COMPETITION LAWS OUTSIDE THE UNITED STATES FIRST SUPPLEMENT CHAPTER 8: ITALY Mario Siragusa Matteo Berretta Saverio Valentino Principal Co-authors Matteo Bay Principal Reviewer Reprinted by permission of the American Bar Association. © 2005 ABA. ISBN: 1-59031-325-9 This volume should be officially cited as: ABA Section of Antitrust Law, Competition Laws Outside the United States, First Supplement (2005) Italy-3 CONTENTS I. INTRODUCTION ..............................................................................................5 A. Overview of Applicable Statutes and Landmark Cases ........................5 B. Overview of Enforcement Agencies and Their Jurisdiction..................6 C. Existence and Practical Availability of Private Rights of Action....................................................................................................8 II. OVERVIEW .....................................................................................................9 A. Application of Relevant Economic Doctrines.......................................9 1. Use of Specific Economic Analyses..............................................9 III. SUBSTANTIVE LAW ......................................................................................10 A. Horizontal Agreements and Practices .................................................10 1. Concept of Undertaking ..............................................................10 2. Agreements, Decisions, and Concerted Practices .......................11 (a) Concerted Practices ...........................................................11 3. Prohibited Agreements ................................................................12 (a) Fixing of Prices or Other Contractual Conditions.............12 (b) Market Allocation..............................................................13 (c) Information Agreements....................................................13 4. Exemption from Prohibition........................................................14 B. Monopolization/Abuse of Dominant Position.....................................17 1. The Relevant Market ...................................................................17 (a) The Relevant Product Market............................................17 2. Dominant Position.......................................................................17 (a) Factors Indicating Dominance...........................................17 3. Types of Abuses ..........................................................................18 (a) Excessive Pricing...............................................................18 (b) Price Discrimination..........................................................18 (c) Rebates ..............................................................................19 (d) Predatory Pricing...............................................................19 (e) Refusal to Deal ..................................................................20 4. Miscellaneous Abuses .................................................................20 (a) Exclusionary Practices.......................................................20 C. Mergers and Acquisitions....................................................................21 1. The Concept of Concentration.....................................................21 (a) Acquisition of Control.......................................................21 2. Concentrations That Must Be Reported ......................................23 3. Transactions That Do Not Need to Be Reported.........................23 4. Appraisal of Concentrations........................................................24 (a) The Test of Dominance .....................................................24 (b) The Appreciable and Long-Lasting Elimination or Restriction of Competition ................................................25 5. Merger Control in Special Sectors ..............................................27 (a) Communications Sector.....................................................27 Italy-4 IV. ENFORCEMENT PROCEDURE ........................................................................27 A. Administrative or Other Procedures....................................................27 1. The Rights of the Parties in the Proceedings...............................28 2. The Competition Authority’s Powers of Investigation................29 (a) Request for Information and Documentation ....................29 (b) Inspections.........................................................................29 (c) Procedural Steps ................................................................30 3. Merger Procedure ........................................................................30 (a) The Notification.................................................................30 (b) Phase II..............................................................................30 (c) The Decision......................................................................31 B. Appeal from Agency Decisions...........................................................32 C. Penalties...............................................................................................34 1. Infringement of Sections 2 and 3.................................................34 2. Infringement of Sections 16 and 18.............................................37 D. Private Actions ....................................................................................38 V. JURISDICTION ...............................................................................................38 A. Internal Jurisdiction Rules...................................................................38 B. Concurrent Jurisdiction with Other Authorities ..................................39 VI. APPLICABLE TREATIES OR INTERNATIONAL AGREEMENTS ........................40 VII. STATUTORY AND REGULATORY TEXTS ......................................................41 A. Law No. 57 of March 5, 2001 (Section 11).........................................41 B. Form for the Notification of a Concentration......................................42 Italy-5 I. Introduction A. Overview of Applicable Statutes and Landmark Cases On March 5, 2001, the Italian Parliament enacted Law No. 57/2001, 1 which introduced a number of amendments to the Competition Law. 2 In particular, Law No. 57/2001 modified Section 8 of the Competition Law, introducing a new set of rules aimed at preventing the unlawful exploitation of the advantages enjoyed by companies in regulated markets who seek to strengthen their position in neighboring markets. Section 8 of the Competition Law, as amended, provides that: (i) firms entrusted with the operation of services of general economic interest and legal monopolists can operate in other markets only through a separate entity; (ii) the formation of the separate entity (as well as the acquisition of control of an entity active in a different market) must be communicated to the Competition Authority; 3 and (iii) if the firm performing services of general interest or a legal monopolist provides its subsidiaries or the companies in which it has an interest with goods or services, it must make such goods and services available to its subsidiaries’ direct competitors on equivalent terms. The Competition Authority was given the power to impose fines for violations of the new rules. In particular, it may impose a fine of up to ITL 100 million (€ 51,645) for a violation of the above-mentioned obligation to notify the Competition Authority of the creation of a new entity. 4 Law No. 57/2001 also modified Section 15(1) of the Competition Law, which sets the limits for the fines that can be imposed for violations of the Competition Law’s substantive provisions (i.e., cartels, abuses of dominant position, etc.). Until April 3, 2001, the maximum fine provided for in Section 15(1) was 10 percent of each company’s turnover in the market affected by the infringement. As a result of the 2001 reform, the maximum fine has been significantly increased and is now set at 10 percent of the total turnover of each company. 5 1. See Law No. 57 of March 5, 2001, § 11 (reproduced in an Annex to this chapter). 2. Law No. 287/1990, The Competition Law ( Norme per la tutela della concorrenza e del mercato), was initially enacted on October 10, 1990, and introduced Italy’s first competition rules. 3. On September 28, 2003, the Competition Authority published a notice detailing how to comply with this notification requirement. The notice covers not only future separations or acquisitions, but also requires that notice be given to the Authority under the new procedures of separations and acquisitions completed before issuance of the notice (namely, those completed between April 4, 2001 and September 28, 2003). Notice of previous separations had to be given by November 28, 2003, even if they had already been completed, and regardless of whether notice was already given under merger control rules or through other means (for example, by means of a letter that did not contain all of the information required by the new notice). 4. Law No. 57/2001, § 11(3). 5. Based on a recent judgment by the regional administrative court of first instance of Latium (Trib. ammin. reg. or TAR), the notion of total turnover must be interpreted as referring to total worldwide turnover. See Philip Morris & ETI v. Autorità Garante della Concorrenza e del Mercato, 29 Oct. 2003, n. 9203/2003 (Trib. ammin. reg.). This interpretation is consistent with the Community Courts’ interpretation