ITALY Law and Practice Contributed by: Matteo Beretta, Alice Setari, Natalia Latronico and Riccardo Molè, Cleary Gottlieb Steen & Hamilton
4. Substance of the Review 4.1 Substantive Test
4.2 Markets Affected by a Transaction Criteria for Defining Affected Markets The relevant product and geographic markets define the scope within which the market power resulting from the concentration must be assessed. They represent, respectively, the smallest group of products and the smallest geographic area in which – given existing substitution possibilities – the concen - tration may significantly impede effective competition, in particular through the creation or strengthening of a dominant position. Also in this respect, the Authority generally follows the European Commission’s deci - sion-making practice. The relevant markets are considered affected by the concentration where any of the following conditions is met: • two or more of the parties to the merger operate in the same market and will hold, post-transaction, a combined market share of at least 20% (with a HHI delta exceeding 150) or a share exceeding 50%; • one of the parties to the merger holds at least a 20% share and another participant is either a potential competitor (ie, it has planned, developed or pursued market entry within the last three years) or a recent entrant (having entered the market within the last five years); • one of the parties to the merger will hold at least a 30% share post-transaction, and another par - ticipant operates in an upstream or downstream market (in which case that adjacent market is also considered affected); • one of the parties to the merger holds at least a 30% share, and another participant holds assets (such as raw materials, infrastructure, data, or intel - lectual property rights) that are important for that market or a closely related neighbouring market; • one of the parties to the merger is present in a product market that is closely related to a product market in which another participant operates, and the individual or combined share on either market is at least 30%; • the target of the acquisition or merger is an impor - tant innovator or is conducting potentially signifi - cant research activities; and
From the Dominance Test to the SIEC Standard Up until recently, the Authority has employed the so-called dominance test, under which a transac - tion could be blocked only if it led to the “creation or strengthening of a dominant position as a result of which effective competition would be significant - ly impeded” (see Article 4 of Regulation (EEC) No 4064/89). In 2022, Article 6 (1) of Law No 287/1990 was amended in line with EU Regulation (EC) No 139/2004, replac - ing the dominance test with the “Significant Impedi - ment to Effective Competition” (SIEC) test. Under this standard, a transaction is to be declared compatible with the market provided that it does not “impede effective competition in the common market or in a substantial part of it, in particular [but not exclusively] as a result of the creation or strengthening of a domi - nant position”. Accordingly, the Authority must take into considera - tion the competitive impact of a transaction in light of the need to preserve and develop effective competi - tion, irrespective of whether the transaction leads to the creation or strengthening of a dominant position, taking into account the structure of all affected mar - kets and actual or potential competition, as well as a range of factors including: • the market position of the undertakings concerned and their economic and financial strength; • the alternatives available to suppliers and users; • access to sources of supply or market outlets; • the existence of legal or de facto barriers to entry; • supply and demand trends for the relevant prod - ucts and services; the interests of intermediate and final consumers; and • technical and economic progress, provided that such progress benefits consumers and does not constitute an impediment to competition.
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