The Cartels and Leniency Review: Italy
Enforcement policies and guidance
i The notion and ban of cartels
The prohibition of cartels is provided by Article 2 of Law No. 287/90, the Italian antitrust law (IAL). This provision, which largely resembles Article 101(1) of the Treaty on the Functioning of the European Union (TFEU), prohibits agreements between undertakings, concerted practices or decisions by associations of undertakings that have as their object or effect the prevention, restriction or distortion of competition within the national market or a substantial part of it. The Italian Antitrust Authority (IAA) is the independent agency entrusted with the public enforcement of the cartel prohibition set out in Article 101(1) of the TFEU.
In December 2021, Legislative Decree No. 185/2021 (the IAL Amendment) came into force, implementing EU Directive 2019/1 (known as the ECN+ Directive).2 The IAL now provides a non-exhaustive list of conduct constituting 'secret cartels' that is consistent with the IAA's practice in including fixing prices, limiting production, sharing markets and customers, and bid rigging. Since agreements or concerted practices of this kind are by their very nature harmful to the proper functioning of competitive markets, they are considered restrictions of competition 'by object' and, therefore, a full analysis of their effects is not required; cartels are thus punished as restrictions per se. However, the economic and legal context in which they take place remain a central element in their assessment.
The IAA has been a pioneer within the EU in adopting a fairly rigid approach to the assessment of cartel-like behaviour in relation to 'pure' exchanges of sensitive information between competitors, which in Italy may be deemed to be restrictions per se, even when they concern neither future prices nor volumes.3 The relevant case law includes two landmark cases dealing with indirect exchanges of information in the insurance business, namely RC Log and IAMA Consulting.4 The IAA's continuing focus on exchanges of information in the insurance and financial sector has been confirmed by recent cases, including Car Financing5 and Progetto Antifrode Ania,6 as well as the ongoing investigation in Comparatori di Prezzo/Scambio di Informazioni Polizze RCA.7
Moreover, the IAA has been particularly active in recent years with regard to anticompetitive behaviour in the context of public tenders for goods or services,8 and for awards of public services concessions, treating these practices as cartel conduct when dealing with not only clear bid-rigging agreements but also less obviously illegal behaviour (such as temporary bidding consortia grouping participants that would otherwise have been capable of participating alone in the tender).9 That said, in the past two years, there has been a decrease in the number of investigations launched by the IAA into alleged competition law infringements in public tenders (three,10 compared to 16 in the previous five years), which seems to indicate both a switch of focus by the IAA and bidding parties' increasing awareness and caution.
While there is no general guidance on cartels in the IAA's soft law, in 2014, the IAA adopted guidelines on the method for setting fines in relation to antitrust infringements, which are particularly relevant for cartels. Moreover, in 2018, the IAA adopted compliance programmes guidelines that are to be read in close connection with the leniency programmes (see Section I.ii). Finally, in 2020 the IAA issued a notice providing guidelines on the assessment of cooperation agreements in the context of the covid-19 pandemic, focusing on temporary cooperation agreements aimed at favouring the production and distribution of essential services and goods that may be subject to shortages due to a sudden rise in demand, in particular in the agri-food and health sector. While there is no departure from the general prohibition of cartels, the notice provides some informal guidance on the conditions under which cooperation between competitors can be lawful.11
ii The leniency programme
Under the IAL, the IAA is authorised to set up a national leniency programme in accordance with EU law. On 15 February 2007, the IAA adopted its Leniency Notice.12 With the adoption of the IAL Amendment, a set of detailed provisions on leniency applications have now been introduced. Full immunity from a fine is available to the first cartel participant that spontaneously reports a collusive arrangement, providing the IAA with qualified information or documentary evidence, or both. Subsequent applicants may instead obtain fine reductions, depending on how they rank in the order in which they approached the IAA. All parties only obtain and retain those benefits on condition of their qualified cooperation (as explained in Section IV). Moreover, if a company has applied for leniency, current and former directors, managers and staff members who participated in a cartel that also constitutes a criminal offence are not punishable for this offence if they actively collaborate with the IAA and with the public prosecutor.
iii The enforcing authorities
The IAA is responsible for the public enforcement of competition law. The IAA is also the only venue for immunity applications.
The Lazio Regional Administrative Tribunal (TAR Lazio) in Rome has exclusive jurisdiction over appeals on decisions of the IAA. The applicant lodges its appeal before the TAR Lazio within 60 days of the notification of the challenged decision. Decisions subject to such judicial review include decisions dismissing a complaint and decisions closing the case without the finding of an infringement; for example, by accepting commitments from the investigated parties. In contrast, as a general rule, procedural decisions of the IAA must be challenged as part of the appeal concerning the IAA's final decision.
Judgments of the TAR Lazio may be further appealed before the Supreme Administrative Court within 30 days of notification of the judgment or three months from its publication.
Antitrust law can also be enforced before civil courts. The specialised business divisions of the courts of Milan, Rome and Naples enjoy exclusive jurisdiction in Italy over actions based on antitrust law.
Cooperation with other jurisdictions
i Collaboration within the EU
The European Competition Network (ECN), established by EU Regulation No. 1/2003 to ensure a high level of consistency in the enforcement of antitrust law in the EU, is the IAA's natural forum for coordinating case allocation, exchanging best practice and sharing detailed information concerning enforcement priorities and ongoing cases with the EU Commission and other national competition authorities (NCAs) within the EU. The IAL Amendment provides for even closer cooperation between NCAs in relation to the notification and enforcement of decisions, and to cross-border investigations. The IAA has also entered into bilateral cooperation arrangements with EU competition authorities. As recently as October 2021, the IAA and the Spanish competition authority signed a memorandum of understanding to strengthen their bilateral cooperation, inter alia, in the context of cartel investigations.
ii Interplay between proceedings within the EU
Regulation No. 1/2003 provides that national courts and NCAs must avoid adopting decisions that would conflict with a decision contemplated by the EU Commission. Further, as mentioned, within the ECN but also on a bilateral basis the EU Commission regularly liaises with the IAA (and other NCAs) to ensure there is adequate coordination and no overlapping investigations.
With regard to cooperation in the area of leniency applications, the Leniency Programme, like the EU Model Leniency Programme on which it is based, allows undertakings to file a simplified application with the IAA if a 'main' leniency application has been or is being submitted to the EU Commission13 for the same infringement. However, if the scope of the EU and the national applications do not perfectly coincide in respect of the infringement disclosed, the existence of the EU application does not preclude the IAA from intervening at a national level.14 Moreover, the recent IAL Amendment states that if the Commission decides not to continue an investigation, it can ask for a more complete leniency application to be submitted by the company to proceed autonomously.
iii Collaboration with NCAs outside the EU
The IAA is one of the founding members of the International Competition Network, a specialised network of competition agencies that meets on a regular basis and addresses practical competition concerns. The IAA cooperates with NCAs outside the EU mainly in this framework, although bilateral cooperation arrangements are also possible (e.g., in February 2020, the IAA and the Brazilian competition authority, CADE, signed a memorandum of understanding). Other, albeit less specialised, fora for international cooperation include the United Nations Conference on Trade and Development and the Organisation for Economic Co-operation and Development.
As cartels do not generally amount to criminal infringements under Italian law (except in the case of bid rigging in public tenders – see Section V.iii), extradition to or from Italy is unlikely to be relevant in practice. It is possible for extradition from Italy to be granted if two conditions are met: (1) there must be an extradition treaty in place with the requesting jurisdiction; and (2) the alleged antitrust breach must also be considered, or be included in, a crime in Italy.15
Jurisdictional limitations, affirmative defences and exemptions
i Jurisdictional reach of the IAL
The IAL (as well as EU law, as enforced by the IAA) applies not only to acts occurring in Italy but also to ones that take place outside the national borders provided that they have as their 'object or effect' the restriction of competition in Italy (i.e., they have an impact on competition in Italy). Conversely, acts taking place in Italy that exclusively concern foreign markets do not fall within the scope of the IAL, unless it could possibly be argued that any goods affected by the conduct concerned has a reasonable probability of being reimported into Italy.
Furthermore, for an act to be caught by the IAL, it is not necessary that the undertaking concerned be present in Italy (e.g., via a local subsidiary); the IAA regularly opens proceedings against, and imposes fines on, foreign undertakings.
ii Parental liability
The IAA and Italian courts generally acknowledge the case law affirmed by the EU Court of Justice in Akzo,16 according to which parent companies may be held liable for the conduct of their subsidiaries where the latter do not independently determine their own conduct on the market. When a parent company directly or indirectly holds 100 per cent (or a percentage close to 100 per cent) of the share capital or is able to exercise all the voting rights17 in the subsidiary engaging in a cartel, there is a (theoretically) rebuttable presumption that the parent company actually exercised a decisive influence over its subsidiary, so that the parent company may be found jointly and severally liable for the cartel. While historically this presumption has been difficult to rebut in practice in relation to the IAA, very recent case law suggests a relaxation of this rigid stance, at least in relation to certain types of pure holding companies.18
That said, until recently the IAA typically considered parent companies liable only in cases of demonstrably active involvement in or reasonable knowledge of the infringing conduct on the part of the parent.19 Moreover, this trend seems likely to be confirmed in light of a recent decision by the Council of State.20
iii Exemptions and defences
There are no general exemptions for cartels in Italy. Legal defences (e.g., the need to deal with an industry crisis) are not typically admitted in cartel proceedings, even if they are in theory available. This was recently confirmed in the context of the covid-19 pandemic. Defences against the IAA (or plaintiffs in general), therefore, generally focus on the fact that the IAA or the plaintiff has not satisfied the burden of proof for the entire duration of the alleged infringement (or part thereof). Focus is also normally placed on the insufficient or illogical reasoning of the cartel allegation.
The IAL21 envisages the possibility for undertakings under investigation to submit to the IAA within three months of the notification of the opening of the investigation commitments aimed at addressing the anticompetitive concerns raised by the proceedings. If after a market test the commitments are accepted and made binding by the IAA, no finding of infringement will be made nor a fine be imposed by the IAA.
Note that the commitments route is not available in the most serious cases: as stated in the IAA's Commitments Notice, which refers to Article 13 of Regulation (EC) No. 1/2003, a commitment decision is not appropriate where the conduct is of such gravity that a sanction is considered necessary. However, as can be seen from recent cases, commitments are accepted in cases of information exchanges22 and less harmful forms of (non-cartel) horizontal cooperation.23
i Scope of the leniency programme in Italy
The leniency programme was first introduced in Italy by Law-decree No. 223/2006, which modified Article 15 of the IAL. The IAA then adopted a Leniency Notice setting out the criteria for obtaining immunity or a fine reduction. Most recently, a set of detailed provisions on leniency applications have been provided by the IAL Amendment. These rules are consistent with those adopted at EU level24 and are modelled on the ECN Model Leniency Programme.25
The leniency programme is only available to cartels, including those realised through hub-and-spoke practices (i.e., a cartel or even a pure information exchange between competitors intermediated by a supplier or a distributor). Following the entry into force of the national legislation implementing the Damages Directive,26 a successful immunity applicant is also granted the additional benefit of no longer being considered jointly and severally liable for damages with the other co-cartelists.
At present, there seems to be a decline in this programme's popularity: in 2019, the IAA opened three proceedings as a result of leniency applications, whereas in 2020 and 2021 there were none. This may be linked to the entry into force in Italy of Legislative Decree No. 3/2017 strengthening private enforcement of antitrust damages claims (because of the risk this entails for successful leniency applicants).
ii Conditions for immunity
Full immunity is granted to the first undertaking that voluntarily provides the IAA with information or evidence about the existence of a cartel, provided that: (1) the information or evidence (along with a targeted inspection) is decisive in establishing the infringement; and (2) the IAA does not already have sufficient information or evidence to prove the existence of that infringement.
A marker may be obtained by means of a reasoned request, in which case the IAA sets a deadline for the submission of evidence. If the deadline is met, the request for leniency is deemed to have been finalised on the date of the marker request.
iii Conditions for a fine reduction
Undertakings that do not qualify for full immunity may be eligible for a fine reduction, 'usually not exceeding 50 per cent'. To qualify for this advantage, undertakings must disclose facts or evidence that provide added value with respect to the information already in the IAA's possession or enabling the IAA to extend the material scope of the infringement or its duration (i.e., partial immunity). It should be noted that this aspect of the Italian leniency regime differs from the EU regulatory framework, which instead provides for three specific levels of reduction in fines. To gauge the reduction, the IAA takes into account (1) the timeliness and extent of the collaboration; and (2) the value of the information or documents provided.
iv Obligations after the leniency application
Following the submission of an application and in order not to lose the benefit of immunity or a reduction of fines, an undertaking must immediately terminate its participation in the cartel. In addition, the undertaking must continue to cooperate fully and diligently for the entire duration of the investigation. Such continued cooperation implies, inter alia, that the relevant undertaking continues to provide the IAA with any information or documents in its possession, that it takes steps to ensure that its employees can be heard at hearings, and that it refrains from informing anyone of the fact that it has made a leniency application.
In some cases, however, the IAA may require or allow the undertaking not to interrupt its participation in the cartel or not suspend certain conduct, to safeguard the successful outcome of the investigation.
v Leniency application and discovery risk
Undertakings may submit corporate statements in writing. It is, however, common practice for undertakings to provide them orally, to address the disclosure risk associated with private damages claims. Oral proffers could in principle be admitted where discovery obligations requiring the defendant to provide written evidence or documents in its possession are a realistic possibility, either in Italy or abroad. Most recently, Legislative Decree 3/2017 clarified that civil judges may not order the disclosure of statements issued as part of a leniency programme, but this does not apply to the documents filed along with the leniency application.
i Fines and orders
Article 15 of the IAL entitles the IAA to adopt cease-and-desist orders and issue administrative fines up to 10 per cent of the yearly turnover of the undertakings concerned.
To increase deterrence and legal certainty, the IAA has adopted guidelines (the Guidelines) setting out the methodology that the IAA applies when calculating the fines applicable to antitrust infringements. This is largely in line with the European Commission's 2006 'Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003'.
The Guidelines prescribe that, to determine the base amount, the IAA will apply a percentage (up to 30 per cent and no less than 15 per cent for serious infringements such as cartels)27 of the annual sales affected by the infringement and then multiply this value by the number of years the infringement lasted. This amount may then be increased by 15 to 25 per cent where necessary to ensure deterrence (i.e., an 'entry fee'), in particular for infringements with a very short duration. Once the base amount is so determined, it may then be increased or decreased by up to 50 per cent to account for mitigating or aggravating circumstances. Note that the base amount, so adjusted, could then be increased up to 100 per cent to account for recidivism and decreased by up to 50 per cent where the fined undertaking provides information or evidence decisive for ascertaining a different infringement (i.e., the 'leniency plus' mechanism). The Guidelines also provide for the option to claim inability to pay, to reduce the level of the fine. Finally, the IAA retains discretion to adjust whatever amount it has reached to reflect special circumstances or the need to adjust it for effective deterrence.
Setting the base amount on the basis of the relevant sales has proven problematic with respect to single-product undertakings, whereby the relevant sales generally coincide with the undertaking's overall turnover. This results in fines against single-product undertakings rarely amounting to less than the maximum permitted by the law.
If a company fails to comply with a cease-and-desist order, the IAA may, after an additional dedicated investigation, issue a fine of not less than double the original fine (still within the 10 per cent threshold). The recent IAL Amendment has also empowered the IAA to issue periodic penalties for non-compliance with cease-and-desist orders (of up to 5 per cent of the company's average daily global turnover, for each day of delay).
The IAA was open to considering the impact of the covid-19 pandemic when setting fines for undertakings operating in sectors that faced an increased risk of recession28 (e.g., in Servizi di prenotazione del trasporto taxi – Napoli,29 the IAA reduced the amount of the fine by 80 per cent, acknowledging the severe impact of the pandemic on the transport sector and, specifically, on taxi services).
Finally, the recent IAL Amendment has made it clear that orders issued by the IAA at the end of an investigation in which an infringement has been ascertained can also include positive prescriptive measures.
Article 30 of the draft of 4 November 2021 of the annual law on competition, which should be approved shortly, introduces settlements into the IAL. The settlement procedure, which has been used by the Commission to speed up the adoption of cartel decisions, is subject to an admission of guilt by the undertakings involved and their reaching a 'common understanding' with the Commission regarding their anticompetitive conduct. The IAA retains wide discretionary power, as it has the power to discontinue the discussions at any time.
The definition of the procedural rules and the extent of the reductions in the sanction shall be defined by the IAA in line with European law in due course, by means of its own implementing regulations.
iii Compliance programmes and fine reduction
The adoption of an antitrust compliance programme is expressly recognised as an attenuating circumstance for the purposes of fine calculation. The IAA has published ad hoc guidelines to support undertakings in adopting effective compliance programmes.
Programmes implemented before the opening of the investigation that have allowed discovery and interruption of the infringement prior to investigation could give rise to a fine reduction up to 15 per cent. Programmes implemented before the opening of the investigation that have not proved effective but are nonetheless not manifestly inadequate could lead to a fine reduction of up to 10 per cent to the extent the fined undertakings supplement the programme pending the investigation. Finally, a fine reduction of up to 5 per cent is available for programmes that are not adequate in origin in the event substantial improvements are implemented pending the investigation.
iv Antitrust and criminal law in Italy
Cartels (and other antitrust infringements) per se do not constitute criminal infringements under Italian law. However, some acts that constitute antitrust infringements may also violate criminal law. The most significant is bid rigging in the context of public procurement.
For this reason, the IAL Amendment has introduced criminal immunity for current and former directors, managers and staff members of companies submitting a leniency application. In particular, these individuals cannot be punished for the criminal offence concerned if they cooperate fully with the IAA and the public prosecutor. This change specifically addresses one of the obstacles to more frequent use of the leniency toolkit in one of the IAA's priority enforcement areas, bid rigging in public tenders.
To date there has been limited enforcement of criminal violations resulting from these particular anticompetitive acts. To also ensure full cooperation with the public prosecutors on this front, in 2018, the IAA signed memorandums of understanding with the Milan and Rome prosecutors' offices to facilitate the exchange of information pertaining to facts that may be relevant under both antitrust and criminal law.
'Day one' response
i Inspection powers and fines
Article 20 of the IAL enables the IAA to conduct inspections at the business premises of the companies under investigation at any time during an investigation. Moreover, following the adoption of the IAL Amendment, subject to authorisation by a public prosecutor the IAA also has the power to conduct inspections at private premises, including the homes and means of transport of company directors, managers and staff members, if there is a reasonable suspicion that documents held there may help prove the infringement.
The IAA's inspections are normally unannounced (dawn raids). The IAA generally avails itself of specialised officers of the tax police for these inspections, and acquires documents and electronic files the bulk of which will constitute the case file.
The IAA can request any entities or individuals to provide or display any information or documents relevant to the investigation that they have in their possession. Thus, this power is not limited to the investigated parties but may be used in relation to anyone. In the course of inspections, IAA officials, with the help of the tax police, can also forcibly access computers, perform keyword searches and collect copies of the resulting documents.
The IAA authorises inspections with a formal decision. This is served on the inspected parties together with the decision to open the investigation, which sets out the scope of the same (normally well defined, in terms of products or services concerned, and time frame). During the inspection, the IAA cannot require documents outside the scope of the decision to start proceedings. In addition, the IAA cannot require documents covered by legal professional privilege.
Correlatively with global digitalisation, inspections in the past have focused mainly, but not exclusively, on electronic files, including those held on portable devices such as smartphones.
The IAL Amendment has extended the IAA's fining powers. Specifically, a company may be fined up to 1 per cent of its global turnover if it fails to cooperate or obstructs the inspection or provides misleading information. In addition, dissuasive periodic penalties (of up to 5 per cent of the company's average daily global turnover, for each day of delay) for non-compliance with the IAA's requests have been introduced. Individuals can also be held liable now if they obstruct inspections, refuse to provide information or provide misleading information. Where this is the case, individuals can be subject to administrative fines (ranging from €150 to €25,823) as well as periodic penalty payments for each day of delay in fulfilling the duty to cooperate (ranging from €150 to €500). Finally, according to the draft annual law on competition (the Draft Law), still under consideration by Parliament, the IAA could issue mandatory requests for information and impose fines for failure to respond, even prior to the launch of a formal investigation.
ii Practical recommendations
IAA officers will often wait until external counsel is present or able to at least provide assistance over the phone if practical within a reasonable time frame. Counsel generally shadow officers to ensure compliance with the limits set out above.
The right not to self-incriminate is respected also with respect to the information the IAA requests during inspections (the IAA is in fact allowed to put questions to the employees concerning the subject matter of the investigation). In the event of genuine, factual uncertainty over certain information, the IAA will allow delay in answering to its questions with answers in subsequent written communication.
Any dispute arising during the inspection (e.g., with regard to the manner in which it is conducted) should be reflected in the inspection minutes.
Before the implementation of Directive 2014/104/EU (the Damages Directive) in Legislative Decree No. 3 of 19 January 2017 (the Decree), lawsuits for the redress of antitrust damage were relatively uncommon in Italy. This was because no plaintiff Bar existed and actions of this kind were a relative novelty, and thus the most aggressive claimants tended to opt for other jurisdictions perceived to be more knowledgeable and plaintiff-friendly. The situation has been changing in the past few years. This is due not only to modifications in the applicable legislation but also to other factors, including: (1) an increased activism by consumers' associations and industry associations in promoting actions for damages; (2) a nascent plaintiff Bar offering remuneration schemes based on contingency fees; and (3) increased activism by third-party funders, including international market participants now specifically targeting, inter alia, the Italian market.
ii Applicable legislation, limitation periods and competent courts
The current legislative framework applicable to private antitrust enforcement is based on the following key provisions: (1) Article 33(2) of the IAL, under which actions for antitrust damages can be brought before civil courts; (2) the Decree, which confirms that both direct and indirect clients can seek compensation; and (3) general civil law principles concerning tort liability, namely Article 2043 et seq. of the Civil Code.
From a procedural standpoint, the Decree has increased the degree of specialisation in antitrust matters, for both stand-alone and follow-on actions. The commercial divisions of the Courts of Milan, Rome and Naples in fact enjoy exclusive jurisdiction in Italy over actions for antitrust damages.
The Decree also clarified that the five years' limitation period only starts running when: (1) the infringement has ceased; and (2) the claimant is – or, using reasonable care, should be – aware of the behaviour itself, the harm caused to the injured party and the identity of the infringer. This term is in any case suspended, if the IAA opens an investigation, within one year of the closing of the proceedings.
The possibility of using the procedure set out by Article 696 bis of the Civil Procedure Code, which allows the civil judge to order a preventive economic expert witness report, to obtain an accelerated judge-validated ascertaining of the overcharge, is somewhat controversial. This procedure has been considered admissible by the Naples court but was rejected by the Tribunal of Milan.
iii Standard of proof and quantification of damage
Under Article 7 of the Decree, a final IAA finding of an infringement (i.e., a decision that is no longer subject to appeal in court) must be considered, in civil proceedings, as irrefutable evidence of the nature of the infringement and its actual, personal, temporal and territorial scope.30 This means that there is an absolute presumption that the antitrust conduct (as determined in the decision at issue) occurred.
Moreover, Article 14(2) of the Decree introduces a rebuttable presumption that cartel infringements cause harm. This implies that the claimant's burden of proof in follow-on actions concerning cartels is essentially limited to quantifying the damage suffered and the causal nexus.
In relation to the quantification of the harm, the Decree confirms the general principle under Italian and EU law that any punitive damages must be excluded from the redress. It also provides the courts with the option to be assisted by the IAA.31
Finally, any possible passing on of the relevant overcharge is regulated by Articles 10 to 13 of the Decree. More specifically, Article 12 provides a rebuttable presumption concerning the passing on of overcharges to indirect purchasers (the passing-on offence), thereby entitling them to sue the indirect sellers for damages where the purchasers are able to prove the following: (1) the indirect defendant committed an antitrust infringement; (2) the infringement resulted in an overcharge for the direct purchaser; and (3) the indirect purchaser purchased the goods or services that were the object of the infringement. Conversely, the defendant has to prove (without the benefit of any presumption) that the counterparty or plaintiff passed on the whole or part of any possible overcharge resulting from the antitrust infringement (the passing-on defence).
iv Access to evidence and protection of confidentiality
Articles 3 to 5 of the Decree contain provisions concerning a strengthened mechanism – the 'exhibition orders' facilitating antitrust plaintiffs when seeking to obtain the disclosure of evidence held by the defendants. In particular, in antitrust cases civil judges can now order the parties (or any third party, including antitrust authorities) to disclose any evidentiary elements in their possession provided that, in doing so, the principles of proportionality and specificity are respected, while preserving the attorney-client privilege.
These powers of disclosure (which go well beyond the powers foreseen by the Code of Civil Procedure for cases not based on antitrust grounds) are balanced by (1) the option for the party holding the requested evidentiary elements to be heard on the order of exhibition; (2) the fact that the order must be crafted as precisely and narrowly as possible; and (3) the fact that judges cannot order disclosure of certain key evidence related to leniency (i.e., the application) or settlement programmes (although these have not been introduced in Italy as at the time of writing).
Furthermore, if the requested evidence relates to confidential information, judges can adopt certain measures to protect this (e.g., through confidentiality rings, limiting the number of persons authorised to view the evidence or similar mechanisms), which are becoming increasingly common.
i Recent enforcement records
In the course of 2021, the IAA initiated five cartel proceedings (as many as were initiated in 2019) while two cartel cases were concluded. This compares with three cartel decisions adopted in 2020.
As was the case in 2020, none of the cartel proceedings initiated in 2021 resulted from a leniency application (whereas, in 2019, three cartel cases started from a leniency application). This confirms a trend also seen in 2020: leniency, which has never been particularly popular in Italy as a means of detecting antitrust conduct, is in fact used less and less to this end, probably as a direct consequence of the recent increase in follow-on actions for civil damages. Of the investigations opened during the course of the year, two concern cases of suspected bid-rigging practices.
In addition, it seems that the IAA is paying particular attention to the pharmaceutical industry in this period of health emergency: the most recent cartel case opened concerns an agreement between local pharmacies allegedly seeking to control the application of discounts on drugs.
ii Recent trends and possible developments
Following the IAA proposal submitted on 23 March 2021, the government adopted the Draft Law on 4 November and included it in the National Recovery and Resilience Plan among the urgent measures. It now has to be approved by Parliament to become law. With regard to cartels, the Draft Law will introduce into the IAL the settlement instrument (i.e., a procedure, already existing at EU level, allowing investigated companies to benefit from a 10 per cent reduction in fine in cases of full cooperation and admission of liability during the proceedings) and further strengthens the IAA's inspection powers (notably, even outside the opening of a formal investigation).
Moreover, as noted above, the IAL Amendment entered into force in December 2021. This includes far-reaching reforms, inter alia, to the IAA's enforcement powers, including in particular house searches, higher fines (not only for companies but also now for individuals) in cases of non-compliance during investigations, periodic penalty payments for non-compliance with IAA fines or orders and enhanced coordination with other NCAs in cross-border investigations and enforcement.
On the basis of recent enforcement records and given the covid-19 crisis, it is reasonable to expect that the IAA will continue to focus on the pharmaceutical industry. Moreover, as highlighted in its annual report, the IAA specifically decided to focus on those sectors particularly impacted by the pandemic, including e-commerce and the digital sector. As already mentioned, the IAA has opened cases on the exchange of information carried out by means of digital and artificial intelligence tools. Furthermore, generally it has shown interest in the digital and online sector (most notably through consumer issues and vertical agreement and abuse of dominance cases) and it is possible that cartel enforcement may be focused on those areas too.
In addition, the IAA has recently shown itself not to be shy in significantly increasing the magnitude of its fines. In particular, a record fine of approximately €1.1 billion was levied against Amazon32 at the end of 2021 and although this was an abuse-of-dominance case rather than a cartel case, it clearly illustrates the establishment of a new trend by the IAA.33
Finally, the IAA has stated in its annual report for 2021 its interest and concern regarding sustainability, and specifically that it is ready to contribute to sustainable development by applying existing tools in an 'evolutionary' manner, while at the same time intensifying its cooperation with the European Commission and other national authorities.
iii Impact of the new class action
As from 19 May 2021, new rules on class actions entered into force. These rules amended the Civil Procedure Code and are expected to expand private antitrust enforcement. Under the new framework, these special proceedings are accessible not only by consumers but also by undertakings. Other notable changes include the widening of the range of subjects that can seek redress by these means, since a class action can be brought by all holders of homogeneous individual rights, and the widening of the scope of class actions, which can now be initiated in respect of both contractual and extra-contractual liability. Another key change concerns the option for all claimants to opt in not only at the very first stage in the proceedings (after certification of the class action) but also after the decision on the merits, making the procedure extremely flexible.
The aim of these new rules is to incentivise class actions and, to this effect, the representatives of a certified class action shall be entitled to additional compensation, calculated as a percentage of the total amount due. Furthermore, if the judge appoints a technical expert, as is often the case in follow-on actions, the general rule is that defendants must advance the relevant expenses. In turn, some existing provisions remain in place (e.g., upon agreeing to join a class action, the participant automatically waives the right to pursue any individual restitutionary or compensatory action in respect of the same infringement).
1 Gian Luca Zampa is a partner and Ermelinda Spinelli and Alessandro Di Giò are counsels at Freshfields Bruckhaus Deringer. The authors would like to thank Luigi Bisogno and Alessia Delucchi, trainees at Freshfields Bruckhaus Deringer, for their research assistance.
2 Directive (EU) 2019/1 of the European Parliament and of the Council of 11 December 2018 to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market.
3 Administrative courts have made important findings as to the importance of the exchanged data's potential to actually affect competition. See for instance TAR Lazio, judgment No. 6523 of 23 May 2018 concerning the Bars for Reinforced Concrete case.
4 RC Log case (No. I377), decision No. 8546 of 28 July 2000 and IAMA Consulting case (No. I575) No. 13622 of 30 September 2004.
5 Car Financing case (No. I811), decision No. 27497 of 20 December 2018. The decision was annulled by the administrative judges of TAR Lazio (judgment No. 12531 of 24 November 2020, subject to pending appeal before the Council of State).
6 Progetto Antifrode Ania case (No. I844), decision No. 29826 of 21 September 2021.The IAA accepted commitments from ANIA, the Italian association of insurance companies, aimed at reducing the risk related to a potential exchange of competitively sensitive information in the context of a fraud prevention database.
7 Comparatori di Prezzo/Scambio di Informazioni Polizze RCA case (No. I856), decision No. 29658 of 11 May 2021. The investigation concerns the exchange of information on the economic conditions of third-party liability insurance policies by the most prominent insurance companies active in Italy, through the sharing of daily or weekly reports distributed by price comparator websites.
8 See notably the cases concerning the public tenders run by Consip, the state agency for centralised procurement (e.g., most recently I808 – Tender Consip FM4 – Facility Management, with a decision in April 2019 (later corrected, also by the IAA) levying total fines of approximately €194 million).
9 See, for example, No. I740 – Casalmaggiore Municipality – Tender for the Award of the Natural Gas Distribution Service.
10 I846 – Gare per la fornitura di vestiario professionale e accessori tecnici; I845 – Gara manutenzione pavimentazioni tratte autostradali di Milano Serravalle – Milano Tangenziali; I847 – Gare d'appalto bandite dall'Arsenale Marina Militare di Taranto.
11 To date, the IAA has publicly approved two emergency cooperation projects pursuant to the cited covid-19 notice: a joint purchasing agreement for surgical masks via pharmacies and drugstores and a moratorium scheme on loan repayments agreed with ASSOFIN, the Italian Association of Consumer Credit and Mortgage Lending.
12 Notice on the Non-imposition and Reduction of Fines under Article 15 IAL (the Leniency Notice). The Leniency Notice was amended several times (the most recent amendment dates from 2013), mainly to bring it in line with EU law developments.
13 Leniency Notice, paragraphs 16–18.
14 EU Court of Justice (CJEU), case C-428-14, DHL Express (Italy) and DHL Global Forwarding (Italy), 10 September 2015.
15 For instance, in January 2020, a Dutch manager at Martinair NV was extradited from Italy to the United States on price-fixing charges stemming from a US Department of Justice investigation into the air cargo industry.
16 CJEU, case C-97/08 P – Akzo Nobel and Others v. Commission, 10 September 2010.
17 CJEU, case C-595/18 P – Goldman Sachs v. Commission, 27 January 2021.
18 Council of State, judgment No. 6214 of September 2021.The Council of State found that the parent company being a pure holding company with a single managing director, no staff and no operational offices was sufficient to overturn the presumption of parental liability and to shift the burden of proof onto the IAA, which would have had to demonstrate the actual exercise of the parent company's decisive influence over its subsidiary.
19 An exception to this approach is represented by the recent IAA decision in Car Financing (cited above), where, for the first time, the IAA fined parent companies in the marked absence of evidence of any involvement in the conduct at issue. This decision was quashed in its entirety in November 2020 by TAR Lazio but on grounds not linked to the parent-company presumption.
20 Council of State, judgment No. 1101 of 2 February 2021. In a case concerning an abuse of dominant position, the Council of State held that the IAA must prove that the parent company was actually involved in the abusive conduct, whether by coordinating, promoting or participating in it. Special emphasis was placed on whether the parent company gained an economic advantage from the abuse committed by its subsidiaries.
21 Communication on procedures for the application of Article 14 ter, Law No. 287/1990.
22 Progetto Antifrode Ania case (No. I844), decision No. 29826 of 21 September 2021. See footnote 5.
23 See, for example, the Fibercom Accordi case (No. I850), currently pending. In these proceedings, all five parties have submitted commitments, which are still under review by the IAA.
24 Commission Notice on Immunity from fines and reductions of fines in cartel cases, OJ C 298/17.
25 As revised in 2012: https://ec.europa.eu/competition/ecn/mlp_revised_2012_en.pdf.
26 Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union (the Damages Directive), implemented in Italy by means of Legislative Decree 19 January 2017, No. 3 (see Section VII).
27 The 15 per cent figure as the minimum sales value coefficient to be considered in determining the base amount of fines for cartels has been confirmed by recent IAA precedents (e.g., I820 – Fatturazionemensile con rimodulazionetariffaria) and administrative court judgments (e.g., Council of State, judgment No. 874 of 29 January 2021).
28 Pursuant to para. 34 of the Guidelines.
29 Servizi di prenotazione del trasporto taxi – Napoli case (No. I832), decision No. 28353 of 15 September 2020.
30 This Article (and the corresponding provision in the Damages Directive) is modelled on the binding effect of the Commission's decisions on national courts pursuant to Article 16(1) of Regulation (CE) 1/2003.
31 The IAA may deny assistance where it deems it inappropriate in relation to safeguarding the effectiveness of public antitrust enforcement.
32 A528 – FBA Amazon, decision of 30 November 2021.
33 Recent examples of material fines for alleged anticompetitive agreements are the above-cited Car Financing case (No. I811), with fines (currently annulled in court) totalling over €600 million, and over €150 million against two parties individually, and the recent case against Apple and Amazon in Vendita prodotti Apple e Beats su Amazon marketplace (No. I842, decision of 16 November 2021), with total fines of almost €200 million (although arguably this was in fact a distribution case).