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

Competition AuthorityCompetition Authority

Alessandra TonazziDirectorate 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

Trento, December 12, 2008Trento, December 12, 2008

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

Legal FrameworkLegal Framework

Competition ActCompetition Act (Law No 287 of October 10, 1990) and

Implementing RegulationImplementing Regulation (DPR No 217/98): substantive substantive

rules based on Community competition law Strong rules based on Community competition law Strong

emphasis on consumer welfare No sectors or firms emphasis on consumer welfare No sectors or firms

excludedexcluded Misleading and comparative advertisingMisleading and comparative advertising

(Legislative Decree No 74 of January 25, 1992) and Implementing RegulationImplementing 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).

Legal FrameworkLegal Framework

Decree Law no. 223/2006, strengthened the Authority’s powers of intervention by introducing new instruments

Interim measures

Commitment decisions

Leniency programme

Institutional DesignInstitutional Design

Independent administrative authorityIndependent administrative authority Annual Report submitted to the Prime Minister Annual Report submitted to the Prime Minister

and to Parliamentand to Parliament Law enforcement decisions are all motivated, Law enforcement decisions are all motivated,

based exclusively on competition considerations based exclusively on competition considerations and made publicand made public

No government overriding powersNo government overriding powers Decisions are only subject to review by Decisions are only subject to review by

administrative Courts:administrative Courts: the Regional Administrative Tribunal (TAR) of Laziothe Regional Administrative Tribunal (TAR) of Lazio the Council of State (Supreme Administrative Court)the Council of State (Supreme Administrative Court)

The CommissionThe Commission

President and 4 Commissioners are jointly President and 4 Commissioners are jointly appointed by the two speakers of Parliament for appointed by the two speakers of Parliament for a 7-year, non-renewable term and cannnot be a 7-year, non-renewable term and cannnot be dismisseddismissed

High institutional profile and professional High institutional profile and professional reputation requirements laid down in the lawreputation requirements laid down in the law

Position incompatible with any other professional Position incompatible with any other professional activity or office in public or private entitiesactivity or office in public or private entities

Decisions are taken by majority voteDecisions are taken by majority vote

Main PowersMain Powers

Competition law enforcement powers against Competition law enforcement powers against anticompetitive practices or mergers include:anticompetitive practices or mergers include: inspectionsinspections cease and desist orderscease and desist orders prescription of preventive or remedial measuresprescription of preventive or remedial measures administrative finesadministrative fines

Sectoral inquiriesSectoral inquiries Advisory and competition advocacy powers vis-à-Advisory and competition advocacy powers vis-à-

vis Government and Parliament in relation to:vis Government and Parliament in relation to: existing and draft legislation or regulationexisting and draft legislation or regulation general administrative provisionsgeneral administrative provisions

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 448 million euro (set 5 May 2008).

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)

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

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

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

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

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

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

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.

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.

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.

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.

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

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.

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

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

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

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)

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)

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.

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