The Italian competition authority (AGCM) disapproves of regional restrictive rules for Sunday trading
The Italian competition authority (AGCM) disapproves of regional restrictive rules for Sunday trading
Some time ago retailers raised before EC courts the issue whether national laws prohibiting or restricting Sunday trading violated the principles of the EC single market. More recently, the issue of Sunday trading was the subject of an opinion issued by the Italian competition authority (AGCM, AS480, Osservazioni in materia di apertura degli esercizi commerciali in Italia, Bollettino n. 39 of 12 November 2008, www.agcm.it ). The opinion is about the compatibility of a number of rules adopted by regional and local authorities to set the opening times of shops with the Act n. 114/1998. The Act n. 114/1998 reshuffled the regulatory framework for retailing in Italy and, more importantly, liberalized the opening times of businesses that meet the conditions set out in Article 12 or in Article 13. Article 12 regards shops located in municipalities with a predominantly tourism-based economy, in so called “art cities” or in expressly identified areas located within these municipalities. Article 13 relates to shops which sells exclusively and prevalently determined products, such as journals, beverages, books, flowers… To sum it up, shops falling under the situation laid down by either Article 12 or Article 13 are entitled to open on Sundays and bank holydays.
Contrary to the wording of Articles 12 and 13, certain regional and local authorities adopted instruments to govern the retailing activities in their territories that appear to frustrate the objective of liberalisation and market opening of retailing pursued by the Act 114/1998. The AGCM notices that some regional and local rules set a more restrictive regime for shop opening than that provided for by the Act 114/1998. As a further example, regional and local authorities have arbitrarily identified to which areas within their territory the more favourable regime of Article 12 applies. The result is a patchwork of differing local opening times rules which is expected to negatively affect competition among retailers located in the same province on in the same geographical market. Some of them may be allowed to open on Sundays and bank holydays, while others located in other areas may be subjected to a less favourable regulatory regime banning them from opening.
Similar problems also affect Article 13, especially as for the interpretation of the criterion of prevalence to determine whether a retailer falls within the scope of application of this provision. By a circular the competent minister states that a shop with at least 50% of revenue being generated by the proceeds of the sale of the products enlisted by the Article 13 meets the criterion of prevalence and, accordingly, the liberalised regime applies to it. Yet, some regional authorities have opted for a different criterion to establish where a shop prevalently sells the products enlisted by the Article 13, which is based on the retailing surface dedicated to the sale of these products. However, such a criterion is criticized by the AGCM for being more complex and less clear than that based on the proceeds of sale, which may give rise to many conflicts when monitoring compliance.
The view that the AGCM strongly advocates in its opinion is that regime for retailing introduced by the Act 114/1998 has a pro-competition nature, its objective being to inject more competition in the sector with positive effects on consumers’ welfare. Accordingly, the regulatory powers of regional and local bodies with relation to retailing should be exercised to remove unjustified unequal treatments and other anticompetitive situations among retailers. Differing regimes to regulating opening times of shops located in a same area are justified only in particular conditions provided that they will not have anticompetitive effects.
The AGCM draws further support to its views by referring to the latest case law of the Constitutional Court developed on the interpretation of Article 117 of the Italian Constitution about the allocation of competences between State and regions. Article 117 confers on the exclusive competence of the State the preservation of competition. This means that every measure adopted by the State for the preservation of competition prevails over the measures adopted by regional and local bodies. The liberalization of retailing activities of the Act 114/1198 can be regarded as a measure for the preservation of competition. State has the power to adopt such measures also on subjects allocated to the competence of regions to the extent that they are instrumental in removing barriers to market entry and obstacles to the carrying of economic activities. Therefore, regions can exercise their powers only to regulate marginal aspects with the limitation that they are not allowed to adopt measures incompatible with the goal of preservation of competition. In light of the above, the AGCM recommends region and other local bodies that have adopted measures non compliant with competition rules to accordingly amend them. In any event, these measures because of their incompatibility with the hierarchically superior principle of preservation of competition, shall be disapplied.
Some time ago retailers raised before EC courts the issue whether national laws prohibiting or restricting Sunday trading violated the principles of the EC single market. More recently, the issue of Sunday trading was the subject of an opinion issued by the Italian competition authority (AGCM, AS480, Osservazioni in materia di apertura degli esercizi commerciali in Italia, Bollettino n. 39 of 12 November 2008, www.agcm.it ). The opinion is about the compatibility of a number of rules adopted by regional and local authorities to set the opening times of shops with the Act n. 114/1998. The Act n. 114/1998 reshuffled the regulatory framework for retailing in Italy and, more importantly, liberalized the opening times of businesses that meet the conditions set out in Article 12 or in Article 13. Article 12 regards shops located in municipalities with a predominantly tourism-based economy, in so called “art cities” or in expressly identified areas located within these municipalities. Article 13 relates to shops which sells exclusively and prevalently determined products, such as journals, beverages, books, flowers… To sum it up, shops falling under the situation laid down by either Article 12 or Article 13 are entitled to open on Sundays and bank holydays.
Contrary to the wording of Articles 12 and 13, certain regional and local authorities adopted instruments to govern the retailing activities in their territories that appear to frustrate the objective of liberalisation and market opening of retailing pursued by the Act 114/1998. The AGCM notices that some regional and local rules set a more restrictive regime for shop opening than that provided for by the Act 114/1998. As a further example, regional and local authorities have arbitrarily identified to which areas within their territory the more favourable regime of Article 12 applies. The result is a patchwork of differing local opening times rules which is expected to negatively affect competition among retailers located in the same province on in the same geographical market. Some of them may be allowed to open on Sundays and bank holydays, while others located in other areas may be subjected to a less favourable regulatory regime banning them from opening.
Similar problems also affect Article 13, especially as for the interpretation of the criterion of prevalence to determine whether a retailer falls within the scope of application of this provision. By a circular the competent minister states that a shop with at least 50% of revenue being generated by the proceeds of the sale of the products enlisted by the Article 13 meets the criterion of prevalence and, accordingly, the liberalised regime applies to it. Yet, some regional authorities have opted for a different criterion to establish where a shop prevalently sells the products enlisted by the Article 13, which is based on the retailing surface dedicated to the sale of these products. However, such a criterion is criticized by the AGCM for being more complex and less clear than that based on the proceeds of sale, which may give rise to many conflicts when monitoring compliance.
The view that the AGCM strongly advocates in its opinion is that regime for retailing introduced by the Act 114/1998 has a pro-competition nature, its objective being to inject more competition in the sector with positive effects on consumers’ welfare. Accordingly, the regulatory powers of regional and local bodies with relation to retailing should be exercised to remove unjustified unequal treatments and other anticompetitive situations among retailers. Differing regimes to regulating opening times of shops located in a same area are justified only in particular conditions provided that they will not have anticompetitive effects.
The AGCM draws further support to its views by referring to the latest case law of the Constitutional Court developed on the interpretation of Article 117 of the Italian Constitution about the allocation of competences between State and regions. Article 117 confers on the exclusive competence of the State the preservation of competition. This means that every measure adopted by the State for the preservation of competition prevails over the measures adopted by regional and local bodies. The liberalization of retailing activities of the Act 114/1198 can be regarded as a measure for the preservation of competition. State has the power to adopt such measures also on subjects allocated to the competence of regions to the extent that they are instrumental in removing barriers to market entry and obstacles to the carrying of economic activities. Therefore, regions can exercise their powers only to regulate marginal aspects with the limitation that they are not allowed to adopt measures incompatible with the goal of preservation of competition. In light of the above, the AGCM recommends region and other local bodies that have adopted measures non compliant with competition rules to accordingly amend them. In any event, these measures because of their incompatibility with the hierarchically superior principle of preservation of competition, shall be disapplied.
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my free sundays group.