Italy: The 2021 Annual Law for Market and Competition

On August 5, 2022, the Italian Parliament adopted the 2021 Yearly Legislation for Market and Competitors (the “2021 Level of competition Law”), [1] the intention of which is to adapt the Italian method to EU competitors policies and policies and to enhance and liberalize markets influenced by regulatory or financial boundaries. The law reflects most of the key proposals submitted to the Authorities by the Italian Levels of competition Authority (AGCM or “ICA“) in March 2021 and is also section of the essential methods to which Italy is dedicated in buy to accomplish the aims of the Nationwide Plan for Restoration and Resilience (or “PNNR”).

The 2021 Competition Regulation launched improvements in numerous delicate sectors, these as a mapping and monitoring system for general public concessions, actions simplifying and reducing the administrative load for community authorizations and improving upon levels of competition and efficiency in general public services and in the realization of digital infrastructures. With unique regard to competitors legislation, it amended the Italian Competitiveness Act (Law no. 287/90) by:

• introducing vital procedural and substantive adjustments to merger control regulations
• introducing a “settlement technique” for undertakings included in competitors regulation investigations
• raising the ICA’s investigative powers.

Past but not least, the 2021 Level of competition Regulation also amended the procedures 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 business buyers on the electronic platforms they use to provide their goods or services (Art. 33).

Modifications to merger control regulations

Post 32 of the 2021 Level of competition Law amended the substantive test for the appraisal of focus (Short article 6 of the Italian Antitrust Act), aligning it with the “SIEC” test [2] delivered by Regulation (EC) no. 139/2004 (the “EU Merger Regulation”). Previously, the take a look at was dependent on the generation or strengthening of a dominant position, while this amendment permits the ICA to prohibit or impose circumstances on concentrations that fall quick of making a dominant position but are probably even so to “noticeably impede effective competitors”. Common cases would be in which a concentration creates an oligopoly circumstance in marketplaces afflicted by considerable barriers to entry or in which collusion tends to manifest.

Additional, it also provides in the power for the ICA to request undertakings to mandatorily notify a merger or focus that falls beneath the beforehand current turnover thresholds established out in Posting 16 of the Italian Antitrust Act, such as if the transaction is by now completed. Nevertheless, the ICA can request obligatory notification of transactions underneath the thresholds only if the adhering to cumulative conditions are satisfied:

• the transaction was accomplished in 6 months prior to the request
• the undertakings concerned exceed at minimum 1 of the previously existing 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 minimum two of the undertakings worried) or, alternatively, the undertakings worried obtained an aggregate international turnover in extra of €5 billion
• the transaction raises true pitfalls for competitors in the countrywide industry (or a sizeable section thereof), in watch also of the likely prejudice to the growth of tiny but revolutionary corporations.

The intent of these amendments is to deal with so-named “killer acquisitions” [3] and other “hole circumstances” of mergers that would have fallen outdoors of the scope of the ICA’s powers to scrutinize, block or impose disorders or treatments to protect successful competitiveness. The digital/media and wellbeing/pharmaceutical sectors are ordinarily affected by these worries, but the described changes implement across the board.

Further more, the 2021 Level of competition Regulation also totally aligns the principles to calculate the applicable turnover of financial institutions and economic institutions (for merger handle uses only) with individuals offered by the EU Merger Regulation, by replacing the just one-tenth of whole property rule employed to work out turnover with the standards similar to the financial earnings of such institutions.

Additionally, it de facto absolutely aligns the requirements to distinguish involving joint ventures that constitute a concentration and all those that do not by resorting to the similar difference as involving “whole-function” and “partial-functionality” joint ventures applied by the European Fee. Consequently, pursuant to amended Short article 5(3) of legislation 287/90, any concentrative (i.e. complete-purpose) joint undertaking that may possibly also entail coordination of the competitive conduct of the mother companies (to the extent they remain impartial competition in any market place exterior of the joint enterprise) will have to be assessed in the context of the merger manage process, nevertheless on the foundation of the substantive parameters on the prohibition of anti-competitive agreements (Write-up 101 TFEU or Write-up 2 of law 287/90). Previously, if the joint undertaking was deemed to entail these types of coordination it would have precluded the ICA from applying the merger management rules and course of action, irrespective of whether or not the joint enterprise could be deemed entire purpose beneath the standards used by the European Fee pursuant to the EU Merger Regulation.

Presumption of financial dependence on digital platforms

By amending Report 9 of regulation no. 192/1998 on abuse of financial dependence, Posting 33 of the 2021 Competitiveness Legislation introduced a (rebuttable) presumption of economic dependence of company people on electronic platforms that play a “critical job” in achieving end buyers or suppliers. Notably, it will have to be witnessed whether this presumption will use only to so-named “gatekeepers” (as described in the Digital Markets Act) or, somewhat, to a broader category of platforms. This may well be clarified by guidelines that could be issued by the Authorities in cooperation with the ICA.

More, the regulation integrates the non-exhaustive listing of common types of abusive carry out with unique illustrations relating to digital platforms, namely: (i) supplying insufficient facts on the scope or high-quality of the supplied support (ii) imposing non-reciprocal obligations not justified by the form or articles of the exercise done and (iii) limiting the means to use substitute vendors for the exact same support, including by imposing additional fees or unilateral conditions. Notably, the ultimate textual content of the regulation did not include things like specified additional kinds of perform that the ICA experienced proposed which include, in distinct, restricting interoperability and portability of information and tying and bundling practices. The new amendments will occur into pressure from October 31, 2022.

Settlement procedure

Report 34 of the 2021 Competitors Law introduced in a new technique that the events in an ICA investigation of a breach of opposition procedures can access in order to settle the situation with a lessen fine in exchange for an admission of the infringement. This new settlement technique displays the exact technique that exists at the EU stage in the context of the European Commission’s antitrust investigations. In unique, the amended variation of Short article 14-quater of the Italian Antitrust Legislation now lays down the primary methods of the procedure, developing that the ICA ought to give the get-togethers to the investigation a expression by which they will have to declare their willingness to start out settlement discussions.

Investigative powers of the Competitors Authority

Post 35 of the 2021 Levels of competition Regulation improves the investigative powers of the ICA by enabling it to impose fines on any individual or entity failing to give details or documentation asked for, including outdoors of the context of a official investigation. Formerly, the ICA could impose such fines only in relationship with requests for facts or paperwork formulated following formal proceedings for breach of opposition regulation experienced 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), posted in Gazzetta Ufficiale, Serie Generale no. 188 of August 12, 2021. The law entered into power on August 27, 2022.

[2] SIEC stands for “Substantial Impediment to Powerful Levels of competition”. Report 2(2) and (3) of the EU Merger Regulation provide that a concentration can be declared incompatible with the Union market place if it “noticeably impedes helpful competitiveness […] in certain as a final result of the development or strengthening of a dominant situation”. The same take a look at is now furnished for by the Italian merger control rules.

[3] Killer acquisitions refer to those acquisitions by which an current incumbent in a particular marketplace acquires a new technology or innovative firm that, inspite of still acquiring to start its market place functions and not acquiring important turnover, nevertheless represents a danger to the obtaining company’s monopolistic or dominant placement. These acquisitions usually slide underneath the countrywide or turnover thresholds that bring about a prior obligatory notification pursuant to countrywide or EU merger manage policies and, thus, may possibly only be detected immediately after their completion, with much less prospects of stopping or remedying the damage to competitors.

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