The Italian arm of British multinational telecoms firm Vodafone is seeking £850 million in damages from Telecom Italia, the country's biggest mobile phone company.
Vodafone has claimed that Telecom Italia, which formerly held a monopoly in Italy, abused its dominant position in the market to prevent competition.
Vodafone is now the second largest network provider in the country. Together, the businesses control around two thirds of the Italian market.
"Vodafone has commenced litigation against Telecom Italia," Vodafone said in a statement. "The civil action states that Telecom Italia committed a series of abuses between 2008 and 2013 with the intention and effect of impeding growth in competition in the Italian fixed-line market."
Telecom Italia has denied the claim and in a statement said it will show the "absolute correctness" of its actions.
The company has already been found guilty of breaching competition rules in a separate case earlier this year.
In May, the Italian regulator fined Telecom Italia around €104 million (£90 million) for abusing its dominant control of network infrastructure, a decision which the firm is currently appealing.
Vodafone, which does not have a fixed line network in the country, is currently seeking to offer combined phone, Internet and television packages in Italy and across Europe.
The company recently became embroiled in the Edward Snowden spying scandal, with new documents claiming Vodafone supplied its data to UK spy agency GCHQ.