ITALY Trends and Developments Contributed by: Matteo Beretta, Alice Setari, Natalia Latronico and Riccardo Molè, Cleary Gottlieb Steen & Hamilton
Cleary Gottlieb Steen & Hamilton Via San Paolo, 7 20121 Milan Italy Piazza di Spagna, 15 00187 Rome Italy Tel: +39 02 726081/+39 06 695221 Web: www.clearygottlieb.com
Introduction Italian merger control has undergone a progressive but far-reaching transformation in recent years. The combination of sweeping legislative reforms aimed at aligning the substantive and procedural approach to that existing at EU level, an evolving economic landscape and a shift in enforcement philosophy has reshaped the way the Italian Competition Authority (the “Authority”) reviews transactions. For businesses planning acquisitions in or with a nexus to Italy, under - standing these changes is essential for managing deal risk, timeline and certainty. This essay surveys the most significant trends and developments, with a focus on those that are most relevant to the current legal, political and socio-economic context. A New Substantive Test and Broader Jurisdictional Scope: From Dominance to SIEC and the Alignment of Joint Venture Treatment For decades, the Authority could only intervene against a merger if it created or strengthened a dominant posi - tion. That changed with Law 118/2022, which formally introduced the “Significant Impediment to Effective Competition” (SIEC) test, thus aligning Italian merger assessment with the legal standard used by the Euro - pean Commission. The practical consequence is that the Authority can now challenge a transaction even where no single firm achieves dominance, for instance in oligopolistic markets where the elimination of a competitor would reduce rivalry and create incentives for the remain - ing players to raise prices. The reform also implic - itly contemplates the assessment of so-called “killer acquisitions” – transactions in which a large incum -
bent acquires a small, highly innovative firm not for its current revenues (which may well be non-existent) but to neutralise its competitive potential. Following its introduction, the Authority applied the SIEC test. For instance, in 2022, it found that a merger in the retail sector ( Bubbles BidCo / Acqua & Sapone ) would eliminate an important competitive constraint and create incentives to raise prices in several local markets, even though the merged entity would not be dominant in all of them. The transaction was cleared subject to divestitures. In addition to the change in substantive test, Italy has recently aligned its treatment of joint ventures with the EU merger control regime. Under the reformed framework, all full-function joint ventures – including those with a co-operative dimension – now fall within the scope of merger control scrutiny. Previously, co- operative joint ventures were not reportable under Italian merger control rules, hence certain structur - ally significant transactions escaped review or risked being assessed under the general prohibition of anti- competitive agreements. The reform removes this differential treatment for co-operative joint ventures: any joint venture that performs, on a lasting basis, all the functions of an autonomous economic entity is now subject to the same notification and substan - tive assessment rules as any other concentration, regardless of whether it also involves co-ordination of the competitive behaviour of the parent compa - nies. This alignment ensures that the Authority can assess, where relevant, the risk that the creation of a full-function joint venture may lead, under the SIEC test, to co-ordination between the parents in related
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