Italy has a long-standing tradition of private antitrust enforcement. This piece, available here, provides an overview of Italy’s private enforcement regime, focusing on developments brought about by Italy’s implementation of the EU Damages Directive in early 2017.
This reform introduced a number of substantive and procedural provisions to facilitate damages claims by victims of antitrust infringements. As a result, the authors expect private antitrust litigation in Italy, and particularly follow-on actions, to increase.
The note begins with a description of how private enforcement changed following the implementation of the EU Damages Directive.
The Italian legislator took advantage of the transposition of the Directive to reform the rules regarding disclosure of evidence. The Italian system already contained a provision regulating disclosure (Article 210 of the Civil Procedure Code). However, this provision required the party seeking disclosure to show that the evidence to be disclosed was necessary and indispensable for the case. In addition, the courts interpreted this provision narrowly as allowing them only to order the disclosure of precisely identified documents. Given this, courts very seldom used this provision in antitrust damages actions.
With the reform, courts can now order the parties (or even third parties) to disclose specific items or categories of evidence available to them. Further, now the courts also have the power to give practical directions aimed at reconciling access to evidence with the protection of confidential data. In particular, a non-exhaustive list of judicial orders to protect the confidentiality of evidence, which were already used in patent litigation – concerning duties of secrecy, redacted versions of documents, non-confidential summaries, and data rooms – can now be issued in competition litigation as well. Lastly, while before the reform judges were only allowed to draw very weak inferences from failures to disclose evidence, this has changed. Anyone who refuses or fails to comply with disclosure orders can be subject not only to heavy fines, but also to adverse evidential inferences. In addition, courts are now empowered to suspend private claims until investigations by the competition authority are over, so that parties can have access to those documents that can only be disclosed after the investigation by a public authority comes to an end.
Another area which has seen significant developments is the binding effect of infringement decisions. The Italian competition authority’s findings have long been considered highly reliable evidence, and were treated as “prova privilegiata” (literally, privileged evidence) in subsequent private proceedings. This approach conferred special evidentiary value on infringement decisions no longer subject to appeal as regards the facts set out therein. The practical effect of an infringement decision was therefore to create a rebuttable presumption that an infringement of competition law took place, which the defendant would then have to refute.
With the implementation of the Directive, this effect has been reinforced. A final infringement decision is now binding on civil courts having jurisdiction over follow-on damages actions in relation to the nature of the infringement and its actual, personal, temporal and territorial scope. Moreover, the finding of infringement by a competition authority or a court of another Member State will be admissible evidence of an infringement, even if it will have to be assessed along with other available evidence.
Other areas where Italy has aligned itself with the Directive are limitation periods, joint and several liability, passing on and the quantification of harm. Perhaps the most relevant development in this respect is that, in line with the Damages Directive, Italian law for the first time expressly includes a rebuttable presumption that cartel infringements cause damage.
Another section describes recent developments in the case law.
Italian courts have long taken a proactive approach to antitrust private enforcement. The Supreme Court has held that courts must take into account the information asymmetry between the parties as regards access to evidence in damages claims, while emphasising that courts must guarantee the effectiveness of the right to compensation. This has been achieved through a more relaxed interpretation of procedural rules on disclosure and court-appointed experts than in other standard civil matters. The courts have also accepted that expert reports play a crucial role in cases involving complex economic assessments, in particular with regard to the assessment of causal links and calculation of damages, in a way that may make it easier for victims to obtain compensation.
Another area of judicial activity concerns the probative effect of infringement decisions, and some developments may be seen to go against the claimant-friendly trends described above. Recently, the Rome court dismissed a follow on claim by holding that an infringement decision was not binding as regards the nature of the infringement, as well as its material and territorial scope. This could be said to depart from the principle described above according to which infringement decisions amount to ‘prova privilegiata’. However, the situation seems to have been exceptional, since the court doubted the existence of an antitrust infringement in this case, which involved the validity of IP rights. Further, other national courts – including the Milan court, where c. 90% of cases are brought – have stressed the importance of the assessments contained in an infringement decision.
There have also been decisions concerning how the statute of limitations should apply to cases not covered by the Damages Directive and its implementing legislation. The stature of limitation is of five years from the date when the infringement of competition law has ceased and the claimant is – or, using reasonable care, should be aware of – (i) the behaviour and the fact that it constitutes an infringement of competition law; (ii) the fact that the infringement of competition law caused harm; and (iii) the identity of the infringer. In line with the ECJ’s decision in Cogeco, the Milan court found that the mere opening of an investigation does not trigger the five-year statute of limitation. This is because press releases announcing the investigation do not provide sufficient information to enable a victim to be aware of all the components of the unlawful conduct – at that date yet to be ascertained –, including the specific antitrust infringement and the loss it caused.
This piece provides a very high level, light touch description of private enforcement in Italy. For those first looking to learn about private enforcement in this country, they can find an introduction to it here.
Personally, I was left somewhat at a loss about how the Rome court was able to ignore the Supreme Court’s case law on the binding effect of infringement decisions. In any event, this question is likely to become less relevant as the binding effect of infringement decisions has recently become embedded in statute – and is bound to be the subject of a reference to the European courts at some point.