Vodafone (VOD) Italy Is Suing Telecom Italia (TI), Claiming Italy’s Largest Telecom Shutting Out Competition

Here’s more bad news for Italy’s largest telecommunications company. After reporting on Friday a net loss of €1.41 billion ($1.87 billion) in the first half of the year, Telecom Italia SpA (NYSE:TI) is now facing a more than €1 billion ($1.33 billion) lawsuit from the Italian subsidiary of the world’s second-largest telecoms company, Britain’s Vodafone Group PLC (NASDAQ:VOD), over allegations it has abused its dominant position in Italy to stifle competition.

Vodafone Italy’s civil action in a Milan court claims Telecom Italia initiated a series of actions between 2008 and 2012 “with the intention and effect of impeding growth in competition in the Italian fixed-line market,” according to a statement emailed from Vodafone to Reuters Sunday. The lawsuit comes after the Italian company was slapped in May with a €104 million ($138.16 million) fine by the country’s antitrust regulator following complaints from smaller competitors there.

Among its other allegations, Vodafone Italy claims Telecom Italia has overcharged for use of its network. Vodafone Group owns 77 percent of Vodafone Italy.

Telecom Italia reported Friday a €2.20 billion ($2.92 billion) goodwill write-down in the first half of the year. And, according to Bloomberg News, the beleaguered company’s total impairment costs since 2011 amounts to €14 billion ($18.60 billion).