During Sunday's match against Juventus in Turin, hundreds of Milan supporters shouted "We are not Neapolitans" and other offensive chants which the Naples daily Il Mattino said reflected long-standing contempt for the south by northern clubs.
In the fiercely territorial world of Italian football, abusive rivalry between supporters of clubs in the rich north and those in the poorer south is not uncommon and Milan officials reacted with shock to the verdict by Serie A sporting judges.
The punishment means that Milan, 12th in Serie A after the 3-2 loss to Juve, will play their next home game on Oct. 19 against Udinese behind closed doors.
"To say I'm furious would be putting it mildly," Milan chief executive Adriano Galliani told reporters on Tuesday. "I understand that racism is a big problem, a problem everywhere in the world but...here in Italy we have invented territorial discrimination for ourselves.
"I called (Italian football) president (Giancarlo) Abete to ask whether he thinks that this rule is just. What I ask is that it is abolished."
A football federation (FIGC) spokesman said the rules were being applied in line with UEFA guidelines.
"It's not as though the rules are imposed on any club. It's down to a judge to decide on the punishment, and they can make their case against any decision," he said.
FIGC president Abete added: "Italian legislation follows UEFA proposals that apart from anything else have been the subject of UEFA and FIFA congresses. We are in an international context in which a different way of dealing with discrimination is required."
Mayor of Naples Luigi De Magistris backed the decision to punish Milan.
"There isn't a first and second division of discrimination. Often Neapolitans have been the subject of unacceptable levels of discrimination," said De Magistris.
The ruling has enraged hardcore "ultra" fans, who are fed up with having sections of stadiums and entire grounds closed for what they see as the harmless expression of sporting rivalry.
Napoli fans in the Curva B section of the San Paolo stadium on Sunday brought out a banner referring to previous chants by rivals which read: "Naples cholera-sufferers. Now close our curva!".
They then began singing the offending chants which follow them up and down the country.
"Welcome to the country where teasing and making fun (of opponents) motivate sanctions that limit freedom. In Italy we are seeing in recent days a ridiculous interpretation of the rules that is making us the targets of a senseless and unjustifiable attack," said a statement on curvasudmilano.com.
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