Vodafone is suing Telecom Italia for Euro 1bn in damages. The telecoms giant claims Telecom Italia has abused its dominant position in its home market.
Vodafone claims Telecom Italia committed abuses between 2008 and 2013, 'with the intention and effect of impeding growth in competition in the Italian fixed-line market.'
Telecom Italia denies the claim.
The move follows Italy's competition authorities decision to fine Telecom Italia Euro 104m ($138m) in May this year for abusing its dominant market position.
Telecom Italia, which runs Italy's biggest fixed-line telephone network, said it will appeal against the fine.
Vodafone Italy claims that Telecom Italiaprevented it effectively competinge in the Italian market causing it 'to lose existing and potential customers through predatory activities'.
Vodafone Italy also claims that it was forced to pay 'artificially high costs in order to compete in the market' restricting its ability to grow its fixed-line business in Italy.
The lawsuit has been filed at the Court of Milan.
Vodafone Italy is 77% owned by the British Vodafone Group, with the rest held by the group's US partner, Verizon.