The Italian 2022 annual Competition law (“Law n. 118/2022”) introduced significant changes with reference to the merger thresholds applicable in Italy.
Article 32 of Law n. 118/2022 amended Article 16 of the Italian Competition Law (“Law n. 287/1990”), governing merger notifications, enlarging the Italian Competition Authority’s (“ICA”) powers in this respect.
Up to now, pursuant to Article 16, paragraph 1, of Law n. 287/1990 the only relevant thresholds to consider when assessing the need to notify a concentration to the ICA were the followings:
As a consequence of the amendments introduced by Law n. 118/2022, the Italian legislator added a new paragraph 1-bis to Article 16 of Law n. 287/1990. Under this new paragraph, the ICA can now request relevant undertakings to notify also the so-called “sub-threshold” concentration operations (i.e., merger operations that do not fall under Article 16, paragraph 1, of Law n. 287/1990).
Pursuant to the new Article 16, paragraph 1-bis, of Law n. 287/1990, the ICA may in fact also request the notification of relevant operations when the following cumulative conditions are met:
The notification shall be made within 30 days from the receipt of the relevant request from the ICA.
Failure to notify within the above-mentioned deadline leads to the application of administrative pecuniary sanctions pursuant to Article 19 of Law n. 287/1990 (i.e., fines up to 1% of the relevant turnover of the undertakings concerned referring to the last consolidated financial statement).
Law n. 118/2022 also tasked the ICA with the duty to publish specific guidance in order to clarify the procedural aspects to apply the new Article 16, paragraph 1-bis, of Law n. 287/1990. With the adoption of such guidance, the ICA provided for clarifications on the substantial aspects of the new provision and established additional procedural aspects with respect to what was already provided for under Law n. 118/2022.
In October 2022, the ICA, considering the relevance of the amendments made to Law n. 287/1990, launched a public consultation on the draft text of its guidance, inviting relevant stakeholders to send feedbacks.
Based on the comments received, on 2 January 2023, the ICA adopted the final text of the Communication related to the sub-threshold concentration operations (the “ICA Communication”). The ICA Communication clarifies certain elements of uncertainty included in the new provision, especially with reference to the meaning of “concrete risks for the competition in the market” (i.e., point 2) above) and to the chronological application of the new provision (i.e., point 3) above). Furthermore, the ICA also introduced the possibility for interested undertakings to request a preliminary assessment of a “sub-threshold” merger that is deemed to meet the requirements established under Article 16, paragraph 1-bis, of Law n. 287/1990.
In particular, the ICA Communication deals with the following main points:
Procedural aspects
Concrete risks for the competition in the Italian market
Voluntary notification
Article 16, paragraph 1, Law n. 287/1990
Merger Notifications: (cumulative) relevant thresholds (last updated on 21 March 2022) |
Article 16, paragraph 1-bis, Law n. 287/1990
|
Relevant turnover achieved in Italy by all involved companies: EUR 517 million |
One of the two relevant thresholds criteria set forth under Article 16, paragraph 1, is exceeded OR the global turnover achieved by all the companies concerned exceeds EUR 5 billion; |
Relevant turnover achieved in Italy individually by each company involved: EUR 31 million. | Concrete risks for the competition in the Italian market or in a relevant part therein; |
No more than six months have elapsed since the merger was concluded. |
Although the ICA Communication sheds light on some controversial aspects of the new Article 16, paragraph 1-bis, of Law n. 287/1990, it remains to be seen whether a fair balance will actually be struck in practice between, on the one hand, the need to ensure that mergers do not entail any significant risks for the maintenance of fair competition on the market and, on the other hand, the need to avoid unnecessary burdens for companies.
For further information, please contact: Federico Marini Balestra, Lucia Antonazzi and Chiara Horgan.