Following the Italian Competition Authority (“ICA”)’s proposal for pro-competitive legislative changes submitted on 23 March 2021, briefly summarised in our previous article, on 4 November the Italian Government approved the draft of the Annual Competition Law (hereinafter the “Draft Law”), which will be then sent to the Parliament for formal adoption through the legislative process (this generally takes between 6 and 17 months).
The Draft Law confirms that certain radical changes in the ICA’s enforcement powers as regards both the antitrust and the merger control area are underway, such as, the reportability of certain strategic concentrations, the reform of the merger thresholds for banks and financial institutions, the introduction of a settlement procedure, the adoption of the SIEC test and the endorsement of a rebuttable presumption of dominance for digital platforms.
Also, the adoption of the Draft Law, boosted by the paramount importance attributed to the promotion of competition by President Mario Draghi and by the National Recovery and Resilience Plan (PNRR), intervenes on a number of economic sectors such as, local public services and transport, energy, waste management systems, health protection, and electronic communications networks.
Strengthening of antitrust enforcement powers
Substantive changes are introduced under the Italian merger control regime in order to ensure greater consistency with the EU regulatory framework. Basically:
Also transactions which meet only one of the two legal thresholds or where the total worldwide turnover of the companies that are parties to the concentration exceeds € 5 billion will be included within the scope of the Italian regulation on merger control provided that a fumus of concrete anticompetitive risks exists and that the concentration has been carried out in the last 6 months. In that case, the ICA may request the companies to notify within 30 days.
Cooperative, full functioning joint ventures will be reportable.
The same criteria for the calculation of the relevant turnover in case of banks and financial institutions adopted at the EU level will apply also in Italy.
A finding of dominance will be no longer necessary in order to prohibit the concentration, although dominance will still be considered the main form of anti-competitive behaviour. Indeed, the current substantive test for review of mergers consisting in the “creation or strengthening of a dominant position on the national market” will be replaced with the “significant impediment to effective competition” (SIEC) test, adopted at EU level.
Moreover, it is provided as follows:
A rebuttable presumption of economic dependence in commercial relations with a company offering the intermediation services of a digital platform, where the latter plays a decisive role in reaching end-users and/or suppliers, including in terms of network effects and/or data availability.
A settlement procedure in administrative proceedings conducted by the competition authority.
The strengthening of the ICA’s powers to obtain information and documents even outside formal investigation proceedings, by giving it the power to impose administrative sanctions in case of refusal to or delay in providing the requested information or documents or in case of misleading or incomplete information.
Measures to remove obstacles to the entry of new operators in the concessions sector
The Draft Law provides for a delegation of powers to the Government to set up an information system for surveying the concessions of assets, in order to promote publicity and transparency of the main data and information relating to all concessionary relationships. Moreover, competitive procedures must be guaranteed in relation to concessions of: (a) port services, (b) natural gas distribution and (c) large hydroelectric. In this latter case, the process of assigning concessions must be started by 31 December 2022: after this deadline, the Ministry of Infrastructure and Sustainable Mobility shall promote the exercise of replacement powers if the Regions have not adopted the relevant regional law.
Local public services and transport
Reorganisation of local public service, as well as the revision of non-scheduled public transport have been also delegated to the Government with the caveat that specific features of web applications that use technology platforms to interconnect passengers and drivers must be taken into account.
Energy and environmental sustainability
The implementation of charging stations is also strengthened. In particular, the Draft Law establishes criteria for the selection of operators that will be responsible for the setting up of electric recharging infrastructures by local authorities and motorway concessionaires so that the choice is made through transparent and non-discriminatory competitive procedures.
Waste management systems
In order to encourage greater competitive dynamism in the provision of waste management services and to guarantee the objectives of the circular economy, the minimum duration of the agreements that non-domestic users must enter into for the collection and recovery of their waste is reduced from 5 to 2 years. Moreover, specific regulatory powers are assigned to ARERA in order to strengthen the quality standards for the provision of disposal and recovery activities.
The Draft Law also intervenes in the health area by:
facilitating access to the accreditation system for private health facilities and introducing dynamic criteria for periodic verification of private contracted facilities;
overcoming the current strict requirement for wholesalers to stock at least 90% of the medicines with a marketing authorisation, with a flexible criterion based on the territorial needs;
removing barriers to market entry for generic medicines; by eliminating the provision that makes the inclusion of generics in the National Pharmaceutical Inventory (for the purposes of reimbursement by the National Health System) subject to the expiry of the patent or supplementary protection certificate of the reference medicinal products;
incentivising pharmaceutical companies to define the reimbursement price (negotiated with AIFA), providing that in case of inertia the alignment to the lowest price is applied.
Electronic communications networks
With regard to the deployment of next-generation infrastructure, the Draft Law provides for: (i) more stringent conditions to justify refusal of access to existing physical infrastructure; (ii) coordination obligations between physical infrastructure managers and network operators for the deployment of high-speed communication networks; (iii) a requirement for operators of telephony and electronic communications services to obtain explicit consent for all subscription services offered by them and by third parties.
In its current version the Draft Law largely transposes the ICA’s proposals. While, it remains to be seen, whether which/any of these provisions will ultimately be transformed into law, a milestone reform of the Italian competition law system is likely approaching.
This time of reform will be further enriched by the measures to be taken by the Italian legislator in the coming months for the implementation of Directive (EU) 2019/1, known as “ECN+” with a view to further harmonize the tools and powers at the disposal of the competition authorities of the Member States, including the ICA, and empowering them to be more effective enforcers.
The Directive has been published on January 14, 2019 and entered into force on February 3, 2019. The implementation process in Italy, which should have occurred by February 4, 2021 at the latest, is still on-going. Last August 2021 a draft legislative decree was presented by the Italian Government before the Parliament and its final adoption is expected during the course of 2022. This additional set of provisions will strength the investigative and sanctioning powers of the ICA, such as, e.g., a new “house searches” power in addition to the current power to search the undertaking’s premises; periodic penalties in addition to the current regime of lump sum fines; and a new system of pecuniary penalties for individuals.
Authored by Sabrina Borocci, Luigi Nascimbene, and Marina Maccagno.