As we reported in May, the Italian Competition Authority (the “ICA”) opened an in-depth investigation into six (then extended to other ten) banks operating in the Province of Trento and Bolzano (the “Banks”) for the alleged infringement of Article 2 of the Italian Law No. 287 of 1990 and/or Article 101 TFEU, the provisions against anti-competitive agreements.

The background of the case was that after a complaint filed by the consumer association “Centro Consumatori Utenti Alto Adige” (the “Claimant”), the ICA started an in-depth investigation alleging the existence of an anti-competitive agreement aimed at setting a minimum mortgage interest rate among the Banks.

Such investigation was initially based on the outcome of a comparative survey carried out by the Claimant itself in November 2013, then the ICA found that the Banks all provided for a minimum mortgage interest rate set at 3% called “rate floor”. In essence, the interest rate could never be below the said threshold.

Following this, on 4th March 2016 the ICA held that the homogeneous application of the interest rate threshold among the Banks amounted to setting a minimum price for mortgage. Further, the ICA found that the minimum price was decided by the Banks through the sharing of sensitive commercial information among them.

Such behaviour would constitute a hard-core restriction of competition (setting a minimum price) and would aim at avoiding interest rate price reduction to the detriment of mortgage subscribers.

In addition, the ICA found that the anti-competitive agreement among the Banks would infringe Article 101 TFEU as the territory of Trento and Bolzano borders another European Union Member State (Austria).

The collusion therefore caused damages on commercial trade between two Member States, at the least.

The decision is likely to hasten reform of the Italian banking sector, a sector which despite recent legislative interventions, appears unwilling to keep up with the pace of change in international banking.