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Italian Competition Authority has adopted its Guidelines on antitrust compliance

  • United Kingdom
  • Italy
  • Competition, EU and Trade

17-10-2018

Following a public consultation, during which stakeholders could submit their observations, the Italian Competition Authority (ICA), with its resolution no. 27356 dated 25 September 2018, published on 4 October 2018, has adopted its Guidelines on Antitrust Compliance (Guidelines).

The Guidelines, in line with international best practices, set forth the main elements of an antitrust compliance program, such as (i) the acknowledgement of competition as part of the corporate culture, (ii) the identification and assessment of a tailored antitrust risk for the undertaking, (iii) the design of management processes suitable to reduce such risk, (iv) the definition of an incentive scheme and the deployment of trainings and of periodic monitoring and (v) the possible updating of the program. These Guidelines apply to formal investigations initiated by the ICA after 4 October 2018.

Overall, the Guidelines provide undertakings with guidance on three specific areas, namely (a) the definition of the content of the compliance program; (b) the request for an assessment of the program for the purposes of obtaining a possible mitigation; and (c) the criteria that the ICA will be following in its assessment for the purposes of awarding a mitigation.

The Guidelines establish that the program must be drawn up on the basis of a careful analysis of the risk of anti-competitive conducts that the undertaking may face (i.e. the antitrust risk). Such risk analysis enables to properly identify priorities for action through the recognition of the most problematic areas and the most appropriate actions of prevention and/or management and the consequent maximization of the effectiveness of the resources employed for the implementation of the program. The consistency of the compliance program to the specific antitrust risk of the undertaking is a key element in the assessment of its suitability for the purposes of awarding a mitigation. In particular the Guidelines establish that an effective compliance program shall have a number of features:

- from the Guidelines it emerges that in order to be effective the compliance program shall foresee staff training on the antitrust risks to which the undertaking is exposed, that shall also be appropriate in light of the size of the undertaking and of its business environment. Normally, training does not consist of an isolated event, but rather involves regular updating, in line with the evolution of the business environment and of the antitrust risk. An effective compliance program shall also include an adequate system of disciplinary measures and incentives aimed at encouraging compliance with the program itself and, ultimately, with competition rules.

- the compliance program must include the design of management processes capable to reduce the risk of conducts in breach of antitrust rules. It is desirable that the management of critical processes intended to reduce antitrust risk become an integral part of normal business. Periodic monitoring and possible updating of the program are essential to ensuring the adequacy of the program to prevent anticompetitive behaviours.

- in order to being awarded with the mitigation for the firms involved in an antitrust investigation, only those compliance programs adopted, implemented and transmitted to the ICA within six months from the notification of the opening of the investigation can be assessed to this purpose, given that a transmission at a later date would not allow the ICA to ascertain the existence of a serious and sound commitment to adopt a corporate policy of internalization, dissemination and compliance with competition rules. Similarly, any amendment to the compliance programs adopted before the opening of the investigation must be introduced and communicated to the ICA within the said deadline.

- the undertaking involved in a formal investigation that intends to benefit from mitigation in light of its compliance program must submit (i) a request to the ICA accompanied by (ii) an explanatory report that clarifies the reasons why the program is adequate for the prevention of competition infringements and the concrete initiatives put in place by the undertaking for the effective and efficient application/implementation of the program. The burden of proof of the adequacy and effective implementation of the compliance program falls on the undertaking involved in antitrust proceedings, which must argue with precision the adequacy and effectiveness of the program adopted.

- with specific regard to the possible mitigations levels that can be awarded, compliance programs adopted before the opening of investigations may qualify for mitigation of up to:

o 15%, for adequate compliance programs that have effectively worked to enable the prompt detection and interruption of the infringement before the opening of investigation. In leniency cases, such a reduction may be granted only if the undertaking has submitted a leniency application;

o 10%, for programs that are not manifestly inadequate, provided that the undertaking adequately amends the program and begins its implementation after the opening of the investigation (and within six months from the opening);

o 5%, for programs that are manifestly inadequate, only if the undertaking introduces substantial changes to the program after the opening of investigation (and within six months from the opening).

- the new compliance programs adopted after the opening of the investigations may also qualify for a reduction of the fine up to 5%. In order to benefit from this mitigation, a mere approval of the program by the management body of the undertaking is insufficient; instead, there must be the effective and concrete implementation of the program within a time frame that allows such implementation to be assessed by the ICA in the course of the investigation.

- a repeat offender undertaking (an undertaking that previously committed one or more similar infringements or infringements of the same type, in relation to the object or the effects, that have been ascertained by the ICA or the European Commission, in the five years prior to the opening of the relevant investigation) which already has a compliance program in place can not obtain more than 5% mitigation and only upon demonstration of the amendments made to the program after the opening of the investigation.

- with regards to groups of undertakings, in the case of antitrust investigation that also involve the parent company, in order the compliance program of this parent company to be deemed appropriate by the ICA, it must be adopted and implemented at group level. The adoption of a compliance program by the parent company shall not be considered sufficient to exclude the liability of the parent company for the anti-competitive conduct of its subsidiary.

- the existence of an antitrust compliance program may be qualified as an aggravating circumstance if the compliance program has been used to facilitate or conceal an infringement, mislead the ICA about the existence or the nature of an infringement and/or to engage in conducts intended to prevent, hinder or in any case delay the investigation by the ICA and there is evidence that the indications included in the program have been effectively followed.

It must be noted that the Guidelines have designed a more rigorous process for the assessment of compliance programs for the purpose of awarding a mitigation. In fact, in the past the ICA had granted mitigation up to 10% also in those cases in which the undertakings had introduced compliance programs after the opening of the investigation.

These Guidelines definitely make clear that introducing and adopting adequate compliance programs is beneficial for the undertaking and thus may represent a clear incentive for firms to ensure a proper antitrust compliance. Moreover, it must be noted that by the Guidelines, the ICA appears to reconcile its approach on parental liability to the more rigorous one of the European Commission. As a consequence, the effect of the Guidelines is not being exclusively limited to Italy as parent multinational companies whose Italian subsidiaries might be involved in ICA investigations will have to take into account also this new antitrust compliance standards in order to be awarded with a mitigation.

 

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