Following the adoption of new Guidelines on Fines in 2014, the Italian Antitrust Authority (“IAA”) now offers a reduction in fines of up to 15% when the company under investigation operates an effective compliance program. As the cases develop, it is clear that the IAA is keen to reward those companies who have taken steps to avoid competition law breaches by their employees.
The Contents of the Guidelines
According to the Guidelines, the adoption and effective implementation of a specific compliance programme can be taken into account as a “mitigating circumstance” and can lead to a reduction of the basic amount of the fine of up to 15%.
The Guidelines specify that the compliance programme must be adequate and in line with the European and national best practices. Importantly, the mere adoption of a compliance programme will not be considered as a mitigating factor unless it is proven that there is an effective and real commitment to ensuring that it is complied with.
In this respect, the IAA has highlighted the following crucial elements of an effective compliance model:
- full involvement of management;
- clear identification of the persons responsible for the programme;
- identification and evaluation of the risks, taking into account the business sector and operations;
- provision of training, proportionate to the economic size of the business;
- incentives for complying with the programme, as well as disincentives for failure to comply; and
- implementation of monitoring and auditing systems.
It is therefore not enough to have a historic compliance policy on file. Companies must ensure that their policy is up to date and actively promoted and enforced across the business.
How have the Guidelines been applied in practice?
To date the IAA has evaluated the applicability of this mitigating circumstance in five cases, accepting it in three.
Of particular note is that the IAA has offered a reduction in fines for the adoption of a compliance program even when this occurred after the start of the proceedings, provided that it has been effectively adopted before the IAA issues its Statement of Objections. If you are facing investigation and do not have a compliance policy in place, acting quickly to rectify this could therefore ultimately reduce any fine imposed.
A new ground for departing from the Guidelines: The “Vending” case
On 8 June 2016, the IAA imposed a fine on the main Italian operators in the food and beverage vending machine market. Many of them received a reduction of up to 10% of the basic amount of the fine as a mitigating circumstance for having adopted an appropriate compliance programme.
However, even taking into account the mitigating circumstances, all of the fines exceeded the legal maximum of 10% of the respective total turnover of the undertakings concerned (as the value of sales of the cartelised product represented a high proportion of the total turnover for each of them). Against this
background, the IAA took steps to ensure that the undertakings who had adopted a compliance programme were properly rewarded, so that their fines were relatively lower than those who had not, applying point 34 of the Guidelines, which provides that the facts of a given case may justify departing from the methodology set in the Guidelines themselves.
This suggests that the IAA is treating an effective compliance program as an important indicator that the company should bear less responsibility for the anticompetitive activities of its employees – and that this should be reflected in the fine.
The IAA is actively campaigning to raise business awareness of competition rules, making sure that those who invest in the prevention of antitrust violations are effectively rewarded – and those who do not are penalised.
To find out more about implementing an effective competition compliance policy in Italy and beyond, contact our experts.