The Public Competition Enforcement Review: Italy
The Italian Competition Authority (ICA) enforces EU and national competition rules in Italy.
Each of the ICA's five directorates deals with mergers, abuses and restrictive practices in their assigned business sectors. The ICA also has advocacy powers. It reports to Parliament and the government on any laws, regulations and general administrative acts that give rise to competition concerns and are not justified by general interest considerations. The ICA is also entitled to challenge before the administrative courts secondary legislation, acts and decisions of public administrations that it considers incompatible with competition law. Furthermore, the ICA is empowered to address abuses of economic dependence, unfair commercial practices and conflicts of interest of government officials. Since 2012, the ICA has also managed the legal rating system, an indicator of companies' compliance with high standards of legality.2
Case teams in each directorate conduct the investigations. The opening and final decisions, as well as decisions to notify the statements of objections, are taken by a college of three members appointed by the presidents of the two branches of Parliament.
On 30 November 2021, Legislative Decree No. 185/2021 (the Decree) was adopted, transposing Directive (EU) 2019/1 (the ECN+ Directive),3 which aims to achieve a more effective application of EU competition rules by the national competition authorities (NCAs). The Decree, which entered into force on 14 December 2021, amends the Italian Competition Law4 by codifying a series of investigative tools and powers that had already been developed in practice by the ICA. The Decree also provides the ICA with new instruments especially intended to strengthen its investigative and sanctioning powers. This development comes at a momentous point in the evolution of the Italian competition law framework, which will be further enhanced by the planned adoption of the Annual Competition Law, which includes far-reaching reforms in the ICA's enforcement powers as regards both antitrust and merger control.
In particular, the Decree gives the ICA the possibility to set its priorities and focus on matters it considers to be of major importance. Moreover, the Decree provides the ICA with a number of investigative tools and includes the possibility to extend the duration of interim measures that may be adopted in urgent cases with a risk of serious, irreparable damage to competition and where a cursory examination reveals the existence of an infringement.
Furthermore, the ICA can now impose administrative fines and periodic penalty payments directly on individuals who, intentionally or negligently, (1) obstruct an inspection; (2) provide incorrect, incomplete or misleading information in response to a request for information; or (3) fail to appear at an interview.
The Decree also strengthens cooperation between NCAs and the ICA within the framework of the European Competition Network. The Decree provides the ICA with a right to carry out dawn raids and investigations at the request of NCAs of other EU Member States. Moreover, officials of NCAs of other Member States can be permitted to attend and actively assist the ICA's staff in inspections and hearings conducted by the ICA.
Finally, although the previous regime did not expressly provide for limitation periods for the imposition of antitrust fines, the Decree imposes a 10-year absolute limitation period.
i Significant cases
The ICA fines Apple and Amazon for restricting competition in the market for the online selling of electronic products through the Amazon.it marketplace
On 16 November 2021, the ICA imposed fines of €134.530 million on Apple and €68.734 million on Amazon (together, the parties) for entering into two agreements – the Global Tenants Agreement and the Amended Apple Authorized Reseller Agreement (the agreements) – allegedly restricting competition in the market for the online selling of electronic products through the Italian Amazon marketplace (the Amazon.it marketplace).5
On 31 October 2018, the parties undertook the agreements with the alleged intention of limiting to a maximum of 20 the number of resellers – including Amazon itself – allowed to sell Apple and Beats products via the Amazon.it marketplace (a practice known as 'gating'). Although the distribution agreements between Apple and its distributors did not contain any restrictions on the use of online marketplaces, the agreements prevented even authorised Apple and Beats resellers from accessing the Amazon.it marketplace.
In particular, the parties handpicked the individual operators allowed to access the Amazon.it marketplace, excluding from it many resellers who legitimately trade genuine products via different sales channels. This selection of the resellers was deemed by the ICA to be arbitrary as it was not based on any qualitative criteria. Moreover, the ICA considered that the selection had been made by discriminating between retailers on the basis of the Member State of establishment, thus partitioning the access to the marketplace on a national basis.
In the ICA's view, the agreements have determined an anticompetitive foreclosure effect for retailers excluded from using the Amazon.it sales channel. In fact, the Amazon.it marketplace was recognised by the ICA to be the most important, if not completely dominant, marketplace in Italy, as well as the most important and widespread tool for Italian consumers to purchase electronic products online. Moreover, the ICA took the view that the agreements had the effect of partitioning the internal market by hindering parallel trading between Member States. In fact, resellers were chosen only from those exclusively active in the marketplace located in their Member State of origin.
According to the ICA, the agreements could not be traced back to the principles enunciated by the Court of Justice in Coty,6 as the requirements identified by that Court were not satisfied.
The ICA considered that the discriminatory clauses of the agreement constituted a restriction of competition by object as they consisted of agreements limiting the number of resellers, without any objective justification. On 17 December 2021, the ICA ascertained that there had been a critical error in the calculation of the fine and has thus redetermined the fines imposed on the parties. After the recalculation, the fines are therefore €114.681 million for Apple and €58.592 million for Amazon.
ii Trends, developments and strategies
The TAR Lazio annuls the ICA's decision on an agreement on remuneration for SEDA services
In six judgments dated 30 June to 1 July 2021,7 the Lazio Regional Administrative Court (the TAR Lazio) set aside an infringement decision issued by the ICA against 11 Italian banks and ABI.
The ICA decision concerned an alleged anticompetitive agreement aimed at coordinating business strategies to determine the remuneration model for the SEDA service.8 Between June and July 2021, the TAR Lazio upheld the appeals brought by the Parties and annulled the ICA decision.
Most interestingly, the Parties – except BNL, which did not raise this issue – successfully challenged the ICA's delay in initiating proceedings. The ICA opened the proceedings on 21 January 2016, yet the Parties proved that it had been aware of the conduct since the end of 2012. The TAR Lazio held that, although the 90-day term prescribed by law does not apply to the duration of the preliminary investigation phase, this phase cannot be extended for an indefinite period. The ICA must commence proceedings within a reasonable time frame (i.e., a period not exceeding some months) from the complaints filed with it, also in light of the due process right enshrined in Article 6 of the European Convention on Human Rights and the right to good administration established by Article 41 of the EU Charter of Fundamental Rights. The starting date to calculate the time frame coincides with the acquisition of full knowledge of the alleged anticompetitive conduct. Having noted that the ICA was aware of all the details of the conduct in December 2013, the TAR Lazio concluded that the ICA's decision to start the investigation two years later was contrary to the principles of good management and efficiency of administrative action.
This finding anticipated – and is coherent with – the newly enacted provisions of the Decree transposing the ECN+ Directive, according to which the ICA's investigations shall be carried out within a reasonable period.
The TAR Lazio annuls the ICA's decision to fine telecoms operators for their participation in an alleged 'repricing' cartel
On 12 July 2021, the Tar Lazio annulled the overall €228 million fines imposed by the ICA on four telecoms operators (the operators) for an alleged cartel aimed at coordinating pricing strategies in the transition from a 28-day to a monthly billing period (repricing).9
The ICA found that the operators unlawfully coordinated their conduct in the context of the implementation of Law No. 172/2017. The ICA noted that, following the implementation of Law No. 172/2017, the operators were required to issue monthly invoices but were free to determine whether and how to reprice the services offered to customers. Nonetheless, in the ICA's view, their allegedly collusive conduct included (1) the adoption of identical repricing in the transition to monthly billing, and (2) the simultaneous communications sent by the operators to their customers to inform them of the upcoming changes in invoicing. More specifically, despite several alternative options being available, the operators intentionally opted for the same strategy by applying an identical monthly increase of 8.6 per cent. In light of this, the ICA deemed that the remaining divergences in the amendments to the content of the operators' offers could not call into question the existence of collusion.
The TAR Lazio annulled the ICA decision, finding that the ICA failed to meet the standard of proof.10 First, the TAR Lazio found that most of the internal documents relied on by the ICA fell outside the temporal scope of the investigation. Second, the TAR Lazio held that the decision lacked serious, precise and conclusive elements in support of the ICA's allegations and failed to prove that the alleged collusion was the only possible explanation for the operators' behaviour. In this regard, the TAR Lazio found that the operators had provided an alternative plausible explanation for their meetings and exchanges of information (i.e., that they were necessary to understanding how to comply with the regulatory change, in addition to being the mere expression of the right of any economic operator to adapt intelligently to the existing and anticipated conduct of competitors).
In the coming months, the ICA will pursue several important investigations launched in 2021. For example, on 6 July 2021 the ICA opened an investigation into TIM and DAZN to ascertain whether the agreement for the distribution of DAZN's streaming service, including the display of football matches of the Italian Serie A, restricted competition.11 On 27 July 2021, the ICA closed the sub-proceedings for the application of precautionary measures in light of the commitments offered by TIM and DAZN that were deemed sufficient to eliminate any risk of harm to competition. Most interestingly, TIM undertook not to offer its web access services and its media content services – including DAZN's services – in a bundle. As concerns the price of the bundle comprising TIMVision and sports content, TIM undertook not to discriminate between its clients for the web access service and customers using its competitors' web access services.
Furthermore, the Court of Justice will have to decide on a preliminary reference submitted by the Council of State. On 15 March 2021, the Council of State delivered a non-final judgment dismissing in part, on procedural grounds, the applications brought by Roche and Novartis for the revocation of a 2019 judgment of the same court.12 By separate order issued on 18 March 2021, the Council of State referred the case to the Court of Justice, seeking, in particular, guidance on the lawfulness of the Italian rules of procedure, insofar as they do not provide for a case of revocation in the event of a violation of EU law by the court that delivered the judgment being challenged, even when the lack of the remedy results in a final court ruling contrary to EU law.
Antitrust: restrictive agreements and dominance
i Significant cases
The ICA fines Google €102 million for an alleged refusal to publish Enel X's app for electric vehicle charging on Android Auto
On 27 April 2021, the ICA imposed a fine of €102 million on Google for an alleged refusal to allow an electric vehicle (EV) charging app developed by Enel X (named JuicePass) to be published on Google's Android Auto platform.13
In May 2019, following a complaint submitted by Enel, the ICA opened an investigation into Google's conduct. In its complaint, Enel argued that Google was violating Article 102 of the Treaty on the Functioning of the European Union (TFEU) by refusing, with no objective justification, to render Enel's JuicePass app interoperable with the Android Auto platform. After an investigation lasting almost two years, on 27 April 2021 the ICA found that Google abused its dominant position in the markets for the licensing of smart mobile operating systems (OSs) and for Android app stores, in violation of Article 102 of the TFEU.
The ICA identified two upstream relevant markets, in line with the position adopted by the European Commission in its Google Android case:14 (1) the worldwide market (excluding China) for the licensing of smart mobile OSs, where Google is active through Android; and (2) the worldwide market (excluding China) for Android app stores, where Google is active through Google Play. The ICA also referred – at the downstream level – to a 'competitive space' including both EV charging apps (such as JuicePass) and navigation apps (such as Google's proprietary navigation app, Google Maps, which – unlike JuicePass – is available on Android Auto). In the ICA's view, both types of apps offer services used for EV charging (although EV charging apps are specialised, whereas navigation apps have a generalist approach), thereby competing with each other.
The ICA found that Google had abused its dominant position by failing to implement appropriate technical solutions to allow interoperability of JuicePass with Android Auto, despite Enel's repeated requests and Android Auto's indispensability to conveniently reach end users. In this regard, the ICA held that Google should have alternatively (1) developed a template to accommodate Enel's request, (2) developed a tailored custom app for Enel, or (3) allowed Enel to publish a version of JuicePass based on voice commands. In light of the competitive relationship between JuicePass and Google Maps, the ICA held that Google's refusal had an exclusionary intent, as it was aimed at hindering and delaying JuicePass's availability on Android Auto to favour Google's own proprietary navigation app. In addition, the ICA maintained that there was no objective justification for Google's refusal to publish JuicePass on Android Auto.
The ICA imposed a fine of €1.128 billion on Amazon for abusing its dominant position in the Italian market for intermediation services in e-commerce marketplaces
On 30 November 2021, the ICA imposed a fine of €1.128 billion on Amazon.15
On 10 April 2019, the ICA opened an investigation into Amazon to ascertain whether it abused its dominant position by tying a set of exclusive benefits – essential for gaining visibility and increasing sales on its Italian marketplace (Amazon.it) – to the use of its own logistics service (Fulfilment by Amazon (FBA)). In particular, third-party sellers using FBA are granted the following benefits: (1) assignment of the Prime label; (2) exclusion from the stringent performance indicators that Amazon applies to monitor non-FBA sellers' performance, which can ultimately lead to the suspension of non-compliant sellers' accounts on Amazon.it; (3) increased chances of assignment of Buy Box eligibility; (4) access to special events; and (5) a preferential access route to non-Prime customers. In its final decision, the ICA took the view that these benefits, taken together, can be regarded as a single, non-replicable product – namely a form of 'increased visibility' that generates an increase in sales on Amazon.it.
The ICA considered that Amazon abused its dominant position in the market for intermediation services on e-commerce platforms by self-preferencing its own logistics services. In particular, the ICA found that Amazon's conduct had anticompetitive effects both on the market for e-commerce logistics services and on the market for intermediation services in marketplaces. On one side, the conduct deprived competing providers of logistics services of a significant portion of the retailers' demand; on the other side, it made selling on multiple platforms (multi-homing) more expensive for retailers active on Amazon.it, thus reducing their offers on competing platforms. In other words, the ICA considered that Amazon leveraged its super-dominance in the Italian market for intermediation services in marketplaces both to increase its dominance in that market and to artificially increase its market share of the vertically connected market for e-commerce logistics services.
Amazon argued that the alleged abuse ceased following the launch of the Seller Fulfilled Prime (SFP) programme. The SFP programme allows retailers that meet certain standards and rely on the delivery services provided by carriers approved by Amazon to enjoy the same benefits as retailers using FBA. The ICA rejected this view, in particular because of the absence of objective requirements to be met by alternative providers of logistics services and to Amazon's intermediation between retailers and carriers, which resulted in higher costs for retailers compared with what they might individually negotiate with carriers.
The ICA imposed on Amazon a detailed list of measures to be put in place to restore a level playing field and to foster the development of logistics services alternatives to FBA. In particular, Amazon was asked to (1) publish a list of objective and non-discriminatory requirements for retailers to obtain the Prime label, (2) modify the SFP programme to allow all retailers meeting those requirements to freely choose their logistics providers, (3) monitor compliance with Prime standards without discriminating against retailers that do not use FBA, (4) grant the Prime badge and all other related benefits to all retailers using the SFP programme, (5) abstain from any intermediation between retailers and logistics service providers within one year of the date of the ICA's final decision, and (6) properly advertise the new SFP programme.
ii Trends, developments and strategies
The ICA fully dismisses allegations of abuse of a dominant position in the market for maintenance of high-tech diagnostic imaging devices and in the market for the production of PET preforms
In 2021, the ICA dismissed allegations in two cases concerning an abuse of a dominant position for not having collected sufficient evidence to demonstrate the existence of the abuse. This suggests that a new trend is being followed by the ICA: not every difference in treatment by a vertically integrated company between its downstream business units and competitors is capable of distorting competition.
More specifically, on 30 March 2021 the ICA closed an investigation against three equipment manufacturers in the market for maintenance of high-tech diagnostic imaging devices, without finding any abuse of their dominant position.16 The ICA found that the evidence collected during the investigation did not allow confirmation of the allegations put forward at the beginning of the investigation. In the opening decision, the ICA alleged that the three main original equipment manufacturers (OEMs) of high-end diagnostic imaging devices (DI Devices) – namely Philips, GE and Siemens – could have implemented exclusionary strategies aimed at hindering the provision of maintenance services by parties other than the manufacturers. The contested practices consisted of, among other things, the refusal to provide access to service software and information and the refusal to supply spare parts.
The ICA identified a primary market for the production and commercialisation of DI Devices, and for the secondary market for DI Devices maintenance services, the ICA defined three distinct markets, each one related to the OEMs' respective brands (branded aftermarkets). The ICA found that the primary market for the production and commercialisation of DI Devices was highly concentrated, with stable market shares over time. Furthermore, each OEM – with a market share of over 90 per cent in the sale of branded maintenance services – was dominant in its branded aftermarket.
In the analysis of the contested conduct, the ICA concluded that the evidence collected was insufficient. First, the ICA excluded the existence of abusive conduct consisting of the refusal to grant access to the maintenance software of the 'minimum set' and the supply of spare parts. Second, the ICA held that the OEMs' policy of reserving access to the maintenance software of the 'advanced set' (software and service manuals) to their technicians and business partners was compatible with antitrust rules, as the advanced set software was covered by intellectual property and, in any case, was not indispensable for third parties to carry out maintenance activities on the OEMs' DI Devices.
With the same approach, on 29 October 2021 the ICA decided to close the investigation into an alleged abuse of its dominant position by Husky, without finding any infringement.17 After having received a complaint, the ICA opened an investigation into Husky, which is active in the sale of both machinery and moulds for the production of PET preforms. According to the complaint, Husky had installed a system on its new generation high-pressure processing machinery to make it work at full speed only when the original Husky moulds were installed. In addition, Husky had allegedly threatened to refuse to provide technical assistance to customers using competitor moulds on their machines.
In its decision, the ICA found that there was insufficient evidence to demonstrate that Husky's conduct significantly restricted competition. In fact, Husky's system did not prevent clients from using third-party moulds. If they used third-party moulds, for safety reasons the system reduced machinery performance in terms of speed by 10 per cent. However, according to the ICA, there was no evidence that this small reduction in speed was a decisive factor in a buyer's choice of machinery and moulds.
On 20 July 2020, the Council of State referred a case to the Court of Justice for a preliminary ruling on the interpretation of the concept of abusive conduct within the meaning of Article 102 of the TFEU.18 In 2018, the ICA fined Enel more than €93 million for abusive conduct in the market for the retail sale of electricity. The decision of the ICA was partially upheld by the TAR Lazio and Enel filed an appeal against the judgment. The Council of State asked the Court of Justice to clarify whether 'abusive exploitation' should be considered only on the basis of its potential restrictive effects or whether it should also include an additional element of unlawfulness. It also asked whether the abusive conduct should be considered unlawful per se or if other elements should be taken into account (such as the intention of the alleged infringer). In his Opinion of 9 December 2021,19 Advocate General Rantos found that (1) a practice adopted by an undertaking in a dominant position may not be characterised as abusive solely on the basis of its exclusionary effect on the relevant market, as conduct of this kind should not be equated with a restrictive effect on competition unless it is shown that the undertaking has employed methods or means different from those that come within the scope of competition on the merits; (2) Article 102 prohibits not only exclusionary practices that might cause direct harm to consumers but also conduct that might harm them indirectly as a result of the effect on the structure of the market; and (3) to class an exclusionary practice of a dominant undertaking as abusive, it is not necessary to establish the undertaking's subjective intention to exclude its competitors. Such an intention may, however, be taken into account as one factor, in particular in establishing that the conduct is capable of restricting competition. The Court of Justice is expected to release its decision in the coming months.
Sectoral competition: market investigations and regulated industries
i Significant cases
The ICA enforces national legislation on unfair practices. These are commercial, promotional and communication strategies that – although not amounting to antitrust infringements – result in an unfair prejudice to consumers' rights.
In a decision dated 26 November 2021, the ICA fined Google and Apple €10 million each for aggressive and misleading commercial practices related to the acquisition and commercial use of consumers' data. In particular, the ICA found that Google and Apple did not disclose, at the stage of account creation and during the use of the services, clear information regarding the collection and use of users' data for commercial purposes. Moreover, the ICA found that in the account creation phase, Google preactivated the user's acceptance of the transfer and use of their data for commercial purposes. This preactivation allowed the transfer and use of data by Google without allowing users to confirm or modify the preset choice. As for Apple, the ICA found that it acquired consent to the use of consumers' data for commercial purposes without providing them with the possibility of any prior and express choice. Both companies announced that they will challenge the decision.
ii Trends, developments and strategies
The ICA imposed a fine of €10 million on Facebook for unfair commercial practices for using its subscribers' data for commercial purposes
On 29 November 2018, the ICA closed the investigation for alleged violations of the Italian Consumer Code by Facebook, imposing two fines of a total amount of €10 million.20
The ICA found that Facebook misled consumers registering on the Facebook platform as it did not adequately inform them during the creation of the account that the data they provided was to be used for commercial purposes. More generally, in the registration process Facebook emphasised the free nature of the service but not the commercial use of the customers' data. Facebook did not provide sufficient information for the user to understand the difference between the use of data to personalise the service (to connect the users) and the use of data to carry out advertising campaigns aimed at specific targets.
The ICA also found that Facebook carried out an aggressive practice, as it exerted undue influence at the moment of registration. The undue influence was caused by the preselection of the broadest consent to data sharing. When users decide to limit their consent, they are faced with significant restrictions on the use of the social network and third-party websites or apps, which induce them to maintain the preselected choice.
The ICA also requested Facebook to publish an amending declaration on its website and app.
On 17 February 2021, the ICA again fined Facebook €7 million for not having complied with its 2018 cease-and-desist order and for not having published the amending declaration on its website. Despite having eliminated the claim of the free nature of the service during the registration phase, there is still no clear information on the collection and use of users' data for commercial purposes. According to the ICA, this information needs to be known by consumers for them to decide whether to join the platform, in light of the economic value of the data provided by the user, which constitutes the 'remuneration' for the use of the service.
On 4 November 2021, the government approved the draft Annual Competition Law (the Draft Law) implementing a number of proposals from the ICA. The Draft Law has yet to be approved by Parliament and might be subject to changes in the course of parliamentary debates. Although it remains to be seen which of these provisions will ultimately be adopted, new rules are expected to enter into force soon, as reforming competition law is one of the top priorities of Italian President Mario Draghi's agenda. Among the several changes, Article 29 of the Draft Law introduces a rebuttable presumption of economic dependence in respect of digital platforms, particularly in cases where digital platforms act as gatekeepers for businesses to reach their customers or suppliers. Moreover, the Draft Law introduces a non-exhaustive list of abusive practices formulated in general terms, which appear to be suggested by the experience gained in the relationships between the big digital platforms and the companies that use their intermediation services.
i Significant cases
The Commission found that Italian loans to Alitalia worth €900 million are illegal aid
On 10 September 2021, the Commission concluded that two state loans for the amount of €900 million granted by Italy to Alitalia in 2017 are illegal under EU state-aid rules.21
Alitalia was an Italian airline that provided domestic and international air transport services, maintenance, ground handling and cargo transportation. Since 2008, the company had been loss-making, and therefore it closed down on October 2021. At the same time, a new operator entered the market, ITA, which plans to take over part of Alitalia's assets and related rights.
At the beginning of 2017, Alitalia was in urgent need of liquidity but had lost access to credit markets because of the deterioration in its financial situation. To keep Alitalia operating, in May and October 2017, Italy granted the company two loans for the amount of €600 million and €300 million, respectively.
On April 2018, the Commission opened a formal investigation to establish whether the two loans were in line with EU state-aid rules.
On 10 September 2021, the Commission concluded its investigation and found that, when granting the two loans to Alitalia, Italy did not act like a private investor, as it did not assess in advance the probability of repayment of the loans plus interest. The Commission's assessment of Alitalia's financial statements at the time showed that Alitalia was unlikely to be able to generate enough revenue to repay the state loans by their maturity dates, nor could it sell its assets to raise enough cash for the debt repayment. The Commission found that the private investor principle was therefore not respected in the case at stake, as no private investor would have granted the loans to the company at that time. The Commission also found that the aid could not be approved under the Guidelines on Rescue and Restructuring Aid, as requested by the Italian state. This is because (1) the loans were not reimbursed within six months, (2) Italy did not submit a restructuring plan for the return of the company to viability, and (3) the company was not liquidated, in line with the conditions set out in the Guidelines on Rescue and Restructuring Aid.
The Commission therefore concluded that the loans gave Alitalia an unfair economic advantage compared with its competitors on national, European and world routes, which amounted to incompatible state aid. Italy has been ordered to recover the illegal state aid from Alitalia, amounting to €900 million plus interest.
Nonetheless, the Commission also found that ITA will be a different company from Alitalia because there is economic discontinuity between the two companies.22 This means that ITA will not be liable for the €900 million plus interest that Alitalia has to repay to Italy. It also found that Italy's capital injections of €1.35 billion into the new company are in line with market conditions and therefore do not amount to state aid under EU rules. Indeed, the Commission found that the investment in ITA would give the Italian state a return that an investor would also accept.
ii Trends, developments and strategies
The Court of Justice found that the management of a bank account for the collection of taxes by Poste Italiane might constitute state aid
On 3 March 2021, the Court of Justice issued a preliminary ruling following a request by the Italian Supreme Court.23 The referring court asked, in essence, whether Articles 106(2) and 107 of the TFEU must be interpreted as precluding the application of national rules that require the agents responsible for collecting the municipal real estate tax (ICI) to open a bank account with Poste Italiane to enable taxpayers to pay that tax, and to pay a fee to Poste Italiane for the management of that bank account in the event that the Commission was not notified of those rules under Article 108(3) of the TFEU.
Italian taxpayers are required to pay the ICI to one of the agents of the state responsible for collecting that tax. Moreover, the ICI must be paid directly to the agent or into a post office bank account in the name of that agent.
The disputes in the main proceedings concerned the payment of the fees requested by Poste Italiane to two agents responsible for collecting the ICI. Poste Italiane sued the collection agency seeking an order for the payment of the fees, and the latter filed counterclaims alleging that the fees were unlawful under national and EU law.
The Court of Justice found that Article 107 of the TFEU must be interpreted as meaning that a national measure whereby the agents responsible for collecting the ICI are required to hold a bank account in their name with Poste Italiane, and to pay a fee for the management of that bank account, constitutes state aid, provided that the measure is (1) attributable to the Italian state, (2) provides a selective advantage to Poste Italiane through state resources, and (3) is liable to distort competition and trade between the Member States, which are all matters for the referring court to ascertain.
The referring court also asked whether Poste Italiane was exempted from state-aid rules under the framework laid down in the Court of Justice's Altmark Trans preliminary ruling of 2003. The framework exempts a company from state-aid scrutiny if it is awarded a financial benefit for the sole purpose of discharging its public service obligations. Nonetheless, the Court of Justice said that Poste Italiane did not qualify for this exemption because the measure related to the company's banking business, not to postal services.
In 2017, the Commission found that state aid issued by the Italian state in favour of Banca Monte dei Paschi di Siena (BMPS) was restructuring aid compatible with the internal market.24 More specifically, the Commission assessed two aid measures. The first of these consisted of liquidity aid of the sum of €15 billion, in the form of state guarantees on senior liabilities. The second measure consisted of precautionary recapitalisation of BMPS of the sum of €5.4 billion. Competing banks brought an action before the General Court for the annulment of the Commission's compatibility decision. Among the several pleas put forward by the applicants and by the Commission the General Court ruled on 24 February 2021 only on the procedural grounds raised by the Commission.25 More specifically, the Commission claimed that the applicants did not have an interest in bringing proceedings and, second, they did not have standing to bring proceedings for the purposes of Article 263 of the TFEU. The General Court rejected the procedural counterclaims and – by confirming the EU courts' case law on third-parties' rights – found that (1) the aid measures at issue, as notified and declared compatible with the internal market in the contested decision, are likely to have a specific effect on the applicants' situation, which justifies their categorisation as 'interested parties'; and (2) the applicants have shown to the requisite legal standard that the potential annulment of the contested decision is capable of benefiting them. In the coming months the General Court is expected to provide a decision on the other legal and factual pleas.
i Significant cases
The ICA approves an acquisition in the gas sector imposing both structural and behavioural commitments
On 30 March 2021, the ICA accepted the commitments offered by 2i Rete and approved the acquisition of IDG.26
On 23 February 2021, the ICA opened an in-depth investigation, as the proposed concentration could have created or strengthened a dominant position in the markets for future tenders for natural gas distribution in certain geographical areas. Because the gas distribution services are carried out, by law, under a legal monopoly on the basis of a concession, the only way to compete in this market is by participating in tenders for the assignment of expired concessions. In particular, the ICA considered that the acquisition would at the same time have eliminated one of the three main competitors for the next tender and strengthened the market position of 2i Rete. These conditions would have strongly discouraged other operators from participating in the tender and thus hampered competition.
The ICA approved the acquisition in light of the commitments offered by 2i Rete. In particular, 2i Rete offered two sets of alternative measures. It first committed to dismiss certain assets to reconstitute a potential participant to the tender. Complementing the asset disposal, 2i Rete also committed to implementing behavioural remedies to eliminate all the ICA's competition concerns. However, the sale was exceptionally conditioned to the achievement of a minimum price. For this reason, if the minimum price should not be reached, 2i Rete alternatively committed to implementing a set of incisive behavioural remedies that the ICA considered capable of increasing the incentives for third-party operators to take part in the tender. The ICA thus considered that the remedies offered were appropriate to remove the competitive concerns arising from the merger under review and approved the acquisition of IDG.
ii Trends, developments and strategies
The draft of the Annual Competition Law introduces wide-ranging changes to the Italian merger control regime
The draft of the Annual Competition Law (see above) also contains several novelties concerning the Italian merger control regime, aimed at ensuring greater consistency with the EU regulatory framework. In particular, the draft includes the following changes:
- widening of the ICA's merger control jurisdiction by giving it the power, to be exercised within six months of closing, to request companies to notify transactions that meet only one of the two cumulative merger control thresholds or where the total worldwide turnover of the companies party to the concentration exceeds €5 billion, provided that prima facie anticompetitive risks exist. In that case, the ICA may request the companies to notify the transaction within 30 days;
- a finding of dominance will no longer be necessary to prohibit the concentration, although dominance will still be considered the main form of anticompetitive behaviour. The current substantive test for review of mergers, consisting of the 'creation or strengthening of a dominant position on the national market', will be replaced with the 'significant impediment to effective competition test', adopted at the EU level;
- alignment of the Italian merger control system with EU standards, with cooperative and full-function joint ventures now also being reportable; and
- the criteria for the calculation of the relevant turnover in the case of banks and financial institutions adopted at the EU level will apply also in Italy.
On 22 March 2021, the ICA updated the filing thresholds for the Italian merger control regime, which remain extraordinarily high. Currently, a filing is not required unless (1) the aggregate Italian turnover in the previous financial year of all the undertakings involved exceeds €511 million, and (2) the Italian turnover in the previous financial year of each of at least two of those undertakings exceeds €31 million.
The ICA has continued to pursue its approach in terms of both advocacy and enforcement, particularly in regulated sectors and in digital markets. Its investigations remain focused on infringements affecting public finances, such as bid rigging in public tenders, and on abuses of dominance by big tech participants. Merger control is the area in which the major amendments are expected to occur, in terms of both filing thresholds and substantive test analysis (moving away from the dominance test to the significant impediment to effective competition test). Overall, the transposition of the ECN+ Directive into Italian law concerns several areas of the Italian competition law regime and introduces substantial changes stemming from the Directive, as well as from the evolution of decision-making practice and case law in recent years, at both Italian and European levels. Furthermore, together with the Draft Law, it creates important new tools for the ICA to deal with upcoming challenges. It also contributes to convergence in the application of competition law at the national level and will have a major impact on the ICA's enforcement practice.
1 Marco D'Ostuni and Giuseppe Scassellati-Sforzolini are partners, Luciana Bellia is a senior attorney, Elio Maciariello is an associate and Francesco Trombetta is a trainee lawyer at Cleary Gottlieb Steen & Hamilton LLP.
2 Undertakings that obtain a suitable compliance score can have easier access to public funding and bank credit.
3 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, PE/42/2018/REV/1. OJ L 11, 1.14.2019, pp. 3–33.
4 Law No. 287/90.
5 Case I842 – Vendita prodotti Apple e Beats su Amazon Marketplace.
6 Court of Justice, Case C-230/16, Coty, judgment of 6 December 2017, § 36.
7 TAR Lazio, judgments of 30 June 2021, Iccrea Banca S.p.A. v. ICA; Intesa San Paolo S.p.A. v. ICA; Ubi Banca S.p.A. v. ICA; Banca Nazionale del Lavoro S.p.A. v. ICA; Unicredit S.p.A. v. ICA and of 1 July 2021, Banca Monte dei Paschi di Siena S.p.A. v. ICA (judgments 7708, 7709, 7710, 7713, 7714 and 7795).
8 Case I794 – ABI/SEDA.
9 Case I820 – Fatturazione mensile con rimodulazione tariffaria.
10 TAR Lazio, judgments of 12 July 2021, Fastweb S.p.A. v. ICA; Telecom Italia S.p.A. v. ICA; Vodafone Italia S.p.A. v. ICA; Wind Tre S.p.A. v. ICA (judgments 8233, 8236, 8239 and 8240).
11 Case I857 – Accordi TIM-DAZN Serie A 2021/2024.
12 Council of State, judgment of 15 March 2021, Roche S.p.A., F. Hoffmann-La Roche Ltd and Novartis Ag. v. ICA (judgment 2222).
13 Case A529 – Google/compatibilità app Enel X Italia con sistema Android Auto.
14 Case AT.40099 – Google Android.
15 Case A528 – FBA Amazon.
16 Case A517 – Mercati di manutenzione di dispositivi diagnostici.
17 Case A537 – Mercato della produzione di contenitori in PET.
18 Council of State, Order of 20 July 2020, Enel v. ICA (Order No. 4646).
19 Court of Justice, Advocate General's Opinion in Case C-377/20, Servizio Elettrico Nazionale and Others, judgment of 9 December 2021.
20 IP330 – Facebook – Raccolta utilizzo dati degli utenti.
21 SA.48171 – Complaints against alleged State aid to Alitalia.
22 SA.58173 – Newco – ITA.
23 Court of Justice, Case C-434/19, Poste Italiane, judgment of 3 March 2021.
24 Case SA.47677, New aid and amended restructuring plan of Banca Monte dei Paschi di Siena.
25 General Court, T-161/18, Braesch and Others v. Commission, judgment of 24 February 2021.
26 Case C-12360 – 2i Rete Gas/Infrastrutture Distribuzione Gas.