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situation: Over the past year, the Italian Competition Law (Law 287/1990) has undergone a number of amendments aimed at strengthening the enforcement powers of the Italian Competition Authority (“ICA”). At the time of writing, the Italian Parliament has approved changes to the law aimed at aligning Italy’s merger control schedule with procedures before the European Commission under the European Union (“EU”) Merger Regulation.
result: The reforms go beyond the long-awaited harmonization of domestic law with EU rules. This will pave the way for more aggressive enforcement of merger control rules and expand the ICA’s investigative powers. As a result of the reforms, ICA can now expect: (i) Authority to review competitively sensitive and substandard mergers. (ii) broader substantive tests to deter anticompetitive transactions; (iii) new settlement procedures for cartels and unilateral actions; (iv) new investigative powers outside of formal antitrust and merger proceedings; (v) stricter provisions regarding abuse of economic dependence in the digital sector;
Looking to the future:Changes to Italy’s competition law are likely to result in further scrutiny and enforcement across the board, with a particular focus on high-tech and innovative industries.
I. New merger control rules
New post-mortem examination of “sub-threshold transactions”
Under Italy’s new competition law, merger transactions that do not meet Italian turnover standards (so-called “substandard transactions”) may still be reviewed at the request of the ICA, provided that three conditions are met: there is.
- At least one of the two application criteria applicable in Italy is met (total sales in Italy exceeding EUR 532 million or separate sales in Italy by each of at least two related businesses); 32 million euros or more). Or if the total turnover of all related businesses worldwide exceeds 5 billion euros.
- This transaction raises serious competition concerns in the Italian market.and
- The ICA requires parties to submit notifications no later than six months after completion of the transaction.
Regarding the requirement that a transaction raise significant competition concerns, the ICA recently issued guidelines clarifying that the transactions most likely to be scrutinized are: (i) Acquisition of innovators. (ii) so-called “killer acquisitions” of promising start-ups in high-tech industries; (iii) Acquisitions of strategic companies with significant assets but low sales. However, transactions involving more traditional industries may also be subject to increased scrutiny if they have a significant competitive impact on the Italian market.
From a procedural perspective, parallel to the ICA’s power to require parties to notify parties of substandard transactions, companies may voluntarily voluntarily seek the ICA’s opinion on whether a transaction is subject to review before closing. They also have the right to file a notice. This tool should be used carefully to avoid suggesting that the transaction may pose competitive issues.
The risk of post-closing review by the ICA adds an additional layer of regulation for below-the-line transactions and should be taken into account when negotiating the terms of such transactions (conditions precedent, execution/closing dates) .
SIEC test to mitigate lack of enforcement in “gap cases”
The old dominance test for assessing reportable transactions (“creating or strengthening a dominant position in the domestic market”) is now consistent with the legal test applicable to: has been replaced by “Severe Failure”). EU Merger Regulation.
The SIEC test is broader in scope than the dominance test because it can detect so-called “gap cases” (i.e., concentrations in oligopolistic markets that do not create or strengthen a dominant position of an individual or group, but still raise competitive concerns). It is intended to be broad.
Joint Ventures: Complete Functional Requirements and “Spillover” Assessment
The treatment of joint ventures is compliant with the EU Merger Regulation. As a result, joint ventures that meet the full functional requirements (i.e., joint ventures that can operate as full-fledged independent businesses in the market) will be treated as notifiable concentrations, regardless of whether they give rise to coordination risks between the parent companies. Become. .
New deadline for Phase II merger investigation
In accordance with the EU Merger Regulation, the period for Phase II investigations was recently extended from 45 to 90 calendar days. The duration of the Phase I investigation will be maintained within his 30 calendar days from the application.
II. ICA’s new enforcement tools
Completely new investigative powers beyond formal antitrust and merger investigations
The ICA currently has the power to request information and documents outside of formal antitrust investigations or merger proceedings “at any time” upon request: (i) clearly indicates the underlying legal basis; (ii) has a proportionate scope; (iii) give the recipient a reasonable deadline to respond (i.e., up to 60 days, with extensions available upon reasoned request);
The ICA may impose a fine of up to 1% of the turnover of the recipient of the request for failure to comply with the request or for inaccurate, partial or misleading information. Immediately after the new rules came into force, the ICA fined two companies for failing to meet deadlines for providing information requested outside of formal merger review procedures.
Whistleblowing online platform
To assist in the identification and investigation of clandestine cartels, the ICA has introduced a new whistleblowing online platform, following best practice from the European Commission and other national competition authorities within the EU. The ICA launched at least two investigations in 2023 following complaints through its newly introduced whistleblower investigation tool.
New and extensive payment procedures
Italy’s new competition law also introduces a settlement procedure that allows companies to benefit from reduced fines if they admit wrongdoing. This procedure largely mirrors the pre-EC procedure, but goes beyond anti-competition agreements to also cover unilateral conduct (i.e. abuse of dominance), with higher penalty reductions (for all monopolies except secret cartels). (up to 20%) for violations of the Prohibition Act.
ICA powers related to digital markets law
The new Italian Competition Law gives the ICA the power to enforce EU Regulation 2022/1925 on competitive and fair markets in the digital sector (Digital Markets Law), and to ensure that certain digital platforms with market power ( So-called “gatekeepers”, preventing the exploitation of market power between different digital services, reducing barriers to entry or expansion across digital markets, facilitating switching and multihoming between services, and how user data is stored. There are many regulatory obligations to control the processing and where such data must be made available not only to users but also to third-party competitors.
As a result, the ICA will have special powers to carry out investigations and inspections, and to impose fines, in order to assist the European Commission in investigating possible violations of digital market law in Italy.
III.Abuse of economic dependence in the digital economy
Italy’s new competition bill also expanded the scope of the law on abuse of economic dependence (i.e. Law No. 192 of 1998) to cover relationships between large digital platforms and weaker commercial partners.
In particular, the bill introduces a rebuttable presumption of economic dependence from digital platforms that play a “significant role” in reaching end users or suppliers, and would allow for a number of fraudulent practices, including: It is listed. (i) Insufficient information regarding the digital platform, scope or quality of services provided; (ii) request unsolicited services that are not justified by the nature or content of the activity being performed; (iii) adopt practices that prohibit or discourage the use of different providers for the same services through unilateral terms or additional costs not regulated by contractual arrangements or existing licenses;
In addition to the risk of civil litigation, violations of the prohibition on abuse of economic dependence are subject to antitrust fines of up to 10% of the infringer’s most recent audited sales.
Three important points
- Italy’s competition law reform goes far beyond simply aligning national law with EU regulations and provides the ICA with a more effective investigative toolkit. This allows for stronger competition overall.
- The ICA’s new authority to review transactions that fall below competitively sensitive standards introduces further complexity and legal uncertainty, and requires antitrust lawyers to tread carefully when advising on such transactions. there will be.
- High-tech, life sciences, and other innovative industries may face increased antitrust scrutiny as a result of this reform.