ITALY Trends and Developments Contributed by: Matteo Beretta, Alice Setari, Natalia Latronico and Riccardo Molè, Cleary Gottlieb Steen & Hamilton
but this relative rarity should not breed complacency. When a transaction does proceed to Phase II, the experience for the parties can be burdensome. The extended review timelines (now up to 120 calendar days), combined with the Authority’s increasingly data-intensive methodology, mean that parties face extensive requests for information, detailed economic analysis and protracted engagement with the Author - ity’s case team. The process of designing a remedies package that the Authority is willing to accept adds a further layer of complexity: the Authority has shown a willingness to require granular, market-by-market divestitures – as illustrated by recent retail cases – and to insist on structural remedies rather than behaviour - al undertakings wherever possible. Negotiating and implementing such packages is time-consuming, and may require the involvement of monitoring mecha - nisms and ongoing compliance obligations. In short, while the probability of a Phase II investigation could remain low, the consequences of ending up in one are significant. Parties contemplating transactions in concentrated or sensitive sectors should plan for this contingency from the outset, including by building appropriate conditionality into transaction agreements and preparing economic and evidentiary materials in advance. Stabilisation of the below-threshold call-in power The Authority’s use of its power to call in transac - tions falling below the notification thresholds remains at an early stage, and the Authority’s decision-making practice has yet to settle into a clear pattern. Going forward, one should expect this practice to stabilise in one of two directions. On the one hand, the Authority may move towards a more structured and transparent use of the call-in mechanism, developing clearer cri - teria for intervention and deploying it as a meaningful tool – particularly in technology and innovation-driv - en transactions where traditional turnover thresholds may fail to capture competitively significant deals. On the other hand, the Authority may gravitate towards using the instrument only in exceptional circumstanc -
es, effectively rendering it a residual power. This latter outcome could be reinforced by the ongoing evolution of the broader EU competition law framework – includ - ing the shaping of the interplay between the European Commission and national competition authorities by the European Court of Justice, notably in the wake of the Illumina / Grail judgment – which may narrow the scope for, or perceived need for, national-level call- in mechanisms. In either scenario, greater clarity is expected as the Authority accumulates decisional experience and as the EU-level landscape continues to crystallise. Conclusion In summary, Italian merger control has been evolv - ing from a relatively light-touch, dominance-focused system into a more sophisticated, economics-driven regime closely aligned with the European Commis - sion’s approach – not only in its substantive test, but also in its treatment of joint ventures, its procedural requirements and its analytical methodology. While the Authority remains pragmatic – clearing the vast majority of transactions without conditions – it now possesses a broader toolkit, a more demand - ing substantive standard and a greater willingness to intervene where it identifies genuine risks to competi - tion. The introduction of the below-threshold call-in power adds a further dimension of regulatory uncer - tainty, particularly for transactions involving innovative targets or concentrated local markets, even where tra - ditional filing thresholds are not met. At the same time, the rarity but intensity of Phase II investigations means that parties who do face in-depth scrutiny must be prepared for a demanding and resource-intensive pro - cess, including possibly the negotiation of complex, far-reaching remedies. For businesses, the key takeaway is that early plan - ning, robust data, careful deal structuring and a clear understanding of the regulatory landscape are more important than ever.
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