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Italian Developments

Italian Competition Authority Mandatory Fee Due by 30 October 2012

by McDermott Will & Emery | Oct 1, 2012 | Italian Developments, Mergers & Acquisitions

by Veronica Pinotti, Martino Sforza and Nicolò Di Castelnuovo

In response to significant feedback, the Italian Competition Authority (the Authority) clarified the following issues concerning the new mandatory fee that was discussed in our recent blog post, Italian Competition Authority Mandatory Fee Due by 30 October 2012:

In relation to foreign companies, only those registered in the Companies Register (Registro delle Imprese) before any of the Italian Chambers of Commerce, will pay the mandatory fee (provided that their revenues exceed €50 million). Foreign companies are subject to registration with the Companies Register if they have an administrative/secondary seat in Italy, or their main business is in Italy.
Companies belonging to a group are subject individually to the mandatory fee, provided that their revenues exceed the €50 million threshold. When several companies which are subject to the mandatory fee, belong to the same group, the maximum amount—equal to €400,000 for the year 2013—refers to the entire group. The payment may be carried out by the parent company, individually for each of the subsidiaries that are subject to the fee. However, if the group’s liability reaches the maximum threshold, a single payment by the parent company is allowed. In this situation, the Authority must be provided with a chart specifying the details of all companies subject to the fee and for which the payment is being made.
For the companies drafting their financial statements in accordance with international accounting standards, the bases for calculating the fee are the revenues corresponding to item A1 on the Income Statement, drafted in accordance with Italian accounting standards. The Authority has not provided any further guidance on this specific issue but it should be possible to determine those revenues by reclassifying the Income Statement’s items on the basis of the criteria set out in Article 2425 of the Italian Civil Code.

Italian Competition Authority Mandatory Fee Due by 30 October 2012

by Jackie Sinn | Sep 4, 2012 | Italian Developments, Mergers & Acquisitions

by Veronica Pinotti and Martino Sforza

From 1 October 2012 until 30 October 2012, public limited companies based in Italy that have total revenues exceeding EUR 50 million must pay to the Italian Competition Authority (ICA) a new mandatory fee, which replaces the current filing fees for merger transactions.

Entities Subject to the Fee

Public limited companies (e.g., S.p.A. or S.r.l.) with total revenues—according to the latest financial statements (item A1 of the income statement)—exceeding EUR 50 million are subject to the fee.
For banks and financial institutions, the amount of revenue for the purposes of calculating the fee is one-tenth of the institution’s assets on its balance sheet.
The revenues of insurance companies are equal to the amount of premiums collected. Subsidiaries and associate companies belonging to a group must each pay the fee separately on the basis of the revenues set out in their financial statements.

Contribution Amount

The amount of the fee is equal to 0.08 ‰ of the revenues set out in the latest financial statements. The fee cannot exceed EUR 400,000.

Terms of Payment

For 2013, the fee must be paid in advance to the ICA from 1 October 2012 until 30 October 2012, and the payment must be communicated to the ICA by 30 November 2012.

Liberalizations Decree: Main Relevant Changes and Powers of the Italian Competition Authority

by McDermott Will & Emery | May 23, 2012 | Italian Developments, Mergers & Acquisitions

by Veronica Pinotti and Martino Sforza.

The main developments in antitrust are:

1. Merger Control (Art. 5-bis)

From January 1, 2013:

The Italian merger control thresholds will be cumulative and no longer alternative (i.e. the combined turnover in Italy of all undertakings concerned exceeds € 468 million AND the Italian turnover of the target exceeds € 47 million);
The current mandatory merger control filing fee (i.e. 1.2 percent of the value of the transaction in a range of € 3,000 and € 60,000) will be replaced by a mandatory fee of 0.08 per thousand of the turnover applicable (regardless of a transaction being filed) to all companies having a turnover exceeding € 50 million (such contribution shall be paid by October 30, 2012 for the first year, and July 31, 2013 for the following years).

2. New Bodies

Business Courts (Art. 2) – by September 24, 2012, the IP specialized sections of Italy’s Tribunals and Appeal Courts (renamed “business specialized sections”) will have jurisdiction also over all claims for damages caused by national and EU antitrust infringements, as well as corporate and public procurement matters involving limited companies.
Transport Authority (Art. 36) – it will be created within May 31, 2012 and will have supervising powers on the transport sector and the access to relevant infrastructures (it will be fully operative following the adoption of its implementing decrees).

3. Main New Powers of the Authority

Unfair clauses (Art. 5) – since March 24, 2012, the Authority is responsible to ensure protection against unfair contractual clauses in business to consumer agreements and it may impose fines up to € 50,000.
Unfair commercial practices (Art. 7) – since March 24, 2012, extension of the Authority’s powers in the enforcement of the unfair commercial practices rules to protect, not only consumers, but also small enterprises (with less than 10 employees and a turnover of less than € 2 million).
Food sector (Art. 62) – from October 25, 2012, the Authority will have the power to supervise and may apply fines up to € 500,000, in case of breach of the new rules concerning agreements in the food sector (i.e. written form and other specific requirements; obligation to pay within 30 days for perishable goods and within 60 days for all other goods).
Public Utilities (Art. 25) – since March 24, 2012, the Authority shall now be consulted in various fields, including the public utilities local award procedures (where the population is above 10,000 inhabitants).

4. Banks and Insurance

Banks (Art. 28) – from July 1,2012, banks shall propose to their customers the offers of at least two different insurance groups, if they require a life insurance as a condition to issue a mortgage.
Insurance (Art. 34) – no later than July 24, 2012, car insurance intermediaries will be required to inform their customers about the contractual conditions proposed by at least three different insurance groups.

5. Class Action (Art. 6)

Amendments to the current rules (entered [...]

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Italy’s Competition Chair Confirms That ad hoc Compliance Programs Will Continue to be Considered as a Mitigating Factor

by McDermott Will & Emery | Mar 7, 2012 | Italian Developments

by Veronica Pinotti and Martino Sforza

On March 6, 2012, the members of the Italian Antitrust Association met with the new Chair of the Italian Competition Authority (ICA), Giovanni Pitruzzella. During the meeting, Pitruzella stated that ad hoc qualitative compliance programs will continue to be considered as an effective mitigating factor, confirming the ICA’s attitude towards compliance programs and encouraging the use of such programs. However, participation in general online compliance training sessions is unlikely to be considered as a mitigating factor because such sessions are not specifically tailored to a company’s needs. To mitigate the risk of potential antitrust infringements, therefore, multinational groups with operations in Italy should consider developing ad hoc antitrust compliance programs in their Italian subsidiaries.

Italian Competition Authority Updates Merger Control Turnover Thresholds

by Emily Townsend | Nov 21, 2011 | Italian Developments, Mergers & Acquisitions

by Martino Sforza

The Italian Competition Authority has updated its merger control turnover thresholds. Effective as of today, November 21, 2011, Section 16(1) of Law no. 287 of October 10, 1990, requires prior notification of all mergers and acquisitions where either of the following conditions is fulfilled:

Aggregate turnover in Italy of all undertakings involved is above EUR 468 million
Aggregate turnover in Italy of the target company is above EUR 47 million

No notification is required if the target is a foreign company which did not generate any turnover in Italy in the last three years and is not expected to do so as a result of the transaction.

Italy’s merger control thresholds are adjusted annually to take into account increases in the GDP deflator index. The updated thresholds are published in the Competition Authority’s Bulletin once this increase in index is announced officially.

Giovanni Pitruzzella Appointed New Chairman of the Italian Competition Authority

by McDermott Will & Emery | Nov 18, 2011 | Italian Developments

by Veronica Pinotti

The Presidents of the Italian Senate and the Lower Chamber have just appointed Giovanni Pitruzzella as new Chairman of the Italian Competition Authority, after Antonio Catricalà, the current Chairman was named under-secretary to the Prime Minister’s office and Secretary of the Council of Ministers, in the newly established Monti’s government. Pitruzzella is a Professor of Public Law at the University of Palermo and Avvocato admitted to practice before the Italian Supreme Court, and he has chaired various parliamentary and regional commissions.

European Developments: French Competition Authority Launches Public Consultation on Settlement and Compliance Programs and Italy’s Prime Minister Announces New Cabinet

by Emily Townsend | Nov 17, 2011 | Cartel Enforcement, EC Developments, French Developments, Italian Developments, Monopolization/Abuse of Dominance

Public Consultation on Settlement and Compliance Programs Launched by the French Competition Authority
by Louise-Astrid Aberg and Lionel Lesur

On October 14, the French Competition Authority (FCA) launched a two-month public consultation for guidelines on settlement and compliance programs. Both these guidelines have been highly anticipated since they were first announced last May.

The draft settlement guidelines contain details on the FCA’s approach and decisional practices which were developed under the control of the French courts. Among the guidelines, the FCA determined that settlement is possible in all cases where infringement on competition law has taken place, including cartels, vertical restraints and single firm conduct. In the event of infringement, settlement becomes an option only after the parties have been formally charged. Once parties fully acknowledge their participation in anticompetitive conduct, the casehandler in charge of the matter would decide whether to respond positively to their request for a settlement. Parties retain the same procedural rights that they would in an ordinary procedure; in particular, they would be granted access to file. The FCA would reward parties who wish to settle with a fine reduction of 10 percent. In contrast to the settlement procedure of the European Commission (EC), it would not be possible to cumulate both a settlement reduction and a leniency reduction. However, parties settling with the FCA may decide to adopt behavioral or structural remedies which would enable them to benefit from an additional reduction of 5-15 percent. With regard to cartels, parties would benefit from a reduction up to 10 percent if they commit to changing their behavior in the future, in particular, by implementing a compliance program.

The draft guidelines elaborate further on the benefits of implementing a compliance program. The FCA clarifies several instances in which a compliance program would enable a party to benefit from a reduction of its fine. In the course of ordinary proceedings resulting in the imposition of a fine, the existence of a compliance program or the lack of it would not act as an attenuating or an aggravating circumstance. However, in the case of a settlement procedure, the commitment to implement a compliance program would be considered a commitment by the company to change its behavior in the future and would, thus, enable the party to benefit from a reduction of its fine. In this sense, the FCA and the EC agree that implementing compliance program would not have a significant effect on a fine that is set outside of a settlement procedure. The FCA only differs with respect to the specific context of a settlement procedure.

A fine reduction of up to 10 percent may not be easy to obtain. A compliance program would only be considered by the FCA if it includes the following characteristics: (i) the company’s top executives are strongly committed to the program, (ii) the company has designated persons to oversee the program and take charge of its implementation, (iii) the company has taken effective [...]

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Italy’s New Prime Minister: Priorities and Potential Long Term Objectives

by Emily Townsend | Nov 16, 2011 | EC Developments, Italian Developments

by Veronica Pinotti and Martino Sforza

On Sunday November 13, 2011, Mario Monti, a former member of the European Commission, conditionally accepted a mandate to form a new Government. The main task of the new Italian Government will be to adopt a package of economic reforms considered necessary by the European Union to cut Italy’s massive debt and restore the market’s confidence. Italy must repay or refinance around €200 billion (approximately US$276 billion), worth of maturing bonds by April 2012. If Italy is forced to continue to pay high rates for borrowings, it will have difficulty in handling its debt load, which is among the highest in Europe.

Monti is expected to present his cabinet and program for reform to the Italian Parliament in a few days. In order to be able to push through the urgent economic measures, he will ultimately need the support of a broad parliamentary coalition, which (considering Italy’s current political environment) might put the durability of the new Government at risk.

Mario Monti is one of the most prominent economists in Europe and former President of Milan Bocconi University. Between 1995 and 2004, he served as European Commissioner responsible for the Internal Market and Competition, where he won cornerstone antitrust cases such as those against Microsoft and General Electric. He also adopted important legislative changes, showing great sensibility for antitrust related matters.

Many McDermott lawyers have had the chance to work with and know Monti personally from his time at the European Commission. He has the necessary gravitas and rigour to lead the country for a transitional term, which may last a few months. His future administration is likely to reflect his long-run priorities, such as the adoption of liberalisation measures and the gradual reduction in state ownership of local services, as well as a higher level of antitrust scrutiny to increase market competition. These policy objectives are expected to be coupled with the adoption of the austerity measures needed to reform the Italian economy. Such measures may consist of a raise in the standard retirement age, or a pledge to raise funds from public real estate sales.

Health Care Insurance Companies in Italy Fined Over €13 Million for Anti-Competitive Behaviour

by McDermott Will & Emery | Oct 11, 2011 | Italian Developments

by Veronica Pinotti

The Italian Competition Authority has found that four health care insurance providers—HDI-Gerling Industrie Versicherung AG, Faro Compagnia di Assicurazioni e riassicurazioni S.p.a., Navale Assicurazioni, and Primogest (a multi-firm agency)—participated in anti-competitive behaviour between 2003 and 2008.

The Authority has imposed fines against the companies totalling more than €13 million for setting up a unique and complex agreement to divide up various insurance tenders for the coverage of third party liability and operator liability, as determined by local health care and hospital companies in Campania (region located in the South of Italy). According to the Authority, the agreement affected 18 insurance tenders and nine different procurement entities, accounting for approximately 60 per cent of the health care insurance market in the region.

Antonio Catricalà, the Chairman of the antitrust authority stated that “this agreement is particularly serious due to the health insurance sector’s high vulnerability to coordinated participation in tenders… [and] the extended duration and reach of the agreement itself, which involved large numbers of public entities and contracts. I had already made it clear that health care could no longer be treated as an albero della cuccagna [gravy train]”.

According to the Authority, the alleged cartel manifested itself through the anti-competitive use of co-insurance (both before and after the awarding of tenders), and coordinated participation in tenders by means of exchanging lots and contacts sharing between companies.

Under the agreement, the firms participated in a contract “withdrawal/takeover” mechanism that allegedly avoided competitive confrontation and ensured levels of stability over time for the services provided. The Authority found that, Primogest, the multi-firm agency, played the most active role in coordinating the pre-bid preparatory phase and post-bid withdrawals/takeovers, maintaining relations with health care entities and maximising commissions, while enjoying the right of first choice for participation in future tenders with the companies.

Gerling is part of the Talanx AG group, the primary German insurance group. Faro is Italian and did operate several insurance branches, but is currently undergoing forced liquidation. Navale was a member of the Unipol group at the time of the events but was incorporated in UGF in 2011.

The Fines

HDI Gerling: €5,868,703
Faro: €2,015,544
Navale (now UGF): €5,471,168
Primogest: €228,100

Laure Carapezzi, trainee lawyer in McDermott Will & Emery LLP based in the Rome office, also contributed to this blog.

Italian Competition Authority Fines Suppliers of Magnetic Resonance Equipment €5.5 Million

by McDermott Will & Emery | Sep 1, 2011 | Healthcare Antitrust, Italian Developments

by Veronica Pinotti

On 5 August 2011, the Italian Competition Authority levied fines totalling €5,538,750 on Alliance Medical S.r.l., Toshiba Medical Systems Italia S.r.l., Philips S.p.A. and Siemens S.p.A. Each firm produces and sells electro-medical equipment used for diagnostic imaging and together they represent approximately 68 per cent of Italian sales.

The inquiry process started when Ge Medical Systems Italia S.p.A. lodged a complaint against the companies, alleging that they agreed to coordinate their response to the tender that Società Regionale Sanità of Campania issued for the provision (purchase and rental) of seven magnetic resonance machines and related support services. Under the infringing joint tender agreement, each company was allocated a pro-rata share of the business.

According to the Italian Competition Authority, the exchange of sensitive information and the formation of an agreement altered the normal competitive dynamics among businesses involved in the tender. Their commercial strategies were no longer independent as they were based on knowledge of the other companies’ strategies: Siemens and Alliance entered into a temporary association for the direct provision of three machines for purchase, while Philips and Toshiba were sub-contracted by Alliance to provide the remaining four machines for rental.

Laure Carapezzi, trainee lawyer in McDermott Will & Emery based in the Rome office, also contributed to this newsletter.