On 15 September 2020 the Italian Competition Authority ("AGCM") fined three companies active in the production and distribution of energy for failure to notify a concentration before its closing, rejecting the parties' claim that the concentration was interdependent on a second transaction that had been notified on time.
| what you need to know - key takeaways |
- The AGCM can impose fines of up to 1% of a company's consolidated turnover for failure to notify a concentration which meets the Italian thresholds.
- The assessment of whether two or more transactions constitute a single concentration is an objective one.
- Two transactions will be distinct concentrations where, at the time of the first transaction, the second one is considered to be only a future possibility.
- Even a single concentration consisting of two distinct transactions, each of which would meet the applicable turnover thresholds, must be notified before the closing of the first transaction.
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On 15 September 2020 the AGCM levied over EUR 150,000 in fines on three utilities companies, Acea S.p.A., Mediterranea Energia Soc. Cons. a r.l. and Alma C.I.S. S.r.l., for failure to notify a concentration prior to its closing.
In particular, on 18 May 2020 the parties had notified two transactions to the AGCM, claiming that they constituted a single concentration. The first transaction, which concerned the acquisition of joint control of Pescara Distribuzione Gas S.r.l. by the parties, had been closed on 19 March 2019 (prior to its notification to the AGCM), while the second transaction concerning the acquisition of joint control of Alto Sangro Distribuzione Gas S.r.l. by the same parties was duly notified prior to its closing.
According to the parties, the two transactions should be considered part of a single concentration, because they were both part of Acea's plan to enter the gas dispatching market in central Italy and had been carried out by the same parties within a two-year period.
However, the AGCM found that, in the circumstances, the two transactions had to be considered as two distinct concentrations, each of which required prior notification to the AGCM, insofar as they:
- were not simultaneous;
- were not linked by de jure mutual conditionality;
- were not even de facto interdependent since, at the time of the first transaction, future transactions between the same parties were considered only as a mere possibility; and
- both met the merger notification thresholds.
In addition, the AGCM noted that, contrary to the parties' claim, a single concentration consisting of several distinct transactions, each of which meets the applicable turnover thresholds, should in any case be notified to the AGCM before the closing of the first transaction. In this case, the parties only notified the alleged "single concentration" after the closing of the first transaction, thereby breaching the obligation of prior notification.
As a consequence, the AGCM simultaneously:
- found that neither of the two transactions created or strengthened a dominant position on the relevant markets and thus cleared them; but
- opened an investigation into the three parties for failure to notify the first acquisition. It then fined the three parties for gun-jumping, due to their failure to notify the first transaction before its closing.
When quantifying the fine, the AGCM considered as an aggravating circumstance the fact that, if the second transaction had not occurred, the AGCM would not have been made aware of the first one.
This case represented a good opportunity for the AGCM to demonstrate its strict approach to the assessment of the interdependence of two or more transactions. Moreover, the level of the fine and the aggravating circumstance demonstrate the AGCM's strong approach to enforcement of merger control rules and serve as a reminder of the importance of notifying concentrations that meet the national thresholds before their closing and implementation.
