Merger reviewi Significant cases
In 2018, the ICA made merger clearance conditional upon remedies in four cases.
Luxottica, global leader in the production of eyewear, filed a notification for the acquisition of Barberini, active in the production of glass blanks and finished glass lenses. After reviewing the companies' market shares post-merger, the ICA noted that no alternative supplier of high quality lenses would be in a position to effectively meet the requirements of the main customers in this sector. The ICA also raised concerns in relation to Luxottica's significant market power and vertical integration in the segment of glass blanks, as well as in the downstream segment of glass lenses. Finally, the ICA took into account Barberini's competitive advantage resulting from considerable R&D resources and ability to innovate. The acquisition was cleared subject to Luxottica's obligation not to impose minimum purchase requirements in the supply of glass blanks and to allow customers to access certain innovative products covered by Barberini's intellectual property rights.
The ICA also reviewed the proposed acquisition of Nedgia by 2i Rete Gas, both active in the operation of gas distribution networks. The ICA raised concerns about certain territorial districts, particularly in Sicily and Puglia, where the two companies are the main (if not the only) participants in tenders for distribution networks operation. The ICA made the acquisition conditional upon divestment of 2i Rete Gas' assets in some of those districts. The ICA also imposed behavioural measures to be implemented in the event no suitable buyer can be found for the acquisition of the divested assets.
Structural remedies were also required to obtain the ICA's greenlight to the acquisition of Gardenia-Limoni by Douglas, both active in the selective retail distribution of luxury perfumes, and the acquisition of Modial Pet by Noah 2, two distributors of pet food.ii Trends, developments and strategies
Law No. 124 of 4 August 2017 revised the two cumulative turnover thresholds for the notification of concentrations to the ICA. The first threshold, applying to the combined aggregate domestic turnover of all undertakings concerned by the concentration, has been slightly lowered from €499 million to €492 million. The second threshold has been lowered from €50 million to €30 million and now applies to each of at least two of the undertakings concerned, and no longer to the acquired undertaking alone.
Since the first threshold remains extraordinarily high, the ICA's ability to review proposed transactions continues to be very limited. Only 73 concentrations were notified in 2018, slightly more than the 64 transactions notified in 2017. By comparison, more than 400 transactions a year were notified before 2013, when the application of just one of the two turnover thresholds was sufficient to trigger a filing obligation.iii Outlook
The old EU law distinction between cooperative and concentrative joint ventures remains applicable under Italian competition rules. Accordingly, all joint ventures (including full-function ones) whose main object or effect is the coordination of their parent companies' behaviour do not constitute a 'concentration' within the meaning of Article 5 of Law No. 287/1990. These joint ventures must be assessed under the restrictive agreements or market dominance provisions, or both. The ICA presented a reform proposal to the Italian government through Recommendation No. AS988 of 2 October 2012, suggesting to add into Article 5 an explicit reference to the applicability of merger control rules also to full-function cooperative joint ventures. However, the proposal has not yet become law.