Italy: The 2021 Annual Law for Market and Competition

On August 5, 2022, the Italian Parliament adopted the 2021 Annual Legislation for Marketplace and Levels of competition (the “2021 Competitors Law”), [1] the goal of which is to adapt the Italian method to EU competitors rules and guidelines and to improve and liberalize markets influenced by regulatory or economic boundaries. The law demonstrates most of the crucial proposals submitted to the Government by the Italian Levels of competition Authority (AGCM or “ICA“) in March 2021 and is also portion of the essential techniques to which Italy is dedicated in purchase to reach the goals of the Countrywide Program for Restoration and Resilience (or “PNNR”).

The 2021 Levels of competition Regulation introduced innovations in lots of delicate sectors, this sort of as a mapping and monitoring system for public concessions, actions simplifying and decreasing the administrative load for public authorizations and improving levels of competition and performance in community companies and in the realization of electronic infrastructures. With precise regard to competitors law, it amended the Italian Levels of competition Act (Regulation no. 287/90) by:

• introducing important procedural and substantive modifications to merger management policies
• introducing a “settlement method” for undertakings associated in competition regulation investigations
• escalating the ICA’s investigative powers.

Past but not least, the 2021 Competitors Regulation also amended the regulations on abuse of financial dependence – enshrined in Law no. 192/1998 and enforced by the ICA – by introducing a rebuttable presumption of economic dependence of organization end users on the digital platforms they use to promote their products or expert services (Artwork. 33).

 

Changes to merger manage principles

Short article 32 of the 2021 Competition Regulation amended the substantive test for the appraisal of focus (Article 6 of the Italian Antitrust Act), aligning it with the “SIEC” take a look at [2] offered by Regulation (EC) no. 139/2004 (the “EU Merger Regulation”). Previously, the take a look at was based on the creation or strengthening of a dominant posture, while this modification lets the ICA to prohibit or impose circumstances on concentrations that drop brief of developing a dominant situation but are probable nevertheless to “considerably impede productive opposition”. Standard circumstances would be where by a concentration generates an oligopoly circumstance in markets affected by major limitations to entry or in which collusion tends to occur.

Further, it also provides in the electricity for the ICA to request undertakings to mandatorily notify a merger or concentration that falls under the formerly existing turnover thresholds set out in Short article 16 of the Italian Antitrust Act, which include if the transaction is currently concluded. Even so, the ICA can ask for required notification of transactions underneath the thresholds only if the following cumulative circumstances are achieved:

• the transaction was accomplished in just 6 months prior to the ask for
• the undertakings worried exceed at least 1 of the previously present turnover thresholds (i.e., the aggregate 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 involved) or, alternatively, the undertakings concerned realized an aggregate international turnover in excessive of €5 billion
• the transaction raises true challenges for level of competition in the nationwide marketplace (or a considerable element thereof), in view also of the potential prejudice to the development of modest but modern enterprises.

The intent of these amendments is to deal with so-known as “killer acquisitions” [3] and other “hole scenarios” of mergers that would have fallen outdoors of the scope of the ICA’s powers to scrutinize, block or impose disorders or treatments to maintain efficient level of competition. The electronic/media and health/pharmaceutical sectors are typically afflicted by these considerations, but the explained alterations implement throughout the board.

Further more, the 2021 Competitiveness Regulation also completely aligns the guidelines to compute the related turnover of banking institutions and fiscal establishments (for merger command applications only) with all those offered by the EU Merger Regulation, by changing the 1-tenth of whole assets rule applied to work out turnover with the criteria related to the financial cash flow of this kind of establishments.

Furthermore, it de facto fully aligns the criteria to distinguish among joint ventures that represent a concentration and all those that do not by resorting to the exact distinction as between “complete-functionality” and “partial-function” joint ventures used by the European Fee. Therefore, pursuant to amended Short article 5(3) of legislation 287/90, any concentrative (i.e. full-perform) joint venture that may perhaps also entail coordination of the competitive conduct of the mom corporations (to the extent they keep on being independent competition in any sector outside of the joint venture) will have to be assessed in the context of the merger command treatment, however on the foundation of the substantive parameters on the prohibition of anti-competitive agreements (Posting 101 TFEU or Report 2 of law 287/90). Earlier, if the joint venture was deemed to entail these coordination it would have precluded the ICA from implementing the merger command principles and process, irrespective of whether or not the joint undertaking could be deemed entire operate below the requirements applied by the European Commission pursuant to the EU Merger Regulation.

 

Presumption of economic dependence on digital platforms

By amending Short article 9 of legislation no. 192/1998 on abuse of financial dependence, Article 33 of the 2021 Opposition Legislation introduced a (rebuttable) presumption of economic dependence of enterprise consumers on electronic platforms that perform a “crucial purpose” in achieving conclude buyers or suppliers. Notably, it will have to be witnessed no matter if this presumption will utilize only to so-termed “gatekeepers” (as defined in the Digital Markets Act) or, rather, to a broader category of platforms. This might be clarified by rules that could be issued by the Authorities in cooperation with the ICA.

Even further, the regulation integrates the non-exhaustive listing of common kinds of abusive conduct with unique examples concerning digital platforms, particularly: (i) providing insufficient data on the scope or quality of the provided assistance (ii) imposing non-reciprocal obligations not justified by the style or articles of the action executed and (iii) restricting the capability to use choice suppliers for the identical service, like by imposing more expenses or unilateral situations. Notably, the last text of the legislation did not consist of specific extra kinds of perform that the ICA experienced proposed together with, in certain, restricting interoperability and portability of information and tying and bundling practices. The new amendments will occur into power from October 31, 2022.

 

Settlement process

Posting 34 of the 2021 Levels of competition Law introduced in a new method that the functions in an ICA investigation of a breach of competition rules can access in get to settle the scenario with a decrease wonderful in trade for an admission of the infringement. This new settlement process displays the identical treatment that exists at the EU amount in the context of the European Commission’s antitrust investigations. In particular, the amended version of Short article 14-quater of the Italian Antitrust Law now lays down the main steps of the treatment, setting up that the ICA will have to give the events to the investigation a term by which they should declare their willingness to get started settlement conversations.

 

Investigative powers of the Levels of competition Authority

Write-up 35 of the 2021 Level of competition Legislation improves the investigative powers of the ICA by enabling it to impose fines on any particular person or entity failing to offer data or documentation requested, including outside the house of the context of a formal investigation. Beforehand, the ICA could impose this kind of fines only in connection with requests for information and facts or paperwork formulated after official proceedings for breach of competition law had been opened (or for a sector inquiry).

 

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[1] Legislation 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 Opposition”. Report 2(2) and (3) of the EU Merger Regulation offer that a focus can be declared incompatible with the Union market place if it “considerably impedes helpful competition […] in particular as a outcome of the creation or strengthening of a dominant position”. The similar examination is now provided for by the Italian merger regulate regulations.

[3] Killer acquisitions refer to individuals acquisitions by which an existing incumbent in a sure current market acquires a new technological innovation or progressive enterprise that, inspite of however getting to get started its marketplace functions and not getting important turnover, even so represents a danger to the attaining company’s monopolistic or dominant posture. These acquisitions ordinarily tumble underneath the countrywide or turnover thresholds that result in a prior necessary notification pursuant to countrywide or EU merger control rules and, so, may only be detected just after their completion, with fewer options of protecting against or remedying the harm to competitiveness.

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