EU Court of Justice rules on the scope of “passive legitimation” in actions for antitrust damage

With preliminary ruling of 6 October 2021, in case C-882/19, the EU Court of Justice ruled on the possibility for a party damaged by an infringement of Art. 101 TFEU to bring an action for damages against the subsidiaries of a company deemed responsible for the infringement.

In response to the question referred for a preliminary ruling by the Barcelona Provincial Court, the Court of Justice starts from the premise that the concept of “undertaking” relevant under antitrust law – to be determined on the basis of the “unity of conduct on the market” criterion, regardless of the formal separation between different legal entities – has the same scope in the context of both public and private enforcement (concerning actions for antitrust damages). According to the Court of Justice, from such assumption it follows that the party damaged by an illegal antitrust conduct attributed by the Commission to a parent company, may also, in principle, bring a civil action for the compensation of damages against the subsidiaries of the latter, where the parent company and its subsidiaries together constitute an “undertaking” in the antitrust sense.

However, the Court specifies that “the possibility for the victim of an anticompetitive practice of invoking, in the context of an action for damages, the liability of a subsidiary company rather than that of the parent company cannot automatically be available against every subsidiary of a parent company targeted in a decision of the Commission punishing conduct that amounts to an infringement”, since “the same parent company may be part of several economic units made up, depending on the economic activity in question, of itself and of different combinations of its subsidiaries all belonging to the same group of companies”.

Therefore, the Court clarified that to claim damages from a certain subsidiary of the undertaking which was recognized by the Commission as responsible for an infringement of Art. 101 TFEU, the damaged party has to prove that the parent company and its subsidiary together form a single undertaking, having considered both “economic, organizational and legal links” and the existence of a “specific link between the economic activity of that subsidiary company and the subject matter of the infringement for which the parent company has been held responsible”. Therefore, for instance, in relation to the case in which the request for preliminary ruling was referred, concerning the claim for damages brought by a party allegedly damaged by a cartel involving several truck manufacturers, “the victim [of the antitrust infringement] should in principle establish that the anticompetitive agreement concluded by the parent company, for which it has been punished, concerns the same products as those marketed by the subsidiary”.

Italian Competition Authority clears Nexi-Sia merger subject to conditions

With its decision of 12 October 2021, the Italian Competition Authority (ICA) authorized the merger by incorporation of SIA S.p.A. into Nexi S.p.A.

The transaction concerns several activities in the digital payment sector, inter alia merchant acquiring services, processing, payment card issuance, retail payment clearing, interbank data transmission, and more, services for the provision and maintenance of ATMs.

The Authority underlined, from a general perspective, that the current payment services sector is characterized by a high technological component and by an offer of services that are often vertically integrated. Although the competitive environment for these services is often supranational, also because of the adoption of harmonization measures at the EU level, there are still markets with a national dimension.

In this regard, during the investigation, competition concerns have emerged in relation to the domestic markets of processing activity of Bancomat payment circuit cards and clearing services for non-SEPA products.

The ICA therefore authorized the operation, subject to the adoption by the undertakings involved of certain behavioral and structural measures, and in particular:

  • the renunciation, by Nexi S.p.A., of the exclusivity contained in the contracts with equensWorldline, relating to non-SEPA domestic processing and clearing services;
  • the provision by both operators of a non-discriminatory, clear and transparent offer for acquiring processing and issuing processing of household cards, at least until the new ATM platform becomes operational;
  • the adoption, by Nexi s.p.a and SIA s.p.a., for a period of three years, of a clear and transparent offer relating to the clearing of non-SEPA products; and
  • the sale of the non-SEPA clearing agreements currently signed by Nexi S.p.A. with its client banks to an entity that meets the requirements set out by the ICA in the decision, and in accordance with the procedures and timeframes defined in the decision, with the obligation for Nexi S.p.A. and SIA S.p.A. to preserve, in the meantime, the economic viability, marketability and competitiveness of the contracts, and a prohibition for them to regain control over the transferred assets for three years.

Commission launches consultation on proposed amendments to block exemption regulation on state aid

With a press release of 6 October 2021, the European Commission has announced that it has launched a public consultation on a draft amendment to the General Block Exemption Regulation for State aid (Regulation 615/2014, GBER) inviting Member States and other interested parties to submit comments by December 8, 2021.

The GBER declares specific categories of state aid compatible with the EU legislative framework, provided that they fulfil certain conditions, thus exempting these categories from the requirement of prior notification to and approval by the Commission. The rules laid down in the GBER are complementary to those set out in state aid guidelines which set the conditions under which the Commission assesses whether state aid measures that are not block-exempted (and therefore need to be notified to it) are compatible with the Single Market.

The Commission proposes a number of targeted changes to the GBER to reflect the changes in various sets of state aid guidelines which are currently being reviewed (namely, the Regional Aid Guidelines, the Climate, Energy and Environmental State aid Guidelines, the Risk Finance Guidelines and the Research, Development and Innovation Framework).

The aim of the ongoing revision of these Guidelines and of the proposed revision of the GBER is to promote public funding which contributes to the achievement of current EU priorities, notably the Green Deal and the European Industrial and Digital Strategies, and to ensure that state aid rules reflect the most recent market and technological developments.

In the context of the aid for environmental protection and energy, the Commission proposes to:

  • extend the possibilities for Member States to provide support for various types of “green” projects;
  • introduce new “green” conditions that need to be fulfilled for large energy-intensive businesses to receive block-exempted aid;
  • widen the existing exemptions for investment and operating aid for renewable energy to include storage projects that are directly connected to new or existing renewable energy generation facilities;
  • facilitate investments in green hydrogen; and
  • introduce a “green bonus” for aid for improving the energy performance of buildings.

Concerning the aid for risk finance investment, the Commission proposes to:

  • clarify the rules on risk finance aid; and
  • widen the scope of aid for startups to include aid in the form of transfer of intellectual property rights.

The Commission also proposes to simplify the conditions for granting research, development and innovation aid and, in the context of regional aid, to align the conditions with the new Regional Aid Guidelines.

The adoption of the revised GBER is planned for the first half of 2022; the interested parties may submit comments by 8 December 2021.

Council of State clarifications on division of competences between ICA and Italian Communications Authority

With judgment No. 6596/2021 published on October 1, 2021, the Council of State once again addressed the issue of the division of competences between the Italian Competition Authority (ICA) and the Italian Communication Authority (AGCom). The judgment is part of a decades-long jurisprudential debate on the competence of independent authorities, in which both the Plenary Assembly of the Council of State and the Court of Justice of the European Union have intervened on several occasions.

The Council of State, ruling on the lawfulness of an AGCom’s resolution by which an operator was warned not to engage in a conduct already fined as an unfair commercial practice by the ICA, excluded AGCom’s competence, stating that the competence to assess and fine such conduct lies exclusively with the ICA.

The Council of State clarified in particular that for the purposes of the division of competences between the ICA and the AGCom “the general rule is that in case of an unfair commercial practice, the competence lies with the ICA. The competence of the other sector Authorities is residual and occurs only when the sector discipline regulates ‘specific aspects’ of the practices that make the two disciplines incompatible”.

The criterion for the division of competences between the ICA and the AGCom is therefore that of EU inspiration of the “incompatibility” of conducts. In other words, in order for the sectoral regulations to prevail over the general regulation, it is necessary that they impose “on professionals, without any room for maneuver, obligations that are incompatible” – ie in contrast – with those established by the general regulation on unfair commercial practices.

In the case at issue, the Council of State, considering that “the conducts challenged by the two Authorities substantially overlapped, with the consequence that it cannot be considered that the sectoral regulations regulate profiles of the conduct that are ‘incompatible’ with those that constitute the extremes of an unfair commercial practice”, held that the AGCom lacked the competence to initiate a second proceeding concerning the same conduct already sanctioned by the ICA, and consequently annulled the AGCom’s resolution.

New position of the Council of State: the ‘award constraint’ (vincolo di aggiudicazione) in a multiple tender also operates for the subsidiary when the parent company is the successful tenderer

With judgment No. 6481 of 27 September 2021, the Council of State clarified the ratio of the so-called "award constraint" and – changing its previous approach, even in recent decisions – extended its application in respect of bids attributable to a single decision-making center.

The “award constraint” – according to Art. 51 co. 3 of Legislative Decree No. 50/2016, Public Contracts Code – may be provided discretionally by the Contracting Authority, when the contract is divided into several functional or performance lots, in order to limit the lots that can be awarded to the same bidder.

The Council of State clarified that this is a pro-competitive tool, which makes more specific the generic objective – mentioned by Art. 51 of Legislative Decree No. 50/2016 – of ensuring access to contracts by small and medium-sized enterprises. According to the administrative judges, this limit operates in a “discretionary distributive perspective (properly antitrust), intended as such to discourage the concentration of economic power, to preclude the hoarding of orders by 'strong' operators, structured and organized (...)”.

Contrary to the previous decisions, the judges clarified that, in accordance with the above-mentioned ratio, the constraint also operates for “economic operators substantially related to a single decision-making center”.

In this regard, the Council of State clarified the distinction between the “award constraint” and the rule established by Art. 80 paragraph 5 letter m) of the Public Contracts Code. Pursuant to the latter rule, bids which are attributable to a single decision-making body, due to control situations or de facto relations between individual entities, must be excluded.

Unlike the above-mentioned rule, the "award constraint" does not operate by law, but depends on a discretionary decision by the Contracting Authority.

Moreover, although both have a pro-competitive purpose, the cause of exclusion of Art. 80 co. 5 letter m) of Legislative Decree No. 50/2016 operates with regard to the single lot; in the case of a multiple tender, this rule does not apply, where the bids submitted refer to different lots, since the division into lots essentially determines the existence of many tenders, each with its own procedure. Therefore, the “award constraint” retains its own area of applicability.