto such principle («structural separation»), Article 6(1) of the Madia Decree lays downa provision derogating from it for the companies controlled by national or local government.A deeper analysis of the mentioned derogation reveals as both academically and practicallyrelevant, since it appears not only to be in blatant contrast with the principle of «neutrality» expressed in Article 345 of the Community legislation (tfeu), but specifically becauseit risks creating a significant difference in treatment between economic operators. In particular,the paper highlights how the fair competition between sgei companies also operatingin free market economic segments is likely to be altered by the unilateral obligation forcompanies not under (national or local) government control to sustain an expensive organizationalcomplexity. This would undermine both their financial performance and competitiveabilities, with significant impacts also on the quality of services/products offered. The study concludes by suggesting a plausible path aiming to allow a sustainable reconciliationbetween principles of collective economy and business profitability, regardless of the ownershipstructure of companies operating, at the same time, in the both business segments (sgeiand free market).