Italy: The 2021 Annual Law for Market and Competition

On August 5, 2022, the Italian Parliament adopted the 2021 Yearly Law for Sector and Competition (the “2021 Opposition Regulation”), [1] the goal of which is to adapt the Italian procedure to EU levels of competition rules and insurance policies and to boost and liberalize marketplaces influenced by regulatory or financial boundaries. The legislation displays most of the essential proposals submitted to the Federal government by the Italian Level of competition Authority (AGCM or “ICA“) in March 2021 and is also element of the essential ways to which Italy is committed in purchase to achieve the objectives of the Nationwide Program for Restoration and Resilience (or “PNNR”).

The 2021 Competitiveness Regulation launched innovations in lots of delicate sectors, this kind of as a mapping and monitoring method for community concessions, steps simplifying and lowering the administrative stress for general public authorizations and strengthening competitiveness and efficiency in community products and services and in the realization of electronic infrastructures. With unique regard to levels of competition regulation, it amended the Italian Levels of competition Act (Law no. 287/90) by:

• introducing important procedural and substantive variations to merger handle policies
• introducing a “settlement process” for undertakings associated in opposition legislation investigations
• rising the ICA’s investigative powers.

Final but not least, the 2021 Opposition Legislation also amended the rules on abuse of economic dependence – enshrined in Legislation no. 192/1998 and enforced by the ICA – by introducing a rebuttable presumption of financial dependence of organization users on the electronic platforms they use to sell their goods or services (Artwork. 33).

 

Variations to merger command principles

Post 32 of the 2021 Opposition Regulation amended the substantive take a look at for the appraisal of focus (Posting 6 of the Italian Antitrust Act), aligning it with the “SIEC” check [2] supplied by Regulation (EC) no. 139/2004 (the “EU Merger Regulation”). Previously, the take a look at was centered on the generation or strengthening of a dominant position, while this modification makes it possible for the ICA to prohibit or impose ailments on concentrations that tumble short of building a dominant placement but are most likely even so to “substantially impede productive level of competition”. Typical scenarios would be where a concentration results in an oligopoly state of affairs in markets afflicted by significant limitations to entry or in which collusion tends to come about.

More, it also brings in the power for the ICA to ask for undertakings to mandatorily notify a merger or focus that falls underneath the earlier present turnover thresholds established out in Article 16 of the Italian Antitrust Act, like if the transaction is presently concluded. Having said that, the ICA can ask for mandatory notification of transactions underneath the thresholds only if the subsequent cumulative ailments are met:

• the transaction was accomplished inside of six months prior to the ask for
• the undertakings involved exceed at the very least one particular of the formerly current turnover thresholds (i.e., the combination threshold of €517 million in domestic turnover, or the personal threshold of €31 million in domestic turnover posted by at least two of the undertakings anxious) or, alternatively, the undertakings concerned realized an aggregate international turnover in excessive of €5 billion
• the transaction raises genuine pitfalls for level of competition in the countrywide current market (or a significant component thereof), in check out also of the prospective prejudice to the development of smaller but progressive organizations.

The intent of these amendments is to handle so-termed “killer acquisitions” [3] and other “hole conditions” of mergers that would have fallen outdoors of the scope of the ICA’s powers to scrutinize, block or impose disorders or remedies to protect effective levels of competition. The electronic/media and wellness/pharmaceutical sectors are generally impacted by these problems, but the described alterations use across the board.

Additional, the 2021 Competition Regulation also totally aligns the rules to calculate the pertinent turnover of financial institutions and monetary establishments (for merger management purposes only) with individuals presented by the EU Merger Regulation, by changing the a person-tenth of total belongings rule made use of to estimate turnover with the criteria related to the financial profits of this sort of institutions.

Furthermore, it de facto fully aligns the conditions to distinguish among joint ventures that constitute a focus and all those that do not by resorting to the identical distinction as amongst “complete-function” and “partial-operate” joint ventures applied by the European Commission. Therefore, pursuant to amended Article 5(3) of legislation 287/90, any concentrative (i.e. comprehensive-function) joint venture that may also entail coordination of the competitive conduct of the mother firms (to the extent they continue to be independent competitors in any industry exterior of the joint venture) will have to be assessed in the context of the merger manage technique, however on the basis of the substantive parameters on the prohibition of anti-aggressive agreements (Short article 101 TFEU or Article 2 of regulation 287/90). Earlier, if the joint enterprise was deemed to entail these types of coordination it would have precluded the ICA from implementing the merger handle policies and course of action, irrespective of no matter if or not the joint venture could be considered total function beneath the conditions utilized by the European Fee pursuant to the EU Merger Regulation.

 

Presumption of financial dependence on electronic platforms

By amending Article 9 of regulation no. 192/1998 on abuse of economic dependence, Article 33 of the 2021 Level of competition Legislation introduced a (rebuttable) presumption of financial dependence of small business users on electronic platforms that engage in a “essential job” in reaching stop customers or suppliers. Notably, it will have to be observed no matter whether this presumption will use only to so-called “gatekeepers” (as described in the Electronic Marketplaces Act) or, fairly, to a broader category of platforms. This may be clarified by suggestions that could be issued by the Federal government in cooperation with the ICA.

Additional, the legislation integrates the non-exhaustive list of typical forms of abusive conduct with certain examples about electronic platforms, namely: (i) giving inadequate info on the scope or good quality of the furnished company (ii) imposing non-reciprocal obligations not justified by the style or written content of the action executed and (iii) proscribing the capacity to use alternate vendors for the very same assistance, which includes by imposing added costs or unilateral conditions. Notably, the closing textual content of the regulation did not include certain further varieties of conduct that the ICA had proposed including, in distinct, restricting interoperability and portability of data and tying and bundling procedures. The new amendments will arrive into pressure from Oct 31, 2022.

 

Settlement technique

Write-up 34 of the 2021 Levels of competition Regulation introduced in a new technique that the get-togethers in an ICA investigation of a breach of competitiveness procedures can accessibility in purchase to settle the scenario with a decrease great in trade for an admission of the infringement. This new settlement technique reflects the exact treatment that exists at the EU stage in the context of the European Commission’s antitrust investigations. In unique, the amended version of Post 14-quater of the Italian Antitrust Regulation now lays down the primary measures of the course of action, developing that the ICA must give the events to the investigation a phrase by which they have to declare their willingness to start out settlement conversations.

 

Investigative powers of the Competitiveness Authority

Article 35 of the 2021 Opposition Regulation improves the investigative powers of the ICA by enabling it to impose fines on any person or entity failing to give information or documentation asked for, like outside of the context of a official investigation. Beforehand, the ICA could impose this sort of fines only in relationship with requests for facts or files formulated just after formal proceedings for breach of competitors legislation had been opened (or for a sector inquiry).

 

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[1] Regulation no. 118 of August 5, 2022 (Legge annuale for each il mercato e la concorrenza 2021), published in Gazzetta Ufficiale, Serie Generale no. 188 of August 12, 2021. The legislation entered into force on August 27, 2022.

[2] SIEC stands for “Substantial Impediment to Efficient Level of competition”. Report 2(2) and (3) of the EU Merger Regulation deliver that a focus can be declared incompatible with the Union marketplace if it “appreciably impedes powerful opposition […] in unique as a end result of the creation or strengthening of a dominant situation”. The similar examination is now delivered for by the Italian merger regulate regulations.

[3] Killer acquisitions refer to all those acquisitions by which an existing incumbent in a particular sector acquires a new engineering or progressive company that, inspite of nevertheless having to start off its industry operations and not acquiring major turnover, nonetheless represents a risk to the getting company’s monopolistic or dominant placement. These acquisitions normally drop below the countrywide or turnover thresholds that trigger a prior necessary notification pursuant to nationwide or EU merger management procedures and, therefore, could only be detected immediately after their completion, with less opportunities of preventing or remedying the harm to opposition.

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The entry was first published in the pursuing newsletter.