The Italian Competition Authority adopts new Guidelines on setting fines

Following suit of the European Commission and other EU national competition authorities, also the Italian Competition Authority (ICA) has recently adopted guidelines on the methods of setting fines (LineeGuida sulla modalità di applicazione dei criteri di quantificazionedelle sanzioni amministrative pecuniarie irrogate dall'Autorità inapplicazione dell'articolo 15 comma 1 della legge n. 287/90, thereinafter the ICA Guidelines).
Unsurprisingly, the ICA Guidelines closely resembles to the 2006 European Commission's Guidelines on the Method of Setting Fines Imposed Pursuant to Article 23(2(A) of Regulation No. 1/2003 in many aspects. Both the ICA and the Commission adopt a two-step methodology, whereby first the acting authority sets a basic amount of the fine to which set of adjustment factors apply. The ICA Guidelines set out that the basic amount of the fine is calculated on a percentage of the value of sales made in the relevant market made by the condemned firm, which is determined on the basis of gravity of the competition infringement. Such amount is then multiplied by the years of duration of the infringement. Also the ICA Guidelines provides for an entry fee for the more serious competition breaches. The entry fee consists in increasing the basic amount of a percentage comprised between 15% and 25% of the value of sales to strengthen the deterrence of the penalty. The deterrence multiplier is also included in the ICA Guidelines, and the ICA has the power to increase the penalties to be levied on firms having a very large turnover. The adjusting factors, attenuating and aggravating circumstances, set out in the ICA Guidelines are the same as those in the Commission Guidelines with a notable exception.
Unlike the Commission Guidelines, the ICA Guidelines expressly enlist the competition compliance programme as a mitigating factor. It must be stressed that the ICA Guidelines set out that, in order for such factor to apply, the mere adoption of a competition compliance programme is not enough. Indeed, it is also necessary that the compliance programme be specific and suitable as well as in line with the European and national best practices and, more importantly, that the firm shows a concrete and effective commitment to apply the programme. In that regard, the Guidelines provides for a number of circumstances from which it may be inferred that the firm is committed to the application of the compliance programme:
  • a full engagement of the management team;
  • identification of the employees in charge for the application of the competition compliance programme;
  • identification and assessment of risks that are specific to the markets in which firms operate;
  • organization of suitable training programmes;
  • incentive for employees that comply with the programme and disincentives for those that do not abide by it;
  • implementation of monitoring and auditing systems.
A fine reduction up to 15% may be applied to a firm meeting the above conditions. Arguably, the ICA approach to the relevance of competition compliance programmes in its Guidelines differ from that of the Commission. Indeed, the Commission has taken a neutral approach to competition compliance programmes and it is not ready to curb fines to firms that have adopted such programme. In the PO Video Games case, though the Commission conceded that competition compliance programmes raise awareness among employees of competition rules, it ruled out that the introduction of such programmes relieved it of its duty to penalise very serious competition breaches. To say it in the words of the former Competition Commissioner Almunia, 'a successful compliance programme brings its own record. The main reward for a successful compliance programme is not getting involved in unlawful behaviour. Instead, a company involved in a cartel should not expect a reward from us for setting up a compliance programme, because that would be a failed programme by definition'. The cautious approach of the Commission have been recently sanctioned by the EU courts. The EU General Court has consistently ruled that the Commission is not obliged to grant fine reductions to firms that have in place competition compliance programmes (Case T-53/06 UPM-Kymmene v Commission; Joined Cases T-101/05 and T-111/05, BASF and UCB v Commission). And also the Court of Justice in Schindler (Case C-501/11 P, Schindler et al. v Commission) found that the compliance programme introduced by the condemned firm had no positive effects.
The approach to the compliance competition programme in the ICA Guidelines are, on the other hand, closer to those of other EU national competition authorities. In particular, the 'Howyour business can achieve compliance with competition law' published by the then UK OFT says that a fine reduction up to 10% can be granted to firms that adopt competition compliance programmes and take adequate steps to ensure compliance with competition law.


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