Restraints of trade and dominance in Italy: overview

A Q&A guide to restraints of trade and dominance in Italy.

The Q&A gives a succinct overview of restraints of trade, monopolies and abuses of market power in Italy. In particular, it covers the regulatory authorities and the regulatory framework, the scope of rules, exemptions, exclusions, statutes of limitation, notification, investigations, penalties and enforcement, third party damages claims, EU law, joint ventures and proposals for reform.

For information on merger control, regulatory framework and regulatory authorities, relevant triggering events and thresholds in Italy, visit, Merger control in Italy: overview.

This Q&A is part of the global guide to competition and cartel leniency. For a full list of jurisdictional Restraints of Trade and Dominance Q&As visit www.practicallaw.com/restraintsoftrade-guide. For a full list of jurisdictional Merger Control Q&As visit www.practicallaw.com/mergercontrol-guide.

For a full list of jurisdictional Cartel Leniency Q&As, which provide a succinct overview of leniency and immunity, the applicable procedure and the regulatory authorities in multiple jurisdictions, visit www.practicallaw.com/leniency-guide.

Patrick Marco Ferrari, Crowe Horwath – Studio Associato Servizi Professionali Integrati
Contents

Restraints of trade

Scope of rules

1. Are restrictive agreements and practices regulated? If so, what are the substantive provisions and regulatory authority?

Regulatory framework

The main anti-trust rules are provided by Law No. 287 of 10 October 1990 (Law 287/1990). In particular, Article 2 of Law 287/1990 prohibits any form of collusion (that is, agreements between undertakings, concerted practices or decisions by association of undertakings) that has as its object or effect the prevention, restriction or distortion of competition within the national market, or a substantial part of it, including conduct such as price fixing, output limitation, market sharing and discrimination among trading partners.

Article 2 of Law 287/1990 largely resembles Article 101(1) and (2) of the Treaty on the Functioning of the European Union (TFEU). Moreover, under Article 1(4) of Law 287/90, the substantive provisions of Law 287/90 must be interpreted in accordance with well-established EU anti-trust principles.

On certain occasions, the Italian Competition Authority (ICA) (Autorità Garante della Concorrenza e del Mercato) may have an incentive to apply the EU provision (Article 101 TFEU) rather than its national equivalent (Article 2 of Law 287/1990). In fact, the power to directly apply EU competition rules represents an effective weapon against anti-competitive conduct that could be deemed to comply with binding national legislative measures and, therefore, could be shielded from the ICA's scrutiny. In light of the principles of direct effect and supremacy of EU law, as well as of EU member states' obligation to abstain from any measure that could jeopardise the objectives of the EU Treaties, in fact, any state measure undermining the effectiveness of EU competition rules that are directly applicable are unenforceable.

Presidential Decree No. 217 of 30 April 1998 (Decree 217/1998) supplements the basic procedural provisions contained in Law 287/1990 with detailed rules governing proceedings before the ICA.

Other relevant procedural provisions are contained in Law No. 241 of 7 August 1990 (Law 241/1990), which provides a general framework for administrative procedures (including those carried out by the ICA) and sets out a general right of access to documents retained by administrative bodies.

Additionally, under Article 31 of Law 287/1990, the general principles governing administrative sanctions set out under sections 1 and 2 of Chapter I of Law No. 689 of 24 November 1981 (Law 689/1981) apply, as far as compatible, to fines levied by the ICA.

Law No. 153 of 1 March 1994 (Law 153/1994) contains specific substantive provisions that safeguard competition in the film industry.

Italian competition law does not provide for criminal sanctions. The only instance when a violation of competition may clearly lead to criminal liability is where individuals collude in the context of public bids (Articles 353, 353bis and 354, Criminal Code). Certain infringements of competition rules may also lead to criminal liability when they concern speculative conduct aimed at limiting the output or increasing the prices of raw material, food products or first need products (Article 501bis, Criminal Code). The sanctions include both fines and imprisonment.

Regulatory authority

The ICA is the regulatory authority responsible for the enforcement of anti-trust provisions in Italy. The ICA both carries out the investigation and adopts final decisions.

See box, The regulatory authority.

 
2. Do the regulations only apply to formal agreements or can they apply to informal practices?

The Italian anti-trust provisions can also apply to informal agreements and practices.

 

Exemptions

3. Are there any exemptions? If so, what are the criteria for individual exemption and any applicable block exemptions?

Article 4(1) of Law 287/90 (which closely mirrors Article 101(3) TFEU) provides that a form of co-operation between undertakings falling within Article 2 of Law 287/1990 can be authorised, for a limited period, if it leads to substantial benefits to consumers, in terms, for example, of an increase of production, an improvement in the quality of production or distribution, or technical and technological progress. These potential beneficial effects are assessed also taking into account the need to guarantee to the undertakings concerned the necessary level of international competitiveness. In any case, no exemption will be granted in connection with restrictions that are not indispensable to the attainment of these objectives, or that can eliminate competition in respect of a substantial part of the national market.

Article 4(3) of Law 287/1990 still formally provides for a system of prior notification in order to be granted an individual exemption pursuant to Article 4(1) of Law 287/90. However, in practice, applications under Articles 4(3) of Law 287/1990 (as well as those under Article 13 of Law 287/90 for negative clearance decisions) are usually dismissed by the Italian Competition Authority (ICA) by means of non-suit decisions, grounded on the fact that the notified agreement (or the other form of co-operation communicated) falls within the scope of Article 101 TFEU, and not within the scope of the corresponding national provision (Article 2, Law 287/1990). Through this approach, the ICA has de facto aligned its practice to that of the European Commission. At the EU level, the system of voluntary notification has been dismantled by Regulation (EC) 1/2003 on the implementation of the rules on competition laid down in Articles 101 and 102 of the TFEU (formerly Articles 81 and 82 of the EC Treaty).

The ICA has not issued any block exemption regulation. However, in practice, it largely relies on those adopted by the EU Commission when applying national rules. Therefore, the ICA is unlikely to take action against an agreement that meets the conditions of an EU block exemption regulation.

In addition, under Article 8(2) of Law 287/1990, national anti-trust provisions do not apply to undertakings entrusted with the operation of services of general economic interest or that have the character of a legal monopoly to the extent that this is strictly necessary to enable them to carry out and perform the particular tasks assigned to them.

 

Exclusions and statutes of limitation

4. Are there any exclusions? Are there statutes of limitation associated with restrictive agreements and practices?

Exclusions

There is no specific rule excluding anti-competitive agreements or other forms of illegal co-operation between undertakings because of their limited scope. However, Article 2(2) of Law 287/1990 provides that anti-trust provisions only apply in connection with conduct that substantially affects competition. This assessment is usually carried out by the Italian Competition Authority (ICA) in light of the rules set forth in the EU Commission Notice on agreements of minor importance that do not appreciably restrict competition.

Statutes of limitation

Article 28 of Law 689/1981 provides for a statute of limitation of five years for levying administrative fines, starting from the date on which the violation was committed (or ended, in the case of continuous infringements). However, the Supreme Administrative Court has recently clarified that this five-year term may not strictly apply to anti-trust violations in light of (Consiglio di Stato, n. 3291/2015):

  • The fact that this type of infringements are often discovered quite a long time after they are committed.

  • The complexity (and, therefore, duration) of the relevant investigations.

  • The public interests pursued by anti-trust sanctions.

 

Notification

5. What are the notification requirements for restrictive agreements and practices?

Notification

Not applicable. See Question 3.

Informal guidance/opinion

Not applicable. See Question 3.

Responsibility for notification

Not applicable. See Question 3.

Relevant authority

Not applicable. See Question 3.

Form of notification

Not applicable. See Question 3.

Filing fee

Not applicable. See Question 3.

 

Investigations

6. Who can start an investigation into a restrictive agreement or practice?

Regulators

Anti-trust investigations are carried out by the Italian Competition Authority (ICA).

The ICA can start an investigation on any of the following:

  • Its own motion.

  • Based on a leniency application.

  • Following a complaint filed by a third party (see below, Third parties).

Third parties

Under Article 12(1) of the Law 287/1990, third parties can file a formal complaint with, or even simply provide relevant information to, the ICA in connection with a possible anti-trust infringement. However, the ICA is not under an obligation to start an investigation. In the event of refusal to open an investigation, the ICA usually sends a letter to the complainant, explaining its position. There is no official format for filing a complaint.

 
7. What rights (if any) does a complainant or other third party have to make representations, access documents or be heard during the course of an investigation?

Representations

Under Article 7(1)(a) of Decree 217/1998, the complainants who have a direct, immediate and current interest with respect to the alleged violation can participate in the proceedings. In addition, within 30 days of the publication of the decision to open proceedings on the Official Journal (Bulletin) of the Italian Competition Authority (ICA), any other interested third parties can file with the ICA a reasoned application to participate in the proceedings (Article 7(1)(b), Decree 217/1998). Any other interested parties include undertakings, individuals, consumer associations, competitors or other bodies whose interests may be directly, immediately and currently harmed by the alleged anti-competitive conduct or any measures to be possibly adopted as a result of the investigation.

Document access

Under Article 7(2) of Decree 217/1998, complainants and other third parties admitted to participate in the proceedings have the right to both:

  • Access the investigation file (with the exception of confidential information).

  • Produce written submissions, documents, arguments and opinions.

Be heard

Under Article 7(3) of Decree 217/1998, complainants admitted to participate in the proceedings can be heard by the ICA officials. In addition, complainants and other third parties admitted to participate in the proceedings, on their reasoned request, may be allowed to participate in the final oral hearing, if such a hearing is requested by undertakings under investigation (Article 14(6), Decree 217/1998).

 
8. What are the stages of the investigation and timetable?

Under Article 6(1) of Decree 217/1998, anti-trust investigations are launched by an Italian Competition Authority (ICA) Board’s decision to open proceedings.

This decision sets out the (Article 6(3), Decree 217/1998):

  • Date of termination of the proceedings, by which the ICA must adopt its final decision. This initial deadline can be (and is often) extended by the ICA in the course of the proceedings.

  • Time limit within which the representatives of the undertakings under investigation can be heard at their request.

  • Essential elements of the alleged infringement.

  • Name of the case handler.

  • Office where documents and other evidence are kept and can be accessed.

The decision to open proceedings is notified to the undertakings allegedly involved in the infringement and to the complainants who have a direct, immediate and current interest (Article 6(4), Decree 217/1998). Frequently, this decision is notified to the undertakings under investigation together with the parallel decision to carry out a surprise inspection.

The undertakings under investigation, as well as complainants and other third parties admitted to the proceedings, can file written submissions and documents and have access to the investigation file (with the exception of confidential information) (Article 7(2), Decree 217/1998). The undertakings under investigation and the complainants admitted to the proceedings can also request to be heard by the ICA's officials (Article 7(3), Decree 217/1998).

Where the ICA Board considers that it has acquired sufficient evidence, it will authorise the issue of a statement of objections (SO) (Comunicazione delle risultanze istruttorie) (Article 14(1), Decree 217/1998). The undertakings under investigation and the complainants admitted to the proceedings can file written submissions in response to the SO (Article 14(4), Decree 217/1998).

If the undertakings under investigation request to be heard by the ICA Board, a final hearing takes place (Article 14(5-9), Decree 217/1998). Complainants and other third parties admitted to the proceedings may be allowed to participate in the final hearing (but do not have a right to participate). If they so request, the undertakings under investigation can be heard separately in order to safeguard confidentiality. The final hearing is minuted. After the final hearing, the ICA will issue a decision.

 

Publicity and confidentiality

9. How much information is made publicly available concerning investigations into potentially restrictive agreements or practices? Is any information made automatically confidential and is confidentiality available on request?

Publicity

The Italian Competition Authority (ICA) usually posts a press release on its website shortly after the opening of proceedings. The press release contains some basic information concerning the nature of infringement under investigation as well as a reference to the undertakings involved.

Automatic confidentiality

Based on the principle established by the Italian administrative courts (TAR Lazio, n. 8015/2010 and n. 8016/2010; Consiglio di Stato, n. 6481/2010) in relation to leniency material, but possibly also applicable to other types of documents, it is reasonable to conclude that the ICA can on its own initiative (that is, even absent a specific and reasoned request by the relevant undertaking) consider and treat as confidential certain information provided by the parties.

Absent a specific request by the parties, however, the ICA is not legally bound to carry out a confidentiality assessment in relation to the information contained in the file.

Confidentiality on request

Under Article 14(3) of Law 287/1990 and Articles 12 and 13 of Decree 217/1998, parties can ask the ICA to treat as confidential certain documents and information, highlighting the reasons why they should not be disclosed to third parties or published.

 
10. What are the powers (if any) that the relevant regulator has to investigate potentially restrictive agreements or practices?

The investigative powers of the Italian Competition Authority (ICA) are listed in (and governed by) Article 14(2) of Law 287/90 and in Articles 8 to 11 of Decree 217/1998.

Inspections. The ICA can inspect the business premises of parties to the alleged cartel or those of third parties who may be in possession of relevant documents to the investigation. Inspection of private premises are not allowed for breach of provisions of Law 287/90. The officials must show an ad hoc authorisation issued by the ICA indicating, among other things, the object and purpose of the investigation and the penalties provided for refusal to supply information or the provision of incorrect or misleading information. During the inspection, ICA officials can be (and normally are) assisted by the Italian Customs and Excise Police (Guardia di Finanza). ICA officials have the power to:

  • Enter any premises, land, and/or means of transport of the parties under inspection, with the exception of premises in which no business activity is conducted.

  • Examine and make copies of books, business records, and documents that are relevant to the investigation.

  • Ask for oral explanations.

  • Request information.

Requests for information. The ICA can request in writing information and documents from any individual, undertaking, or entity in possession of information and documents that may be relevant for the investigation. Requests for information and disclosure of documents can also be made orally in the course of hearings or inspections. Oral requests and responses to these requests are recorded in the minutes of the hearing or of the inspection. Responses provided during the hearing or the inspection can be supplemented within the deadline set forth in the minutes.

Reports and analysis from independent experts. The ICA can request independent experts to prepare reports and economic or statistical analyses in relation to any matter of relevance to the investigation. The decision to consult experts and the result of their analysis is made available to the parties to the alleged infringement and any third parties admitted to intervene in the proceedings.

Hearings. The ICA can invite relevant parties to hearings to ascertain their position as to the violation being investigated and collect evidence that may be useful for its proof and assessment. ICA officials and representatives of the undertakings being heard are required to sign minutes at the end of each hearing. Hearings can be recorded on tape for the purpose of drafting the minutes.

 

Settlements

11. Can the parties reach settlements with regulators to bring an early resolution to an investigation? If so, what are the circumstances for doing so and the applicable procedure?

There is no settlement procedure under Italian competition law.

 
12. Can the regulator accept remedies (commitments) from the parties to address competition concerns without reaching an infringement decision? If so, what are the circumstances for doing so and the applicable procedure?

Under Article 14-ter of Law 287/1990 and the relevant Italian Competition Authority (ICA) Notice (Comunicazione sulle procedure di applicazione dell'articolo 14-ter della Legge 10 ottobre 1990, n. 287), the parties can offer commitments to the ICA within three months from the opening of proceedings. In exceptional cases, on reasoned request, the ICA can decide to accept commitments offered after this deadline. In order to be accepted by the ICA, commitments should be capable of removing the anti-competitive profiles of the conduct under investigation. Commitments are usually not accepted by the ICA in relation to the most serious types of infringement, such as market allocation or price fixing. In this context, it is worth mentioning that the three-month deadline for submitting commitments has been considered by the administrative courts more as a solicitation term rather than a strict mandatory term (Tar Lazio, n. 2902/2008).

Commitments that are not manifestly inadequate are posted on the ICA website and published on the ICA Official Journal (Bulletin), to enable third parties to submit their comments. If needed, the ICA can also issue specific requests for information to gather further useful elements from third parties (known as market test). Following the market test, the undertakings that have offered the commitments can file a brief with the ICA, commenting on the information and arguments submitted by third parties, and can also amend the commitments originally filed in light of the results of the market test.

After assessing the suitability of the commitments, the ICA can make them binding on the undertakings concerned and terminate the proceedings without ascertaining any infringement. The commitment decisions do not set fines and do not contain findings of infringement. The commitment decisions are published on the Bulletin.

 

Penalties and enforcement

13. What are the regulator's enforcement powers in relation to a prohibited restrictive agreement or practice?

Orders

Under Article 14-bis of Law 287/1990, in urgent cases, where there is a risk of serious and irreparable damage to competition (periculum in mora) and a cursory examination reveals the probable existence of an infringement (fumus boni iuris) the Italian Competition Authority (ICA) can order interim measures.

Additionally, under Article 15(1) of Law 287/1990, the ICA, through its final decision, usually orders the parties to bring the anti-competitive conduct to an end. In its final decision, the ICA can also order the parties to adopt positive measures to restore conditions of effective competition in the affected market(s) within a specific period, as well as to report on their progress in this respect.

Fines

Under Article 15(1) of Law 287/1990, in the case of serious infringements, the ICA can levy on each of the undertakings concerned a fine of up to 10 % of the respective turnover generated in the preceding business year. In setting the fines, the ICA used to rely on the principles set out in the EU Commission Guidelines on the method of setting fines. On 22 October 2014, following a public consultation, the ICA adopted its own guidelines (Guidelines), which largely resemble those in force at EU level. The Guidelines apply to proceedings whose statement of objections has been notified by 31 October 2014 (that is, the day on which the Guidelines entered into force).

The amount of the fine is calculated according to the following steps and rules.

Basic amount. First, the ICA determines the value of the undertaking's sales, that is, the value of goods or services to which the infringement directly or indirectly relates, sold by the undertaking during the last full year of its participation in the infringement.

Second, a percentage of up to 30% of this value is considered, depending on the gravity of the infringement. Cartels are considered to be particularly harmful, but factors other than the nature of the violation can also be taken into account (namely, the degree of competition on the market, the damage to innovation, the actual execution and the negative effects of the unlawful conduct).

Third, the amount resulting from applying this percentage to the value of sales is multiplied by the number of years of participation in the infringement.

The ICA can also decide to include in this basic amount an additional sum of between 15% and 25% of the value of sales, in order to guarantee the deterrent effect of the sanction in the case of particularly serious restrictions of competition (so called "entry fee").

Aggravating and mitigating circumstances. The Guidelines provide for the adjustment of the basic amount in consideration of certain aggravating or mitigating circumstances.

Aggravating circumstances include:

  • The undertaking's role as leader, or instigator of, the infringement.

  • Obstructing the ICA in carrying out its investigations.

Mitigating circumstances include:

  • The adoption of timely measures aimed at mitigating the effects of the infringement.

  • Collaborating with the ICA beyond the undertaking's legal obligations to do so.

  • The marginal participation in the infringement and the abstention from its execution.

  • The existence of regulations or decisions of public authorities facilitating or authorising the infringement.

  • The adoption of a specific compliance programme in line with EU and national best practices.

Each circumstance can result in an increase or decrease of the basic amount up to 15%, while the overall adjustment must not exceed 50%. However, the basic amount can be further increased up to 100% in case of recidivism, that is, when the undertaking, in the five years before the beginning of the new infringement, was already involved in a similar violation ascertained by the ICA or the European Commission. The fine can be decreased up to 50% if the undertaking provides decisive information concerning a distinct infringement of competition rules (known as "leniency plus").

Specific increase for deterrence. The amount of the fine can be increased up to 50% if the undertaking's global turnover appears to be particularly high as compared to the value of goods or services to which the infringement relates. The amount of the fine can also be increased in order to take into account the illegal gains of the undertaking concerned deriving from the infringement.

Concurrence of conducts. When the undertaking, through the same conduct, breached more than one anti-trust provisions (that is, Articles 2 and 3 of Law 287/90 or Articles 101 and 102 TFEU) or the same anti-trust provision more than once, the ICA applies the applicable fine to the most serious infringement, multiplied up to three times.

When the undertaking, through different conduct, breached more than one anti-trust provision or the same anti-trust provisions more than once, the ICA applies a fine in relation to each breach.

Ceiling. Under Article 15 of Law 287/90, the final amount of the fine must not exceed 10% of the worldwide consolidated turnover realised in the last year preceding the adoption of the infringement decision.

Leniency programme. The undertaking can also receive full immunity from, or a reduction of, fines pursuant to the national leniency programme run by the ICA.

Ability to pay. Finally, when setting the amount of the fine, the ICA also considers the undertaking's possible inability to pay. A reduction of fine is possible only when, in light of objective circumstances, the imposition of a full sanction would likely result in the undertaking exiting from the market.

Joint liability. In the case different companies of the same undertaking participated to the infringement, the ICA can consider all these companies jointly and severally liable.

Final considerations. The ICA can depart from the above method of setting fines in light of the specific circumstances of the case.

Under Article 15(2) of Law 287/1990, if an undertaking fails to comply with an order to cease its conduct (see above, Orders), the ICA can apply a fine of up to 10% of the turnover generated by the relevant undertaking in the preceding business year. If the original decision provided for a fine, this additional fine can be no less than double the fine already imposed. If an undertaking repeatedly violates the order of the ICA, the ICA can also suspend the undertaking's activities for up to 30 calendar days.

Personal liability

Italian competition law does not provide for personal liability. However, Italian criminal law provides for criminal sanctions in relation to public bid-rigging and speculative conduct. The relevant sanctions include both fines and imprisonment (see Question 1).

Immunity/leniency

The ICA has been running a leniency programme since 2007. The Italian leniency programme is largely based on the Model Leniency Programme adopted by the European Competition Network (ECN) and the EU leniency programme. It applies to secret cartels (that is, horizontal agreements and concerted practices) in violation of either Article 101 TFEU or Article 2 of Law 287/1990, particularly those concerning price fixing, market sharing and/or limits on production or sales.

Leniency is not available for pure vertical restrictions. However, the current version of the Italian leniency notice expressly extends the scope of the leniency programme to hybrid restrictions (that is, to horizontal conduct with vertical elements). For example, although there are no precedents in this respect, hub-and-spoke-type conduct (for example, a price alignment at the retail level that is obtained through an exchange of information via a common supplier and following the supplier's intervention) is likely to fall within the scope of the Italian leniency programme.

Full immunity from fines is available for the first cartel participant who voluntarily comes forward to report the illegal conduct. No immunity is available where the ICA is already aware of the existence of the cartel at the time when the applicant comes forward. The ICA can grant fine reductions generally not exceeding 50% if the evidence provided by the leniency applicant, due to its nature or level of detail, significantly strengthens the evidence in the ICA's possession (significant added value criterion).

Impact on agreements

Under Article 2(3) of Law 287/1990, anti-competitive agreements are null and void.

 

Third party damages claims and appeals

14. Can third parties claim damages for losses suffered as a result of a prohibited restrictive agreement or practice? If so, what special procedures or rules (if any) apply? Are collective/class actions possible?

Third party damages

Damages in tort for breach of Italian or EU antit-rust provisions can be claimed by victims of anti-competitive conduct under Article 2043 of the Italian Civil Code, which states that any intentional act or act committed with fault, causing injury to another person, requires the person who has committed the act to compensate the damages.

Conduct amounting to an anti-trust infringement can also give rise to damage actions based on contract liability. For example, a company involved in price-fixing collusion with competitors can be found liable to its customers for breach of principles of good faith and fairness under the Italian Civil Code rules on contracts.

Special procedures/rules

Claims for anti-trust damages must be brought before the Tribunal of the Enterprises that is territorially competent for dealing with the case. This Tribunal was recently established following Law No. 27/2012.

The burden of proof lies with the claimant, who must prove the facts on which his claims are founded. All evidence normally admitted in civil liability proceedings, including witness testimonies, documents and expert opinions, is admissible. The Tribunal can also order one of the parties or a third party to submit relevant documents, which must be reasonably identified by the party applying for the disclosure order, or request documents from the Italian Competition Authority (ICA) investigation file. The Tribunal can also appoint an expert to assist in matters requiring specific technical expertise (for example, definition of the relevant market or liquidation of damages). Findings made by the ICA in the context of administrative proceedings are not technically binding on the Tribunal, although they may constitute (strong) elements of proof or even create a sort of rebuttable presumption.

Damages granted in anti-trust actions are limited to the claimant's actual loss (that is, "out of pocket" loss plus loss of income). Punitive or exemplary damages are not available in the Italian legal system.

The limitation periods for damages actions based on tort or breach of contract are five and ten years, respectively. The Italian Supreme Court has clarified that the limitation period for anti-trust damages actions starts running when the claimant is (or, using reasonable care, should be) aware of both the damage and its unlawful nature (that is, that the damage was caused by an anti-trust infringement) (SAI v Nigriello, 2 February 2007, n. 2305).

Articles 141 to141 octies of the Italian Consumer Code also provide for a set of rules applicable to the out-of-court resolution of consumer disputes (so-called alternative dispute resolution proceedings). These rules implement Directive 2013/11/EU on alternative dispute resolution for consumer disputes.

Collective/class actions

Article 140-bis of the Italian Consumer Code provides that, in the case of anti-competitive conduct affecting a multitude of consumers or users, any of them, also through committees or associations, has standing to file a class action with the competent tribunal. The tribunal, at the end of the first hearing, has to decide whether all conditions for the certification of the class are met. If the class action is certified (that is, admitted), a notice about the lawsuit is made public and all consumers or users who claim to have a right identical and homogeneous to that for which the class has been established can join it. The opt-in declaration must be filed with the register of the competent tribunal within the deadline set out by the tribunal.

Consumers and users who opt in do not assume the role of parties to the proceeding and, as such, do not have any procedural power. If the tribunal eventually finds that the class action is well founded, it will condemn the defendant to pay a certain sum to each member of the class or, alternatively, establish the criteria on the basis of which these sums are to be calculated and then liquidated.

Under Articles 139 and 140 of the Italian Consumer Code, consumer associations that are registered with the Ministry for Productive Activities have standing to request:

  • Cease-and-desist orders against certain conduct that can harm consumer interests.

  • Appropriate measures for correcting or eliminating the detrimental effects of such conduct.

Directive 2014/104/EU on actions for damages under national law for infringements of competition law provisions of the member states (Anti-trust Damages Directive) was adopted on 26 November 2014. Member states, including Italy, must implement the Directive in their legal systems by 27 December 2016. Therefore, by that deadline, all member states will have to amend current rules accordingly. The Anti-trust Damages Directive provides for specific rules concerning the following:

  • Disclosure of evidence.

  • Effect of decisions issued by national competition authorities.

  • Limitation periods.

  • Scope of liability of immunity applicants.

  • Passing-on.

The Anti-trust Damages Directive has not yet been implemented in Italy. However, based on the EU law principle of conform interpretation, national rules must be interpreted, as far as possible, in line with EU directives, including when directives have not yet been implemented at domestic level (see Italian Supreme Court, n. 11.564, 4 June 2015).

 
15. Is there a right of appeal against any decision of the regulator? If so, which decisions, to which body and within which time limits? Are rights of appeal available to third parties, or only to the parties to the agreement or practice?

Rights of appeal and procedure

The Italian Competition Authority (ICA) decisions can be appealed before the Regional Administrative Tribunal of Lazio (TAR Lazio). Judgments rendered by the TAR Lazio can be further appealed before the Supreme Administrative Court (Consiglio di Stato). Judgments issued by the Supreme Administrative Court are subject only to:

  • Appeals to the Supreme Court (Corte di Cassazione) on jurisdictional grounds.

  • Appeal for revocation, in the cases and under the circumstances set out in Article 396 of the Italian Civil Code of Procedure.

Parties must file an appeal before the TAR Lazio within 60 days of the receipt of notification of the ICA decision. In the appeal, the parties can also request interim measures. Hearings for interim measures are usually held not long after the filing of the appeal.

Third party rights of appeal

The Italian administrative judge has clarified that persons other than the addressees of the ICA decision may also be entitled to appeal such a decision provided that they are directly and individually affected by it. This is typically (but not exclusively) the case for competitors (Consiglio di Stato, n. 3865/04; n. 4016/2010).

 

Monopolies and abuses of market power

Scope of rules

16. Are monopolies and abuses of market power regulated under administrative and/or criminal law? If so, what are the substantive provisions and regulatory authority?

Regulatory framework

Article 3 of Law 287/1990 bans the abusive exploitation of a dominant position. In particular, it provides that the abuse by one or more undertakings of a dominant position within the domestic market or in a substantial part of it is prohibited. Article 3 of Law 287/1990 also provides for a non-exhaustive list of abusive conduct, such as to:

  • Impose, directly or indirectly, unjustifiable burdensome contractual conditions, including in terms of purchase or selling prices.

  • Limit or restrict production, market access, investment, technical development or technological progress.

  • Apply to trading partners objectively dissimilar conditions for equivalent transactions, thereby placing them at an unjustifiable competitive disadvantage.

  • Make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations that, by their nature or according to commercial usage, have no connection with the subject of such contracts.

An undertaking violates Article 3 of Law 287/1990 only if it abuses its dominant position. Dominance itself is not an offence.

Rules and principles set out in Decree 217/1998, Law 241/1990 and Law 689/1981 with regard to restrictive agreements and practices also apply in respect of abusive conduct (see Question 1).

Specific substantive provisions apply to communications industries under Law No. 249 of 31 July 1997 (Law 249/1997), which prevents dominant positions and enhances pluralism in the communications sector. The concept of dominant position under Law 249/1997 does not correspond to that under competition law.

Italian law does not provide for criminal sanctions in relation to abuse of dominant position. However, it is possible to argue that, in theory, Article 501bis of the Italian Criminal Code, which concerns speculative conduct aimed at limiting the output or increasing the prices of raw material, food products or first need products (see Question 1), could apply to certain abuses of dominant conduct. To date, there is no precedent in this respect.

Regulatory authority

The regulatory authority responsible for the enforcement of abuse of dominance provisions is the Italian Competition Authority (ICA). The ICA both carries out the investigation and adopts final decisions.

 
17. How is dominance/market power determined?

The Italian Competition Authority (ICA) relies on the traditional notion of dominance applied at EU level, whereby a dominant position is "a position of economic strength enjoyed by an undertaking which enables it to prevent effective competition being maintained on the relevant market by affording it the power to behave to an appreciable extent independently of its competitors, its customers and ultimately of the consumers" (Case C-85/76, Hoffman La Roche v Commission, 1979 E.C.R. 461; Case C-27/76, United Brands v Commission, 1978 E.C.R. 207).

In line with well-established EU practice, the ICA considers that a dominant position derives from a combination of factors. Therefore, the ICA usually carries out a comprehensive analysis of different elements, such as, for example:

  • Market shares.

  • Structure of the market.

  • Existence of barriers to entry.

  • Characteristics of the product.

  • Level of production.

  • Countervailing buyer power of customers.

 
18. Are there any broad categories of behaviour that may constitute abusive conduct?

Article 3 of Law 287/1990 contains a non-comprehensive list of abusive conduct (see Question 16).

 

Exemptions and exclusions

19. Are there any exemptions or exclusions?

Conduct by a dominant firm is deemed not to violate Article 3 of Law 287/1990 if it can be objectively justified. This is the case, for example, when the dominant undertaking acts with the only purpose to protect its legitimate commercial interests in face of actions taken by third parties. The conduct, in any case, must be reasonable and proportionate to the threat.

In addition, under Article 8(2) of Law 287/1990, abuse of dominant position provisions do not apply to undertakings entrusted with the operation of services of general economic interest or having the character of a legal monopoly, but only to the extent that this is strictly necessary to enable them to carry out and perform the particular tasks assigned to them (see Question 3).

 

Notification

20. Is it necessary (or, if not necessary, possible/advisable) to notify the conduct to obtain clearance or (formal or informal) guidance from the regulator? If so, what is the applicable procedure?

Italian anti-trust law does not provide for a notification system in relation to abusive conduct.

 

Investigations

21. What (if any) procedural differences are there between investigations into monopolies and abuses of market power and investigations into restrictive agreements and practices?

There are not significant differences between investigations into abuses of market power and investigations into restrictive agreements and practice.

 
22. What are the regulator's powers of investigation?
 

Penalties and enforcement

23. What are the penalties for abuse of market power and what orders can the regulator make?
 

Third party damages claims

24. Can third parties claim damages for losses suffered as a result of abuse of market power? If so, what special procedures or rules (if any) apply? Are collective/class actions possible?

Third party damages

See Question 14.

Special procedures/rules

See Question 14.

Collective/class actions

See Question 14.

 

EU law

25. Are there any differences between the powers of the national regulatory authority(ies) and courts in relation to cases dealt with under Article 101 and/or Article 102 of the TFEU, and those dealt with only under national law?

No specific difference exists between the powers of the Italian Competition Authority (ICA) and the Italian courts in relation to cases dealt with under Articles 101 and/or 102 TFEU, and those dealt with under national law.

However, under Article 16(1) of Regulation (EC) 1/2003 on the implementation of the rules on competition laid down in Articles 101 and 102 of the TFEU (formerly Articles 81 and 82 of the EC Treaty), when national courts rule on agreements, decisions or practices under Article 101 or 102 TFEU that are already the subject of a decision by the EU Commission or courts, they cannot take decisions running counter to such a decision.

 

Joint ventures

26. How are joint ventures analysed under competition law?

The distinction between "concentrative" and "co-operative" joint ventures remains applicable under Italian competition law. A joint venture is deemed to be co-operative where its main object or effect is the co-ordination of behaviour of the parent companies. These joint ventures do not qualify as a "concentration" within the meaning of Italian anti-trust law and, as such, are not reportable to the Italian Competition Authority irrespective of whether they qualify as full-function. Co-operative joint ventures continue to be assessed under the provisions concerning restrictive agreements.

 

Inter-agency co-operation

27. Does the regulatory authority in your jurisdiction co-operate with regulatory authorities in other jurisdictions in relation to infringements of competition law? If so, what is the legal basis for and extent of co-operation (in particular, in relation to the exchange of information)?

The Italian Competition Authority (ICA) is part of the European Competition Network (ECN). Relevant information and documents can be exchanged within this network according to rules, and subject to limitations, set out by both:

  • Articles 11(3) and 12 of Regulation (EC) 1/2003 on the implementation of the rules on competition laid down in Articles 101 and 102 TFEU.

  • Commission Notice on co-operation within the Network of Competition Authorities, in particular points 40 to 43.

Under the above rules, information exchanged within the ECN must only be used in evidence for the purpose of applying Articles 101 or 102 TFEU and for the subject matter for which it was collected by the transmitting authority.

Additionally, information exchanged within the ECN can only be used in evidence to impose sanctions on natural persons where:

  • The law of the transmitting authority foresees sanctions of a similar kind in relation to an infringement of Articles 101 or 102 TFEU.

  • The information has been collected in a way that provides the same level of protection of the rights of defence of natural persons as provided for under the national rules of the receiving authority. However, in this case, the information exchanged cannot be used by the receiving authority to impose custodial sanctions.

The ICA can also co-operate with other competition authorities on the basis of the principles and recommendations provided by the International Competition Network, such as the Cooperation between Competition Agencies in Cartel Investigations Report, the Leniency Waiver Templates and the relevant Explanatory Note.

 

Recent cases

28. What are the recent developments, trends or notable recent cases concerning abuse of market power?

Among the notable recent proceedings concerning abuses of dominant position, it is possible to mention the following cases.

In Case A443, the Italian Competition Authority (ICA) investigated a possible violation of Article 102 TFEU by the FS Group, the incumbent and vertically integrated railway operator in Italy, consisting of a complex strategy aimed at excluding from the market NTV, the only competitor of the FS Group in the Italian high-speed train market. The alleged anti-competitive conduct was implemented through:

  • Restricting access to the national railway infrastructure and maintenance facilities.

  • Discrimination in the management of advertising space in key stations.

  • Inefficiencies in stations served by NTV.

  • A price squeeze and cross-subsidisation practice in the high-speed transportation services.

In a decision dated 19 February 2014, the ICA accepted the commitments put forward by the FS Group and closed the proceedings. The proposed commitments were the subject of a market test. In particular, Rete Ferroviaria Italiana (RFI), the company part of the FS Group active in the management of the national railway network, undertook to:

  • Organise proper signage in the stations to help travellers identify services offered by each railway operator.

  • Make available proper areas in these stations for competitors' mobile desks and self-service ticketing.

  • Offer NTV the possibility to buy advertising space both in stations served by NTV and in other high-traffic stations (not served by its trains).

  • Reduce network access costs by 15% and grant NTV the whole set of high-speed routes requested with reference to the national train timetable for the period December 2013 to December 2014, with particular regard to peak hours in the Rome-North Italy route.

Following the market test, RFI also agreed to a compensatory measure. It waived a substantial part of the outstanding payments due by NTV resulting from non-usage of certain railway routes.

In Case A413, the ICA, in a decision dated 14 December 2011, condemned Poste Italiane, the Italian incumbent postal operator, for an alleged abuse of dominant position in violation of Article 102 TFEU. The ICA found that Poste Italiane had pursued a single complex strategy aimed at excluding TNT Post Italia and other competitors from the markets for guaranteed time and date deliveries services, and notification through messengers. Such abusive strategy allegedly consisted of three conducts:

  • Applying a procedure for handling mails sent through other postal operators, but found in Poste Italiane's network, under which such mails were returned directly to senders, and not to the competitors.

  • Offering relevant products at allegedly selective and predatory prices.

  • Offering predatory prices in two public tenders concerning the delivery of administrative acts.

On 25 June 2012, the Regional Administrative Tribunal of Lazio set aside the ICA decision, finding that the ICA had failed to meet the burden of proof that the contested conduct constituted a violation of Article 102 TFEU (TAR Lazio, n. 5769/2012). The ruling issued by the Regional Administrative Tribunal of Lazio was appealed before the Italian Supreme Administrative Court, which, in its judgment of 6 May 2014, upheld the finding of the lower court (Consiglio di Stato, n. 2302/2014). In its ruling, the Italian Supreme Administrative Court rejected the ground of appeal concerning the scope of the judicial review carried out by the judge of first instance. In particular, the Italian Supreme Court noted that the Regional Administrative Tribunal of Lazio had carried out an extensive review of all factual and legal issues raised by the contested decision, including those involving complex economic assessments, and eventually adopted a decision grounded on sound economic arguments. As a matter of principle, the Italian Supreme Administrative Court also highlighted that the review of the ICA decisions by the administrative judge is full and effective, and also extends to the technical criteria and methods employed by the ICA in its economic assessment. In the past, Italian jurisprudence has been erratic in this respect. In fact, in certain precedents, the Italian Supreme Administrative Court stated that, with respect to technical analysis, the scope of the judicial review was limited, and that the Italian administrative judge was only entitled to assess whether the ICA had based its conclusions on logical and coherent grounds (see, for example, Consiglio di Stato n. 4001/2002).

In this context, it is also worth noting that the European Court of Human Rights, in its judgment of 27 December 2011 (Case No. 43509/08, Menarini) stated that the national administrative enforcement of Italian anti-trust provisions can be deemed compatible with Article 6(1) of the European Convention for the Protection of Human Rights, concerning the right to a fair trial, provided that the administrative judge can exercise full jurisdiction in reviewing ICA decisions.

 

Proposals for reform

29. Are there any proposals for reform concerning restrictive agreements and market dominance?

The past distinction provided at EU level between co-operative and concentrative joint ventures remains applicable under Italian competition rules. Accordingly, all joint ventures (including those that are full-function) whose main object or effect is the co-ordination of behaviour of the parent companies do not constitute a "concentration" within the meaning of Article 5 of Law 287/1990. These joint ventures are therefore to be assessed under the restrictive agreement and/or market dominance provisions of Law 287/90.

A reform proposal was presented by the ICA to the Italian Government through Recommendation No. AS988 of 2 October 2012. Through this recommendation, the ICA has proposed to add to Article 5 of Law 287/1990 an explicit reference to the applicability of merger control rules to full-function co-operative joint ventures.

 

The regulatory authority

Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato) (ICA)

Head. Giovanni Pitruzzella
Contact details. Piazza G. Verdi, 6/a, 00198 Rome, Italy
T +39 06 8582 1872
F +39 06 8582 1177
E protocollo.agcm@pec.agcm
W www.agcm.it

Outline structure. The ICA board is composed of three commissioners, one of whom holds the position of President. The ICA board members are assisted by a Secretary General. The ICA board heads different Directorates. One of them is the Directorate General for Competition, which is further structured in the following Directorates:

  • Energy and Basic Industry.

  • Communications.

  • Banking.

  • Foodstuff and Transport.

  • Manufacturing and Services.

Responsibilities. The ICA has four main areas of activity:

  • Anti-trust (including cartels, vertical agreements, abuses of dominant position and merger control).

  • Protection of consumers (including unfair commercial practices and unfair contract terms).

  • Conflict of interests.

  • Legality rating.

Procedure for obtaining documents. Relevant forms can be found on the ICA website.



Online resources

Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato) (ICA)

W www.agcm.it

Description. The official website of the ICA is structured in different sections. The website contains a significant amount of information and documents relating to ICA activities, including an organisational chart, relevant legal provisions and guidelines, ICA decisions, the ICA's official journal, press releases, and events organised or sponsored by the ICA. The website is maintained and updated by the ICA itself.

W www.agcm.it/en

Description. This is the official English version of the ICA website. However, it contains only part of the information and documents contained on the Italian language website.



Contributor profile

Patrick Marco Ferrari, Head of Competition and Anti-trust Department

Crowe Horwath – Studio Associato Servizi Professionali Integrati

T +39 02 806 731
F +39 02 8901 0836
E patrick.ferrari@crowehorwath.it
W www.crowehorwath.net/it

Professional qualifications. Italy, Milan, 2008

Areas of practice. EU law and competition law; unfair commercial practices.

Recent transactions

  • Advising on a wide range of anti-trust matters, including merger control, cartels, anti-competitive agreements and practices, abuse of dominant position and private anti-trust enforcement.
  • Wide experience in leniency matters, both at European and national level.
  • Representing undertakings in the context of unfair commercial practices proceedings.

Publications. Authored several publications and regularly lectures on anti-trust matters.


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