**3. Protection of competition under Italian law**

Clayton Act [9] was added to that first body of rules, to regulate the phenomena of corporate concentrations, followed by the Federal Trade Commission Act which punishes conduct that is generically defined as "unfair" and which is applied in parallel to the Sherman Act. The difference between the Sherman Act and the Federal Trade Commission Act is of nature and of purpose: the criminal nature of the antitrust bans enshrined in the former, and the consequent punitive nature of the antitrust control carried out in application of these rules, compared to a form of administrative control over behaviour and antitrust action that favours the corrective-

This American experience paved the way for Europe to create provisions to protect market competition, although the first provisions were adopted several decades later than in the United States, only after the end of the Second World War. Only then were the conditions ripe for the creation of the European Single Market, overcoming the political visions of the diverse

In Europe, a single system of antitrust control was adopted only in 1957, with the introduction into the Treaty of Rome of specific provisions to protect competition, focusing on the discipline of restrictive agreements, the abuse of dominating positions and state aid. In 1989, with a specific regulation [11], a specific set of rules was introduced for the antitrust control

The noncompetition discipline is an essential element of European integration inasmuch as it must allow companies to compete at par conditions on the markets of all the member states, ensure the competitiveness of their products and services at the global level and, at the same time, protect the European consumers in the best way. The provisions on competition are contained in Arts. 101 and 102 of the Treaty on the Functioning of the European Union [12],

The competition policy is divided into two main aspects: on the one side, it provides for controlling companies' behaviour regarding agreements and concentrations, and on the other side, it provides for limiting state aid to national producers. The implementation of the EU policy on competition is the responsibility of the European Commission, with control jurisdiction reserved to the European Court of Justice. The member states are obliged to harmonise

In 1957 most of the member states had a competition policy, but the methods and intensity of the control differed greatly from one country to another. The creation of a standardised economic area could not be limited to the coexistence of the various national practices, but the differences between national legislations were too deep to be replaced by a uniform com-

A general principle of community policy on this issue is the ban on agreements between companies that have the purpose or the effect of preventing, limiting or distorting competition within the common market and can prejudice trade between the member states. Agreements on the prices of goods produced and placed on the market, agreements on the regions and areas where the products will be sold or distributed and agreements on the quantities to be

munity legislation. National and community competition policies had to coexist.

countries based, above all, on interventionism and protectionism [10].

which regard national provisions on corporate activities.

national legislation to the EU legislation.

produced are expressly banned.

restorative aspect.

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of concentration operations.

Under Italian law an organic discipline on competition was adopted with considerable delay compared to the other industrialised companies: Germany, the United Kingdom and France adopted the first laws on this issue towards the end of the 1940s, whereas the rules on competition within the European Community, as mentioned above, were already contained in the Treaty of Paris in 1952 and the Treaty of Rome in 1957.

The reasons for this delay are due to the fact that Italy, for a long time, pursued an economic model based on the idea that the state had to play a fundamental role in the direction and protection of the corporate system, with an outlook towards national economic development, in which companies, on the one hand, accepted the limitations to the freedom of economic independence, in exchange for a system that protected the results acquired by the companies existing in the market.

This model is present in the Civil Code of 1942, and it was also confirmed in the Constitution of 1948 in Art. 41, which recognises and guarantees the right to economic initiative, ruling, in the first paragraph, that "Private economic initiative is free". The Constitutional Court, until 1990, seconded this view, refusing to pronounce judgements of a liberalist tendency, except in certain important exceptions such as the pharmaceutical industry and the telecommunications field.

With the promulgation of Law No. 287 of 10 October 1990, better known as the Antitrust Law, a radical change of direction was implemented, under the influence of the ideology of the free market, which dominates at the global level, and also according to the choices of the then European Community, more liberalist than initially. The Italian law swiftly approached the principles of free trade at the level of the legislation introduced. In this sense, the sudden introduction of the antitrust law occurred, but above all the principle of the protection of competition was introduced into the constitution in 2001 as well as the law to promote the competitive market in which parliament must approve every year.

The main aims of the antitrust law, in addition to that of guaranteeing companies the freedom to operate on the market, include that of protecting consumers, favouring an improvement in product quality and innovation without excessive price increases. A specification must be made regarding the concept of company, which with this law takes on a wider meaning than that which can be drawn from the civil code, since company means any entity that practises an economic activity, regardless of its legal status and its method of financing itself [16].

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For the civil code, however, the company can be defined as an economic activity aimed at the production or the exchange of goods and services that the entrepreneur practises by means of a complex of assets organised according to that activity (company). In addition, Law No. 287/90 also rules that public companies or prevalently state-owned companies must be subject to the aforesaid discipline, according to Article 8. The European Court of Justice has also expressed its opinion on this point, affirming that the antitrust law must be excluded only when the activity practised by a public power falls within its institutional duties, thus not

For that matter, the second paragraph states that companies that operate as monopolies on the market or which manage services of general economic interest are also excluded from the application of the law. With regard to the comparison between Italian law and community law, Italian law, on the basis of paragraph 1 of Art. 1, seems to impose two restrictions. The first restriction is that of the "single barrier", regarding the scope of application of national provisions which apply only if the fact does not fall within the scope of community law [18]. Therefore, national law is not applicable in the case of anticompetition effects that occur on the Italian market which are subject to community law because they involve the sphere of the single market. The second restriction regards the interpretation of the provisions, in which interpretation, as stated in paragraph 4 of Art. 1 of Law No. 287/90, "is based on the principles

The Italian antitrust law has almost entirely adopted the European law. The cases of relevance for national law are those described in the European law on competition (except for state aid, disciplined only at the community level), and their rules substantially coincide, consequent to the precepts themselves which are mainly identical to the corresponding European provisions and to the special interpretative rule established by Art. 1, par. 4 of Law No. 287/1990, according to which national law must be interpreted and applied in conformity to the European laws in force. The relevant cases are restrictive agreements, abuse of a dominant position and corporate

The illegal agreements are agreements, agreed practices or decisions of associations of companies that have the purpose or the effect of preventing, limiting or falsifying competition on the national market. The unlawfulness of an agreement can be excluded when it fulfils all the conditions listed

The ban on the abuse of a dominant position, however, aims to punish anticompetitive behaviour adopted by a company or companies with significant power on the market (abuse of an individual dominant position, in the first case, and abuse of a collective dominant position,

under Art. 4 of Law No. 287/1990. Unlawful agreements are to all effects null and void.

representing a corporate business [17].

concentrations.

of the European Community law on competition" [19].

However, if we consider the actual development of the legislation, we have to notice a much more uncertain process of development: the wealth of case law of the Constitutional Court has applied the principle of the protection of competition but restored the authority of the state instead of the regions, therefore, with purposes other than the original purposes of Art. 41.

The fact is that the principle of competition itself contains much ambiguity, because the model of market and of economy that is pursued would require many more clarifications and much more in-depth examination which both the letter of the law and the case law of the Constitutional Court are far from having achieved.

The real driving force that led Italy to adopt the provisions to protect competition was the creation of the European Single Market [13]. This gradually led to the introduction of new laws aimed at changing the role of the state, from manager to regulator. This change in state action represents what had already occurred at the European level, when the various countries tried to influence the market mechanisms, sometimes even substituting them and imposing the rules of the game. The regulator state, instead, according to what happened in the United States, played the *super partes* role of a severe regulator, supervisor and guarantor of trade relations. In both cases, the aim pursued was that of increasing the national economies, but in the first case, there were no great results inasmuch as the focus was more on the efficiency of the market rather than on operations to the advantage of competition.

Finally, with Law No. 287/1990 [14], Italian legislation also implemented the principles of community law, aimed at guaranteeing free competition which would allow for the creation of a European Single Market, avoiding possible abuse on the part of the operators. This definitively marked the change from a pro-intervention policy to a policy in favour of free competition. Thus, with this law, a constitutional value was protected, namely, the public interest/social usefulness contemplated by Art. 41 of the Constitution, which affirms the freedom of private economic initiative, consistent with the European context of which free competition, and the rules of its correct implementation perhaps represent the oldest and most solid pillar [15].

Right from its first article, Law No. 287/90 imposes the implementation of Art. 41 of the Constitution, thus affirming the right to a competitive market as a constitutionally protected right. A necessary consequence of this situation is the fact that public law now disciplines competition, for the first time in an objective sense, with a clear-cut reversal of the provisions of the civil code which, with regard to (unfair) competition, have the purpose of protecting the economic interests of the single entrepreneurs that may be harmed by competitors. The protection of competition (and of the market understood as a *unicum*) structured so that it imposes rules on the companies on the market of reference (geographic or substantial) has a determining influence on the behaviour and choices of those who buy the goods or services produced by the companies.

The main aims of the antitrust law, in addition to that of guaranteeing companies the freedom to operate on the market, include that of protecting consumers, favouring an improvement in product quality and innovation without excessive price increases. A specification must be made regarding the concept of company, which with this law takes on a wider meaning than that which can be drawn from the civil code, since company means any entity that practises an economic activity, regardless of its legal status and its method of financing itself [16].

the free market, which dominates at the global level, and also according to the choices of the then European Community, more liberalist than initially. The Italian law swiftly approached the principles of free trade at the level of the legislation introduced. In this sense, the sudden introduction of the antitrust law occurred, but above all the principle of the protection of competition was introduced into the constitution in 2001 as well as the law to promote the

However, if we consider the actual development of the legislation, we have to notice a much more uncertain process of development: the wealth of case law of the Constitutional Court has applied the principle of the protection of competition but restored the authority of the state instead of the regions, therefore, with purposes other than the original purposes of Art. 41.

The fact is that the principle of competition itself contains much ambiguity, because the model of market and of economy that is pursued would require many more clarifications and much more in-depth examination which both the letter of the law and the case law of the

The real driving force that led Italy to adopt the provisions to protect competition was the creation of the European Single Market [13]. This gradually led to the introduction of new laws aimed at changing the role of the state, from manager to regulator. This change in state action represents what had already occurred at the European level, when the various countries tried to influence the market mechanisms, sometimes even substituting them and imposing the rules of the game. The regulator state, instead, according to what happened in the United States, played the *super partes* role of a severe regulator, supervisor and guarantor of trade relations. In both cases, the aim pursued was that of increasing the national economies, but in the first case, there were no great results inasmuch as the focus was more on the efficiency of

Finally, with Law No. 287/1990 [14], Italian legislation also implemented the principles of community law, aimed at guaranteeing free competition which would allow for the creation of a European Single Market, avoiding possible abuse on the part of the operators. This definitively marked the change from a pro-intervention policy to a policy in favour of free competition. Thus, with this law, a constitutional value was protected, namely, the public interest/social usefulness contemplated by Art. 41 of the Constitution, which affirms the freedom of private economic initiative, consistent with the European context of which free competition, and the rules of its correct implementation perhaps represent the oldest and most solid pillar [15].

Right from its first article, Law No. 287/90 imposes the implementation of Art. 41 of the Constitution, thus affirming the right to a competitive market as a constitutionally protected right. A necessary consequence of this situation is the fact that public law now disciplines competition, for the first time in an objective sense, with a clear-cut reversal of the provisions of the civil code which, with regard to (unfair) competition, have the purpose of protecting the economic interests of the single entrepreneurs that may be harmed by competitors. The protection of competition (and of the market understood as a *unicum*) structured so that it imposes rules on the companies on the market of reference (geographic or substantial) has a determining influence on the behaviour and choices of those who buy the goods or services produced by the companies.

competitive market in which parliament must approve every year.

the market rather than on operations to the advantage of competition.

Constitutional Court are far from having achieved.

102 Public Management and Administration

For the civil code, however, the company can be defined as an economic activity aimed at the production or the exchange of goods and services that the entrepreneur practises by means of a complex of assets organised according to that activity (company). In addition, Law No. 287/90 also rules that public companies or prevalently state-owned companies must be subject to the aforesaid discipline, according to Article 8. The European Court of Justice has also expressed its opinion on this point, affirming that the antitrust law must be excluded only when the activity practised by a public power falls within its institutional duties, thus not representing a corporate business [17].

For that matter, the second paragraph states that companies that operate as monopolies on the market or which manage services of general economic interest are also excluded from the application of the law. With regard to the comparison between Italian law and community law, Italian law, on the basis of paragraph 1 of Art. 1, seems to impose two restrictions. The first restriction is that of the "single barrier", regarding the scope of application of national provisions which apply only if the fact does not fall within the scope of community law [18].

Therefore, national law is not applicable in the case of anticompetition effects that occur on the Italian market which are subject to community law because they involve the sphere of the single market. The second restriction regards the interpretation of the provisions, in which interpretation, as stated in paragraph 4 of Art. 1 of Law No. 287/90, "is based on the principles of the European Community law on competition" [19].

The Italian antitrust law has almost entirely adopted the European law. The cases of relevance for national law are those described in the European law on competition (except for state aid, disciplined only at the community level), and their rules substantially coincide, consequent to the precepts themselves which are mainly identical to the corresponding European provisions and to the special interpretative rule established by Art. 1, par. 4 of Law No. 287/1990, according to which national law must be interpreted and applied in conformity to the European laws in force.

The relevant cases are restrictive agreements, abuse of a dominant position and corporate concentrations.

The illegal agreements are agreements, agreed practices or decisions of associations of companies that have the purpose or the effect of preventing, limiting or falsifying competition on the national market. The unlawfulness of an agreement can be excluded when it fulfils all the conditions listed under Art. 4 of Law No. 287/1990. Unlawful agreements are to all effects null and void.

The ban on the abuse of a dominant position, however, aims to punish anticompetitive behaviour adopted by a company or companies with significant power on the market (abuse of an individual dominant position, in the first case, and abuse of a collective dominant position, in the second case). The behaviour aimed at obtaining supra-competitive profits or other benefits that cannot be obtained in a competitive situation (exploitation abuse) or at preventing the entry or the survival on the market of rival operators (impediment abuse) is abuse.

The special sectors are those of electricity, gas, water, transport, ports and airports and the postal system, in which elements of natural monopoly are present (infrastructures that are, in antitrust jargon, essential facilities). For this reason they are not subject to European sector discipline, usually administered by independent authorities and regulations, aimed at creat-

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The model is based on the idea that if one of the sectors is subjected to the same competitive pressure of nonregulated markets, this eliminates the risk of the operators' purchasing policy being distorted by noneconomic factors. Therefore, the special rules that oblige contractawarding bodies to respect the several times mentioned European principles of *par condicio*

The exemption procedure is in the hands of the European Commission and involves an assessment between the market of the activity in question, of the geographic market of reference and of the full implementation and application of the sector legislation of the union. The criteria to assess the competition of the market are laid down by the provisions of the Treaty on the Functioning of the European Union, and they include "the features of the products or services in question, the existence of alternative products or services that can substitute the former on the demand or the offer side, the prices and the effective or potential existence of

An exemption request must be made by a single member state (but also, if allowed by national legislation, by the single contract-awarding body), and it must contain information on all the pertinent circumstances, including the state of implementation of the sector European legislation, in order to demonstrate that access to the market "is free in fact and in law" [26]. In the procedure, an assessment may be obtained from the independent super-

To sum up, the market analysis tools typical of antitrust law influence, according to the results of the assessment which not by chance is in the hands of the European Commission appointed to apply the antitrust laws, the field of application of European law on public contracts. The sector of activity, to which an exemption provision is applied on the result of the abovedescribed procedure, always remains, as is also the case for the deregulated markets, subject

A similar important justification holds firm to also delimit the subjective profile of European law on public contracts, which is to say the European notion of a public law body, already present in the Public Contract Code and also in the packet of the European directives [28].

As it is known, the public law bodies are included among the "contract-awarding administrations", i.e. the public administrations in the strict sense (countries, territorial bodies, noneconomic bodies, etc.) to which the stricter publicity rules are applied because there is a greater

The public law body is identified on the basis of three parameters: it must have legal personality, whether it is public or private; it must be subject to a dominating influence on the part of a public administration; and it must have been established to satisfy needs of general interests of a non-industrial and non-commercial nature, i.e. as a rule it produces public goods or pub-

risk of the purchasing policy being conditioned by noneconomic reasons [29].

ing the legal conditions to open the sector to competition [23].

and of transparency and publicity become superfluous [24].

to "the application of the legislation on competition" [27].

lic services according to a non-market logic.

the products or services in question" [25].

visory authority.

Concentrations of companies, however, are not in themselves banned, but they are subjected to a prior antitrust control procedure which can result in the companies being banned from carrying out the operation reported when it is found that this can create or reinforce a dominant position on the market.

The responsibility for supervising the application of the antimonopoly legislation in Italy is attributed to Independent Administrative Authority, the antitrust authority that guarantees competition and the market (Italian abbreviation: AGCM). The functions that the said authority performs and the powers that it exercises differ according to whether the operations in question are to form concentrations, to enter into agreements or to abuse a dominant position. In the first case, the authority subjects the reported operation to a prior control which can conclude in the full and unconditioned authorisation of the said operation, a conditioned authorisation subject to compliance with certain prescriptions imposed by the authority or a ban on the execution of the operation. In the second case, instead, the authority, finding an infringement of the antitrust rules, orders the company to cease the prejudicial behaviour, possibly also prescribing specific types of behaviour or structural measures necessary to restore the competitive functioning of the market, and, in the more serious cases, it issues administrative sanctions.

The antitrust authority must also ensure the local application of the European antitrust provisions. In this case, specific rules govern the coordination between the national authority and the commission.

The national authority's power is not exclusive, however, inasmuch as the courts also have power in the case of lawsuits for nullity, claims for compensation for damages and petitions for urgent court orders in the case of anticompetition agreements, in compliance with Arts. 101-102 TFUE [20]. The maintenance of this "double track" of jurisdiction is justified by the fact that the antitrust authority and the ordinary courts must protect different interests and therefore their work must be considered separate and autonomous. As has been stated, "the public enforcement entrusted to the antitrust authority pursues, in the interests of society as a whole, the protection of competition as a constitutionally protected form of market, whereas the need to protect the interests of private subjects prejudiced by the anticompetition behaviour of companies is achieved by the adoption of the provisions set out in Art. 33 of Law 287/90 by the ordinary courts" [21].
