Antitrust Bites – Newsletter

New guidelines on setting fines for antitrust law infringements: ICA launches public consultation

The Italian Competition Authority (ICA) has launched a public consultation to collect stakeholders' comments on the new draft guidelines on applying criteria for quantifying fines pursuant to Article 15, paragraph 1, law N. 287/90. The new guidelines are intended to replace the guidelines adopted in 2014.

The new draft guidelines concern, first of all, how to calculate the value of sales of goods or services affected by the infringement (ie the figure on the basis of which the ICA calculates the base amount of the fine for antitrust violations). This is particularly relevant when the infringement is committed by an association of undertakings and concerns its members' activities. Under the new regime, the value of sales will generally correspond to the sum of the value of sales made directly or indirectly by the members themselves, rather than the total value of the membership fees paid by the members of the association, as was previously the case.

The new draft guidelines also introduce a provision regarding collusion in public procurement procedures, establishing that, if one or more tenders are awarded to subjects other than the parties of the agreement, the value of the sales must be based on the bid submitted by the cartel member who should have won the tender, unless such value is not reliable or sufficiently representative.

Regarding the impact of aggravating or mitigating circumstances on the basic amount of the fine, the new draft guidelines reduce the weight of each circumstance from 15% to 10%, setting the applicable overall percentage at 30%, compared to the 50% provided for in the 2014 guidelines.

Another amendment concerns the reduction granted in so-called amnesty plus cases (ie where an undertaking provides information deemed decisive to establish an infringement other than the one under investigation). This reduction has been lowered from 50% in the 2014 guidelines to 45%. The purpose of this adjustment is to align the reduction threshold with that applicable to the first undertaking benefiting from the penalty reduction under the Leniency Programme (currently subject to public consultation) for infringements of Article 2 of the national law and/or Article 101 TFEU.

All interested parties can participate to the public consultation by submitting their observations on the draft guidelines within 18 December 2024.

 

New ICA regulation on investigation proceedings in matters of consumer protection and misleading and comparative advertising

On 19 November 2024, the new Regulation on investigation proceedings in matters of consumer protection and misleading and comparative advertising of the ICA came into force. It amends the previous regulation on unfair commercial practices, violation of consumer rights in contracts, violation of the prohibition of discrimination, unfair terms, adopted with deliberation of 1 April 2015, No 25411.

The new regulation provides for a single discipline for proceedings on unfair commercial practices and misleading and comparative advertising, violation of consumer rights in contracts, violation of the prohibition of discrimination and unfair terms, which were previously regulated in separate sections of the Regulation. The rules applicable to these proceedings are contained in a single title – the second – of the new regulation. The title is generally dedicated to investigative procedures and largely traces the rules previously provided for procedures on misleading and comparative advertising and unfair commercial practices.

Some of the changes made by the new regulation are mainly aimed at making its text consistent with the provision of a single discipline for the proceedings under the ICA's jurisdiction in matters of consumer protection and misleading and comparative advertising. This is the case, for example, with the clarifications made to certain definitions like those of “consumer” and “trader.” Other changes are more substantial in scope.

Among the main changes, the new regulation:

• introduces new definitions and expands the scope of the regulation to reflect conduct that falls under the jurisdiction of the ICA in the matters of consumer protection and misleading and comparative advertising. The regulation has introduced definitions of (i)  “rights of travellers in contracts concerning tourist packages and related tourist services”; (ii) “prohibitions of unjustified geographic blocking and other forms of discrimination based on nationality, place of residence or place of establishment of customers within the internal market”; (iii) “prohibitions of parasitic activities”; (iv) “IBAN discrimination”; (v) “violations of information requirements regarding currency conversion fees related to card-based transactions”; (vi) “prohibition of the use of automated rate-setting procedures based on user web profiling activities or the type of electronic devices used for bookings”
  
  
• expands the powers of the person responsible for the proceedings, by means of, inter alia, the provision according to which the person responsible for the proceedings will be able to carry out sample purchases of goods and/or services, including anonymously, to identify violations (“mystery shopping”), subject to the ICA's authorization;
  
  
• extends the deadline for concluding the proceedings from 120 to 180 days starting from the date of protocol of the notice of initiation. The deadline is 240 days (no longer 180 as in the previous regulation) if the trader is resident, domiciled or based abroad or in the case of intra-EU infringements, diffuse infringements and diffuse infringements with a Union dimension. In the latter case, the proceedings will be suspended from the initiation of coordinated action between the competent authorities concerned by the infringement until its closure and up to a maximum of one year. In both cases, the deadline for concluding the proceedings can be extended by 30 days when the opinions of regulatory authorities are requested under Article 27 co. 1-bis of the Consumer Code or AGCOM under Article 27 co. 6 of the Consumer Code or Article 8 co. 6 of Legislative Decree 145/2007 on misleading advertising;
  
  
• provides that third parties – not addressees of the administrative action – who may be harmed "directly, immediately and currently" by the infringements that are the subject of the investigation or by the measures adopted as a result of the investigation can request to participate in the proceedings;
  
  
• provides the right of the parties to submit counter-arguments in writing within 20 days (previously, 10) from the transmission of the notice of the date of the closing of the inquiry phase.

 

European Commission fines Meta for abuse of dominant position in national online social media advertising markets

In its press release of 14 November 2024, the European Commission announced that it had found that Meta had engaged in two conducts of abuse of a dominant position in the national markets for online advertising on social media. The Commission imposed a fine of EUR 797.72 million. The investigation proceedings opened in 2021 (see Antitrust Bites – Newsletter | DLA Piper).

The Commission found that Meta held a dominant position in (i) the market for personal social networks that is at least European Economic Area wide; and (ii) the national markets for online display advertising on social media.

The Commission established that these markets were affected by two types of abusive conduct:

• Tying, ie a practice that artificially ties one product or service to another economically separable one. In particular, Meta provided that Facebook's users, automatically and without their consent, had access to and were exposed to the contents of Facebook Marketplace. This conduct had given Meta a competitive advantage not replicable by Facebook Marketplace's competitors, thus producing foreclosure effects.
  
  
• The unilateral imposition of unfair trading conditions to Facebook Marketplace's competitors who used Meta's social networks to advertise their services. Those conditions allowed Meta to acquire a large amount of ads-related data of Facebook Marketplace's competitors and to use them for the sole benefit of the latter.

In addition to fining the company, the Commission ordered Meta to bring the conducts to an end and to refrain from repeating them in the future. As of March 2024, Meta has to comply with the Digital Markets Act (Reg. EU 2022/1925), which prohibits companies designated as gatekeepers, including Meta, from tying their services and requires them to use fair conditions.

 

Below-thresholds concentrations: EU Commission accepts ICA's referral request under Article 22 EUMR

On 31 October 2024, the European Commission announced that it had accepted the referral request submitted by the ICA pursuant to Article 22 of Regulation (EC) No. 139/2004 (EUMR) in respect of a "below-thresholds" concentration.

The transaction at issue, though not reaching the turnover thresholds that give rise to the obligation to formally notify the transaction to the Commission or to the ICA, fulfilled the conditions set out in Article 16, par. 1-bis, of Law 287/1990.

The Authority exercised its “call-in” powers, requiring the acquiring company to notify the transaction. It then submitted a request for referral to the Commission under Article 22 EUMR.

According to the Commission, the transaction meets the criteria for referral under Article 22 EUMR. In particular, the transaction threatens to significantly affect competition in the markets in which the parties are active and that those markets are at least European Economic Area wide and therefore also include Italy, the referring country.

This decision comes less than two months after the publication of the Court of Justice's first ruling on the scope of application of Article 22 EUMR (see Antitrust Bites – September 2024), in which the court clarified that EU member states without jurisdiction to examine a concentration can’t refer its examination to the Commission under Article 22(1) EUMR.

The principle affirmed by the court in this judgment allows (only) EU member states with jurisdiction to examine a concentration (also, therefore, by virtue of their “call-in” powers) to make a referral under Article 22 EUMR, like in the present case.

 

TTBER regulation expires: European Commission publishes its findings

The European Commission has published the Staff Working Document (SWD) on Regulation (EU) No. 316/2014 concerning the application of Article 101(3) TFEU to categories of technology transfer agreements (TTBER) and the related guidelines.

The TTBER, adopted in March 2014, 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.

The TTBER also includes a list of restrictions excluded from the benefit of the exemption, whose inclusion in an agreement results in the application of the exemption for the remainder of the agreement.

In view of the expiration of the application of the TTBER – scheduled for 30 April 2026 – the Commission has initiated an evaluation of its performance. The outcome of the evaluation is summarized in the SWD, which highlights the success of the TTBER and the guidelines in achieving their objectives.

The SWD also highlights certain areas for improvement that the Commission will consider when revising the TTBER. These areas include: the need to ensure that the transfer of data or data rights is covered by the TTBER; the need to revise the rules on market share thresholds in light of the difficulties in applying them to technology markets; and the need for the guidelines to provide indications regarding licensing negotiation groups and for them to be updated in light of recent EU case law.