In a decision published on 10 February 2017, imposing Samsung Electronics Italia S.p.A. (“Samsung”) fines totaling € 3.1 million for alleged aggressive unfair commercial practices, the Italian Competition Authority (the “Authority”) confirmed that the prompt implementation of measures aimed at addressing its concerns regarding alleged unfair commercial practices leads to a higher mitigation of the fine.

According to the Authority, Samsung would have: (i) provided consumers with incomplete and misleading information on the terms and conditions of the promotions; and (ii) forced consumers to provide their consent to the processing of their personal data for marketing purposes, as a condition to obtain the premiums related to the purchase of the product. In setting the amount of the fine, the Authority took into account the measures implemented by Samsung before and after the beginning of the proceeding. Indeed, in relation to the second allegation, the Authority considered the importance of the measures implemented before the opening of the proceeding and granted a significant reduction of the fine (25%). In relation to the first conduct, the Authority granted a lower reduction of the fine (15%), given that the measures aimed at addressing its concerns were adopted only after the opening of the investigation.

On 4 May 2016, the Authority opened the investigation following several complaints received from consumers and consumers’ associations. In particular, Samsung would have used claims aimed at promoting prize-giving events without providing consumers with all relevant information and using a font style, which would have been too small or difficult to read. The Authority also considered that the access to promotions’ rules in each point of sales or through the website was not sufficient in order to overcome this lack of information. Furthermore, as mentioned above, according to the Authority, Samsung would have forced consumers to provide their consent to the processing of personal data for purposes other than the ones necessary for obtaining the premium. During the proceeding, Samsung voluntarily submitted and implemented measures aimed at improving consumers’ awareness on the terms and conditions of the promotions. These measures included simplification of consumers’ involvement in prize-giving events, verification of consumers’ satisfaction, improvement of systems aimed at monitoring whether employees would effectively provide all the relevant information to consumers, streamline procedures for obtaining the premium, a more efficient handling of consumers’ complaints. Furthermore, Samsung also submitted that it had implemented other measures aimed at addressing the concerns related to the provision of the customers’ consent for the processing of their personal data. The Authority fined Samsung of € 3.1 million for alleged unfair commercial practices consisting of aggressive and misleading promotions related to the purchase of smartphone, smart TV and other Samsung’s products. However, in the calculation of the fine, the Authority acknowledged the relevance of the above mentioned measures granting a significant reduction of the applicable fine.

Gabriele Giunta (Trainee) contributed to this blog post.

On 19 January 2017, the Italian Competition Authority (AGCM) and the Italian Medicines Agency (AIFA) signed a memorandum of understanding in order to increase enforcement in the pharmaceutical sector by strengthening their investigation powers and facilitating the exchange of data. Under the agreement, AGCM and AIFA will inform each other on cases concerning alleged violations of rules enforced by one of them. In particular, in case of negotiations carried out by AIFA with pharmaceutical companies on the applicable drugs prices, or whether counterfeiting cases regarding pharmaceutical products emerge during an investigation. Furthermore, the authorities will cooperate in their advocacy activities and in carrying out sector enquiries. Finally, the authorities will exchange information and data on matters of common interest.

Continue Reading An Increased Cooperation in Enforcement Activity: The Italian Competition Authority and the Italian Medicines Agency Sign a Memorandum of Understanding

On 13 January 2017, the Italian Competition Authority (AGCM) and the Italian Communication Authority (AGCOM) signed a memorandum of understanding concerning several aspects of their cooperation in the application of consumers’ protection rules. Under the memorandum of understanding, in the case of consumers’ protection matters, which potentially involve both authorities, there will be coordinated actions, even during the preliminary investigation phase. Furthermore, AGCM will inform AGCOM on cases concerning the violations of rules enforced by AGCOM, which will do the same in case of hypothesis of unfair commercial practices in the electronic communications sector. The authorities agreed also to set up a standing working group in order to promote the debate on consumer protection issues. Finally, the agreement provides rules on the exchange of information between the authorities on investigations.

Continue Reading Unfair Commercial Practices – The Italian Competition Authority and The Italian Communication Authority Sign a Memorandum of Understanding

On 23 December 2016, the Regional Administrative Court of Lazio (the TAR) annulled the decision of the Italian Competition Authority (the Authority), against Sky Italia S.r.l. (Sky); Reti Televisive Italiane S.p.A. (and its subsidiary Mediaset Premium S.p.A.) (RTI); the Italian Football League (Lega Calcio); and Infront Italy S.r.l.(Infront), concerning an alleged violation of Article 101 Treaty on the Functioning of the European Union  (TFEU) on the sale of broadcasting rights of the Italian Premier League “Serie A” for the years 2015–2018. According to the TAR, the Authority failed to observe the mandatory time-limit to contest the alleged conduct. The TAR highlighted that the Authority erred in considering the alleged conduct as a market sharing agreement. Furthermore, the Authority also erred in considering the agreement as a restriction “by object.” In particular,, according to TAR, the Authority has not carried out a thorough analysis of the relevant market and has not followed the recent European case law, according to which “in order to determine whether an agreement between undertakings reveals a sufficient degree of harm that it may be considered a ‘restriction of competition by object’ within the meaning of Article 101(1) TFEU, regard must be had to the content of its provisions, its objectives and the economic and legal context of which it forms part” (see Court of Justice of the European Union, case C-373/14 P, Toshiba Corporation v European Commission, 20 January 2016).

The broadcasting rights for the Italian Premier League “Serie A” are allocated, according to Legislative Decree No. 9 of 9 January 2008, through a tender issued by the Lega Calcio. In the 2014 tender, regarding the broadcasting rights for the years 2015–2018, Sky submitted the best bids for the two most relevant lots (A and B). However, considering the conditional bids presented by RTI and the possible creation of a dominant position in the market, the Lega Calcio, advised also by Infront, decided to allocate the relevant lots between Sky (lot A) and RTI (lots B and D). Then, after having received the authorization of both the Authority and the Italian Communication Authority, RTI granted to Sky the sub license of lot D. However, on 13 May 2015, the Authority opened an investigation on the decision-making process for the allocation of the broadcasting rights, and with decision of 19 April 2016, fined RTI of € 51,4 million, Infront of € 9,04 million, Sky of € 4 million and the Lega Calcio of approximately € 2 million for alleged market sharing in breach of Article 101 TFEU.

Gabriele Giunta contributed to this post.

On 16 November 2016, the Italian Competition Authority (the “Authority”) opened a proceeding against Vodafone Italia and Telecom Italia for alleged abusive conducts in the bulk SMS market. According to the Authority, both companies would have abused their dominant position in the upstream market of SMS termination services through alleged abusive conducts aimed at excluding or limiting other competitors’ ability to compete in the downstream bulk SMS market.

According to the Authority, Vodafone Italia and Telecom Italia would have implemented a margin squeeze strategy in breach of Article 102 TFUE. In particular, the tariffs applied by Vodafone Italia and Telecom Italia in the upstream and downstream markets would leave an insufficient margin for any efficient competitor to cover their own specific costs for providing the bulk SMS service to customers, therefore preventing or restricting their access to the downstream market. The opening of the investigation follows a complaint filed with the Authority by a smaller competitor operating in the downstream bulk SMS market. The proceeding is scheduled to close on 30 November 2017.

Gabriele Giunta contributed to this post

On 11 November 2016, the Italian Competition Authority (the Authority) fined eight modelling agencies (B.M. S.r.l. – Brave, D’management Group S.r.l., Elite Model Management S.r.l., Enjoy S.r.l., Major Model Management S.r.l., Next Italy S.r.l., Why Not S.r.l. and Women Models S.p.a.) and their trade association (Assem) of € 4.5 million for alleged price collusion. According to the Authority, the modelling agencies would have agreed on the applicable prices on the market with the aim of avoiding any form of competition. In particular, the alleged price collusion would have concerned all the components of the prices applied to the major maisons and other clients (e.g., fees for models, wages for the modelling agencies and other additional costs). Furthermore, a practical role would have been played by the trade association, Assem, where the modelling agencies had held frequent meetings to develop the alleged concerted practice.

In calculating the fine, the Authority took into account that the alleged conduct took place between 2007 and 2015. Moreover, the Authority granted to Img Italy S.r.l. the full immunity from fines given that it revealed the existence of the alleged conduct. Regarding the European scenario, on 29 September 2016, the French Competition Authority fined the main trade association, SYNAM and 37 modelling agencies of €2.38 million for price fixing. In addition, there is a pending investigation of the Competition and Market Authority into alleged anti-competitive conducts in the model management services in United Kingdom.

Gabriele Giunta contributed to this blog post.

On 28 October 2016, the Italian Competition Authority (the “Authority”) opened two investigations against WhatsApp Inc. for alleged unfair commercial practices. The first investigation by the Authority alleges that WhatsApp Inc. would have forced users to subscribe to new terms and conditions, in particular, a clause on the sharing of data with Facebook, by making users believe that, otherwise, they would have not be able to use the service. On another other side, the Authority opened a second investigation regarding other alleged unfair commercial practices. According to the Authority, WhatsApp Inc. would have included in its “Terms of Use” unfair contracts terms, including the exercise of the right of withdrawal granted exclusively to the company, the limitation on liability in favor of the company and the identification of the competent court for disputes resolution (currently only US Courts). Finally, the Authority also opened a consultation on these alleged unfair contract terms.

These investigations emerged after the Italian Data Protection Authority, on 27 September 2016, opened an investigation on WhatsApp’s new privacy policy and the data flow from WhatsApp Inc. to Facebook. In particular, the Italian Data Protection Authority asked WhatsApp Inc. to clarify certain aspects regarding the communication of data to Facebook, such as the typology of data communicated, the modality for the acquisition of consent for the communication and the measures adopted to ensure the compliance with data protection laws.

Gabriele Giunta contributed to this blog post.

UNITED STATES:

Continuing an active first half of 2016, the Federal Trade Commission (FTC) and US Department of Justice (DOJ) have challenged several large mergers and acquisitions. In fact, trials for the two national health insurer deals are slated to begin Q4 of 2016 in Washington, DC, where the agencies have had success in obtaining preliminary injunctions this year. Adding to the regulators’ successes in Q3 was a victory for the FTC on appeal in the Penn State Hershey Medical Center/PinnacleHealth System transaction, in which the Third Circuit overturned the district court’s formulation of the geographic market. Indeed, with another appeal in a hospital merger outstanding in the Seventh Circuit, Health Care M&A is an active sector to monitor.

In addition to the agencies’ operations, the upcoming US presidential election has also propelled antitrust policy into a national discussion. For the first time in a few decades, antitrust has appeared on the Democratic Party’s platform, and Hillary Clinton has also issued a statement promising to strengthen antitrust enforcement if elected president.

EUROPEAN UNION:

The July to September period has seen 87 merger control notifications, the vast majority being candidate cases for simplified procedure. There were also eight clearance decisions, five of which were Phase I cases with remedies—in each case, structural remedies were preferred by the European Commission (EC).

Antitrust intervention seems to have been focused more on the telecoms and pharmaceutical sectors, with divestitures being offered in every telecom and pharma Phase I and Phase II clearance decision since July.

Read the full article here.

On 20 October 2016, the Italian Council of State (the “Council of State”) upheld the judgment of the Administrative Court of Lazio (“TAR”) on the cartel in the sector of international road freight forwarding to and from Italy and confirmed the ranking applied in granting the reduction of the fine. According to the Council of State, in order to access the national leniency program, a company should provide the Authority with all necessary information and elements for the uncovering of the infringement, and should take into account that all the relevant information and elements provided to other authorities, in the context of other leniency application, will not be considered by the Authority. Therefore, companies should be careful and verify that each leniency application submitted is prepared ad hoc for each jurisdiction and is not capable of raising doubts regarding its scope. Continue Reading Ad hoc Local Leniency Application Makes the Difference: The Italian Council of State Upholds the Administrative Court of Lazio Judgment on the Alleged International Road Freight Cartel