COMMITMENT DECISIONS UNDER THE ITALIAN COMPETITION LAW: decline of antitrust enforcement? Rome, April 16th 2010 Fabiana Di Porto University of Siena ([email protected]) Commitment decisions New powers to AGCM (L.-dec. 223/06 modif. antitrust L.– leg.-dec. 145 and 146/07) Interim measures (art. 14-bis antitrust L.) Leniency programs (art. 15 § 2-bis antitrust L.) Commitment decisions (art. 14-ter antitrust L.) Unfair commercial practices (arts. Consumers’ code mix of market/consumer protection) Further pro-consumers measures Class actions (art. 140-bis Consumer’s code, Legdecree 206/05) Liberalisation measures: loans’ portability; multibrand insurance distributors, etc. (L.dec. 7/07) Commitment decisions – the discipline 1 Article 14-ter Commitments 1. Within 3 months from notification of the launch of an investigation into the possible violation of Sections 2 or 3 of this law or Articles  or  of the [TFEU], companies may offer commitments that would correct the anti-competitive conduct which is the subject of the investigation. The Authority may, after having assessed the suitability of such commitments and within the limits of EU law, make them binding on those companies and terminate the proceeding without ascertaining the contravention. 2. If the commitments made binding under Paragraph 1 are not observed, the Authority may levy a fine of up to 10 percent of turnover. 3. The Authority, [ex officio], may reopen the proceeding if: a) there is a change in a factual element of the case on which the decision was based; b) the companies concerned act contrary to their commitments; c) the decision was based on information provided by the parties which is shown to be incomplete, inexact or misleading. Commitment decisions – the discipline 2 Procedure: AGCM’s Communication (12.10.06) 1. Presentation within 3 months from notification • Form • term non-peremptory (Tar Lazio 2902/08-Tim/Vodafone/Wind), to be coordinated with leniency programs (art. 15 §2-bis) • Preliminary presentation meetings definite version submitted 2. Publication of commitments on Bulletin & on website – unless manifestly inadequate • Hard core cartels AGCM rejects (Produttori vernici marine 2007; Gare per la fornitura di dispositivi per stomia 2007) • Highly discretional decision – antitrust policy (Tar Lazio 2900/08) • Derogatory decision strict application (Tar Lazio 2902/08) 3. AGCM sets a date for final decision 4. Market test (30 days from publication): • third parties may present written observations to proposed commit.s • AGCM may request more info to assess value of commit.s • Parties may reply to third parties and propose further changes 5. AGCM decides whether to accept/modify/reject commitments 1. Jurisprudential imits Commitment decisions – the the discipline 3 • Commit.s must be suitable in correcting anti-competitive conduct being investigated • Strictly related to competition problems • Easily fully and rapidly enforceable (TAR Lazio14157/07) • Not exceed remedies AGCM would otherwise impose (Alrosa TFI -170/06 of 11.7.07; TAR Lazio 4994/09; contra: ConSta 424/08) • control of proportionality no disproportion between proposed commit.s and contested conducts (stricter in EC than IT: e.g. Merk/Principi attivi 2007, where AGCM accepted commitments in sidemarkets and notwithstanding interim measure brought anticompetitive conduct to an end) adequacy in the double sense of necessary and indispensable (not excessive) to meet the competition concerns (Tar Lazio 4994/09 on AGCM’s decision “Servizi di soccorso autostradale” (A391 of 2008), an alleged ADP in market for highways’ emergency services settled through commit.s. Decision annulled on the ground that by accepting commitments and by making them binding the AGCM has created a brand new regime for access to the market, thus acting as a regulator. Not only had the AGCM unlawfully overcome its antitrust powers, but the new regime it created (a tender procedure) was far more restrictive than the one in place before its intervention (an authorization regime)). Commitment decisions – the discipline 4 market test Investig. opening no hard core restrictions e.g. hard core restric.s Commit.s proposed (3 months from SoO – peremptory) (3rd parties’ observations) www.agcm.it (ev. modificat. of commitments) AGCM’s evaluation of suitability of proposed commit.s no commits proposed (AGCM would sanction) commitments manifestly inadequate Public.n of proposed commit.s Binding commitments No violation (- no infringement assessment (- no sanctions (- file closed Proceeding re-opened if: Infringement assessment + sanction/ remedies -Factual modifications -Violation of commitments -Commitments based on incomplete/false/misleading infos fine up to10% turnover Commitment decisions – pros&cons/1 Catricalà (President AGCM): “dawn of a new antitrust law era” (Ann. Rep. 2007) Polo (Prof. at Bocconi): AGCM’s role is shifting from judge (ex post) to regulator (ex ante); “closed confrontation between AGCM and involved parties”; inadequate instrument in the long run (sole24ore 2007) Nicita (Prof. at Siena Univ.) “One may suspect that in the game of deterrence/sanctioning/leniency AGCM may forget that the carrot is effective when the threat of the stick is credible. Constant forgiving may induce perverse incentives: [better] violating antitrust laws, accepting to eventually ex post give up some rents, when negotiating commitments, if and when one is ‘cought’...” (homepage 31/05/07) Commitment decisions – pros&cons/2 pros cons A • wider range of enf.t instruments G • < time consuming proceedings (no proof) C • easy & quick intervention M < effectiveness of antitrust enf.t capture no exact definition of conduct F I R M S opportunistic behaviours < deterrence (compared to sanctions) < actions for damages (<private • < adm.ve costs • easy control over commitments’ infringements • market test (responsiveness) • • • • no infringements assessment no sanctions approachable administration < actions for damages (private enforcement) • avoid reputational damages regulatory power reduced transparency enforcement) limit to ex ante incentives for procompetitive behaviours bad incentives in the long run Commitment decisions – cases/1 Salonico (Freshfields) “90% of AGCM’s proceedings end up in commitment decisions” (Sole24Ore 21.5.08) Perceptions matter… Commitment decisions – cases/2 = commit.s = non violation = violation + sanction viol. non viol. commit. IT 2 viol. non viol. commit Agr. EC 101 tot commit/ decisions 2006 2 2 - - 2 1 1 - 0/4 2007 11 6+1 1 4 3 2 1 - 4/14 2008 3 1 - 2 4 - 1 2 4/7 2009 7 3 1 3 1 1 - - 3/8 tot 11/33 (33% ca) Commitment decisions – cases/4 = commit.s = non violation = violation + sanction viol. non viol. commit. IT 3 viol. non viol. commit. Abuse CE 102 tot commit/ decisions 2006 5 4 - 1 - - - - 1/5 2007 6 1+1 - 4 2 - - 2 6/8 2008 7 2 - 5 3 - - 3 8/10 2009 5 1 - 4 - - - - 4/5 tot 19/28 (67% ca) Commitment decisions – cases/3 type of agreem./commit. (up to 2007, art. 101 TFUE) = commit. tot case 4 2 (*) case = violation + sanction type agrmt a. ACCORDI INTERBANCARI “ABI-CO.GE.BAN” b. ORDINE DEI MEDICI VETERINARI DI TORINO c. PREZZI DEI CARBURANTI IN RETE d. A.D.S. ACCERTAMENTI DIFFUSIONE STAMPAAUDIPRESS (*) horizontal e. PRODUTTORI VERNICI MARINE f. PRODUTTORI DI PANNELLI TRUCIOLARI IN LEGNO horizontal hard core d.1 A.D.S. ACCERTAMENTI DIFFUSIONE STAMPAAUDIPRESS type commit.t/sanction behav.l a. reduction bank commissions b. abolition tariffs, reform ethical code d. Obblig.n to account for free press (commit.s only for Audipress) struct.l c. facilities’ sharing (boycott/ market sharing) (boycott) commit.s rejected + partial sanction assessment of infringement + sanction for ADS Commitment decisions – cases/5 tipe abuse/commit. (2006-07, 102 TFUE + 3 antitrust L.) 7 case type abuse type commit./sanction 1 a. Prezzi carburanti in rete raising rivals’ costs struct.l/ behav.l a. facilities’ sharing + other 3 a. Merk-Principi attivi b. Gestione utilizzo capacità rigassificazione c. Tele2/TIM-Vodafone-Wind* refusal to deal struct.l b. free licenses c. gas release d. only Vodafone 1 d. Comportamenti restrittivi sulla borsa elettrica different.d /excessive prices struct.l d. virtual capacity release 1 e. Autostrade/Carta prepagata Vacard (failed to reimbourse expired prepaid cards) f. Poste/Concessionari (auctions) Unfavour. contractual conditions behav.l e. elimin.n expiry date + reimboursement f. rise Q/type of auctioned service+ elimin. costly clauses 1 g. Enel Distribuzione (billing of former unpaid bills as condition for connection) Exploit. of final customers behav.l g. modific. procedures for connect. Of new customers Tele2/TIM-Vodafone-Wind sanction of TIM and WIND, no commit.s presented * c.1 (weak) Commitment decisions – critics Dialogue vs sanction Enforcement pyramid (Ayres&Braithwaite 1992) compliance & deterrence (smoking gun) Accountability of AGCM market test () judicial review Regulatory powers for AGCM? proportionality (Alrosa) principle of legality (Tar MI 5005/09) Commitment decisions – conclusions Are we witnessing the decline of antitrust enforcement? Antitrust only ex post, not ex ante are we sure? Antitrust should only intervene where there is no regulation can antitrust correct regulatory failures? what the relationship? what can we learn from Linkline? comments are welcome [email protected] thank you for your attention!