Antitrust Bites – Newsletter

The awaited ruling of the EU Court of Justice on the application of the 90-day limitation period for the opening of proceedings by the ICA

On 30 January 2025, the EU Court of Justice issued two judgements, delivered in cases C-510/23 and C-511/23, on whether the application of a limitation period of 90 days such as that provided by Article 14 of Law 689/1981, for the opening the ICA's investigative procedures in consumer protection and antitrust matters is compatible with EU law.

The two judgments in question refute the now "granitic" orientation in Italian case law which, following a long-standing debate, had come to consider Article 14 of law 689/1981 applicable also to the ICA's proceedings. Such rule provides for a 90-day limitation period for the contestation of administrative violations. According to this orientation, supported for years by national case law and endorsed by a note from the Research Department of the Council of State in July 2023, the opening of the proceedings more than 90 days after knowledge of the essential elements of the violation could have resulted in the annulment, in its entirety, of the decision adopted by the ICA, as in fact it happened in several cases.

The need to verify the compatibility of this orientation with EU law – which the ICA itself had emphasized in the past, urging the courts to submit the matter to the Court of Justice – was finally taken up by the Lazio Regional Administrative Court in 2023 which, in the context of two judgements concerning, respectively, an unfair commercial practice and an abuse of a dominant position, made a preliminary referral asking the Court of Justice to clarify whether the application of a 90-day limitation for initiating proceedings to ascertain an unfair commercial practice or anti-competitive practice is compatible with EU law (on this subject, see Antitrust Bites – September 2023).

With the long-awaited judgments at issue, the Court firstly stated that EU law does not preclude national regulations that establish procedural limitation period for the assessment of infringements, provided that these time limits are reasonable and do not compromise the effective implementation of EU law. To assess the reasonableness of the time limit – according to the Court – it is necessary to consider its duration, the rules for its application (such as its dies a quo), as well as the specific features of the cases, which may require a complex factual and economic analysis.

With regard to the Italian system, the Court underlined that the application of a 90-day time limit for the start of the preliminary investigation risks damaging the autonomy and discretionary power of the ICA, preventing it from gathering the necessary evidence to prove the alleged offence and obliging it to investigate the cases it is presented with in a purely chronological order, without being able to take account of the particular features of each case.

Furthermore, in the Court's view, the consequences that the national legislation attaches to failure to failure to observe the period at issue appear capable of giving rise to a systemic risk of impunity for acts that constitute infringements of competition law and the prohibition of unfair commercial practices, compromising the application of effective and dissuasive sanctions, also in light of the fact that the ICA is unable to initiate a new investigation concerning the same violation, by virtue of the principle ne bis in idem.

Finally, the Court clarifies that non-compliance with the 90-day time limit does not automatically imply a violation of the companies' rights of defence (which the provision of procedural deadlines aims to guarantee), as long as no decision is adopted against them in the absence of an inter partes preliminary investigation phase, during which the companies could have fully asserted their rights of defence. However, regardless of the application of a 90-day time limit, the Court specifies that the discretion of the national competition authorities in dealing with the cases referred to them cannot result in a state of inactivity on their part in the pre-investigation phase, which must in any case be concluded within a reasonable period of time.

In light of the above, the Court, thus marking the end of a "granitic" orientation in Italian case law, concluded that a regulation that imposes a term of 90 days for the conclusion of the pre-investigation phase, under penalty of forfeiture of the Authority's right to exercise its sanctioning power, is in contrast with EU law read in light of the principle of effectiveness.

 

Greenwashing practices once again under the ICA magnifying glass

With its decision of 21 January 2025, the Italian Competition Authority (ICA) fined several undertakings belonging to a major group active in the logistic, transport and parcel delivery sector for a total of EUR8 million. The fines were for organizing, financing and promoting an environmental sustainability initiative in a manner that amounts to an unfair commercial practice, in breach of Articles 20, 21, 22 and 26(f) of the Italian Consumer Code.

The ICA firstly found that the undertakings had used ambiguous environmental claims and/or presented them in a not sufficiently clear, specific, accurate, clear-cut and verifiable manner. This was partly due to the mixing of the notions of “offsetting” and “reduction” of CO2 emissions, which the companies allegedly failed to distinguish with due accuracy. Some of the claims used by the companies would have implied the full achievement of environmental goals that had only partially been achieved.

The ICA also ascertained several profiles of misconduct in relation to a climate protection initiative. Membership for this initiative was mandatory for the companies' customers. And customers had to pay a contribution for the project for the possibility of obtaining a certificate (not required) attesting to the offsetting of CO2 emissions. According to the ICA's findings, the companies allegedly determined the amount of the contribution without conducting a prior assessment as to the actual costs required for offsetting and reducing emissions. They also failed to specify that larger customers wouldn't contribute economically to the project. And they implied that they too would bear the economic burdens related to the project, when, in fact, the economic burdens would be passed on to customers and the companies would profit from them.

The decision under review relates to the ICA's various interventions aimed at tackling the phenomenon of so-called greenwashing. Fighting these phenomena is a priority in the enforcement activities of the ICA, which is aware of the growing interest of consumers and businesses in the issue of environmental claims (on this subject, see Environmental claims and consumer protection: When green claims risk integrating unfair commercial practices).

 

EU Court of Justice expresses views on compensation for damages resulting from violations of competition law

With its decision of 13 February 2025, the European Court of Justice ruled on a request for a preliminary ruling from the Supreme Court of the Netherlands on the issue of establishing jurisdiction in cases concerning actions for damages for infringing competition law.

The reference for a preliminary ruling concerned the interpretation of article 8, point 1, of Regulation No 1215/2012. The regulation states that a person domiciled in a member state may be sued, where they’re one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it’s expedient to hear and determine them together.

The Court was called on to rule on whether – in claims for a parent company and its subsidiary to be held jointly and severally liable to pay compensation for the damage suffered as a result of an infringement, by that subsidiary, of the competition rules – the court for the place of residence of the parent company seised of those claims, in order to establish its jurisdiction under Article 8, must rely exclusively on the presumption that where a parent company holds directly or indirectly all or almost all of the capital of the subsidiary that infringed the competition rules, it exercises a decisive influence over that subsidiary.

The Court stated that, for Article 8 to apply, the judge has to ascertain whether, between various claims brought by the same applicant against various defendants, there is a connection of such a kind that it’s expedient to determine those actions together in order to avoid the risk of irreconcilable judgements resulting from separate proceedings.

According to the Court, a connection like this exists when a company and its subsidiary are part of the same economic unit and thus form a single undertaking, in the meaning of EU competition law. The very existence of that economic unit that committed the infringement automatically entails the application of joint and several liability among the entities that made up the economic unit when the infringement was committed.

The Court also stated that, according to settled case law, if a parent company holds, directly or indirectly all or almost all of the capital of a subsidiary which has infringed the competition rules, there’s a rebuttable presumption of the parent company's decisive influence and liability.

The Court therefore ruled that Article 8 does not preclude the court for the place of residence of the parent company seised of the claims for the compensation of damages deriving from an infringement, by the subsidiary, of the competition rules, from relying exclusively, in order to establish its international jurisdiction, on the presumption that the parent company exercises a decisive influence over the subsidiary. That is if the defendants can rely on firm evidence to rebut the presumption.

 

EC launches public consultation on the revision of the Block Exemption Regulation for Technology Transfer Agreements and Related Guidelines

The European Commission has launched a public consultation on the revision of Regulation (EU) No. 316/2014 concerning the application of Article 101(3) TFEU to technology transfer agreements (TTBER) and the related Guidelines.

The TTBER provides an exemption from the application of Article 101 TFEU for certain categories of technology transfer agreements if the following conditions are cumulatively met: the market shares of the parties to the agreement don’t exceed certain thresholds set out in the TTBER; and

the agreement doesn’t include “hardcore restrictions,” such as restrictions on price and production or market and client allocation.

In November 2024, the European Commission completed an evaluation of the TTBER and its Guidelines, the results of which are outlined in the Staff Working Document. This document highlights the success of the TTBER and the Guidelines in achieving their objectives (see Antitrust Bites – Newsletter | DLA Piper).

The aim of the public consultation is to gather feedback from interested stakeholders on the issues raised in the context of this evaluation, to assess a potential revision of the TTBER and its Guidelines. The most significant issues include:

extending the scope of the TTBER by expanding the definition of technology rights to include certain categories of data or rights in data;

the possibility of reviewing the market share thresholds;

the potential revision of the Guidelines with respect to technology pools; and

updating the TTBER and Guidelines to incorporate the recent case law of the EU Court of Justice.

Interested parties can submit their observations by 25 April 2025.

 

Council of State rules relationship between a patient and a supplier accredited by the national health service could constitute a consumer relationship

With its judgment on 28 January 2025, the Council of State clarified that the conduct of a company active in the supply of therapeutic aids could amount to an unfair commercial practice, even in light of the accreditation (accreditamento) with the National Health Service (SSN).

A company challenged, first before the Lazio Regional Administrative Court (TAR Lazio) and then before the Council of State, the decision with which it had been sanctioned by the ICA for having implemented two commercial practices that had been considered misleading. In its appeal, the appellant argued that the services provided fell within the scope of the SSN, and weren’t economic in nature, since, in Italy, healthcare is a service of non-economic general interest. As a consequence, the rules on unfair commercial practices (and consumer protection in general) wouldn’t apply.

In rejecting the appeal, the Council of State clarified that the distinction between services of general economic interest and services of non-economic general interest relates to the rules on free market and competition but is irrelevant for applying the regulations on consumer protection.

The Court held that, for establishing a consumer relationship, a distinction is made between the different concepts of “consumer” and “trader,” respectively the patient and the company supplying the therapeutic aid in the case at issue, because when a patient turns to a company accredited by the SSN for a purchase, they’re making a commercial decision. This is because the patient chooses whether to turn directly to the SSN or to find what they need on the market themself based on a medical prescription. In this second case, the patient chooses which of the economic operators under accreditation to apply to. It’s not important that the request for the therapeutic aid is made through a doctor. In fact, the doctor simply identifies the type of aid to be prescribed, without indicating which trader to refer to.

The Court also clarified that, although the trader-supplier has a relationship with the SSN in the form of an accreditation, it also establishes a specific legal relationship with the patient, as a result of a qualified social contact. The patient-consumer, on the other hand, even if they’re a third party with respect to the relationship between the accrediting body and the professional-supplier, is the owner of the non-monetary interest that justifies the service (of a financial nature).

The Council of State concluded that the relationship between the patient-consumer and the trader-supplier under accreditation can constitute a consumer relationship, and consumer protection regulations would apply.