The new Italian Annual Market and Competition Law

The Law:

• gives to the Italian Antitrust Authority (IAA) the power to enforce the DMA;
• extends the duration of Phase II merger investigations from 45 to 90 days;
• amends the Italian Consumer Protection Code to grant additional protections to consumers against automatic renewal in the context of fixed term service agreements; and
• limits the use of information that telco operators may use to formulate tailored offers to consumers.

The Law also contains various provisions aimed at enhancing competition in various sectors such as energy, transport, waste, communication, commerce and pharma.

We provide below our initial insights on the Law's main implications.

1. Implementation of national competition authorities’ powers under the DMA

The Law appoints the IAA as the national authority designated by Art. 38 of the Digital Market Act (DMA), extending the scope powers already available for the enforcement of antitrust rules.

Not long ago such powers were enhanced by the ECN+ Directive, with the aim of empowering national competition authorities to be more effective enforcers and ensuring the proper functioning of the internal market. In this respect, the new attributions granted by the Law appear consistent with the harmonization of national authorities, the creation a level playing field and a coherent application of EU antitrust rules by all enforcers.

The Law specifies that the information gathered for the DMA’s investigation may also be used by the IAA for the enforcement of antitrust rules as well as the prohibition of economic dependence.

It will be interesting to see if and how the IAA will use such evidence. As well known, after a long debate in which national antitrust authorities wished to play a more active role, the DMA is based on a system where the Commission acts as sole enforcer and national authorities provide support and assistance.

As noted by several commentators, considering the overlapping nature of the DMA and antitrust rules, the dualism between the European Commission and the national authorities may raise issues of ne bis in idem and legal certainty for the undertakings concerned.

This issue is particularly relevant in the Italian context considering the recent changes to the prohibition of abuse of economic dependence aimed at facilitating investigations against platforms. The expectation is one of close cooperation with the European Commission, notwithstanding the IAA’s activism in the digital sector which already led to the Amazon/BuyBox saga and the need for the Court of Justice to pronounce on the protection of undertakings against double enforcement in the form of parallel proceedings.

2. Deadline extension for merger control Phase II procedures

The Law extends the deadline for Phase II proceedings in merger control cases from 45 to 90 days. Not only does this substantially align the IAA’s timeline with the EC’s, but this extension will also reduce the need for the IAA to “manipulate” the duration of proceedings to have sufficient time to assess cases.

This change should be taken into account in the context of M&A deals, which are already experiencing longer periods for obtaining regulatory clearances. This amendment thus calls for extended long stop dates and contractual mechanisms for dealing with delays in the satisfaction of CPs.

3. Consumer law

The Law also amends the Italian Consumer Protection Code (ICPC) by requiring traders to notify consumers in writing, by text message or other telematic means chosen by the consumer, of the deadline to terminate the fixed-term service contracts with automatic renewal clauses, at least thirty days before their expiry. Should traders fail to do so, consumer can withdraw at any time without charge.

Under the IAA’s decisional practice, notice periods of 3 to 6 months before the renewal were already considered excessive (Cases CV172 - I.V.R.I. - Tacito rinnovo; CV173 - Istituto di vigilanza privata lavoro e giustizia-tacito rinnovo) and the IAA also sanctioned commercial practices that imposed on consumers disproportionate contractual durations and renewals, without the chance to withdraw before the expiry (for example, a 10-year contract with no exit clause was considered unfair; Case CV63 - STIMA GEST-Contratti settore immobiliare).

The Law strengthened consumer protection by requiring traders to actively inform consumers of the period within which they can exercise their right to withdraw from the contract.

4. Electronic Communication Code

The Law also prohibits telco providers from using the data they obtain from the mobile number portability database or for operational reasons, to make tailor-made offers to end-users depending on their current network or service provider.

This is to ensure that there is a level playing field between infrastructured operators (MNOs) and their competitors which need access to their infrastructure to provide retail services (MVNOs), as well as to protect consumers against invasive and potentially discriminatory marketing.

Article edited with the contribution of Martina Oberti, Trainee.