On 2 August 2017, the Italian Parliament enacted the so called “Annual Competition Act”, an Act which is supposed to be approved every year by the Legislator in order to adopt measures that should boost competition on the market. Why is that? Under the Italian Competition Act, the Italian Competition Authority submits an yearly official report to the Presidency of the Council to identify all the pre-existing or emergent legislative measures that create restrictions on competition and to suggest possible solutions. After examining the report, the Government delivers a draft law to the Parliament which will discuss, amend and approve it.
The new law significantly lowers the existing merger notification turnover thresholds. As a consequence, the new thresholds which trigger a mandatory filing to the Italian Competition Authority are:
- i) a combined aggregate domestic turnover of all the undertakings concerned exceeding 492 million EUR (compared to the previous 499 million EUR); and
- ii) an aggregate turnover in Italy of at least two of the undertakings concerned exceeding 30 million EUR (compared to the previous 50 million EUR).
In light of this amendment, the number of notifications is likely to significantly rise.
The new legislation has entered into force on 29 August 2017, therefore after that date all the mergers will be subject to mandatory notification if they meet the above-mentioned thresholds. Should the parties not fulfil their obligation to file, the Italian Competition Authority will open an investigation and will fine the parties up to 1% of their turnover, irrespective of the antitrust assessment of the merger.
Further to this, the Annual Competition Act introduced a number of measures affecting several sectors, including insurance, transport, liberal professions, tourism, banks and pharmacies.
Most notably, with regard to the transport industry, within 12 months from the entry into force of the law the Government will adopt a legislative decree to regulate the new forms of transport services (most importantly, UBER), in an attempt to make the environment more competitive and to impose higher qualitative standards to the supply side of the market (and, hopefully, to dismantle the powerful taxi drivers’ lobby, the only category in Italy that has survived liberalisation over the years). Perhaps, in the meanwhile the European Court of Justice, following the Opinion delivered by AG Szpunar, will have decided whether Uber is an internet platform or a transport service.
Another breakthrough regards the long standing issue of the hotel bookings. Indeed, the new law prohibits contractual clauses restricting hotels from offering lower prices than those offered by the booking sites (“Most Favoured Nation” or “rate parity” clauses). Such clauses, employed in the past by platforms like Booking and Expedia, will be null and void in Italy. Similar measures have already been adopted in Germany, France and Austria.
The Legislator has partially liberalised also the retail pharmacy market. According to the new framework, capital companies will be entitled to own pharmacies, but each company will not be allowed to own more than 20% of the pharmacies existing in each region. In the past, capital companies could own only minority shares in pharmacies and each individual was entitled to own no more than 4 pharmacies.
The liberalisation wave does not spare lawyers. Indeed, under the new provisions, capital companies will now be entitled to own up to 33% of law firms. This is a significant change, since in the past capital companies were not admitted into law firms and only lawyers themselves were eligible to own equity therein.