Mario Siragusa – Matteo Beretta – Matteo Bay Competition Law in Italy The first 20 years of law and practice CONTENTS I. INTRODUCTION A. General Comparison of Italy’s Competition Laws, Enforcement, Procedures with Those of the United States B. Overview of Applicable Statutes 1. Main Legislative Reforms (a) Interim Measures (b) Commitments (c) Leniency Program 2. Relationship between EU and National Competition Rules C. Overview of Structure, Independence and Jurisdiction of Enforcement Agencies D. Overview of Structure, Independence, and Jurisdiction of Judicial Authorities E. Additional Policy & Practical Considerations 1. Costs and Time Considerations in Litigation 2. Costs and Time Considerations in Administrative Proceedings 3. Intervention of Agencies and Political Bodies in Litigation II. OVERVIEW A. General Policies Underlying Italy’s Competition Laws 1. Consumer Welfare 2. Protection of Smaller Enterprises Against Larger Enterprises 3. Protection of Domestic Enterprises Against Foreign Competition B. Role of Economic Doctrines and Analysis 1. Generally 2. Use of Specific Economic Analysis 3. Extent to Which Courts Have Embraced Economic Analysis III. SUBSTANTIVE LAW A. Horizontal Agreements and Practices 1. General Principles (a) Introduction (b) The Notion of “Undertaking” (c) Agreements, Decisions, and Concerted Practices (d) Restrictive Object or Effect (e) Appreciability of the Restriction (f) The Burden of Proof (g) Reliability of Documentary Evidence (h) Relevance of Criminal Findings in the Context of the Competition Authority’s Investigations (i) Successor’s Liability 2. Cartel Enforcement (a) Agreements Covered (ii) Fixing of Prices or Other Contractual Obligations (iii) Market Allocation (iv) Boycotts (v) Covenants Not to Compete (vi) Refusal to Grant Access to Services (vii) Other Horizontal Practices - Information Exchanges (viii) Complex Cartels (b) Exemption from Prohibition 2 (c) Cooperation with Other Competition Authorities (i) Cooperation within the European Competition Network (ii) Cooperation between National Competition Authorities (iii) Cooperation between the European Commission and National Authorities. (d) Amnesty/Leniency Program (i) The New Leniency Program (ii) General Application of the New Leniency Program (iii) The First Leniency Case (e) Penalties (i) General (ii) The Criteria Used to Determine the Amount of the Fines - Excessive or Disproportionate Fines (iii) Aggravating and Attenuating Circumstances (iv) Fines Imposed on Associations of Undertakings (v) The “Relevant Turnover” for the Calculation of the Fine - Sales of Joint Ventures (f) Treatment of Intra-Group Conspiracy or Acts by Related Companies (g) Remedies/Sanctions (i) Structural Remedies B. Mergers and Acquisitions 1. Transactions Covered (a) Mergers (b) Acquisition of Control (i) The Notion of Control (ii) Acquisition of Sole Control (iii) Acquisition of de Facto Control (iv) Acquisition of Control by Means of Contractual Arrangements (v) Call Options 2. Transactions That Do Not Constitute a Concentration (a) Acquisitions of Purely Financial Interest (b) The Creation of a Cooperative Joint Venture (c) Transactions between Undertakings That Are Not Independent (d) Transactions Involving Companies Not Engaged in Economic Activities 3. Concentrations That Must Be Reported 4. Concentrations That Do Not Need to Be Reported 5. Appraisal of Concentrations (a) Market Definition (b) The Test of Dominance (c) The Appreciable and Long-Lasting Elimination or Restriction of Competition 6. Joint Ventures (a) Joint control (b) Full-functionality. (c) No Risks of Coordination 7. Notification and Procedure (a) Filing Procedures (b) Filing Fees (c) Initial Information Requirements (d) Subsequent Investigatory Stages and Information Requirements (i) Phase I (ii) Phase II (e) Final Orders/Sanctions by the Competition Authority 3 (i) Coercitive Powers of the Competition Authority (ii) Fining Power of the Competition Authority (f) Special Provisions for Unsolicited Takeover Bids (g) Confidentiality (h) Exemptions (i) Sanctions for Failure to Notify 8. Substantive Test: Principal Evaluative Criteria (a) Single-Firm Dominance (i) Horizontal Mergers (ii) Vertical Mergers (iii) Conglomerate Mergers (b) Collective Dominance 9. Treatment of Efficiencies 10. Jurisdictional Issues 11. Remedies (a) Revocation/Amendments of Remedies 12. Third-Party Rights (a) Phase I (b) Phase II 13. Post-Closing Review 14. Provisions Applicable to Special Sectors (a) Banking Sector (b) Insurance Sector (c) Communications Sector (d) Film Distribution (e) General Economic Interest Services and Legal Monopolies C. Abuse of Dominant Position 1. Definition of Dominance (a) The Notion of Dominance (b) Collective Dominance 2. Abuse Behavior - General Notions (a) Exclusive Dealing/Single Branding (b) Tied Selling & Bundling (c) Rebates (i) Quantity Rebates (ii) Loyalty Rebates (iii) Target Rebates (d) Refusal to Deal/Essential Facilities (i) Refusal to Supply (ii) Refusal to Grant Access to Essential Facility (iii) Other Types of Refusal (e) Predatory Pricing (f) Exploitative Conduct (i) Excessive Pricing (ii) Price Discrimination (g) Other (i) Unfair Terms and Conditions (ii) Discrimination Other Than Price Discrimination (iii) Other Exclusionary Practices (h) Remedies/Sanctions 4 D. Unfair Practices and Other Prohibited/Reviewable Practices 1. Deceptive Marketing Practices (a) Unfair Competition (b) Consumer Deception (i) Unfair Commercial Practices (ii) Misleading and Comparative Advertising (iii) The Competition Authority’s Powers E. Vertical Agreements and Practices 1. Overview: Standards of Evaluation 2. Resale Price Maintenance 3. Exclusive Dealing F. Intellectual Property G. Agency Enforcement 1. National Enforcement (a) Responsible Agencies & Structure (b) Formal & Informal Consultation and Guidance (c) Investigative Powers and Procedures (d) The Rights of the Parties in the Proceedings (e) The Competition Authority’s Powers of Investigation (f) Procedural Steps (i) The Decision to Open Proceedings and Access to the File (ii) The Statement of Objections (iii) The Final Decision (g) Interim Measures (h) Commitments (i) Consistency between Statement of Objections and Final Decision (j) Penalties (k) Rights of Third Parties H. Judicial & Administrative Procedures 1. Relevant Courts 2. Independence of the Judiciary 3. Mechanics for Initiating Proceedings and Appeals (a) Timing of the Appeal Proceeding and Scope of the Review (b) Standing to Appeal Decisions of the Competition Authority I. Private Actions 1. Types of Private Actions Available in the Italian Legal System (a) Actions for Damages (i) Ground and Standing (ii) Burden and Standard of Proof (iii) Calculation of Damages (iv) Passing on Defense (v) Joint Liability (vi) Statutes of Limitation (b) Actions for Nullity (c) Actions for Injunctive Relief 2. Contingency Fees 3. Class Action 5 J. Jurisdiction 1. Extraterritorial Application of Law 2. International Agreements & Cooperation 6 I. INTRODUCTION A. General Comparison of Italy’s Competition Laws, Enforcement, Procedures with Those of the United States Law No. 287 of October 19901 introduced the first competition rules in Italy. Before 1990, the protection of competition was guaranteed through the application of European Community (EC) competition law and the Civil Code provisions on unfair competition. The Competition Law addresses restrictive agreements, abuse of dominant position, and the creation and/or reinforcement of a dominant position through merger. The crucial interpretative challenge posed by the Competition Law is to define the forms of collective and unilateral conduct that pose unacceptable competitive dangers. The Competition Law proscribes rather than prescribes conduct, and it does not authorize positive administrative regulation of business conduct. For example, the Competition Authority cannot set the price for goods or services. In the past few years, however, independent administrative agencies have been established to monitor prices and contractual conditions in sensitive sectors such as communications and energy. On its face, this legal framework is similar to U.S. competition law. There are, however, significant differences between the Italian and U.S. systems with respect to both the substantive assessment and the applicable procedures. In Italy, the enforcement of the Competition Law is generally entrusted to the Competition Authority (Autorità garante della concorrenza e del mercato). In the banking and insurance sectors, the Competition Authority is responsible for the enforcement of the Competition Law. However, before adopting a final decision concerning undertakings active in these sectors, it must request the non-binding opinion of the Bank of Italy (Banca d’Italia) and of the Insurance Authority (Istituto per la Vigilanza sulle Assicurazioni Private e d’Interesse Collettivo), respectively. Similarly, in the communications field, the Competition Authority must request the non- The Authors would like to thank their colleagues Alessandro Bardanzellu, Luigi Nascimbene, Patrick Marco Ferrari, Luca Crocco, and Gianni De Stefano for their contribution to the drafting of the present publication. A previous version of this publication has been published within “Competition Laws Outside the United States”, 2nd edition, ABA Section of Antitrust Law, January 2011. 1 Law No. 287/1990 of October 10, 1990 [hereinafter Competition Law]. The Competition Law (Norme per la tutela della concorrenza e del mercato) introduced Italy’s first competition