The Italian government has decided to drop the plan to impose a price cap on domestic flights to its islands, allowing the country’s competition authority to intervene when needed instead.
According to the Italian daily Corriere Della Sera, Adolfo Urso, the Minister of Enterprises and Made in Italy, said that the ministry proposed changes to the price cap introduced by the Italian government in early August 2023.
Urso, speaking to reporters at an event in Italy, added that the “competent authorities” will now have more power to ensure competitive and consumer-friendly market conditions. The minister said that the Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato, AGCM) would now be able to examine flight prices even if they are determined by algorithms and not done manually.
In August 2023, the Italian government announced measures to protect Italian consumers. The bill limited flight prices when the flight is from/to mainland Italy to its islands, sold during the peak-demand seasons and/or in conjunction with a state of emergency, and would have resulted in tickets being 200% more expensive compared to the average price on the same route.
The Italian government also looked to ban procedures that changed the prices of flights based on a user’s web activities.
Shortly after the measure was announced, Ryanair’s chief executive officer (CEO) Eddie Wilson told the Italian news agency Agenzia Nazionale Stampa Associata (ANSA) that it was “ridiculous, illegal, and interferes with the free market, according to European law”.
In another interview with Italy’s La Republica, Wilson claimed the measure could be compared to something that would have been done in the Soviet Union in the 1920s.
However, the day after Urso announced changes to the bill, AGCM said it would investigate Ryanair for its dominant position in the market.
The competition authority alleged that the low-cost carrier is abusing its position by “hindering” travel agencies from purchasing flight tickets on its website. Instead, AGCM claimed the company offers tickets through a platform, where prices and after-sale support services are worse.