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Trends and climate

Trends

Have there been any recent changes to the cartel regime? If so, have they had a significant impact on enforcement activity?

While the basic antitrust rules relating to cartels remain the same, an important change is under consideration by the Italian Competition Authority (ICA) with regard to the relevance of compliance programmes for the purposes of imposing a fine for an antitrust infringement.

In April 2018 the ICA ran a public consultation of its draft Guidelines on Compliance Programmes, which may be adopted in the near future.

The draft guidelines explicitly illustrate for the first time the criteria that will govern the granting of discounts to companies that introduce an antitrust compliance programme or had one in place at the time of opening antitrust proceedings. Compared to past practice, the draft guidelines introduce a stringent process for assessing compliance programmes with a view to granting a reduction of the fine. ICA case law provides examples of discounts of up to 10% where companies have introduced compliance programmes after opening antitrust proceedings (see Case I777, Tassi sui mutui nelle province di Bolzano e Trento and Case I783, Accordo tra operatori del settore di vending). The draft guidelines have reduced such discounts to up to 5% (excluding in exceptional cases, which have not been further clarified), while programmes introduced before the opening of antitrust proceedings may lead to a discount of:

  • up to 15% in cases where the programme has prompted the reporting and termination of an antitrust infringement; or
  • up to 10%, provided that certain criteria listed in the draft guidelines are met.

The draft guidelines also suggest that in proceedings involving a parent company, in order for the parent company’s compliance programme to be considered adequate, it must be adopted and implemented at the group level by both the parent company and its subsidiaries. The parent company must take – by virtue of its supervisory powers – all possible measures (including organisational measures) to ensure that its subsidiaries comply with competition law. The adoption of a compliance programme by the parent company does not in itself justify the exclusion of the company’s liability for the conduct of its subsidiary.  

The draft guidelines also provide detailed guidance as to what may or may not be considered a compliance programme that is eligible for a discount.

There are two other, less recent changes that may significantly affect the position of cartelists.

First, recently adopted legislation on public procurement may affect the possibility for undertakings that have been found liable of bid rigging by the ICA to participate in public procurement procedures. This is by virtue of Article 80(5)(c) of Decree-Law 50/2016, which contains the new Public Procurement Code, and its implementing guidelines. Article 80(5)(c) provides for the possibility to exclude an economic operator where, among other things, the contracting authority can demonstrate by appropriate means that it is guilty of serious professional misconduct which renders its integrity or reliability questionable. Under the guidelines (6/2017) adopted by the Anti-corruption Authority to clarify the scope and application of Article 80(5)(c), the entering into anti-competitive agreements by an economic operator constitutes serious professional misconduct (and hence a potential ground for exclusion). In addition, in assessing the integrity or reliability of an economic operator, the contracting authority must take into account the ICA’s adoption of an infringement decision for serious antitrust violations.

Second, Decree-Law 3/2017 has implemented the EU Damages Directive (2014/104/EC).

Are there any proposals to reform or amend the existing cartel regime?

Aside from the draft Guidelines on Compliance Programmes mentioned above, there are no other proposals to amend the existing cartel regime.

Have there been any recent key cases?

Cartels, including parties engaged in bid rigging, continue to be a high priority on the agenda of the ICA, which in 2017 closed several investigations focusing on the following main areas of action.

Bid rigging

In Case I796, which concerned contracts for support and technical assistance services to the public administration, the ICA imposed penalties totalling over €23 million on the main auditing and consulting firms belonging to the international networks Deloitte, KPMG, Ernst & Young and PWC (also known as the ‘big four’) for influencing the outcome of a tender called by the public administration to award the contracts for the performance and development of monitoring and auditing on EU-financed programmes. The ICA ascertained that the collusion took place through a so-called ‘checkerboard’ participation in the tender lots; indeed, each network presented higher discounts in the lots assigned to it on the basis of the sharing layout, without overlapping with lots of interest to the other networks or presenting offers of support that were unsuitable to win the lot.

Cartels in which trade associations played a significant role

In Cases I793 and I742 concerning the markets for cement and reinforcing steel bars and electro-welded mesh, the ICA found eight and 12 producers (and their associations) liable for price fixing and imposed penalties of €140 million and €184 million, respectively. The ICA held that the trade associations had played a significant role in the infringement by, among other things, ensuring the stability of the cartel and circulating sales data. Another cartel that took place within the trade association was investigated in Case I794 ABI/SEDA. The investigation – opened against the Italian Banking Association (ABI) and 11 credit institutions, including leading market operators – concerned an agreement establishing trading strategies in relation to the new SEPA-Compliant Electronic Database Alignment (SEDA) remuneration model. The SEDA model replaced the former direct debit payment system (RID) and allows consumers to pay regular charges (eg, household bills) via direct withdrawal from their bank account. According to the ICA, in the transition from the old RID system to the new SEDA system, ABI and the banks agreed on a system that would lead to a generalised increase of the price of the SEDA services. However, the ICA acknowledged that:

  • the agreement was not secret as the ICA had been notified of it;
  • the infringement was not serious in light of the new regulatory context; and
  • the parties had proposed a new system of remuneration for the service, which would halve the total cost of SEDA to the benefit of user companies and, ultimately, utility end-users.

Accordingly, it did not impose a penalty.

Professional services

In Case I797 the ICA penalised the Notary Council of Rome and Associazione Notariato Romano Dismissioni Immobiliari (ASNODIM) for reserving the exclusive right to designate, through ASNODIM, the notaries entrusted with drafting deeds regarding the disposal of certain public property. This prevented other notaries in the district from offering their services. The ICA imposed a penalty of €216,000 for the infringement, which it considered to be serious.

Interesting cases where no infringement was found

In Case I802 the ICA held that an alleged coordination of car insurance premiums among insurers was not supported by sufficient evidence and closed the case.

Also, in Case I791 the ICA analysed an exchange of allegedly sensitive information among several long-term car rental companies. In this case, the final decision closing the proceedings without the finding of an infringement and the reasoning contained in the decision are inconsistent, as the latter suggests that an infringement has occurred. The ICA Annual Report (pages 25-26) explains the inconsistency by stating that the board (which adopts the final decision based on a proposal from the services, which investigate the case) did not share, in its final assessment, the stance taken by the services and did not find that the exchange of information was “sufficiently harmful”, so as to be considered anti-competitive. According to the ICA, this stance underlines the separation between its two functions – namely, that of investigating and that of deciding the case – as well as the fact that the board decides in an autonomous manner, after having assessed the evidence and defences submitted by the parties.

Open cases

Various cases are ongoing, including several bid-rigging investigations, in markets such as:

  • the collection and disposal of medical waste (Case I816);
  • helicopter emergency medical services and wildfire suppression services (Case I806);
  • the production and supply of plasma-derived medicinal products (Case I819); and
  • facility management services for public properties (Case I808) and security services (Case I821).

In addition, several cartel cases are ongoing in markets such as:

  • management, marketing and distribution of rights pertaining to the transmission of sporting events (Case I814);
  • corrugated cardboard and related packaging (Case I805); and
  • fixed and mobile transmission services (Case I820).

Legal framework

Legislation

Which legislation applies to cartels and what are the relevant substantive provisions?

The relevant provisions in this regard are Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 2 of the Competition Act (Law 287/90). The latter largely reflects Article 101(1) of the TFEU, the main difference being the absence of the requirement of “effect on trade between Member States” (ie, the jurisdictional standard which defines the boundary between conduct that is subject to EU law and conduct that is governed solely by domestic law).

The Italian Competition Authority (ICA) cannot simultaneously apply Article 101 of the TFEU and Article 2 of the Competition Act. The latter tends to be used in cases where entry from foreign players is impossible or unlikely, such as those concerning regulated professions (eg, notaries). Pursuant to Article 1(4) of the Competition Act, its provisions must be interpreted in accordance with the principles of EU competition law.

The procedural framework is provided by Presidential Decree 217/1998, which sets out the rules governing proceedings before the ICA.

Institutions

Which bodies are the relevant regulatory and prosecutory authorities and what are their specific roles?

The ICA acts as both an investigative and a decision-making body. In a recent case (Case I791), the ICA analysed an exchange of allegedly sensitive information among several long-term car rental companies. However, the final decision to close the case without the finding of an infringement and the reasoning contained in the decision are inconsistent, as the latter suggests that an infringement has occurred. The ICA Annual Report (pages 25-26) explains the inconsistency by stating that the board (which adopts the final decision on a proposal from the services, which investigate the case) did not share, in its final assessment, the stance taken by the services and did not find that the exchange of information was sufficiently harmful, so as to be considered anti-competitive. According to the ICA, this stance underlines the separation between its two functions – namely, that of investigating and that of deciding the case – as well as the fact that the board decides in an autonomous manner, after having assessed the evidence and defences submitted by the parties.

Are there any sectoral regulators with concurrent powers?

Before adopting a final decision concerning undertakings active in the banking and insurance sectors, the ICA must request the non-binding opinion of the Bank of Italy and the Insurance Authority, respectively.

Similarly, Law 249/1997, which established the Authority for Communications (the communications regulator), requires that before adopting a decision in the telecoms, broadcasting and media sector, the ICA must request the authority’s non-binding opinion.

Application

Does the legislation apply to both formal agreements and informal practices?

Article 2 of the Competition Act applies to both formal agreements and informal practices.

Does the legislation apply to individuals, companies or both?

The legislation applies only to undertakings.

Does the legislation subject companies to civil liability, criminal liability or both?

Undertakings are subject to administrative penalties under the Competition Act and possible damages claims (of a tortious nature) under Decree-Law 3/2017, which implemented the EU Damages Directive (2014/104/EC).

Violations of Article 2 of the Competition Act or Article 101 of the TFEU may, in case of bid rigging, also constitute criminal behaviour (Articles 353, 353bis and 354 of the Criminal Code). Criminal liability may also be triggered by speculative conduct aimed at limiting the output or increasing the prices of raw material, food products or first need products (Article 501bis of the Criminal Code). The penalties include both fines and imprisonment.

Does the legislation subject individuals to civil liability, criminal liability or both?

Liability under Italian law is of an administrative nature only – although certain types of conduct may constitute an offence under the Criminal Code.

Where cartel conduct is punishable by both civil and criminal penalties, can the enforcement authority pursue both types of penalty? How does the authority decide which penalties to seek?

When anti-competitive conduct also constitutes a criminal offence under a specific provision of the Criminal Code, enforcement is pursued by different entities (the ICA and the public prosecutors or criminal courts, respectively).

Are there any sector-specific offences or exemptions?

According to Article 4(1) of the Competition Act (which closely follows Article 101(3) of the TFEU), agreements or categories of agreements prohibited under Article 2 can be authorised for a limited period if they lead to an improvement of the offer on the market, resulting in substantial consumer benefits. These potential benefits are assessed, taking into account the need to guarantee the necessary level of international competitiveness for the undertakings concerned, as well as any possible:

  • increase in production;
  • improvement in the quality of production or distribution; and
  • technical and technological progress.

In any case, no exemption will be granted in connection with restrictions that:

  • are not strictly necessary to attain these objectives; or
  • may eliminate competition in respect of a substantial part of the national market.

Article 4(3) of the Competition Act provides for a system of individual exemptions via prior notification to the ICA pursuant to Article 4(1). In practice, applications under Article 4(3) (as well as those under Article 13 for negative clearance decisions) are rare and are usually dismissed by the ICA on the basis that the notified agreement falls within the scope of Article 101 of the TFEU.

In other cases, the ICA relies on the EU block exemptions when applying national rules, so it is unlikely that it will take action against an agreement that meets the conditions set out in the exemptions.

In addition, under Article 8(2) of the Competition Act, national competition provisions do not apply to undertakings entrusted with the operation of services of general economic interest or which operate in a monopoly situation, only insofar as this is indispensable to perform the specific tasks assigned to them.

Finally, according to Article 20(5)bis of the Competition Act, the ICA may, at the Bank of Italy’s request, authorise an agreement in derogation of the prohibition provided for by Article 2, in the interests of the efficiency of the payments system, for a limited period and taking due account of the criteria provided by Article 4(1).

To what extent, if any, does the legislation apply to extraterritorial conduct?

To the extent that anti-competitive conduct taking place outside Italy has an effect within the Italian territory or a substantial part thereof, such conduct falls within the scope of the Competition Act or, if it affects trade between EU member states, Article 101 of the TFEU. As a consequence, the ICA may investigate and penalise such conduct.

However, cases in which companies established in Italy engage in cartel conduct that affects only foreign trade (including where the anti-competitive agreement or practice takes place within the domestic territory) are outside the Competition Act’s scope.

Investigations

Initiating an investigation

Who can initiate an investigation of potential cartel conduct?

According to Article 12 of the Competition Act (287/90), after assessing the elements in its possession and those brought to it by the public authorities or any other interested party, the Italian Competition Authority (ICA) can conduct an investigation to ascertain any infringements of the prohibitions provided for by Article 2. However, the ICA is under no obligation to start an investigation. In this case, the ICA sends a letter to the complainant explaining its position.

In practice, the ICA initiates proceedings:

  • by its own motion;
  • based on a leniency application; or
  • following a complaint filed by a third party.

If an investigation is initiated by complainants or third parties, what rights (if any) do they have?

Under Article 6(4) of Decree-Law 217/1998, parties that have a direct, immediate and present interest in an investigation and have submitted reports or complaints relevant to its commencement are entitled to receive a notice of the decision to initiate proceedings. 

Under Article 7(1)(a) of Decree-Law 217/1998, the following parties may participate in the proceedings:

  • parties that have received a notice of the decision to initiate proceedings under Article 6(4); and
  • parties representing public or private interests and associations representing consumers that might be directly, immediately and presently damaged by any infringements forming the subject of the investigation or by any measures adopted as a result of it, provided that they submit reasoned requests to intervene within 30 days from the date of publication of the notice of the decision to initiate proceedings in the ICA Bulletin.

Under Article 7(2) of Decree-Law 217/1998, complainants and other third parties admitted to participate in the proceedings have the right to:

  • access the investigation file (with the exception of confidential information); and
  • produce written submissions, documents, arguments and opinions.

In addition, under Article 7(3) of Decree-Law 217/1998, parties that have received a notice of the decision to initiate proceedings can be heard by ICA officials. Complainants and other third parties admitted to participate in the proceedings, may, on a reasoned request, participate in the final oral hearing (Article 14(6) of Decree-Law 217/1998).

What obligations does a company have on learning that an investigation has commenced?

Undertakings and their representatives must supply the information and documentation requested and cannot refuse to supply such information or documents on any of the following grounds:

  • confidentiality or the exercise of powers and authority imposed by company regulations or internal instructions, including oral instructions;
  • the need to protect the party concerned from the risk of tax or administrative penalties; or
  • the need to protect company or industrial confidentiality, unless the ICA acknowledges particular requirements of this kind that have already been brought to its attention.

What obligations does a company have if it believes that an investigation is likely?

According to its guidelines on setting fines, the ICA considers the provision of information and documents during an investigation which, on closer analysis, is deemed to be crucial to the identification of other infringements to be a mitigating circumstance (entailing a reduction of up to 50% of the basic amount). It may also be a legitimate ground for conditional immunity from penalties, in accordance with the leniency programme.

What are the potential consequences of failing to act or delaying action?

Under Article 14(5) of the Competition Act, the ICA may fine an undertaking that refuses or fails to provide the requested information or documents without justification.

Formal stages of investigation

What are the formal stages of and approximate timeframe for investigations?

Under Article 6(1) of Decree-Law 217/1998, investigations are formally opened by means of an ICA Board decision. The information that must be contained in the decision to open proceedings is listed in Article 6(3) of the decree-law (eg, the essential elements of the alleged infringements, the deadline for completing the proceedings and the name of the person responsible for the proceedings). The decision to open proceedings is notified to the undertakings allegedly involved in the infringement and to the complainants that have a direct, immediate and present interest (Article 6(4) of the decree-law). This decision is frequently notified to the undertakings under investigation together with the parallel decision to conduct a dawn raid.

Once the ICA Board considers that it has acquired sufficient evidence, it will authorise the issue of a statement of objections (Article 14(1) of Decree-Law 217/1998). The undertakings under investigation and the complainants admitted to the proceedings can file written submissions in response to the statement of objections (Article 14(4) of the decree-law).

If the undertakings under investigation so request, a final hearing takes place before the ICA Board (Article 14(5-9) of the decree-law). After the final hearing, the ICA adopts a final decision.

The proceedings as a whole vary in length; however, a final decision is usually adopted no earlier than 18 months from their commencement.

Investigative powers

What investigative powers do the authorities have?

The ICA’s investigative powers are set out in Article 14(2) of the Competition Act and Articles 8 to 11 of Decree-Law 217/1998.

The ICA can request in writing information and documents from any individual, undertaking or entity in possession of information and documents that may be relevant to an investigation. Requests for information and the disclosure of documents can also be made orally in the course of hearings or inspections. Oral requests and responses to these requests are recorded in the minutes of the hearing or inspection. Responses provided during the hearing or inspection can be supplemented within the deadline set out in the minutes. The offices may also:

  • hear any other individual, undertaking or person for the purposes of aiding the investigation; and
  • make written records of any information collected.

The ICA can also inspect the business premises of any party that may be in possession of documents that are relevant to the investigation. ICA officials must exhibit a document issued by the ICA that indicates:

  • the object of the inspection; and
  • the penalties for refusing, omitting or delaying to supply the requested documents and information or for supplying untruthful documents or information.

ICA officials have the power to:

  • enter any premises, land and means of transport of a party under inspection, excluding their place of residence or domicile where it is extraneous to the operations of the undertaking under investigation;
  • examine and copy books, business records and documents that are relevant to the investigation; and
  • ask for oral explanations and request information.

Minutes are taken of an inspection.

The ICA Board can authorise the submission of expert reports and statistical and economic analyses and may consult experts, as proposed by the offices.

The measure with which expert testimony and analyses are requested, and the ensuing results, are notified to the parties to which the investigation refers to enable them to exercise their right of defence.

What is the geographic reach of public enforcement actions?

Italy.

When is court approval required to invoke these powers?

The ICA does not require court approval to exercise its investigative powers.

Are searches of business and personal premises authorised? If so, which bodies carry out searches and will they wait for legal advisers to arrive?

Inspections of private premises are prohibited under Italian law. During the inspection, ICA officials are assisted by the Italian Customs and Excise Police. ICA officials are under no obligation to wait for legal counsel to arrive.

What level of cooperation with the authorities is required and what are the consequences for failing to cooperate?

Refusal or failure to provide the information or documents requested by the ICA without justification may trigger a fine of up to €25,821. Submitting untruthful information or documents may trigger a fine of up to €51,643. 

Is in-house legal advice or attorney work product protected by the law of privilege? Does this extend to the advice of in-house counsel?

Only communications between external lawyers and clients are protected by legal professional privilege. In-house lawyer communications are not protected by legal privilege unless they are limited to copying advice received by external lawyers.

Are any other limitations imposed on investigatory powers in order to safeguard the rights of those under investigation?

As with EU law, parties under investigation have the right not to reply to questions that would entail admission of the infringement. This is known as privilege against self-incrimination.

What is the process for objecting to an authority’s exercise of its claimed powers?

An ICA decision to open competition proceedings or authorise an inspection can be challenged only in limited circumstances – for example, when arguing that the ICA lacks the power to open proceedings (Lazio Regional Administrative Court Judgments 864/215 and 865/2012).

Publicity and confidentiality

What information about investigations will be made publicly available and at which stage(s) of the process?

The decision to open proceedings is usually public and posted on the ICA’s website, together with a press release, shortly after proceedings are opened. This contains some basic information concerning the nature of the infringement under investigation, as well as a reference to the undertakings involved and, sometimes, to whether inspections were carried out.

Is any information automatically confidential and is confidentiality available on request?

Under Article 14(3) of the Competition Act and Articles 12 and 13 of Decree-Law 217/1998, parties can submit a request to the ICA that certain documents and information be treated as confidential.

Based on the principle established by the administrative courts with regard to leniency materials (Supreme Administrative Court Judgment 6481/2010), it is reasonable to conclude that the ICA can on its own initiative (ie, even absent a request by the relevant undertaking) consider and treat as confidential certain information provided by the parties. However, in such cases, the ICA is not legally bound to conduct a confidentiality assessment in relation to the information contained in the file.

International cooperation

Do the authorities in your jurisdiction cooperate with authorities in other jurisdictions?

Beyond the cooperation required by the European Competition Network, no cooperation agreements with authorities in other jurisdictions exist.

Do the relevant enforcement authorities request waivers so as to allow for increased cooperation with authorities in other jurisdictions? What are the consequences of declining to grant a waiver?

No.

Decisions

How is a cartel investigation resolved? Are settlements, plea bargains or other negotiated resolutions available?

Under Italian law, a cartel investigation ends with a finding of either infringement, combined with a prohibition and often a penalty, or no infringement.

There is no settlement procedure under Italian competition law. However, under Article 14ter of the Competition Act, parties can offer commitments. If the commitments are capable of eliminating the anti-competitive nature of the conduct under investigation, the ICA may accept them and close the investigation with neither a finding of infringement nor a fine. However, the ICA does not usually accept commitments in cartel cases.

What is the process for negotiating a settlement, plea bargain or other negotiated resolution? Do such resolutions require court or other approval?

Commitments should be submitted to the ICA within three months from the opening of proceedings, although this term is not mandatory. When not manifestly inadequate, they are posted on the ICA website and published in the ICA Bulletin in order enable third parties to submit comments (market test). If needed, the ICA can also issue specific requests for information to gather further useful elements from third parties. Following the market test, the undertakings that have offered the commitments can submit their comments on the information and third-party arguments and can also amend the commitments originally submitted in light of the results of the market test.

After assessing the suitability of the commitments, the ICA can make them binding on the undertakings concerned and end the proceedings. The commitment decision is then published in the ICA Bulletin.

If a settlement is not reached, what is the procedure for adjudicating a charge of cartel conduct?

Cartels follow the ICA’s general procedure for the enforcement of competition law.

Which party must prove its case? What is the relevant standard of proof?

In line with the principles of EU competition law, the burden of proof rests on the authority alleging the infringement.

With specific regard to cartels, conscious parallelism among competitors cannot be the only evidence of an agreement or concerted practice. However, the ICA must show:

  • the absence of alternative plausible explanations of the parallel behaviour; and
  • actual contact or exchanges of information between the parties.

The burden to prove the absence of alternative explanations for the conduct in question rests on the ICA. In a recent judgment concerning an alleged agreement between two insurers regarding participation in tendering procedures to provide insurance services to the public transport sector (Judgment 1066/2017), the Supreme Administrative Court confirmed that, for a concerted practice to exist, uncertainty as to the competitors’ future conduct must be eliminated or lessened. In the absence of any significant external evidence, the ICA must prove that the parallelism in the parties’ conduct on the market is the result of an infringement and cannot be logically explained in an alternative way. In the case at hand, the ICA did not provide such proof, whereas the parties provided many possible alternative logical explanations based on the market’s specific characteristics.

In particular, the court found that the decision of the other insurers – which were not parties to the proceedings and which represented a large share of the market – not to participate in the calls for the tenders concerned or take part in the bids could have been due to the sector’s low profitability, rather than the result of unlawful collusion between the two companies.

Is there a hearing? If so, what is the process for submitting evidence and testimony?

The procedure followed by the ICA provides for two types of oral hearing:

  • Under Article 14(1) of the Competition Act and Article 6(3) of Decree-Law 217/1998, when the ICA notifies the undertakings of the opening of an investigation, they have the right to request a hearing with the officials within the deadline prescribed in the opening decision. Such a right may be exercised again before the investigative phase ends.
  • Under Article 14(5) of Decree-Law 217/1998, the undertakings and entities concerned may avail themselves of the right to be heard by the ICA Board at a final oral hearing, provided that they have so requested within five days from being notified of the statement of objections.

The board may also hear other parties to the proceedings which have submitted a reasoned request to be heard.

What are the accused’s procedural rights?

The accused has the following procedural rights:

  • the right to be heard by ICA officials when the investigation is opened and before it is closed;
  • the right to be heard by the ICA Board at a final oral hearing;
  • the right to produce, at any time during the investigation, written submissions, documents, arguments and opinions; and
  • the right to access the investigation file (with the exception of confidential information).

With regard to access, the Supreme Administrative Court, on appeal from the Regional Administrative Court, recently overturned an ICA decision to refuse a company (that had already been penalised for taking part in a cartel in the concrete industry) access to confidential documents gathered in the context of new cartel proceedings, in which the company was also involved (Judgment 3409/2016). The reason for the refusal was that the documents concerned different geographic areas to those in which the applicant’s alleged anti-competitive conduct had occurred. The court referred to the quasi-criminal nature of antitrust proceedings to conclude that the parties must be granted access to all administrative documents that appear necessary for the exercise of their rights of defence – both in antitrust administrative proceedings and in appeal proceedings before the courts.

Finally, during an inspection, lawyers may assist companies to avoid the acquisition of documents which are not directly related to the subject of the proceedings or are covered by legal professional privilege.

Appeal process

What is the appeal process?

Pursuant to Article 33(1) of the Competition Act, the Lazio Regional Administrative Court has exclusive jurisdiction over appeals of ICA decisions, which must be brought within 60 days from notification. A Lazio Regional Administrative Court judgment can be appealed before the Supreme Administrative Court within 30 days from its notification or three months from its publication. Supreme Administrative Court judgments can be appealed before the Supreme Court of Cassation for jurisdictional and competence issues or for revocation.

The appellant may also ask the Lazio Regional Administrative Court for a stay of execution when it may cause serious and irreparable damage to its position.

To what extent can the appeal body review the agency’s findings of fact, legal assessment and penalties?

An appeal is essentially limited to a review of the legality of the ICA’s decision (ie, an assessment of whether the ICA based its conclusions on accurately stated facts and supported its decisions with adequate and consistent grounds). However, the review court cannot replace the ICA’s assessment, which is within the discretionary powers vested therein, with its own appraisal.

Pursuant to Article 134 of the Administrative Code, the administrative judge has full merits jurisdiction on fines (including reducing or eliminating a fine).

Penalties

Penalties for companies

What are the potential penalties for companies involved in a cartel?

Pursuant to Article 15 of the Competition Act (287/90), the Italian Competition Authority (ICA) may impose fines of up to 10% of the worldwide turnover realised by each undertaking during the previous financial year.

Are there guidelines in place for penalties? If not, how are penalties normally calculated?

Detailed criteria for setting fines are set out in the 2014 Guidelines on the Application of the Criteria for the Quantification of Administrative Fines Pursuant to Article 15(1) of Law 287/90.

The main elements of the guidelines can be summarised as follows:

  • The calculation of a fine’s minimum ‘floor’ is based on the value of the relevant undertaking’s annual turnover in the relevant market during the past full year. Depending on the severity of the violation, this amount may be up to 30% of the undertaking’s turnover. For the most serious infringements, the minimum percentage should be no less than 15% of the value of sales.
  • In case of a serious competition law violation, the basic fine will be adjusted upwards by an entry fee, ranging from 15% to 25% of the value of sales.
  • The criteria for assessing the gravity of the offence include:
    • the relevant market’s competitive conditions;
    • prejudice against innovation; and
    • the extent of the actual economic effect or – more generally – the effects on the market and consumers, where this can be reliably estimated.
  • The fine may be adjusted if aggravating or mitigating circumstances exist. Each circumstance accounts for 15% of the basic amount.
  • The fine may be increased by up to 50% if the undertaking concerned:
    • recorded a particularly high global turnover during the financial year preceding the issue of the infringement decision; or
    • belongs to a group of significant economic size.
  • The fine may also be further increased in consideration of the amount of unlawful gains resulting from the infringement.
  • Specific criteria exist for calculating the value of sales in cases of collusion in public procurement procedures.
  • Provisions exist which concern several concurrent offences (eg, where the same conduct violates Articles 2 and 3 of the Competition Act or Articles 101 and 102 of the Treaty on the Functioning of the European Union or involves multiple violations of the same provisions.

Do the authorities take into account any penalties imposed in other jurisdictions?

No.

How can a company mitigate its exposure to fines?

Mitigating factors include:

  • the provision of information and documents during an investigation that proves to be crucial to the identification of other infringements. This may result in a penalty reduction and may provide grounds for conditional immunity from penalties; and
  • the adoption and implementation of a specific compliance programme, although its mere existence will not be considered a mitigating circumstance in itself in the absence of evidence of a credible and effective commitment thereto.

The Draft Guidelines on Compliance Programmes (for which the date of adoption is uncertain at the time of writing) further detail the indications contained in the Guidelines on the Method for Setting Fines adopted by the ICA in 2014. The draft guidelines are the first to recognise the possibility to grant a reduction of the fine in light of a compliance programme adopted by the undertaking party to an antitrust proceeding. The draft guidelines aim to provide undertakings with guidance in relation to:

  • the content of the compliance programme;
  • how to request an evaluation of the compliance programme in order for the mitigating factor (ie, a reduction of the fine) to apply; and
  • the criteria that the ICA will follow in the assessment of the compliance programme as a mitigating (or aggravating) factor.

With regard to the content of the compliance programme, the draft guidelines highlight – as a general principle – that the adequacy of a compliance programme must be assessed in relation to:

  • the specific context in which the undertaking operates;
  • the characteristics of the undertaking and its market position; and
  • the risk to which it is exposed.

The draft guidelines then provide a list of the main features which are expected in an adequate compliance programme, including:

  • acknowledgment that antitrust compliance forms an integral part of the undertaking’s culture and policy (eg, it benefits from the endorsement of the top management and from sufficient resources, and there are specific personnel in charge of the programme);
  • identification and evaluation of the main antitrust risks for the undertaking, which must take into account factors such as:
    • the undertaking’s size and market position;
    • the nature of the business and of the goods or services offered;
    • the competitive context;
    • the internal organisational structure and decision-making processes; and
    • the regulatory context;
  • organisation of adequate training, taking into account the size of the undertaking;
  • identification of the internal procedures to reduce the antitrust risks for the undertaking;
  • introduction of a system of incentives and penalties to ensure compliance with the programme; and
  • implementation of monitoring and auditing systems, and the ongoing improvement and update of the programme in order to adapt to changes in the relevant antitrust risks.

As for the request for assessment of the compliance programme, the draft guidelines state that the undertaking concerned bears the burden of proving that the compliance programme is effective, by showing that it fits the specific characteristics of the undertaking and the economic context in which it operates. For a compliance programme to be eligible for a potential reduction of a fine, the undertaking must file a request to the ICA, together with an explanatory memorandum setting out:

  • the reasons for considering the compliance programme to be adequate for the prevention of antitrust risks, in light of the specific context in which the undertaking operates; and
  • the measures through which the programme has been effectively implemented by the undertaking.

Such explanatory memorandum must be accompanied by evidence of the effective implementation of the programme.

With respect to the criteria followed by the ICA in assessing a programme’s adequacy, the approach suggested in the draft guidelines entails the following:

  • A discount of up to 15% may be granted for having an adequate and effective programme in place before the opening of the proceedings, which allows the undertaking to detect and terminate the infringement before the notification of the opening decision from the ICA, on the condition that the firm has filed for leniency (if applicable).
  • A discount of up to 10% may be granted for having a programme in place before the opening of the proceedings when, even if incapable of preventing an infringement, it was successfully amended after the initiation and before the adoption of the statement of objections, provided that the statement was complete and adequate.
  • A discount of up to 5% may be granted for an adequate compliance programme adopted and implemented for the first time after the initiation of the proceedings but before the adoption of the statement of objections, provided that the undertaking can prove its implementation.
  • No discount can be granted for programmes in place before the opening of proceedings which are considered manifestly inadequate. In this case, the undertaking can benefit from a discount of up to 5% if it substantially amends the programme before the adoption of the statement of objections, similar to a newly introduced compliance programme.

With regard to groups of undertakings, the draft guidelines provide that, in proceedings where a parent company is involved, in order for the parent company’s compliance programme to be considered adequate, it must be adopted and implemented at a group level (ie, by the parent company and its subsidiaries). The adoption of a compliance programme by the parent company does not in itself suffice to eliminate the company’s responsibility for the subsidiary’s conduct.

Penalties for individuals

What are the potential penalties for individuals involved in a cartel?

Not applicable.

Do the authorities take into account any penalties imposed in other jurisdictions?

Not applicable.

Is a company permitted to pay a penalty imposed on its employee?

Not applicable.

Is a company permitted to continue to employ an employee involved in cartel conduct?

Not applicable.

Private actions

Private damages actions

Can private actions for damages be brought in your jurisdiction? If so, who may assert such actions?

Italy implemented the EU Damages Directive (2014/104/EC) by means of Decree-Law 3/2017. Claims may be brought by any natural or legal person that has suffered a loss following an infringement of national competition law or Articles 101 or 102 of the Treaty on the Functioning of the European Union.

The competent courts with exclusive jurisdiction in Italy over actions for antitrust damages are the specialised business courts of Milan, Rome and Naples.

What relief may be awarded to successful claimants (eg, damages, costs, injunctive relief or attorneys’ fees)?

Italian law does not allow the recovery of punitive or treble damages. The winning party may fully recover the expenses and costs from the losing party. However, the court may issue an equitable judgment in this regard, which usually means that each party must bear its own costs. 

How are the amounts of any damages, costs or attorneys’ fees calculated?

According to the Civil Code, recoverable damages consist of actual losses and lost profits.

Attorneys’ fees and other costs incurred for providing evidence on behalf of the defendant may also be recovered. Attorneys’ fees are set by the court and depend on the seriousness and number of the issues addressed, as well as certain non-binding parameters adopted by the Ministry of Justice in 2014.

Have there been any notable recent cases in which a private action was the subject of adjudication?

Although delivered in the context of an alleged abuse of dominant position, a Supreme Court of Cassation judgment (11564/2015) played an important role in reducing the burden of proof on claimants bringing standalone actions (ie, actions brought in the absence of a competition authority’s finding of infringement) even before the implementation of the EU Damages Directive. The court held that national courts must order full disclosure by the defendant in case of evidence incompletely submitted by a plaintiff where there is a plausible indication of an antitrust infringement.

Class actions

Can class actions be brought in your jurisdiction? If so, what is the procedure for such cases?

As of 2010, consumers can bring class actions for damages suffered as a result of certain breaches of contract or torts on the basis of Article 140bis of the Consumer Code. In particular, class actions may be brought by individual users or consumers that have suffered damage due to the conduct of the defendant, provided that they can claim homogenous rights.

National consumer associations, committees and representative entities have locus standi only if they have received a specific mandate from members of the class.

The class action procedure consists of two stages. Following an opening hearing, the court first decides on the admissibility of the action. If the court deems the class action to be admissible, it issues an order setting out:

  • the rules for notification of the proceedings to the other members of the class;
  • the description of the rights that are the subject of the proceedings;
  • the deadline for the exercise of other consumers’ or users’ right to opt in; and
  • the rules governing the ensuing investigatory phase.

All other proceedings follow the ordinary trial procedure before the competent court, which will – based on the evidence submitted by the parties – either reject the action or condemn the defendant to pay damages to the class action members. Transaction agreements between class members and the defendant are possible throughout the proceeding; however, these agreements are exclusively binding on the class members that expressly accept them.

Immunity and leniency

Immunity and leniency programmes

Is an immunity and leniency programme available for companies? If so, how does it operate?

In 2007 the Italian Competition Authority (ICA) developed a system of partial or total immunity from fines for companies reporting a horizontal secret agreement to which they are a party (Leniency Notice, last amended by ICA Decision 24506/2013). The Leniency Notice also applies to vertical aspects of cartels. 

According to the Leniency Notice, full immunity from a fine is granted to the first cartel participant to report the illegal activity to the ICA on its own initiative by providing information and documentary evidence. The following requirements must be met:

  • The information or evidence provided must be decisive to discover a cartel infringement, possibly through an inspection.
  • The ICA must not already have sufficient information or evidence to prove the cartel.
  • The formal conditions for access to the leniency programme must be satisfied. These are listed in Article 7 of the notice and comprise:
    • terminating participation in the illegal activities (unless the ICA requests otherwise);
    • cooperating with the ICA in a continuous and complete manner; and
    • informing no party of the leniency application.

Can the enforcement authority decline or withdraw leniency? If so, on what basis?

If the conditions for leniency are not initially satisfied, the ICA will promptly inform the applicant, which may either withdraw the information and documents already filed for immunity purposes or request the ICA to consider this material for a possible fine reduction. In case of an initial application for a fine reduction, the applicant may withdraw only the documents submitted.

Even if the ICA finds that the conditions for the non-imposition of fines are met, acceptance of the application is conditional on the undertaking’s compliance with the conditions attached to leniency pursuant to Article 7 of the Leniency Notice. The ICA will take its final position on the non-imposition of fines only in the final decision on the infringement. Accordingly, even after accepting the application, if the ICA finds that the conditions attached to leniency pursuant to Article 7 have not been met, it can disqualify the undertaking from any benefits provided by the notice.

Are there benefits for cooperators that do not qualify for immunity? If so, how are these benefits determined?

A fine reduction, normally not exceeding 50%, may be granted to cartel participants that submit evidence which significantly strengthens, by its very nature or its level of detail, the evidence already in the ICA’s possession. The other conditions attached to leniency pursuant to Article 7 of the Leniency Notice must also be met. In order to determine the appropriate level of fine reduction, the ICA will consider the timeliness of the undertaking’s cooperation and the evidentiary value of the material submitted.

What benefits (if any) are available for employees and former employees of a company that seeks leniency?

Not applicable.

Is an immunity or leniency programme specifically available for individuals? If so, how does it operate?

No immunity or leniency programme is specifically available for individuals.

Have there been any notable recent cases in which a leniency application was the subject of adjudication?

An ICA decision to grant only partial immunity in the context of a leniency application lodged both to the European Commission and the ICA was the subject of a Supreme Administrative Court request for a European Court of Justice preliminary ruling (C-428/14, DHL Express). The European Court of Justice stated that, at the EU level, single leniency applications or main applications are not submitted parallel to secondary applications. Rather, applications for immunity are submitted to the European Commission and summary applications are submitted to the national competition authorities, which have the exclusive responsibility to assess summary applications addressed thereto. No EU provision in relation to cartels requires national authorities to interpret a summary application in light of an application for immunity submitted to the European Commission, irrespective of whether the summary application accurately reflects the content of the application submitted to the commission. The Supreme Administrative Court applied the European Court of Justice’s decision in its judgment (4374/2016).

Criminal liability

Is immunity from criminal prosecution available? If so, how and under what conditions is immunity granted?

Not applicable.

Application procedure

What is the procedure for a leniency application?

A formal request, accompanied by relevant documents and any other important information, must be submitted to the ICA, which will then issue a receipt certifying the date and time of submission. The ICA evaluates multiple applications for leniency concerning the same agreement in the order in which they are received.

Before filing a leniency application, an undertaking may approach the ICA, including anonymously, in order to seek guidance.

The ICA may, on a motivated request, allow applications to be submitted orally. In this case, statements by company representatives are recorded on suitable media and put into writing by the ICA.

What is the typical timeframe for consideration of a leniency application?

There is no specific timeframe for handling leniency applications.

What information and evidence is required?

For immunity, the information or evidence provided must be decisive to discover a cartel infringement, possibly through an inspection.

For a fine reduction, evidence must significantly strengthen, by its very nature or its level of detail, the evidence already in the ICA’s possession, thereby appreciably contributing to the ICA's ability to prove the alleged infringement.

What information and evidence is disclosed to subjects of the investigation other than the leniency applicant?

As against parties to which a decision to initiate proceedings has been addressed, access to the applicant’s oral or written disclosure statements is deferred until the statement of objections has been communicated. After that, access is possible on the condition that the information is not copied by any means or used for any purpose other than in the context of legal or administrative proceedings concerning the competition provisions relating to the administrative proceedings.

With regard to documents attached to the application or as a complement to the disclosure statements, access may be deferred until communication of the statement of objections.

What level of cooperation is required from applicants?

See above.

What confidentiality protection is offered to applicants?

See above.

Can the company apply for a marker? If so, under which conditions?

An applicant may file a request for a marker identifying the parties to the alleged agreements, describing the agreement and providing information on any other applications that it has made or is making in order to receive no or a reduced fine.

The ICA may set a deadline for the completion of the application. If complied with, the application will be deemed to have been submitted in its entirety on the date when the deadline was set. Evidence submitted by the applicant together with its request for a marker may otherwise be assessed for the purposes of a fine reduction.