Italy: The 2021 Annual Law for Market and Competition

On August 5, 2022, the Italian Parliament adopted the 2021 Once-a-year Legislation for Market and Level of competition (the “2021 Competitiveness Legislation”), [1] the aim of which is to adapt the Italian program to EU level of competition rules and insurance policies and to increase and liberalize marketplaces affected by regulatory or financial obstacles. The law reflects most of the vital proposals submitted to the Authorities by the Italian Opposition Authority (AGCM or “ICA“) in March 2021 and is also element of the critical methods to which Italy is fully commited in get to attain the aims of the National System for Restoration and Resilience (or “PNNR”).

The 2021 Level of competition Legislation launched improvements in many delicate sectors, these as a mapping and checking system for public concessions, steps simplifying and lowering the administrative stress for community authorizations and increasing competitiveness and performance in community providers and in the realization of electronic infrastructures. With certain regard to competition law, it amended the Italian Competitors Act (Legislation no. 287/90) by:

• introducing essential procedural and substantive alterations to merger regulate policies
• introducing a “settlement method” for undertakings associated in opposition regulation investigations
• increasing the ICA’s investigative powers.

Final but not the very least, the 2021 Competition Legislation also amended the policies on abuse of economic dependence – enshrined in Regulation no. 192/1998 and enforced by the ICA – by introducing a rebuttable presumption of economic dependence of business enterprise buyers on the electronic platforms they use to market their items or products and services (Art. 33).

Alterations to merger command guidelines

Article 32 of the 2021 Competition Legislation amended the substantive check for the appraisal of focus (Write-up 6 of the Italian Antitrust Act), aligning it with the “SIEC” check [2] furnished by Regulation (EC) no. 139/2004 (the “EU Merger Regulation”). Previously, the exam was dependent on the generation or strengthening of a dominant position, whereas this amendment enables the ICA to prohibit or impose problems on concentrations that drop shorter of generating a dominant position but are most likely nonetheless to “significantly impede efficient competitiveness”. Regular instances would be where a concentration generates an oligopoly situation in marketplaces influenced by sizeable boundaries to entry or in which collusion tends to come about.

Even more, it also provides in the energy for the ICA to request undertakings to mandatorily notify a merger or focus that falls below the beforehand existing turnover thresholds set out in Article 16 of the Italian Antitrust Act, together with if the transaction is currently completed. On the other hand, the ICA can request necessary notification of transactions under the thresholds only if the next cumulative disorders are achieved:

• the transaction was completed within just six months prior to the request
• the undertakings worried exceed at the very least 1 of the formerly existing turnover thresholds (i.e., the combination threshold of €517 million in domestic turnover, or the specific threshold of €31 million in domestic turnover posted by at least two of the undertakings anxious) or, alternatively, the undertakings concerned accomplished an combination world-wide turnover in excessive of €5 billion
• the transaction raises authentic hazards for competition in the countrywide marketplace (or a significant component thereof), in see also of the probable prejudice to the enhancement of tiny but revolutionary firms.

The intent of these amendments is to address so-named “killer acquisitions” [3] and other “gap situations” of mergers that would have fallen outside of the scope of the ICA’s powers to scrutinize, block or impose problems or treatments to preserve helpful competition. The digital/media and wellness/pharmaceutical sectors are generally affected by these issues, but the described variations implement across the board.

Even further, the 2021 Level of competition Legislation also totally aligns the policies to determine the relevant turnover of banks and fiscal establishments (for merger regulate reasons only) with all those delivered by the EU Merger Regulation, by changing the a person-tenth of overall assets rule utilized to estimate turnover with the standards relevant to the economic revenue of this kind of institutions.

In addition, it de facto completely aligns the conditions to distinguish among joint ventures that constitute a concentration and these that do not by resorting to the exact same difference as between “whole-operate” and “partial-functionality” joint ventures utilized by the European Commission. Consequently, pursuant to amended Short article 5(3) of legislation 287/90, any concentrative (i.e. complete-functionality) joint enterprise that could also entail coordination of the aggressive conduct of the mother corporations (to the extent they keep on being independent competition in any market place outside the house of the joint venture) will have to be assessed in the context of the merger management treatment, even though on the basis of the substantive parameters on the prohibition of anti-competitive agreements (Posting 101 TFEU or Post 2 of regulation 287/90). Earlier, if the joint enterprise was deemed to entail this kind of coordination it would have precluded the ICA from applying the merger handle guidelines and process, irrespective of irrespective of whether or not the joint undertaking could be considered entire operate below the criteria used by the European Fee pursuant to the EU Merger Regulation.

Presumption of financial dependence on digital platforms

By amending Posting 9 of law no. 192/1998 on abuse of economic dependence, Report 33 of the 2021 Level of competition Legislation released a (rebuttable) presumption of economic dependence of organization people on electronic platforms that engage in a “very important position” in reaching stop end users or suppliers. Notably, it will have to be found no matter if this presumption will utilize only to so-identified as “gatekeepers” (as described in the Electronic Markets Act) or, rather, to a wider class of platforms. This could be clarified by pointers that could be issued by the Federal government in cooperation with the ICA.

Even more, the regulation integrates the non-exhaustive list of usual kinds of abusive conduct with certain illustrations concerning electronic platforms, specifically: (i) offering inadequate data on the scope or excellent of the furnished company (ii) imposing non-reciprocal obligations not justified by the type or information of the exercise done and (iii) restricting the skill to use different suppliers for the identical support, which include by imposing further expenses or unilateral situations. Notably, the remaining textual content of the law did not include specific supplemental types of carry out that the ICA had proposed which includes, in certain, restricting interoperability and portability of information and tying and bundling techniques. The new amendments will appear into force from Oct 31, 2022.

Settlement technique

Report 34 of the 2021 Competitors Regulation introduced in a new method that the get-togethers in an ICA investigation of a breach of competition guidelines can accessibility in buy to settle the case with a decrease wonderful in trade for an admission of the infringement. This new settlement procedure displays the identical technique that exists at the EU level in the context of the European Commission’s antitrust investigations. In individual, the amended model of Report 14-quater of the Italian Antitrust Regulation now lays down the most important techniques of the treatment, setting up that the ICA have to give the parties to the investigation a expression by which they ought to declare their willingness to start out settlement discussions.

Investigative powers of the Levels of competition Authority

Write-up 35 of the 2021 Opposition Regulation enhances the investigative powers of the ICA by enabling it to impose fines on any individual or entity failing to supply facts or documentation asked for, which includes exterior of the context of a formal investigation. Previously, the ICA could impose this kind of fines only in relationship with requests for information and facts or paperwork formulated after formal proceedings for breach of opposition regulation experienced been opened (or for a sector inquiry).

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[1] Law no. 118 of August 5, 2022 (Legge annuale per il mercato e la concorrenza 2021), published in Gazzetta Ufficiale, Serie Generale no. 188 of August 12, 2021. The regulation entered into power on August 27, 2022.

[2] SIEC stands for “Significant Impediment to Effective Competitors”. Write-up 2(2) and (3) of the EU Merger Regulation offer that a focus can be declared incompatible with the Union sector if it “noticeably impedes productive competitors […] in unique as a final result of the generation or strengthening of a dominant situation”. The similar exam is now presented for by the Italian merger management regulations.

[3] Killer acquisitions refer to those people acquisitions by which an existing incumbent in a specified marketplace acquires a new know-how or ground breaking business that, regardless of nonetheless owning to start out its market place operations and not possessing significant turnover, nevertheless represents a danger to the getting company’s monopolistic or dominant posture. These acquisitions normally drop down below the national or turnover thresholds that bring about a prior obligatory notification pursuant to countrywide or EU merger command regulations and, as a result, may well only be detected after their completion, with fewer possibilities of avoiding or remedying the harm to competition.

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