Italy: Italian Implementation Of The Directive 2014/104/EU On Antitrust Damages Actions

Last Updated: 11 January 2018
Article by Luca Toffoletti and Alessandro De Stefano
Most Read Contributor in Italy, December 2017

On January 19, 2017, the Italian Government has adopted the Legislative Decree No. 3/2017 ("Decree"), which has implemented in Italy the Directive No. 2014/104/UE dated November, 26, 2014, on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union ("Directive"). One year after its adoption, this article summarizes the main principles set forth by the Decree and examines their impact on the Italian private antitrust enforcement system resulting from the relevant case-law.

Standing

Any individual – i.e., any natural or legal person, as well as any entity devoid of legal personality – may claim damages for loss caused to him by an infringement of the European and/or Italian competition law provisions1, also by means of class actions2.

This principle is in line with the Italian legal system and case-law: the recognition of such a wide standing had already been set by the Italian Supreme Court in 20053, in the wake of ECJ's Courage judgement4. Moreover, class actions for damages (including damages caused by anti-competitive practices) – based on an opt-in model – have been introduced in Italy in 20105.

Compensatory nature of the antitrust damages

The victims of antitrust violations may claim a compensation, which shall (only) cover actual loss (damnum emergens), loss of profit (lucrum cessans), plus the payment of interests. Over-compensation or multiple compensation (e.g., treble damages as in the United States) are not admitted6.

This principle is in line with the Italian legal system and case-law, according to which the compensation shall place the injured person in the same position in which that person would have been, had the harmful event not been committed.

Disclosure of evidence by counterparty or third parties

The victims of antitrust infringements tipically face difficulties in supporting their claims with evidence, in particular in the case of secret cartels. In order to alleviate this task, the Decree provides that, upon reasoned request of a party, the courts may order the counterparty or third parties the disclosure of specified items of evidence or categories of evidence that are in their availibility, where (a) the requesting party has given sufficient evidence of the plausibility of its claim; (b) the disclosure is relevant to the action; (c) the disclosure is proportionate, balancing the interests of all parties concerned; (d) the request does not concern attorney-to-client correspondence7.

Should such items of evidence contain confidential information, the courts may adopt any measure to protect such confidential information from being disclosed during the litigation. Those measures include the possibility of redacting sensitive passages in documents, conducting hearings in camera, restricting the persons allowed to see the evidence, and instructing experts to produce summaries of the information in an aggregated or otherwise non-confidential form.

The Italian system already has a provision allowing a similar disclosure: pursuant to Article 210 of the Italian Civil Procedure Code ("ICPC"), upon request of a party, the courts may order the counterparty or third parties the disclosure of specified documents or further means of proof, which are deemed to be relevant to the decision of the case. However, the Italian courts have used such power in very few cases in the context of antitrust damages actions.

The main innovation of the above-mentioned provision of the Decree with respect to Article 210 ICPC is the wider scope of the disclosure, which may concern not only specific documents or other means of proofs, but also entire "categories of evidence".

It may be reasonably expected that the provision of the Decree on disclosure encourages the courts to use such power, also in the light of the recent judgement of the Italian Supreme Court, according to which the courts should ex officio interpret extensively the provision on disclosure set forth in Article 210 ICPC8.

Discovery of evidence included in the file of a national antitrust authority ("NCA")

In a further attempt to stimulate private enforcement, the Decree sets forth that, in case of follow-on actions, the courts may order – upon reasoned and detailed request of a party – a NCAs to disclose certain documents included in its file9, provided that such order does not undermine the effectiveness of the public enforcement of competition law. In accordance with the Directive, the Decree further clarifies that:

  • leniency statements and settlement submissions10 cannot at any time be disclosed (black list);
  • (a) information prepared specifically for the proceedings of the NCA; (b) information that the NCA has drawn up and sent to the parties in the course of its proceedings; and (c) settlement submissions that have been withdrawn; may be disclosed only after the NCA has closed its proceedings (grey list);
  • any other evidence not falling within the above-mentioned categories may be disclosed at any time (white list).

The Italian system already has a provision allowing a similar disclosure: pursuant to Article 213 of the ICPC, the courts may request the Authority to provide documents, which are in its availibility and are relevant to the decision of the case. However, even this power has been rarely used by Italian judges.

Also in this case it may be reasonably expected that the provision of the Decree on disclosure of documents in the availability of a NCA may encourage the courts to use such power.

Effect of NCA's decisions

An infringement of competition law ascertained by a final decision of the Italian Competition Authority ("ICA"), which is no more appealable before a national court11, is deemed to be irrefutably established for the purposes of an action for damages brought before Italian courts. The binding effect of ICA's final decision covers the nature of the infringement as well as its material, personal, temporal and territorial scope, not also the causal relationship between the alleged harm and the infringement of competition law nor the existence of a damage12.

The provision introduces a new element into the Italian private enforcement system, which has never recognized a binding effect of ICA's findings in the context of damages actions. Indeed, according to the Supreme Court, ICA's findings have value as a preferred means of proof (prova privilegiata) of the infringement, meaning that they institute a presumption as to the existence of the infringement, which may be rebutted by the defendant only providing evidence that has not already been assessed by the ICA.

Moreover, the Decree provides that a final infringement decision adopted by a NCA of another Member State is in principle not binding on the Italian judges. In particular, such decision amounts to a means of proof as regards the nature of the infringement as well as its material, personal, temporal and territorial scope; however, its findings can be assessed by the judge as appropriate, along with any other evidence adduced by the parties13.

Limitation periods

The limitation period for damages actions is five years; it begins to run when the infringement ceases and the claimant knows – or can reasonably be expected to know – the behaviour constituting the infringement, the fact that the infringement caused the claimant harm, and the identity of the infringer14.

This general provision is in line with well-established Italian case-law15.

In order to facilitate follow-on actions, the Decree introduces an innovative provision, pursuant to which (a) limitation period is suspended if the ICA initiates a proceeding in respect of an infringement of competition law to which the action for damages relates, and (b) the suspension ends one year after the infringement decision has become final or after the proceeding is otherwise terminated16.

Joint and several liability

Where several undertakings infringe the competition rules jointly (e.g., in the case of a cartel), those co-infringers are jointly and severally liable for the entire harm caused by the infringement. As a consequence, each co-infringer is bound to compensate for the harm in full, the injured party has the right to require full compensation from any co-infringer, and each co-infringer has the right to obtain a contribution from other co-infringers if it has paid more compensation than its share.

The Decree sets forth the following two exceptions to the above-mentioned joint and several liability principle:

  • where the infringer is a small or medium-sized enterprise ("SME"), the infringer is liable only to its own direct and indirect purchasers where: (a) its market share in the relevant market was below 5% during the infringement, and (b) the application of the rules of joint and several liability would irretrievably jeopardise its economic viability and cause its assets to lose all their value. However, such exception is not applicabile, where: (a) the injuried parties cannot obtain full compensation from the other infringers; (b) the SME has led the infringement or has coerced other undertakings to participate therein; (c) the SME has previously been found to have infringed competition law17;
  • any immunity recipient is jointly and severally liable (a) to its direct or indirect purchasers or providers, and (b) to other injured parties only where full compensation cannot be obtained from the other undertakings that were involved in the same infringement. In any case, the amount of contribution of the co-infringer which has been granted immunity from fines under a leniency programme cannot exceed the amount of the harm it caused to its own direct or indirect purchasers o providers18.

The two exceptions introduce a relevant and innovative derogation to the general principle of joint and several liability provided by Article 2055 of the Italian Civil Code, pursuant to which "if the act causing damage can be attributed to more than one person, all are jointly and severally liable for the damages. The person who has compensated for the damage has recourse against each of the others in proportion to the degree of fault of each and to the consequences arising therefrom. In case of doubt, the degree of fault attributable to each is presumed to be equal".

Passing-on of the overcharge

The Decree introduces detailed rules concerning the so-called passing-on of the overcharge, i.e., the situation in which harm resulting from the price difference between what was actually paid and what would otherwise have been paid in the absence of the infringement has been, entirely or partially, "passed" from the injured party to its own purchasers. In such case, the loss which has been passed on no longer constitutes harm for which the party that passed it on needs to be compensated (nor is such party anymore entitled to compensation in accordance with the strict compensatory regime of the antitrust damages chosen by the Directive and transposed by the Decree).

The Decree covers:

  • the passing-on defence, whereby the defendant can invoke as a defence against a claim for damages the fact that the claimant passed on the whole or part of the overcharge resulting from the infringement of competition law. The burden of proving that the overcharge was passed on shall be on the defendant19;
  • the passing-on offence, whereby any indirect purchaser can claim and obtain compensation, when the overcharge imposed by the infringer of competition law is passed on by its direct counterparty, by raising its own prices20. The burden of proving the existence and scope of such a passing-on shall rest with the claimant; however, there is a rebuttable presumption of passing-on where the claimants has shown that: (a) the defendant has committed an infringement of competition law; (b) the infringement has resulted in an overcharge for the direct purchaser of the defendant; and (c) the indirect purchaser has purchased the goods or services that were the object of the infringement, or has purchased goods or services derived from or containing them.

To date, the passing-on was not expressly recognized in the Italian legal system; however, in some cases21, the Italian judges have applied the passing-on principles on the basis of the general civil liability principles, pursuant to which a claimant may only seek compensation for damages it actually suffered.

Presumption of damages in case of cartels

The Decree introduces a rebuttable presumption of damages in case of cartels22. This innovative presumption, which does not cover the concrete amount of harm, is limited to cartels, given their secret nature, which increases the information asymmetry and makes it more difficult for claimants to obtain the evidence necessary to prove the harm.

Jurisdiction

The Decree has concentrated the jurisdiction for handling antitrust damages actions on the Tribunals of Rome, Milan and Naples23.

Status of the transposition of the Directive in the Member States

The deadline for transposing the Directive into Member States' legal systems expired on December 27, 2016. The Directive has been fully transposed by almost all member States, with the exception of Bulgaria, Greece, and Portugal24.

Footnotes

[1] Article 2(1)(c) of the Decree, which implements Article 3(1) of the Directive.

[2] Article 1(1) of the Decree.

[3] See judgement No. 2207/2005.

[4] Judgment of the ECJ of September 20, 2001, Courage Ltd v Bernard Crehan and Bernard Crehan v Courage Ltd and Others, Case C-453/99.

[5] See Article 140-bis of Legislative Decree No. 206/2005 (Consumer Code).

[6] Article 1(2) of the Decree, which implements Article 3(2-3) of the Directive.

[7] Article 3 of the Decree, which implements Article 5 of the Directive.

[8] See judgement No. 11564/2015.

[9] Article 4 of the Decree, which implements Article 6 of the Directive.

[10] However, to the date the settlement procedure has not been introduced in Italy.

[11] ICA's decisions are reviewed by the administrative courts, i.e., the TAR Lazio, at first instance, and the Consiglio di Stato, at second instance.

[12] Article 7(1) of the Decree, which implements Article 9(1) of the Directive.

[13] Article 7(2) of the Decree, which implements Article 9(2) of the Directive.

[14] Article 8(1) of the Decree, which implements Article 10(2-3) of the Directive.

[15] See Supreme Court, judgement No. 2305/2007.

[16] Article 8(2) of the Decree, which implements Article 10(4) of the Directive.

[17] Article 9(1-2) of the Decree, which implements Article 11(2-3) of the Directive.

[18] Article 9(3-5) of the Decree, which implements Article 11(4-5) of the Directive.

[19] Article 11 of the Decree, which implements Article 13 of the Directive.

[20] Article 12 of the Decree, which implements Article 14 of the Directive.

[21] Court of Appeal Turin, judgement dated 6.7.2000; Court of Appeal Cagliari, judgement dated 23.1.1999.

[22] Article 14(2) of the Decree, which implements Article 17(2) of the Directive.

[23] Article 18 of the Decree.

[24] Source: http://ec.europa.eu/competition/antitrust/actionsdamages/directive_en.html.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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