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Italian Merger Control Thresholds – New Revisions

The Italian Competition Authority has updated its merger control turnover thresholds. Effective today, 16 March 2015, Section 16(1) of Law no. 287 of 10 October 1990 requires prior notification of all mergers and acquisitions where both the following conditions are fulfilled:

  • Aggregate turnover in Italy of all undertakings involved is above EUR 492 million (revised under the terms of the same Section 16(1)); AND
  • Aggregate turnover in Italy of the target company is above EUR 49 million (as revised)

Italy’s merger control thresholds are adjusted annually to take into account increases in the GDP deflator index. The updated thresholds are published in the Competition Authority’s Bulletin once this increase in index is announced officially.




New Joint Protocol of the Italian Competition Authority and the Italian Tax Police

The Italian Competition Authority and the Italian Tax Police (Guardia di Finanza) signed a new Joint Protocol, which provides increased mutual exchange of information and closer cooperation in the context of investigations for alleged breach of antitrust, unfair commercial practices and misleading advertising rules. The new Joint Protocol also sets out specific means of collaboration concerning the legality rating (i.e. a two-year, renewable certification for companies, issued by the Italian Competition Authority upon voluntary filing and designed to facilitate companies’ access to credit from banks and public financial support) and investigations on the supply of agrifood products, under Article 62 of the Law-Decree No 1 of 24 January 2012.

Click here to review the text of the Joint Protocol.




Getting the Deal Through: Pharmaceutical Antitrust 2014

McDermott has contributed to the Italian chapter of the 2014 edition of “Pharmaceutical Antitrust” published by Getting the Deal Through, a valuable work tool for legal practitioners dealing with antitrust rules in the pharmaceutical sector.  The chapter addresses the most significant regulatory and antitrust issues affecting the marketing, authorization and pricing of pharmaceutical products in Italy.

Click here to read the full chapter.




New Italian Competition Authority’s Regulation on Legality Rating Certification

On 4 July 2014, the new regulation on legality rating certification by the Italian Competition Authority entered into force. The legality rating is designed to facilitate companies’ access to credit from banks and public financial support.

Certification is expressed in a score of between one and three stars and is issued by the Italian Competition Authority at the request of companies that have

  • An operating office in the Italian territory
  • A minimum turnover of €2 million in the year preceding the request
  • Been registered in the Italian Business Register for at least two years.

As part of the procedure for the awarding of public finance, companies that have been granted the legality rating certification will benefit from either a preferential ranking, a higher score or a specifically reserved share of the financing available.

Banks and financial institutions are obliged to take the legality rating certification into account in their loan granting procedures. The Bank of Italy will monitor and enforce this obligation.

In order to obtain legality rating certification, the applicant company (and its management) must demonstrate that they have not been found to have committed certain specific violations including tax and criminal offences and serious breaches of antitrust and unfair commercial practice rules.

Certification is confirmed within 60 days of application and is valid for two years, subject to renewals.




Italian Merger Control Thresholds Update

The Italian Competition Authority has updated its merger control turnover thresholds. Effective from 10 March 2014, Section 16 (1) of Law No 287 of 10 October 1990 requires prior notification of all mergers and acquisitions where:

  • Aggregate turnover in Italy of all undertakings involved is above EUR 489 million, and
  • Aggregate turnover in Italy of the target company is above EUR 49 million.

Italy’s merger control thresholds are adjusted annually to take into account increases in the gross domestic product deflator index. The updated thresholds are published in the Authority’s Bulletin once the index is announced officially.

Recently, the Authority launched a consultation on its proposed amendments to the Italian merger control thresholds, namely:

  • The reduction of the current second merger control threshold
  • The amendment to the second threshold, whereby it would refer to the turnover of each of at least two of the parties to the transaction (rather than the target’s turnover)

For more information, please contact your regular McDermott Will & Emery lawyer or an author.




Italian Competition Authority Releases New Guidelines on Competitive Bids

On October 26, 2013, the Italian Competition Authority (the Authority) published its new guidelines on competitive bids.  The guidelines are intended to help contracting entities to recognize and inform the Authority of potentially anti-competitive behavior during the awarding procedure.

According to the guidelines, potential anti-competitive behavior is more likely in markets with few competitors (or companies that are similar in efficiency and size), homogeneous products, the same companies repeatedly tendering for work or where bids are subdivided into several contracts of similar economic value.

The guidelines note that breaches of competition laws tend to be associated with the following behavior:

  • Boycotts of competitive bids, e.g., companies presenting offers below those required by the award procedure, or presenting offers of the same value, aimed at prolonging the existing agreement or forcing the awarding party to award the contract pro quota.
  • Offers that are intended to be refused, e.g., excessive offers that have conditions attached that are clearly unacceptable to the awarding party.
  • Misuse of subcontracts or temporary associations of companies aimed at market-sharing between the participants or foreclosure of potential new entrants.
  • Market sharing and bid rotation, which can usually be spotted by analyzing the patterns of wins across a number of awarding procedures.
  • Other activities, such as simultaneous presentation of offers, the same errors appearing in bids and the same handwriting on documents.

In the first phase of the application of the guidelines, the Authority has invited the contracting parties to only report suspicious matters related to competitive bids above the community threshold.

The guidelines show that the public works sector continues to be one of the main priorities for the Authority, which has imposed over 500 million euros in fines since the early 1990s on companies found to have allegedly co-ordinated their behavior in public bids.

Italian and international organizations active in Italy are advised to carefully monitor their conduct during awarding procedures to avoid the risk of unmotivated involvement in potential proceedings before the Authority.




Italy’s Competition Chair and Minister of Justice Confirm That ad hoc Compliance Programs Will Continue to be Considered as a Mitigating Factor

On 24 October 2013, Chair of the Italian Competition Authority, Giovanni Pitruzzella, and Italy’s Minister of Justice, Anna Maria Cancellieri, spoke in favour of effective ad hoc antitrust compliance programs and their value as a mitigating factor in investigations.  Mr Pitruzzella underlined the importance of an effective compliance program because “imposing fines is not appreciated by anyone”.  According to Ms Cancellieri, “it’s useful to adopt effective compliance programs”, which should be taken into account as mitigating factors in determining the amount of the fine.  The Italian Competition Authority will soon launch a consultation on the adoption of guidelines for the setting of fines, and there is great interest in the assessment of compliance programs.

The Italian Antitrust & Competition team at McDermott Will & Emery Studio Legale Associato has vast experience in structuring ad hoc compliance programs for Italian and international clients that are active in Italy, in order to maximise the chances of obtaining a reduction of any potential fine.




Italian Competition Authority Mandatory Fee Due by 31 July 2014

by Veronica Pinotti, Martino Sforza and Nicolò di Castelnuovo

The Italian Competition Authority has decided that the 2014 mandatory annual fee due by limited companies based in Italy, that have total revenues exceeding EUR 50 million, will have to be paid by July 31, 2014, while for the current year no payment is due.

Entities Subject to the Fee

  • Limited liability companies (e.g., S.p.A. or S.r.l.) with total revenues—according to the latest financial statements (item A1 of the income statement)—exceeding EUR 50 million are subject to the fee.  
  • For banks and financial institutions, the amount of revenue for the purposes of calculating the fee is one-tenth of the institution’s assets on its balance sheet.  
  • The revenues of insurance companies are equal to the amount of premiums collected. Subsidiaries and associate companies belonging to a group must each pay the fee separately on the basis of the revenues set out in their financial statements.

Fee Amount 

For 2014, the amount of the fee is equal to 0.06 percent of the revenues set out in the latest financial statements.  The fee cannot exceed EUR 300,000.




Italian Competition Authority Mandatory Fee Due by 30 October 2012

by Veronica Pinotti, Martino Sforza and Nicolò Di Castelnuovo

In response to significant feedback, the Italian Competition Authority (the Authority) clarified the following issues concerning the new mandatory fee that was discussed in our recent blog post, Italian Competition Authority Mandatory Fee Due by 30 October 2012:

  • In relation to foreign companies, only those registered in the Companies Register (Registro delle Imprese) before any of the Italian Chambers of Commerce, will pay the mandatory fee (provided that their revenues exceed €50 million).  Foreign companies are subject to registration with the Companies Register if they have an administrative/secondary seat in Italy, or their main business is in Italy.
  • Companies belonging to a group are subject individually to the mandatory fee, provided that their revenues exceed the €50 million threshold.  When several companies which are subject to the mandatory fee, belong to the same group, the maximum amount—equal to €400,000 for the year 2013—refers to the entire group.  The payment may be carried out by the parent company, individually for each of the subsidiaries that are subject to the fee.  However, if the group’s liability reaches the maximum threshold, a single payment by the parent company is allowed.  In this situation, the Authority must be provided with a chart specifying the details of all companies subject to the fee and for which the payment is being made.
  • For the companies drafting their financial statements in accordance with international accounting standards, the bases for calculating the fee are the revenues corresponding to item A1 on the Income Statement, drafted in accordance with Italian accounting standards.  The Authority has not provided any further guidance on this specific issue but it should be possible to determine those revenues by reclassifying the Income Statement’s items on the basis of the criteria set out in Article 2425 of the Italian Civil Code.



Italian Competition Authority Mandatory Fee Due by 30 October 2012

by Veronica Pinotti and Martino Sforza

From 1 October 2012 until 30 October 2012, public limited companies based in Italy that have total revenues exceeding EUR 50 million must pay to the Italian Competition Authority (ICA) a new mandatory fee, which replaces the current filing fees for merger transactions.

Entities Subject to the Fee

  • Public limited companies (e.g., S.p.A. or S.r.l.) with total revenues—according to the latest financial statements (item A1 of the income statement)—exceeding EUR 50 million are subject to the fee.
  • For banks and financial institutions, the amount of revenue for the purposes of calculating the fee is one-tenth of the institution’s assets on its balance sheet.
  • The revenues of insurance companies are equal to the amount of premiums collected. Subsidiaries and associate companies belonging to a group must each pay the fee separately on the basis of the revenues set out in their financial statements.

Contribution Amount

  • The amount of the fee is equal to 0.08 ‰ of the revenues set out in the latest financial statements. The fee cannot exceed EUR 400,000.

Terms of Payment

For 2013, the fee must be paid in advance to the ICA from 1 October 2012 until 30 October 2012, and the payment must be communicated to the ICA by 30 November 2012.
 




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