26 February 2016

The Italian Competition Authority accepts Italian stock exchange commitments in abuse probe

In April 2015, the Italian Competition Authority (AGCM) opened an investigation into a possible abuse of a dominant position by the Italian stock exchange, Borsa Italiana, and its subsidiary, BIt Market Services (BMS). The AGCM was concerned that the vertical integration between the company holding financial data (BMS) and its distribution arm (Divisione MC) could foreclose third party distributors by making access to financial information more difficult for them.

Last October, Borsa Italiana offered to sell the business unit of BMS that provides financial information services to close the investigation without incurring a fine. The company also offered behavioural remedies, including that BMS and the financial information unit will be run separately until the sale is completed. The AGCM, after a successful market test, accepted Borsa Italiana's commitments on 3 February 2016. Indeed, the sale of the unit will solve all competition concerns as it will eliminate any incentives for BMS to discriminate between its subsidiary and third party financial data distributors.

In 2006, to align with the EU competition regime, the Italian parliament adopted a law which allows undertakings under investigation by the AGCM to submit structural and behavioural remedies to close an antitrust investigation. However, contrary to what happens at the EU level, the law introduced a three month deadline to submit remedies which starts running from the moment the companies under review receive the AGCM’s decision opening an investigation. The case law has ruled that such a deadline is not peremptory. Hence, in exceptional cases, the AGCM can and does extend the deadline. However, parties under review in Italy should consider the merits of providing commitments at a very early stage. This is a procedural anomaly, compared to other jurisdictions across the EU and beyond where commitments can be provided at much later stages of an investigation. As such, parties should carefully consider their strategy, in particular when the conduct under review concerns a number of jurisdictions.

The AGCM has a high degree of discretion regarding the acceptance of remedies offered. In order to be accepted by the AGCM, the commitments offered should remove all competition concerns, be proportionate to the allegations made by the AGCM, be effectively implemented in a short period of time and easily monitored.

Remedies are only deemed to be appropriate if the AGCM does not intend to impose a fine. However, the practice of the AGCM suggests that remedies can be considered in all cases except for investigations into hard core cartel conduct. Finally, it should be noted that the AGCM’s decision to accept or refuse the remedies offered is subject to judicial review.

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