The Reshaping of Competition Rules and Procedures in Italy

I. New Merger Control Rules

New Ex-Post Scrutiny of "Below-Threshold Transactions"

Under the new Italian Competition Bill, merger transactions that do not meet the Italian turnover thresholds (so-called "below-threshold transactions") can still be reviewed upon the ICA's request, if the following three conditions are met:

• At least one of the two applicable Italian filing thresholds is met (either combined turnover exceeding €532 million in Italy or individual turnover by each of at least two undertakings concerned exceeding €32 million in Italy); or, alternatively, if the combined turnover of all undertakings concerned exceeds €5 billion worldwide;
• The transaction raises substantial competition concerns in the Italian market; and
• The ICA requests the parties to submit a notification within six months after closing of the transaction, at the latest.

With respect to the requirement that the transaction raises substantial competition concerns, the ICA has recently published guidelines clarifying that the transactions most likely to attract scrutiny are: (i) acquisitions of innovators; (ii) so-called "killer acquisitions" of promising start-ups in high-tech industries; and (iii) acquisitions of strategic companies with significant assets but low turnover. Yet, transactions involving more traditional industries can also attract scrutiny if they give rise to an appreciable competition impact on the Italian market.

From a procedural standpoint, alongside the ICA's powers to require parties to notify below-threshold transactions, companies are also entitled to submit a voluntary notification before closing to seek the ICA's views on whether the transaction would be eligible for review. This tool should be carefully used to avoid implying that the transaction may raise competitive issues.

The risk of a post-closing review by the ICA adds an additional regulatory layer for below-threshold transactions and should be factored in when negotiating the terms of such deals (condition precedents, implementation/closing dates).

The SIEC Test to Mitigate Lack of Enforcement in "Gap Cases"

The old dominance test to assess reportable transactions ("creation or strengthening of a dominant position in the national market") has been replaced with the so-called SIEC test ("significant impediment to effective competition"), consistent with the legal test applicable under the EU Merger Regulation.

The SIEC test is meant to be wider than the dominance test as it can catch so-called "gap cases" (i.e., concentrations in oligopolistic markets which do not create or reinforce an individual or collective dominant position but still raise competition concerns). 

Joint Ventures: Full-Functionality Requirement and Assessment of "Spill-Over Effects"

The treatment of joint ventures has been aligned to the EU Merger Regulation. As a result, joint ventures fulfilling the full function requirement (i.e., those joint ventures capable to act as full-fledged independent businesses in the marketplace) will now be treated as notifiable concentrations, regardless of whether they cause risks of coordination between the parent companies.

New Time-Limit For Phase II Merger Investigations

The duration of Phase II investigations was recently extended from 45 to 90 calendar days, consistently with the EU Merger Regulation. The duration of Phase I investigations is kept at 30 calendar days from filing.

II. ICA's New Enforcement Tools

Brand New Investigative Powers Outside of Formal Antitrust and Mergers Investigations

The ICA now has the power to request information and documents outside of formal antitrust investigations or merger proceedings "at any moment", if such request: (i) clearly indicates the underlying legal basis; (ii) has a proportionate scope; and (iii) grants a reasonable deadline to the addressee to respond (i.e., maximum 60 days, which can be extended upon a reasoned request).

The ICA can impose fines up to 1% of the turnover of the addressee of the request for failure to comply with the request or in case of incorrect, partial or misleading information. Shortly after the entry into force of the new rules, the ICA imposed fines on two companies for failure to meet the deadline to provide the requested information outside a formal merger review proceeding.

Whistleblowing Online Platform

To help identify and investigate secret cartels, the ICA has introduced a new whistleblowing online platform following the best practices of the European Commission and other national competition authorities in the EU. In the course of 2023, the ICA opened at least two investigations following a complaint via the newly introduced whistleblowing investigative tool.

New Far-Reaching Settlement Procedure

The new Italian Competition Bill has also introduced a settlement procedure, which enables companies to benefit from reduced fines upon acknowledgement of wrongdoing. The procedure largely mirrors that before the EC, although it extends beyond anticompetitive agreements to also encompass unilateral conducts (i.e., abuse of dominance) and grants higher fine reductions (up to 20% for all antitrust violations, except for secret cartels).

ICA's Powers in Connection With the Digital Markets Act

The new Italian Competition Bill also granted the ICA the power to enforce EU Regulation 2022/1925 on contestable and fair markets in the digital sector (Digital Markets Act), imposing upon certain digital platforms with market power (so called "gatekeepers", such as social networks, intermediation services, advertisers) a number of regulatory obligations to prevent the leveraging of market power across different digital services, reduce barriers to entry or expansion across digital markets, facilitate switching and multi-homing between services, and control how user data are processed and when such data must be made available to users as well as third party competitors.

As a result, the ICA will have specific powers to carry out investigations and inspections, as well as issue fines in order to support the European Commission investigating possible violations of the Digital Markets Act in Italy.

III. Abuse of Economic Dependence in the Digital Economy

The new Italian Competition Bill has also broadened the scope of the law on abuse of economic dependence (i.e., Law No. 192/1998), in order to cover the relationships between large digital platforms and weaker commercial partners. 

In particular, the bill has introduced a rebuttable presumption of economic dependence from digital platforms that play a "key role" in reaching end users and/or suppliers, and lists a number of abusive conducts such as: (i) providing insufficient information on the scope or quality of the service provided; (ii) requesting unilateral services that are not justified by the nature or content of the activity performed; and (iii) adopting practices that inhibit or hinder the use of different providers for the same service, also through unilateral conditions or additional costs that are not regulated by contractual agreements or existing licenses.

In addition to the risk of civil litigation, the breach of the prohibition of abuse of economic dependence is subject to antitrust fines of up to 10% of the infringer's latest audited turnover.