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Italian competition law reform: focus on the new merger control rules

  • Italy
  • Competition, EU and Trade - Foreign investment regimes
  • ESG



On 5 August 2022, the Italian Parliament adopted Law No. 118/2022 (“Annual Competition Law”).

The Annual Competition Law, which entered into force on 27 August 2022, amends Law No. 287/90 (“Italian Competition Law”) to further align Italian competition law with EU rules, which have evolved over the years. The changes concern, in particular, the introduction of new powers for the Italian Competition Authority (“ICA”) to: review certain “below threshold” mergers, replace the substantive test for assessing mergers, amend the rules applicable to joint ventures and amend the calculation of turnover for credit and financial institutions.

The extension of the current timeframe for the merger review process by the ICA (30 days for phase I, and 45 days (with the possibility of an extension for a further 30 days) for phase II, subject to other exceptional circumstances), however, has not been included in the Annual Competition Law, despite many parties having advocated for this change.

Review of below-threshold mergers

The Annual Competition Law – echoing a general trend which culminated in the most recent change of enforcement policy by the EU Commission and EU Courts concerning the referral mechanism under Article 22 of the EU Merger Regulation (“EUMR”) – gives the ICA the power to ex post review concentrations falling below the Italian merger control thresholds if:

  • at least one of the two turnover thresholds provided for in the amended Italian Competition Law (i.e., undertakings’ combined turnover in Italy exceeds Euro 517 million and at least two undertakings each has turnover in Italy exceeding Euro 31 million) is met OR, in any case, if the worldwide turnover of the undertakings concerned is higher than Euro 5 billion; AND
  • the merger raises competition concerns in the national market, or in a relevant part of it, taking into account possible detrimental effects on the development of small enterprises with innovative strategies.

If these conditions are met, the ICA can send a request to the acquiring companies, up to six months from closing, to notify the transaction. Companies must notify within 30 days of receiving the request. Failure to do so will be treated as an omitted filing and the ICA will have the power to impose a fine of up to 1% of the turnover generated by the parties in the previous financial year.

The purpose of the Annual Competition Law is to address so-called “killer acquisitions” that would have fallen outside of the scope of the ICA’s powers to scrutinize, block, or impose conditions or remedies. The digital/media and health/pharmaceutical sectors are typically the focus of such acquisitions, but the described changes apply to all sectors.

The new regime, which takes effect immediately (although ICA will have to adopt a measure to define the procedural rules), creates a certain level of legal uncertainty for ongoing and future transactions, given the wide margin of discretion that the legislature has granted to the ICA, as well as the wide time frame within which the ICA can request notification (six months from the closing of the transaction). It will, therefore, be crucial to monitor the ICA's enforcement practice to see to what extent the ICA will make use of this power and what procedural rules it will adopt (e.g., the possibility for companies to consult the ICA in advance).

Substantive test for assessing mergers

The substantive test which the ICA has applied to date to evaluate mergers is the traditional “dominance test” (“creation or strengthening of a dominant position in the national market”). The Annual Competition Law replaces this test with the so-called SIEC test (“significant impediment to effective competition”), as set out in Articles 2(2) and (3) of the EUMR. This provides that a concentration can be declared incompatible with the Single Market if it significantly impedes effective competition, in particular as a result of the creation or strengthening of a dominant position. The introduction of the SIEC test allows the ICA to impose remedies or prohibit transactions that, while not resulting in the creation of a dominant position, may result in a worsening of competitive conditions because of, for example, the oligopolistic but non-collusive nature of the markets involved or the presence of particularly complex vertical relationships.

Rules applicable to joint ventures

The Annual Competition Law provides for a further alignment of the Italian merger control rules with the EU merger control rules with regard to joint ventures. All full-function joint ventures are now subject to merger control rules, regardless of their “concentrative” and “cooperative” nature.

Pursuant to the amended Italian Competition Law any full-function joint venture that may also entail a coordination of the competitive conduct of the parent companies (to the extent they remain independent competitors on any market outside of the joint venture) will have to be assessed in the context of the merger control procedure, albeit on the basis of the substantive parameters on the prohibition of anti-competitive agreements (Article 101 of the Treaty on the Functioning of the European Union or Article 2 of the Italian Competition Law). Previously, the ICA would have been precluded from applying the Italian merger control rules and procedure to such a joint venture, irrespective of whether or not the joint venture could be deemed full-function under the criteria applied by the European Commission pursuant to the EUMR.

Calculation of turnover for credit and financial institutions

The Annual Competition Law also fully aligns the rules to calculate the relevant turnover of banks and financial institutions (for merger control purposes only) with those provided by the EUMR, by replacing the 1/10 of total assets rule used to calculate turnover with the criteria related to the financial income of such institutions.

Concerning insurance companies, the Annual Competition Law clarifies the previous calculation criterion and explicitly provides that the turnover is should be calculated based on the value of gross premiums written, comprising all amounts received and receivable in respect of insurance contracts issued by or on behalf of the insurance undertakings, including also outgoing reinsurance premiums.


The Annual Competition Law alligns Italian merger control concepts with those applied under the EUMR, creating greater consistency with respect to: the substantive test for assesing mergers, the rules which apply to joint ventures and calculating the relevant turnover of credit and financial institutions.

On the other hand, the Annual Competition Law grants the ICA greater powers in respect of numerous areas, enabling it to review joint ventures which were not previously caught by Italian merger control rules as well as certain transactions which do not meet the Italian merger control thresholds (“below threshold” mergers). The ICA’s power to call-in “below threshold” mergers could prove problematic for businesses moving forwards and creates uncertainty. Parties to a transaction may be required to take additional steps post-transaction, and monitoring is required to see exactly how the ICA puts this new power into action.

For further information on merger control, please get in touch with your usual Eversheds Sutherland contact or the contacts listed here.