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Italy’s competition law approved (finally) by Senate after over two years in parliament

by Carmine Fotina

It took 803 days to transfer the draft law on competition from the Cabinet meeting where it was approved on February 20, 2015, to the Senate floor. In practice, that is 10.8 days to examine, modify and approve a single article (the current text has 74). In the Senate, the government won the confidence vote on the measures with 158 “yes” votes, 110 “no” and one “abstain.”

The law now has to return to the Chamber of Deputies, where it was already approved on a first reading. The opposition will ask to assess it again, the government may pose another confidence vote to prevent the measure from foundering before legislature ends in 2018.

The idea behind the law is to open up entire sectors of Italy’s economy to more competition, helping to spur the growth of its slow economy. In practice, the legislation has been very difficult to pass because of lobbying.

The law, which remains only partly in the form in which it was approved by the government, is a collection of measures regarding about 20 sectors including energy (with the abolition of the protected market slipping to July 2019), insurance, pharmacies, but also firearms and rickshaws (for which rental with a driver is legalized).

Beyond the anti-fraud measures, the long insurance section is concentrated on the civil responsibility policy discounts to car drivers who accept one of these conditions: inspection of the vehicle, installation of the black box (with costs charged to the company), a mechanism that impedes the start of the engine at a high alcohol level. Additional discounts will also be defined for residents in the provinces with the greatest number of accidents who have not been the cause of claims with exclusive or main responsibility or equal responsibility in the last four years.

Banks and post offices
Banks or financial institutions that supply loans will have the obligation to present the client at least two quotes for life insurance policies, from two different insurance groups. They will have to accept the policy that the client presents without changing the conditions offered for the supply of the real estate mortgage or consumer credit.

The halt to state controlled postal service and financial group Poste Italiane's exclusive right to deliver the notification of fines and judicial documents has been postponed until September 10, 2017 from June 10, 2017.

The limit on the number of pharmacies that someone can own (formerly equal to four) has been scrapped. Limited companies below a maximum threshold will be included among the possible owners of private pharmacies (at present only individuals, associations of people or cooperatives with limited responsibility are admitted).

Expenses incurred in the event of a withdrawal or transfer of a service to another telephone operator must be commensurate with the value of the contract and the actual costs borne by the company, ie the costs incurred to dispose of the telephone line or to transfer the service. However, the customer must be guaranteed the right to inform the company of the change electronically. If the contract includes promotional offers, it may not last longer than 24 months

Pension funds
Agreements governing pension funds managed by unions or professional associations may provide for the allocation of a fixed (or 100%) share of a person’s severance pay.

Hotels and Web Platforms
The “parity rate” is forbidden. Pacts that forbid hotels from offering their customers better prices than those offered through third-party platforms such as Booking, Expedia or others are invalid.

Professional workers
Investors will be able to enter into lawyers’ partnerships, but in a minority stake compared to the lawyers. There is news on price quotes and associations: lawyers will have to always present to clients in writing “the foreseeable size of the cost of the service”; and the obligation for lawyers to take part in just one professional association will be scrapped.

The criteria to establish the number and residence of notaries will be revised: the reference to a minimum annual income of €50,000 will be eliminated and a notary is foreseen for every 5,000 inhabitants, rather than the current 7,000.

Uber, tax drivers and other unanswered questions

The new rules on taxi services are postponed pending the government’s further legislation.

The elimination of the protected market for energy has been postpoed to July 1 2019 (to increase guarantees in transition to the free market).