Competition Policy in a Global Perspective: a view from the Italian Competition Authority

1. Competition Policy in a Global Perspective: a view from the Italian Competition Authority Trento, December 12, 2008 Alessandra Tonazzi Directorate for Research and International Affairs Italian Competition Authority The views expressed herein are those of the author and should not be attributed to the Italian Competition Authority

2. Layout • A brief introduction on the Italian Competition Authority • Issues presented by Globalization of Antritrust • Networks: ECN and ICN • Other international bodies: OECD, UNCTAD and WTO • Technical assistance

3. Legal Framework • Competition Act (Law No 287 of October 10, 1990) and Implementing Regulation (DPR No 217/98): substantive rules based on Community competition law Strong emphasis on consumer welfare No sectors or firms excluded • Misleading and comparative advertising (Legislative Decree No 74 of January 25, 1992) and Implementing Regulation (DPR No 284/03) • New competences: Conflict of interest (Law n. 215 of 20 July 2004) and unfair commercial practices (Legislative Decrees 145-146/2007 implementing EU Directives 2006/114/EC and 2005/29/EC).

4. Legal Framework • Decree Law no. 223/2006, strengthened the Authority’s powers of intervention by introducing new instruments • Interim measures • Commitment decisions • Leniency programme

5. Institutional Design • Independent administrative authority • Annual Report submitted to the Prime Minister and to Parliament • Law enforcement decisions are all motivated, based exclusively on competition considerations and made public • No government overriding powers • Decisions are only subject to review by administrative Courts: • the Regional Administrative Tribunal (TAR) of Lazio • the Council of State (Supreme Administrative Court)

6. The Commission • President and 4 Commissioners are jointly appointed by the two speakers of Parliament for a 7-year, non-renewable term and cannnot be dismissed • High institutional profile and professional reputation requirements laid down in the law • Position incompatible with any other professional activity or office in public or private entities • Decisions are taken by majority vote

7. Main Powers • Competition law enforcement powers against anticompetitive practices or mergers include: • inspections • cease and desist orders • prescription of preventive or remedial measures • administrative fines • Sectoral inquiries • Advisory and competition advocacy powers vis-à-vis Government and Parliament in relation to: • existing and draft legislation or regulation • general administrative provisions

8. Competition: areas of intervention • Agreements and concerted practices (cartels) (art 2 Law 247/90 ►art. 81 of EU Treaty) • Abuses of dominant position (art. 3 Law 247/90 ► art. 82 of EU Treaty) • Mergers (artt. 5 and 6 Law 247/90): prior notification of all mergers and acquisitions when the gross aggregate turnover on Italian territory of the acquired company exceeds 45 million euro or if the gross turnover in Italy of all the companies involved exceeds 448million euro (set 5 May 2008).

9. Issues presented by Globalization of Antritrust • Business increasingly conducted across national markets: conduct in one country and possible anticompetitive effects in other countries • Proliferation of antitrust laws (and a very high percentage of these laws enacted in the last 10-12 years)

10. Issues presented by Globalization of Antritrust • Preventing anticompetitive practices from undermining benefits of trade liberalization • Promoting sound antitrust enforcement and policy • Minimizing conflicts among antitrust laws and policies • Encouraging cooperation and coordination among antitrust enforcing agencies

11. National Bilateral and Multilateral Approaches • Many countries have tools to address anticompetitive practices that take place outside their borders • Antitrust cooperation agreements have been very successful in facilitating cooperation and coordination between antitrust enforcers • Antitrust issues have been addressed in numerous multilateral fora

12. Competition Policy in the European Union • The EU operates a competition policy intended to ensure undistorted competition within the single market. • The Commission as the competition regulator for the single market is responsible for antitrust issues, approving mergers, breaking up cartels, working for economic liberalisation and preventing state aid. • National Competition Authorities (NCAs) have parallel competences to those of the Commission

13. Competition Policy in the European Union • Entry into force, on 1 May 2004, of Council Regulation 1/2003 on the implementation of the rules of competition laid down in Articles 81 and 82 EC developed the enforcement powers of the competition authorities of the EU Member States. • Modernisation of competition rules • Subsidiarity

14. Competition Policy in the European Union • Regulation 1/2003 made it compulsory for national competition authorities (NCAs) to apply Article 81 and Article 82 of the EC Treaty when the conducts may affect trade between EU Member States • Regulation 1/2003 foresees mechanisms of close co-operation between all competition authorities in the European Union. As a framework for these mechanisms, the network of European competition authorities (ECN) has been established

15. European Competition Network • The ECN has been established, in particular: • to agree on working arrangements and cooperation methods, in keeping with Regulation 1/2003, and to provide an efficient framework for the obligatory and optional information mechanisms; • to establish a continual dialogue between the different enforcers, to discuss and build a common competition culture approach. • It is a network of countries applying the same competition rules

16. European Competition Network • Powers and competences: • The ECN as such does not have any autonomous powers or competences. It is not an institution, and it does not have any legal personality. • The ECN is the framework for the close cooperation mechanisms of Council Regulation 1/2003. • At the same time it is a discussion forum dealing with a variety of topical issues of interest to its member authorities.

17. European Competition Network • Contacts are frequent at all levels of administrations. Transparency within the Network about relevant cases is ensured by means of standard forms providing limited details in an electronic case database. • Moreover, working groups have been established where the Network members can discuss general issues or issues relating to certain sectors. There are no voting rules, because this type of cooperation relies on consensus building.

18. European Competition Network • Usually the competition authority that starts investigations retains responsibility for the case. • Issue of a possible re-allocation: if a single practice affecting trade between Member States is subject to multiple procedures carried out at the same time by several Network members. • In these situations these authorities start discussions about a possible re-allocation with a view to a quick and efficient sharing of work within the network. There must be a close connection between the infraction and the territory of a Member State, in order for the competition authority of that Member State to consider itself "well placed" to handle the case.

19. European Competition Network • If a case needs to be re-allocated to protect competition and the Community interest effectively, members of the Network strive to ensure that it is handed to one, well placed authority wherever possible. • The duty to inform the other network members either before or immediately after the first formal investigative measure, where acting under Article 81 or 82 EC, allows the detection of multiple proceedings (for instance parallel complaints) and allows an efficient and rapid re-allocation if appropriate.

20. OECD, WTO and UNCTAD • All these organizations deal with competition issues • However…not only competition • Different rules on membership (and different numbers…) • Co-operation and coordination with ICN in order to avoid duplications

21. OECD • Participants: 30 member countries • The Competition Committee is the premier source of policy analysis and advice to governments on how best to harness market forces in the interests of greater global economic efficiency and prosperity. • The OECD’s governing Council has adopted a number of non-binding Recommendations on competition law and policy.  In addition, the Competition Committee has adopted Best Practices on information exchange in cartel investigations.

22. World Trade Organization • Participants: 153 countries accepting WTO rules on trade • It has a Working Group which has been a valuable educative forum fro sharing experiences and helping to build a culture of competition among a wide range of countries

23. UNCTAD • Participants: 192 members of UN (not necessarily adopting a competition law or even a free market economy) • “Code on restrictive commercial practices” approved by a conference of the United nations, adopted in 1980 by the General Assembly of the united nations and addressed especially to UNCTAD • Annual conference in Geneva – advances in debating competition issues

24. International Competition Network • A network of countries applying different competition rules • Enhance cooperation among antitrust agencies in order to improve the effectiveness of their actions and reduce the cost of parallel enforcement • Development of a set of basic general principles

25. International Competition Network • Distinguishing features of ICN: • Inclusiveness: agency representatives from around the globe are full members, not observers or invited guests. • Openness: representatives from the private sector,academia and other international organizations dealing with competition issues, so called non-government members ( NGA’s)

26. International Competition Network • Joint Work Products • Focus on a small number of projects each year, guaranteeing a manageable workload to facilitate timely deliverables. • The result should be clear, concise and pragmatic guidance for developed and developing competition agencies. • Focus on identifying best practices from around the world, rather than protecting or legitimizing existing domestic systems (ex: recommended practices)

27. International Competition Network • Goal of Soft Convergence • The recommended practices are endorsed and adopted by the ICN. • Because the ICN is not a rule-making body, members are under no obligation to ensure their domestic laws reflect these practices. It is up to each agency to decide whether, and how, to implement the recommendations. • This illustrates another significant feature of the ICN: recognition of the need for greater communication and cooperation in the realm of antitrust enforcement not as a result of some treaty obligation; rather, it is a community of interest.

28. Capacity building and technical assistance • A very important area of the international activity • Many programs within EU (entry of new Member States): Twinnings, Taiex • Programs with developing countries