Competition Law in Italy The first 20 years of law and practice

no confidentiality request may be submitted once the Competition Authority has adopted its
decision.
With respect to information and documents filed with the Form, the request for
confidentiality is normally filed together with the notification or shortly thereafter.
(h) Exemptions
Though it has not accepted the failing company defense in any case thus far, the
Competition Authority might take into account the possible financial or industrial problems
of the undertaking that is being acquired. In accordance with EU law principles, 282 the
Competition Authority has suggested that a concentration giving rise to the creation or the
strengthening of a dominant position would not be capable of substantially altering the
competitive situation in the relevant market if the following conditions occur: (i) the target
undertaking would otherwise be forced to exit the market due to its irreversible crisis
situation if it was not acquired by another undertaking, (ii) the acquiring undertaking would
get the target undertaking’s market share without acquiring it should the target undertaking
exit the market; and (iii) there is no alternative to the acquisition which is less restrictive of
competition in the relevant market. 283
284
In Groupe Canal+/Stream, the Competition Authority held that the proposed merger
between the two major Italian pay-TV operators could have led to the strengthening of a
dominant position in the Italian pay-TV market and related activities. The Competition
Authority found that the “failing firm” defense, advocated by the parties, was not
sufficiently corroborated by the evidence. 285
In particular, the Competition Authority found
that the three conditions outlined by the European Commission for such a defense to be
relevant were not satisfied: (i) the target (Stream) would not otherwise be forced to exit the
market due to an irreversible crisis situation if it was not acquired by Canal+, because it was
controlled by two significant financial groups (News Corporation and Telecom Italia) and its
initial losses had been forecast in its business plan; (ii) the parties did not prove that, should
Stream exit the market, Canal+ would capture Stream’s market share without acquiring it;
and (iii) the parties did not produce sufficient evidence that there was no alternative to the
acquisition that was less restrictive of competition in the pay-TV market. Nevertheless, the
Competition Authority recognized that the Italian pay-TV market was characterized by a
“clear element of critical nature” and that, in these circumstances, it was possible to remove
282
See Kali und Salz/Mdk/Treuhand, Case IV/M.308, 1997 O.J. (L 186) 38; Boeing v. McDonnell
Douglas, Case IV/M.877, 1997 O.J. (L 336) 16.
283
Banco di Sicilia/Sicilcassa/Mediocredito Centrale, 29 Jan. 1998, n. C2988, Bulletin 15/1998. Before
the above-mentioned opinion, the Competition Authority had acknowledged that the failing
company defense might apply under certain circumstances. See also Fiatimpresit-Mannesmann-
TechNet/Italimpianti, 15 Feb. 1996, n. C2227, Bulletin 7/1996.
284
Groupe Canal+/Stream, 13 May 2002, n. C5109, Bulletin 19/2002.
285
It could be argued that in this case, the proffered “failing firm” defense deserved more careful
consideration.
79