Strengthening of the powers of the Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato) (“ICA”)
Mergers
The Competition Law amends the test applied by the ICA for the assessment of mergers by aligning it with the test adopted at the EU level. In particular, the Competition Law amends Article 6(1) of Italian Law no. 287 of 10 October 1990 (“Law 287/1990”) which, pursuant to the previous wording, provided that the test was the assessment by the ICA as to whether the merger would lead to the establishment or strengthening of a dominant position in the domestic market, as a result of which competition would be substantially and permanently eliminated or reduced. Conversely, according to the new wording, the ICA will have to verify whether the notified transaction significantly impedes effective competition in the domestic market or in a relevant part thereof, particularly as a result of establishing or strengthening a dominant position.
The Competition Law, by listing the factors to be taken into account in assessing a merger’s impact on the market, specifically addresses the issue of innovative start-ups by expressly providing that the ICA may assess the anti-competitive effects of acquisitions of control over small enterprises that are characterised by innovative strategies, including with respect to new technologies.
An important change in the merger control regulations concerns the introduction of paragraph 1 bis to Article 16 of Italian Law no. 287/1990. Under this provision, the ICA may also request the notification of transactions that would otherwise fall outside of the scope of its control (because they do not meet both of the cumulative thresholds provided for in Article 16(1) of Italian Law no. 287/90) if the transaction exceeds only one of the two turnover thresholds referred to in paragraph 1, or in case the total worldwide turnover achieved by the set of undertakings concerned exceeds EUR 5 billion. This may be the case when the ICA deems that there are actual competitive risks in the domestic market, or in a relevant part thereof, also taking into account the detrimental effects on the development and distribution of small undertakings that characterised by innovative strategies, and provided that no more than six months have elapsed since the transaction was concluded.
Changes are also introduced to the criteria for identifying the relevant turnover for merger transactions involving banks and insurance companies, which are now in line with the criteria applied at EU level.
In respect of joint ventures, the Competition Law clarifies that the establishment of a joint venture is subject to notification when such joint venture permanently performs all the functions of an autonomous economic entity. It specifies, moreover, that cooperative objects or effects of a such a concentrative joint venture will be analysed in accordance with principles applying to anti-competitive agreements or concerted practices and indicates some of the criteria it will apply in its analysis.
Abuse of economic dependence
The Competition Law also expands the scope of application of the provisions on the abuse of economic dependence by introducing a rebuttable presumption of economic dependence where an undertaking uses the intermediation services provided by a digital platform that plays a decisive role in reaching end-users or suppliers, including in terms of network effects or data availability.
The Competition Law also introduces a descriptive list of practices that are considered to be abusive when they are carried out by digital platforms, which may also consist in providing insufficient information or data on the service provided, in requesting unilateral services that are not justified by the activity carried out, or in hindering the use of a different provider for the same service.
It is also provided that civil actions that may be brought under Article 9 of the sub-contracting law shall be brought before the Courts’ specialised business divisions.
The new provisions on abuse of economic dependence will apply as from 31 October 2022.
Settlement procedure
The Competition Law introduces another important new development by making the settlement procedure available also for proceedings brought by the ICA.
To this end, the new Article 14-quater of Law 287/1990 provides that the ICA may set a time limit within which the undertakings concerned may state in writing their willingness to participate in discussions with a view to possibly submitting settlement proposals.
Article 14-quater identifies the essential features of the settlement procedure, which is also available for cases of abuse of dominant position, including the requirement for the company to acknowledge its participation in the infringement of Articles 2 and 3 of Law 287/1990 (and similar EU provisions).
Investigative powers
The Competition Law also gives the ICA the power to request information and documents at any time and therefore also separately from formal proceedings.
Any refusal or failure to provide the requested information or documents is subject to the administrative sanctions provided for in Article 14(5) of Law 287/1990.
This power applies both to the application of the provisions on cartels and abuses and to mergers between undertakings.
Other new features
Other new features introduced by the Competition Law which are particularly relevant are:
- Next-generation infrastructures: the Competition Law introduces i) stricter requirements to justify denial of access to existing physical infrastructures; ii) coordination obligations between physical infrastructure managers and network operators for the development of high-speed communication networks; iii) an obligation for telephony and electronic communication service operators to obtain express consent for all subscription services offered by them and by third parties.
- Waste management: non-household users who bring their waste outside the service and can prove that they have sent it for recycling are excluded from paying the relevant tariff for a quantity corresponding to the quantity brought in. These users can choose whether to use the public service or to turn to the market for a period of no less than two years. It is also provided that ARERA (Regulatory Authority for Energy, Networks and the Environment) shall establish appropriate technical and quality standards for the performance of disposal and recovery activities, verifying minimum quality levels and the coverage of efficient costs.
Authored by Sabrina Borocci, Francesca Moretti, and Aurora Muselli.
