Italy

Introduction

Antitrust enforcement in Italy is governed by Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) and Articles 2 and 3 of Italian Law No. 287/90.^[2]

Under Italian competition law, an antitrust investigation ends with either a finding of infringement, combined with a prohibition and frequently a monetary sanction, or a finding of no infringement. There is no settlement procedure under Italian competition law similar to the one provided at EU level by Commission Regulation (EC) No. 622/2008 of 30 June 2008 amending Regulation (EC) No. 773/2004, as regards the conduct of settlement procedures in cartel cases. Nevertheless, cooperation and constructive communications during an investigation are rewarded in various ways under Italian competition law.

A key development in the cooperation between the investigated companies and the Italian Competition Authority (ICA) took place in July 2006 with the introduction of the new Article 14-ter in Law No. 287/90. With Article 14-ter, the Italian legislator formally granted the ICA power to accept commitments offered by the investigated company and close the investigation without the finding of an infringement, mirroring the commitments route successfully implemented at European Union level with Regulation 1/2003.^[3]

While the commitments route was formally introduced in Italy with Article 14-ter, it is important to note from the outset that the actual practice of the ICA is of paramount importance in Italy, as it often guides and anticipates legislative developments. In fact, similar to other important developments in Italian antitrust law, the introduction of the commitments route in Italy was anticipated by the ICA for more than a year.^[4]

Under Article 14-ter of Law No. 287/90, companies investigated for antitrust infringements (including abuses of dominant position, other anticompetitive agreements and, in exceptional cases, cartels) may offer commitments to address the concerns expressed by the ICA in the decision opening the investigation (the opening decision). If the proposed commitments are capable of eliminating the competition concerns raised in the opening decision, the ICA may accept them and close the investigation without the finding of an infringement or a fine. The Italian policy on commitments and the relevant procedure is further detailed in a notice published by the ICA, which was last revised in September 2012 (Notice).^[5] As explained in detail below, the ICA relied extensively on commitments decisions in the years following the introduction of Article 14-ter, raising concerns that the institute was being over applied.^[6] Nowadays, commitments decisions are applied in a more limited number of cases.

Even where the case is not closed with commitments, cooperation with the ICA may provide significant advantages to the investigated company, in the form of a fine reduction. The ICA’s fining guidelines (the ICA Fining Guidelines)^[7] expressly acknowledge that the voluntary implementation of commitments rejected by the ICA, the implementation of a compliance programme after the opening of an investigation and the effective cooperation with the ICA during an investigation may be rewarded with reductions in fines that are in line with (if not larger than) what could be achieved via the settlement route at the European Union level. Notably, the rationale for such reductions, as in the case of settlements with the European Commission, is procedural efficiency.

This chapter provides a practical guide on the cooperative options available to investigated companies to avoid or reduce an antitrust fine in the context of proceedings before the ICA.

The commitments route

The commitments route is available in most antitrust cases. However, the ICA does not usually admit commitments in proceedings concerning the most serious types of antitrust infringements, such as hardcore cartels.^[8]

Italian competition law does not provide for specific rules on the application of the commitments route to multiparty investigations. In particular, the law does not provide for centralised negotiation or collective hearings between the ICA and the investigated companies to discuss the commitments. It is not uncommon that companies involved in multiparty investigations offer different commitments, or that only some investigated companies offer commitments.^[9] Nevertheless, investigated companies in multiparty investigations frequently align on the core of the commitments to maximise the chances that the commitments will be accepted by the ICA.^[10]

Commitments decisions have been very successful in Italy, as they often meet the interests of both the ICA and the investigated company.

For the ICA, a commitments decision allows a swift resolution of the concerns raised with the opening decision and, at the same time, enables the ICA to save internal resources. In particular, by ending an investigation with a commitments decision at the early stages of the proceedings, the ICA does not have to invest its limited resources in the evidence collection and contentious phases that characterise fully fledged infringement proceedings.

Commitments are also frequently used by the ICA in complex cases involving regulated sectors, where the application of the competition law framework may not be particularly straightforward and commitments may be more suitable to address the concerns identified by the ICA.

Finally, the commitments route is particularly appealing for the ICA as commitments decisions are less likely than infringement decisions to be appealed or overturned.

For the investigated company, a swift resolution of the case through commitments removes the risk of an infringement decision, which often includes the imposition of significant monetary sanctions.^[11] Furthermore, commitments decisions have less detrimental effects on the reputation of the investigated company than infringement decisions.

The commitments route also grants the investigated company the chance to design the package required to address the ICA’s concerns. This allows the investigated company to choose, from the possible commitments that may address the ICA’s concerns, those that are the least onerous for the company.

Finally, a commitment decision reduces the likelihood of civil damages actions, which have been recently facilitated in Italy with the transposition into the national legislation of Directive 2014/104/EU.^[12] In particular, because the ICA in a commitments decision does not take a final position on the alleged infringement, such decision cannot be used as ‘prominent evidence’^[13] of the infringement in private damages cases before the Italian civil courts. As a result, the Italian civil courts normally have to ascertain the existence of an infringement ex novo.^[14]

Commitments in practice

Since the introduction of the commitments route in 2006, the ICA has relied extensively on commitments decisions, especially in abuse of dominance cases. In the years immediately following the introduction of Article 14-ter of Law No. 287/90, approximately half of the decisions issued by the ICA in investigations for alleged infringements of Articles 101 and 102 TFEU, as well as Articles 2 and 3 of Law No. 287/90, were commitments decisions.

Such an extensive use of the commitments proceedings raised widespread criticism in Italy. The main objection faced by the ICA was that the commitments route was no longer a tool to efficiently resolve competition concerns characterised by limited gravity. Instead, it became an instrument used by the ICA to actively intervene in the market in the interests of consumers. In particular, the ICA’s initial reliance on commitments was often perceived as a way to proactively impose changes in the way the market functioned under the threat of hefty fines.

The ICA’s approach towards commitments has changed following the initial criticism. Its recent practice shows that commitments are currently being used in a more targeted and selective way, in line with the original rationale behind the introduction of this type of proceeding. The Italian administrative courts have also contributed to the development of the ICA’s practice. On many occasions, the Italian administrative courts stressed that the principle of proportionality should play a key role in the ICA’s assessment of the proposed commitments.^[15] In the past five years, commitments decisions accounted for approximately one-third of the ICA’s decisions in antitrust cases.

Process and implementation

Commitments proposal

The procedure for the negotiation of commitments is relatively informal and is designed to enable both the investigated company and the ICA to gradually assess the workability and willingness of each party to engage in the commitment route.^[16]

Commitments have to be offered by the investigated company. Absent such offer, the ICA does not have the power to commence commitments proceedings, even if it considers that commitments would be the most effective way to resolve its competition concerns. Nevertheless, the ICA may informally suggest the commitment route to the investigated company.

The commitments process begins with the submission of a form (the commitments proposal) to the ICA for discussion.^[17] In the commitments proposal, the investigated company is required to detail the ICA’s allegations, the relevant markets, the proposed commitments and their duration, as well as considerations relating to the suitability of the proposed commitments to address the competition concerns expressed by the ICA.

Importantly, the commitments cannot be subject to any conditions that may give the investigated company the right to withdraw from the commitments after they have been approved.^[18]

The submission of the commitments proposal triggers informal discussions between the ICA and the investigated company. The latter may also request an oral hearing to discuss the scope of the proposed commitments with the ICA. Once the preliminary discussions with the ICA regarding the commitments proposal have been concluded, the investigated company may submit a final version of the proposed commitments to be assessed by the ICA.

The final version of the proposed commitments should be submitted within three months of the date on which the opening decision was notified to the investigated company. The three-month deadline has been interpreted by the Italian administrative courts as non-mandatory,^[19] and, in multiple instances, the ICA has accepted commitments offered after the expiry of this deadline.^[20] Nevertheless, non-compliance with the three-month deadline significantly decreases the likelihood of the commitments being accepted by the ICA. Indeed, the deadline serves to deter investigated companies from using the commitments route to delay the main infringement proceedings.^[21] While the late submission of commitments is rarely cited by the ICA as the sole reason for the rejection of commitments, it is frequently listed in support of the other grounds on which the commitments were rejected.

Assessment of the proposed commitments

The submission of the final version of proposed commitments begins sub-proceedings aimed at assessing the investigated company’s proposal.

First, the ICA is called to assess the admissibility of the proposed commitments within 45 calendar days of their presentation. The ICA has wide discretion in assessing the proposed commitments and their suitability to address the competition concerns.^[22] Commitments may be rejected for multiple reasons, including:

• late submission of the commitments;
• submission of commitments that are manifestly inadequate for resolving the competition concerns;
• the conduct involves a serious breach of competition law; and
• the ICA identifies a need for a full assessment due to the novelty of the case.^[23]

The assessment carried out by the ICA to decide whether the proposed commitments are admissible and suitable to address the competition concerns expressed in the opening decision is twofold. On one hand, the proposed commitments have to be relevant for the competition concerns. In particular, there has to be a direct link between the proposed commitments and the competition concerns that the commitments are trying to address. On the other hand, the proposed commitments have to be sufficient, meaning that they have to be capable of fully addressing the competition concerns identified by the ICA.^[24]

The Italian administrative courts have ruled that an ICA decision rejecting the commitments cannot be appealed, as it is part of the overall proceedings that are not, per se, capable of impairing the rights of the investigated company.^[25] Nevertheless, an investigated company may include the rejection of the proposed commitments on the grounds of appeal against the possible infringement decision. For example, the Supreme Administrative Court recently halved the fine imposed on Holcim Italia SpA for its participation in a cartel in the cement sector because, among other things, the ICA decision to reject the commitments offered by Holcim was not sufficiently reasoned.^[26]

The proposed commitments, if not rejected by the ICA, are subject to a market test. The ICA’s decision to proceed with the market test indicates that the proposed commitments may be capable of resolving the competition concerns identified in the opening decision. However, such conclusion is preliminary in nature and not binding for the ICA.

The market test phase begins with the publication of the proposed commitments on the ICA’s website.^[27] Interested third parties, such as customers and competitors, may present their written observations on the proposed commitments within 30 calendar days of the date of publication of the commitments. At the same time, the ICA may contact the market participants to gather the information that it deems necessary for the final assessment of the commitments. In cases involving regulated industries, the ICA also frequently consults the relevant administrative authorities to evaluate the compatibility of the commitments with the rules applicable in the specific sectors. The ICA frequently discusses the proposed commitments with the regulatory authorities for the electricity and gas^[28] and communications^[29] sectors.

Within 30 calendar days of the deadline for the submission of third-party comments (i.e., 60 calendar days from the publication of the commitments for market test purposes), the investigated company may submit written comments on the observations presented by the third parties and amend the commitments. Such amendments shall be strictly related to the outcome of the market test and cannot radically change the commitments already submitted.^[30]

The final version of the commitments, as amended following the market test (if required), is ultimately assessed by the ICA. If, based on the feedback received during the market test, the ICA decides to reject the commitments, it ends the commitments proceedings, informs the interested parties and continues with the main infringement proceedings.

If the ICA decides to accept the commitments, it issues a commitments decision, which makes the commitments binding for the investigated company and ends the antitrust proceedings without the ascertainment of any infringements. The commitment decision is published in the ICA Bulletin.

In its commitments decisions, the ICA frequently imposes on the companies an obligation to report on the subsequent implementation of the commitments on a regular basis (every six or 12 months) as commitments are mainly behavioural in nature. Structural commitments (e.g., divestments) may not require periodic reporting.

The commitments decision may be appealed by any parties that consider themselves wronged by such decision. The company that offered commitments is only allowed to appeal to challenge irregularities in the commitments proceedings (e.g., if the commitments decision sets commitments that are different from the final commitments offered to the ICA).

Non-compliance with the commitments has two possible consequences. First, the ICA may fine the company up to 10 per cent of its global turnover.^[31] Second, the ICA may restart the antitrust investigation that was ended with the commitments decision.^[32]

Voluntary implementation of rejected commitments

Pursuant to the ICA Fining Guidelines, the voluntary implementation of measures that may mitigate or remove the effects of the infringement before the publication of the infringement decision should be taken into account as a mitigating factor by the ICA. According to the ICA’s guidelines, the mere interruption of the anticompetitive conduct after the opening of the investigation shall not be considered as a mitigating factor.

On the contrary, the voluntary implementation of commitments offered to, and rejected by, the ICA may be taken into account as a mitigating factor by the ICA, especially in cases where the voluntary implementation of the commitments has reduced the anticompetitive effects of the conduct. Indeed, as noted above, a rejection of the proposed commitments does not automatically mean that the commitments offered to the ICA were not suitable to address the competition concern. The ICA may also reject commitments because of their late submission or the serious nature of the conduct, or because it identifies the need for a full assessment of the conduct due to the novelty of the case. The voluntary implementation of commitments rejected by the ICA has been taken into account as a mitigating factor in multiple instances, including in the infringement decisions relating to cartels in the logistics and marine agency sectors.^[33]

Implementation of compliance programmes

Another example of cooperative behaviour that may result in a reduction in antitrust fines is the voluntary implementation of a compliance programme. The ICA Fining Guidelines list the implementation of an adequate compliance programme, in line with the best practices in Italy and in the EU, among the mitigating factors taken into account when setting a fine.

According to the ICA Fining Guidelines, the mere existence of a compliance programme is not a mitigating factor per se. The investigated company is required to demonstrate its efforts in designing and complying with the programme, including:

• the involvement of management;
• the identification of personnel responsible for the programme;
• the identification of possible antitrust risks depending on the sector in which the company operates;
• the organisation of periodic training;
• the introduction of sanctions for failure to comply with the programme and of rewards for compliant behaviour; and
• the implementation of monitoring and auditing programmes.

In 2018, the ICA issued guidelines on antitrust compliance (the ICA Guidelines on Antitrust Compliance) to provide additional guidance on the content of an adequate compliance programme, the procedure to request an assessment of the programme for the purposes of awarding possible mitigation and the criteria taken into account by the ICA as part of this assessment.

Pursuant to the ICA Guidelines on Antitrust Compliance, an investigated company that intends to benefit from mitigation in light of its compliance programme must submit a request to the ICA, accompanied by an explanatory report that clarifies the reasons why the programme is adequate for the prevention of competition infringements and the concrete initiatives put in place by the company for the effective and efficient application or implementation of the programme. This explanatory report must be accompanied by appropriate documents including the preparatory documents (such as internal guidelines or operating manuals) and documents showing the company’s concrete commitment to comply with the programme.

Notably, only compliance programmes adopted, implemented and notified to the ICA within six months of the notification of the opening decision can be taken into account by the ICA as a mitigating factor. Notification of a compliance programme to the ICA during infringement proceedings does not imply an admission of guilt by the investigated company.

The adoption of adequate compliance programmes (or amendments to a clearly inadequate, but already existing, programme) after an opening decision is issued may result in a fine reduction of up to 5 per cent.^[34] If an adequate and effective compliance programme that was in place prior to an opening decision enabled the detection and interruption of the alleged infringement, the ICA may grant a fine reduction of up to 15 per cent.^[35] These reductions are in line with those achievable via the settlement route at the European Union level.

Cooperation with the ICA during proceedings

Finally, the ICA’s Fining Guidelines also recognise that effective cooperation with the ICA during the infringement proceedings, which goes beyond what is required by the company by law,^[36] may be considered as a mitigating factor.

Importantly, the mere voluntary termination of the alleged infringement following the adoption of the opening decision is not in itself sufficient to determine a mitigation of the fine.^[37] The voluntary cooperation has to provide a ‘material contribution to the investigation’^[38] and be ‘effective enough that it facilitates the ascertainment of the infringement for the ICA’.^[39] For example, in Unilever/Distribuzione Gelati, the ICA considered that the investigated company did not sufficiently collaborate with the ICA, as the ICA had to reassess the information provided by the company following the identification of material inconsistencies.^[40] The Italian administrative courts also recognised that the ICA has full discretion in assessing whether the investigated company’s cooperation gives rise to a mitigating circumstance.^[41]

Notes