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Arbitration
The Mediation Law – which transposed the EU Mediation Directive into Italian law – originally provided that a large range of disputes could not be brought before civil courts unless the plaintiff had first attempted mediation. However, the Constitutional Court recently overturned the law on the grounds that it exceeded the scope of both the directive and the Italian Constitution by making mediation mandatory.
Aviation
A planning agreement has finally been approved between the Italian Civil Aviation Authority and Società Aeroporti di Roma, which manages the two Rome airports. However, the new regulatory framework has failed to secure a widespread positive consensus, and the Italian air carriers' association has challenged the agreement before the Administrative Court of Rome.
The government recently approved a law amending financial regulations for the aviation sector, which the local media has named the 'anti-Ryanair rule'. This is because the measure is thought to target the Irish airline, which, despite operating an important part of the Italian transportation market within Italian territory, is not subject to certain Italian laws and regulations on tax, labour and passenger rights.
The first application by an Italian airline has been filed for the concordato preventivo in continuità procedure, a new form of arrangement with creditors which has similarities to US Chapter 11 bankruptcy proceedings. The new procedure could be an effective way to assist airlines in restructuring their business and regaining competitiveness in the market.
Planning agreement signed by ENAC and SEA
After months of negotiations the planning agreement between the Italian Civil Aviation Authority (ENAC) and SEA Group has entered into force. The new system provides an investment plan, expected traffic forecast and the fee trend to ensure that the management company can cover costs. The agreement could represent a benchmark for all agreements to be signed by ENAC with the largest Italian airports.
The Italian press recently reported that Irish low-cost carrier Ryanair had overtaken Alitalia as the largest carrier in Italy. Although Ryanair denies this, the coverage has raised the question of whether the airline has a de facto permanent business establishment in Italy and is therefore subject to certain provisions of Italian law on tax obligations, treatment of employees, passenger rights and regulatory issues
In line with a worldwide trend in the air transport sector, Alitalia has identified Blue Panorama Airlines SpA and Wind Jet SpA as potential merger targets. A national consumer association has already asked the Antitrust Authority to refuse clearance, alleging that Alitalia would be in a position to apply predatory pricing strategies to reduce significant competition on certain routes.
Banking
The Data Protection Authority has issued regulations for banks and companies within banking groups on the lawful processing of clients' personal data. They govern the circulation of information related to banking clients and the tracking of banking operations (relating to money flow or information) performed by bank employees.
A new legislative decree has implemented the EU Consumer Credit Directive in Italy. Among other things, its amendments to the Banking Law regulate the advertising of consumer credit and introduce new rules on transparency provisions, micro-credit operators, financial agents and credit brokers.
A new legislative decree has implemented the EU Acquisitions Directive in respect of acquisitions and increases in holdings in the financial sector. The new rules aim to increase transparency in the approval procedure for acquisitions of stakes in banks and financial intermediaries, introducing new clearance thresholds and setting out the criteria by which the Bank of Italy will assess a potential acquirer.
The legislative decree that implements the EU Payment Services Directive in Italy has recently entered into force. It introduces a new category of payment services provider - the payment institution - and defines the regulatory requirements for Italian institutions and those from other EU member states. In addition, it sets out rules for conducting payment service operations.
Capital Markets
Borsa Italiana Unveils AIM Italia
A recently launched market, AIM Italia, gives small and medium-sized enterprises with strong growth potential the opportunity to access international venture capital. However, its success will ultimately depend on the company's determination to attract investment, the efficiency of the market's rules and the independence and impartiality of its nominated advisers.
CONSOB, the Italian securities market regulator, has completed the transposition of the EU Market Abuse Directive. Its new regulatory provisions codify its increased powers of intervention and introduce new disciplinary measures on corporate information and crime, particularly with respect to insider dealing and market manipulation.
A new resolution has been unveiled which aims to govern regulated markets. The law harmonizes market regulations with recent corporate law reforms and takes into consideration the implementation of the EU Financial Collateral Directive. It will be of particular interest to market operators, who were consulted on the new law.
Company & Commercial
Italian corporate legislation does not stipulate a rule on the share premium for ordinary corporate capital increases when the option right is not excluded. As such, there is a real risk that gaps in legislation may jeopardise the interests of minority shareholders.
The government has approved economic liberalisation measures that make it easier for consumers to bring class actions. The new decree also grants the Competition Authority additional powers in respect of standard business-to-consumer contracts and extends the application of certain consumer protection provisions to microenterprises.
An Italian court has sentenced a company's chief executive officer (CEO) to 16 years' imprisonment for an offence related to the death of seven of the company's workers. This is the first case in Italy in which a CEO has been found guilty of homicide, rather than manslaughter.
Reforms to Italian company law have aimed to facilitate investment in listed companies by allowing for greater participation in shareholders' meetings by minority shareholders and investors residing outside Italy. This makes a minority participation a more attractive opportunity, especially for investors such as investments funds.
The courts are increasingly required to consider disputes under agency agreements between a principal from a non-EU state and an Italian agent operating in Italy. Where agreements include a forum-shopping clause, such disputes raise the question of how and where an Italian agent can claim against the principal.
Tracking Stocks: Preparation Counts
An Italian joint stock company may issue shares that track the results of a specific line of business or a subsidiary. The value of tracking stocks depends on the return of assets by the division or subsidiary in question, but remains affected by the company's overall performance. Therefore, the company's bylaws and any shareholders’ agreements should provide for adequate regulation.
Competition
The Competition Authority recently published its decision to open antitrust proceedings against Italian railway operator Ferrovie dello Stato Italiane for possible abusive conduct against Nuovo Trasporto Viaggiatori (NTV), a new market entrant. The authority believes that this alleged conduct could be aimed at impeding NTV's entry into the market and harming consumers.
The Competition Authority recently fined Telecom Italia for exclusionary conduct aimed at hampering its competitors' market expansion. The authority determined that Telecom Italia abused its dominant position by denying wholesale network infrastructure access and broadband access to its competitors and by offering anti-competitive discounts to its business clients, thereby squeezing its rivals' margins.
The government has introduced two important changes to the competition rules that will affect companies doing business in Italy. The first is the introduction of a new mandatory tax that companies must pay annually to the Competition Authority. The second is a change in the merger turnover thresholds, which will result in a significantly reduced number of mergers being notified to the authority.
The Administrative Court of Lazio has annulled the Competition Authority's decision against MasterCard's domestic interchange fees. This is the first case in which the court, following the European Court of Justice's precedent in Alrosa, has limited the authority's broad discretion in rejecting undertakings and has annulled one of its decisions solely because the parties' undertakings were unlawfully rejected.
Corporate Finance/M&A
Last year, the $21 billion Kinder Morgan bid for El Paso was challenged before a US court due to alleged breach of fiduciary duties by both advisers and company executives. A billion-dollar deal, a chief executive officer with underlying motives and conflicted investment banks are the perfect elements of a modern play with plenty of drama and plot twists for the international legal community. But what if this deal had happened in Italy?
When professional investors are entering into an investment agreement and can predict when the investment will reach maturity, a key consideration will be when and how to exit. A drag-along clause is one of the more interesting contractual clauses that may be included in agreements and bylaws to deal with exit issues.
As they are not specifically regulated in Italian law, representations and warranties - and the legal remedies available in the event of an infringement - have long been a source of controversy. Adopting certain precautions when drafting an acquisition agreement may save the acquirer from a number of costly mistakes.
New government powers of intervention and veto - affecting defence and national security, energy, transport and communications - are set to have a significant impact on investments by non-Italian entities. Among other things, they may give the government greater freedom to scrutinise sovereign fund investments, while Italian bidders for a target in a strategic sector may gain a crucial edge over foreign rivals.
In times of economic adversity, a material adverse change clause can be a vital part of an M&A agreement. However, such clauses do not provide clear-cut solutions and can raise problems of interpretation and enforceability, expecially if the crucial terms are vaguely defined. Parties concluding an agreement under Italian law should consider whether they can better protect their position by using additional remedies.
Deal makers are generally quick to see the positives in asset deals, and are often right to do so. However, crucial issues may arise from the fragmentary and ambiguous Italian legislation in this area. Advisers to acquirers and vendors must be aware of the divergent opinions in case law that may jeopardise the will of the parties.
Corporate Immigration
The Council of Ministers has approved the Immigration Law Bill, empowering the government to revise the current law. Proposed changes include measures to address the problem of labour supply and demand with new rules on worker lists and sponsors, encourage voluntary repatriation and revise the system for issuing work permits and visas.
An Italian employer that intends to hire a foreign employee must first conclude a 'residence contract' with the employee, under which it undertakes to provide accommodation for him or her and to cover the cost of the return journey to the employee's home country. Without this contract, no residence permit will be issued.
Corporate Tax
Under the Income Tax Code, any capital gain derived by an Italian-resident company is 95% exempt from corporate income tax. Since the participation exemption regime was introduced, the tax authorities have often been asked to consider specific cases involving the residence and the business activity requirements. As a result, Circular Letter 7/E was recently issued to clarify such issues further.
Stability Law ushers in new tax provisions
Parliament recently approved the so-called 'Stability Law' for 2013. The law includes a number of significant measures affecting individual and corporate taxpayers. New provisions include an increase in value added tax, the reintroduction of an elective regime providing for a step-up in the tax basis for participation in unlisted 'revaluation' companies and the introduction of a financial transaction tax.
Law Decree 138/2011, which was later converted to Law 148/2011, introduced new anti-abuse provisions for companies consecutively incurring tax losses and widened the application of provisions concerning non-operating companies that are required to disclose for tax purposes a minimum income determined on the basis of their assets, notwithstanding the actual result of the application of ordinary tax provisions.
In order to encourage corporate self-financing, the government has introduced the allowance for corporate equity, which enables companies to deduct an amount equal to the notional return on invested capital from their taxable income for income tax and corporation tax purposes. Further deductions are available for regional tax on production as an incentive to employers.
Parliament recently approved an austerity package that aims to present a balanced budget for 2012. Its various provisions - with an estimated financial impact of €54 billion - include a number of significant measures for individual and corporate taxpayers. In particular, companies should be aware of new provisions on carry-forward rules, criminal penalties and dormant companies.
Since 2010 Italy's controlled foreign company rules have applied to foreign subsidiaries that are established in whitelisted jurisdictions. The tax authorities have recently issued a circular which provides new guidelines on the application of the controlled foreign company rules to foreign companies in jurisdictions that are not tax havens.
E-commerce
The Court of Milan's conviction of three Google executives for violating data protection law provoked strong reactions, with many commentators claiming that the legal grounds for the decision threatened the freedom of the Internet. The recent publication of the full text of the decision sheds more light on the case, correcting this view and spelling out the ramifications for the processing of sensitive personal data.
The Court of Milan has convicted three Google executives of violating Italian protection provisions in connection with a video, uploaded onto the Google Video website, of a boy with Down's syndrome being bullied by his classmates. In addition to violation of data protection provisions, the defendants were charged with defamation; their acquittal on the latter charge sheds significant light on the judge's reasoning.
Registering and opposing '.it' domain names
In the event of a disputed registration of a '.it' domain name, a reassignment procedure is the quickest and least expensive option for trademark owners. However, this administrative procedure does not exclude possible future litigation. Interested parties should consider whether they are entitled to register or oppose registration of a '.it' domain name and how they can act in the event of a dispute.
According to recent press reports, Italy's tax police has been investigating the directors of Google's Italian subsidiary for tax evasion. Future developments could have wider implications for the e-commerce sector as Google's business and marketing model is common to many other internet companies, which may be forced to consider pre-emptive tax-structuring changes.
Online Cash Gaming and Taxation Changes
New legislation that allows for new online lotteries and new means of playing lottery-style games is likely to introduce online cash gaming in Italy. Other provisions implement changes in taxation and allow for measures to give operators greater choice in the betting products that they offer. However, the State Monopolies Authority retains broad control over the sector.
In a dispute centred on around 4,000 online audiovisual clips, Italian television network Mediaset is reportedly suing Google and video-sharing website YouTube for €500 million in damages before the Court of Rome. The claim raises significant questions about the liability of internet service providers, which has proved a problematic issue for the Italian courts.
Employment & Labour
The Supreme Court recently issued an important decision that deals with two specific issues: anonymous whistleblowing and the boundaries of an employee's duty of loyalty in case of the employer's alleged illegal conduct. The decision validates the legitimacy of the whistleblowing system, allowing its use in order to collect information about the misconduct, but also underlines the system's limits.
The labour minister recently issued a circular containing practical instructions for the mandatory mediation procedure for dismissals for objective justified reason under the recent labour reform legislation. Failure to comply with these steps may be used against the employer in litigation, so companies are advised to consider them closely.
One of the most innovative changes introduced by the recent Fornero labour reform is a special streamlined procedure for cases relating to appeals against dismissals and issues of employment qualification linked to dismissals. The Milan Labour Court is now dealing with the application of this new procedure. In two recent cases brought by employees, certain procedural issues were addressed differently by judges.
Fornero labour reform: dismissal
Labour Minister Elsa Fornero's recent reform has introduced important changes regarding dismissals. One of the most debated aspects of the reform is Article 18 of the Workers Statute, the structure of which has been significantly revised. The new structure provides for various consequences regarding different reasons for unfair dismissal.
Fornero labour reform at a glance
Recent labour reforms spearheaded by Labour Minister Elsa Fornero have introduced important changes regarding dismissal, so-called 'social safety valves' and flexible working. Among other things, dismissals are now subject to new mandatory procedures, and fixed-term employment agreements may be established with no reason given for the contract term not exceeding 12 months.
The Court of Milan has held that an employer was wrong to impose disciplinary measures on a union leader for carrying out union activities during working hours using his employer's IT systems. The decision is particularly significant because computer metadata was used as evidence to support the claim against the union leader, in an attempt to prove that he carried out union activities during working hours.
Energy & Natural Resources
In spite of the overall economic climate, the renewable energy sector shows promising signs of improvement. Long-awaited national guidelines on authorisation for renewable energy plants, as well as new classifications for photovoltaic plants, will be crucial to the future development of the sector.
The Ministry of Economic Development and the Ministry of Environment have prepared a draft decree to amend the system of incentives for photovoltaic solar power generation. The main concern for entities working in the sector is the overall reduction in incentive tariffs. However, the framework for investment is still advantageous.
In addition to the general liberalization of electricity generation in Italy over the past decade, further liberalizing incentives apply to generation from renewable sources. A streamlined application system applies for authorization to establish and manage new renewable energy plants.
Environment
In January 2013 new rules concerning municipal solid waste taxation were introduced. However, some municipal waste management companies have retroactively recalculated the waste tax rate without regard for the mandated transition period, requiring higher rates for past years and thus violating the principle of non-retroactivity of taxes. A recent court decision has confirmed this retroactive application as unlawful.
Under Legislative Decree 231/2001, corporations and individuals who act on their behalf may be held liable for a specific list of offences committed – or merely attempted – in the interest or for the benefit of the entity. A large number of environmental crimes were recently added to this list, mainly related to unlawful waste management. Consequently, the correct implementation of an environmental management system is crucial.
In October 2012 six scientists were sentenced to six years' imprisonment by an Italian court for their alleged role in the death of many people in the L'Aquila earthquake of April 6 2009. The full reasoning behind the verdict has now been made public. From a legal point of view, the convictions appear to be wrong, and it is hoped that the decision will be overturned on appeal.
Italian environmental law contains separate regulations for plants that are subject to the EU Integrated Pollution Prevention and Control (IPPC) Directive and those that are not. Until recently, non-IPPC plants required different environmental licences for their various potential environmental impacts. However, the government recently introduced a unified authorisation procedure, even for 'minor' installations.
A recent decision of the Council of State could lower the costs of the emergency measures to be implemented in areas with contaminated groundwater. Many remediation experts hope that this decision will help to reduce the consequences of the rigid approach taken by Italian public bodies when deciding which remediation and emergency measures are to be adopted in contaminated areas.
Franchising
Overview
Including: Economic Framework; Legal Regime; Competition Law; Proposed Legislation.
From the first contact onwards, franchisors should maintain the utmost transparency when advertising their networks to prospective franchisees, in particular with regard to the cost of joining their networks. As one case shows, an advertisement that does not provide fully detailed information may constitute a breach of the Law on Misleading Advertising, even if the information is provided at a later stage.
Exclusivity in franchise agreements
The debate regarding exclusivity in franchise agreements – in particular, whether exclusivity should be considered an essential element of this type of contract – raged on for many years before Law 129/2004 entered into force. This law provides that if exclusivity is granted, it must be expressly agreed and indicated in the franchise agreement.
Franchisors often wish to purchase a branch (ie, a point of sale) that was previously managed by a franchisee under a franchise agreement, and franchise agreements frequently provide for a pre-emption right or a right of first refusal in the franchisor's favour. However, the question of whether such an acquisition constitutes a concentration in competition law terms is not as clear as it might appear.
A recent decision confirmed that under the terms of a franchise agreement, a franchisor had the option to repurchase the franchisee's point of sale furnishings and equipment on termination of the agreement. However, the provision did not require the franchisor to do so. If a franchisor wishes to exercise such an option, the franchisee will incur civil liability if it fails to fulfil its obligation to sell at the agreed price.
Article 2497 of the Civil Code - on the power of direction and coordination in respect of a company - applies to franchising. However, direction and coordination on a contractual basis do not automatically arise because a franchisor appears to be the stronger party or because, as is usual in franchise agreements, the franchisee must accept certain obligations and give certain undertakings.
Some forms of contract are presented as franchise agreements even if they have few or no characteristics in common with franchising. This is the case of multi-level marketing, which may be operated with intent to defraud. Prospective franchisees must review the terms of an arrangement to ensure that they are entering into a genuine franchising relationship, not a fraudulent scheme.
Information Technology
AGCOM backs anti-piracy 'lightning war'
AGCOM (the Italian communications authority) has announced that new regulations aimed at fighting online piracy will be published soon. Among other things, the introduction of a new type of trial has been proposed, which would halve the length of the decision-making process concerning copyright infringement through the Internet. The new regulations will also combat the advertising that fuels online piracy.
Spamming hit with criminal penalties
The Court of Cassation has penalised the senders of email newsletters without the recipients' prior consent with nine months' imprisonment. The Data Protection Code criminalises the processing of personal data without the data subject's consent and with the intent to gain profit or cause harm. In this case, the harm sustained by the recipients was linked merely to the time lost in going through the non-requested emails.
StanleyBet: the final victory?
The Criminal Court of Cassation has issued a final decision in favour of StanleyBet's data transmission centres, finding that their business operations comply with Italian and EU law. The company operates a highly successful business model based on 200 agencies which do not hold an Italian gaming licence or pay Italian gaming taxes, but operate as internet cafés that offer bets under Stanley's UK gaming licence.
Google not liable for search results
The IP Court of Florence has ruled on the liability of search engines and the circumstances in which they are obliged to remove infringing material. The court's view of Google as a caching provider reflects the conclusion reached in the recent Yahoo! case, albeit that this view had different outcomes for the two search engines in question.
A close-up on the new cookie law
The new Privacy Code amendments closely reflect the wording of Recital 66 of EU Directive 2009/136/EC and Section 5(3) of the EU Directive on the Processing of Personal Data - and, as such, pose many of the same interpretation problems, especially with regard to the nature of consent required for compliance. However, with the law already in force, companies across Italy must familiarise themselves with the new provisions.
Privacy implications of offshore outsourcing
The transfer of personal data from an outsourcer based in Italy to an outsourcee based in a non-EU jurisdiction can be carried out only if there is a sound legal basis to do so. Italian outsourcing clients should carefully consider the structure of the arrangement from a data privacy perspective and ensure that they understand the issues that arise when data crosses EU borders.
Insolvency & Restructuring
In addition to amendments to the composition procedure, the Decree-Law on Urgent Measures for the Country's Growth introduced new provisions applying to debt restructuring agreements pursuant to Article 182bis of the Insolvency Act, as well as some crossover provisions applicable to both composition with creditors and debt restructuring agreements.
In order to foster economic growth, Parliament has amended the Insolvency Act. The changes are intended to allow businesses in financial difficulties to have faster and simpler access to insolvency procedures by affording them an opportunity to apply for new loans and to rely on legal protection at an early stage in preliminary negotiations with creditors.
New legislation allows a person who is ineligible for bankruptcy proceedings to discharge his or her indebtedness through a procedure that involves all of his or her creditors, even if only some of them participate in the agreement. However, will the benefits to creditors of accepting such a proposal be sufficient to dissuade them from seeking individual enforcement actions?
Before the reform of Italian insolvency law, the mainstream view was that no limitations should be placed on a court's power to test the debtor's compliance with the objective and subjective conditions for admission to the composition procedure. However, a greater emphasis on the private autonomy of the parties has led to new approaches to a judge's review of composition proposals and their accompanying plans.
Bankruptcy is increasingly regarded as a last resort for a struggling company. Changes to the composition procedure promote the parties' shared interest in negotiating a solution to the debtor's difficulties. The result is a legislative framework that is better suited to a commercial environment in which competitiveness, reactivity and flexibility are key requirements.
Recent modifications to the composition procedure under Italian law were intended to give debtors greater latitude in structuring the content and terms of the composition proposal. Although the stages of the procedure are well established, questions still arise as to when, and to what extent, a proposal for composition can be amended.
Insurance & Reinsurance
Overview
Including: Government as Insurer; Private Insurance; Authorization; Regulatory Body; Insurance Contract; Loss Insurance; Life Insurance; Mandatory Insurance
As part of the recently launched integration process of bank and insurance supervision, IVASS, the insurance regulator, has issued new guidelines for the supervisory inspection process for insurance and reinsurance companies. The principles underlying the new guidelines include a focus on risks, proportionality and objectivity of interventions, and effectiveness and flexibility of action.
In the context of the liberalisation measures recently adopted by Parliament with a view to increasing competition in the insurance sector, IVASS, the insurance regulator, recently issued a draft order that requires insurers to allow insureds to access information relating to their insurance contracts through dedicated areas on their websites.
A 2012 decree-law includes several new provisions governing third-party liability car insurance. These include the establishment of new terms for the submission of data to the claims database of IVASS (the insurance regulator), the introduction of a new report form for insurers in order to prevent fraud and the insurers' obligation to inform clients of the tariffs of competing companies.
In light of Italy's ratification of the UN Convention on the Rights of Persons with Disabilities, IVASS, the insurance regulator, has issued a letter calling on companies to adjust their health insurance policies with the aim of eliminating discriminatory provisions that limit or prohibit coverage of persons with mental illness or disabilities.
Decree-Law 179 recently introduced important changes to the insurance market, including with respect to compulsory motor liability insurance, insurers' websites, insurance mediation and the statute of limitations. A new law has partially amended the decree-law by reducing the originally planned 10-year term statute of limitations for non-life insurance contracts.
Liberalisation measures are introduced
A new law has introduced important changes affecting the insurance market. Among other things, the law provides for a maximum duration for mandatory motor liability insurance policies, mandates that insurers provide up-to-date policy information on their websites and revokes the prohibition against insurance agents entering into cooperation agreements among themselves for insurance mediation.
Intellectual Property
In focus: anti-counterfeiting enforcement
Contrary to common belief, the legislative instruments available in Italy against IP infringement are quite efficient. The legal framework for anti-counterfeiting enforcement has been reinforced through the Code of Industrial Property, which consolidated most of the principal IP laws; moreover, a draft bill aimed at strengthening the protection of IP rights against online infringement is under consideration by Parliament.
The Court of Turin has issued a decision protecting the Italian trademark ERACLIT against use of the trademark HERAKLITH – owned by an Austrian company, but never used as such in Italy – for similar products. The court thus implicitly applied settled EU case law which recognises that similar – or even identical – trademarks belonging to different parties might co-exist in different EU member states.
Within the space of a few months the Italian government has intervened twice on the sensitive issue of patent linkage for generic drugs, through two opposing decrees. The second decree, which provides that generic drugs cannot be reimbursed by the Italian National Health Service (thus making them uncompetitive) until the relevant patent or supplementary protection certificate expires, has been heavily criticised.
An order by the specialist IP division of the Court of Turin to withdraw infringing products from the market has additionally compelled the infringer to buy back the illicit products directly from stores at their retail price. This is the first time in Italy that an order of withdrawal has been extended in this manner, which is consistent with the judicial defence of IP rights under the EU Enforcement Directive.
The president of the IP Division of the Court of Milan has granted protection to a well-known bed design. The 'Nathalie' was created in 1978 and is considered a masterpiece of Italian design. The decision is important because it demonstrates that the Italian courts are no longer prejudiced against the possibility of protecting industrial designs with copyright.
The IP Division of the Court of Milan has issued a landmark decision concerning the protection in Italy of a Swiss protected denomination of origin, 'Emmentaler/Emmental Svizzero'. The court found that the denomination in question should be protected in Italy, although it was not registered at EU level, on the basis of the Stresa Convention 1951.
Leisure & Tourism
The State Monopolies Authority seems to have approached the regulatory leap into online and remote-access skill-based games with trepidation: forced by law to allow them, it has tried to do so in the most regulated and controlled way possible. Despite this approach, many aspects of the new regulations are unclear and potentially vulnerable to challenge by operators.
Betting operators and service users throughout Italy are familiar with punti di commercializzazione - shops or concessions which promote licensed online betting services and offer facilities for accessing such services. However, the gambling market has changed radically since the main regulating decree for such shops was introduced in 2006 and new legislation has put their future regulation in doubt.
Establishing a Travel Agency
The Italian authority with responsibility for granting a travel agency licence is the government office of the province in which the company in question intends to open the agency. The company must supply details of its corporate status and comply with certain financial and insurance requirements.
ECJ rules again on Italian gambling law
Gaming operators have welcomed the ruling issued by the European Court of Justice in the Placanica Case. Although the decision does not break new ground, it adds to the case law on the compatibility of Italian regulations on gambling with EU principles and confirms the principles established in the Gambelli Case.
The European Commission is once again preparing for infringement proceedings against Italy in relation to its restrictions on online gambling. The confusion over Italy's legislation and contradictory case law has highlighted the fact that the state is restricting betting services provided by operators without Italian licences while creating ever more licensed but inadequately monitored betting opportunities.
A month after an Italian civil court ordered interim measures in favour of the operators of a gambling website which had been blacklisted by the State Monopolies Authority, the list of unauthorized websites has been challenged again, this time before an administrative court.
Litigation
For the first time in Italian court history, a private class action seeking to obtain damages from a tour operator has been successful. This was made possible with the modification of the Consumer Code during the course of the proceedings, which effectively extended the availability of class actions and made them easier to initiate. This reform of the code will have a significant impact on future class actions.
In January 2012 the Costa Concordia capsized while carrying around 3,200 passengers and 1,000 crew members. The disaster is one of the worst in the cruise industry's recent history, and will likely be the largest marine insurance loss on record. One year on, a host of issues regarding the victims' compensation claims remain unresolved.
Unilateral jurisdiction clauses grant one party the possibility to choose from several jurisdictional options for contractual disputes while the other party is bound to bring an action or claim before a single jurisdiction. Such clauses are generally considered valid, although their validity has been questioned – most recently before the Supreme Court – on the grounds that they lack mutuality or are completely unilateral.
The Supreme Court has upheld the validity of the jurisdiction clause contained in a letter of undertaking. The decision is the latest instalment in the Italian side of the long-running dispute between the insurers of the charterers of the vessel Front Comor and its owners, West Tankers. It further confirms the trend followed by Italian courts in favour of the validity of choice of jurisdiction clauses.
A recent Supreme Court decision confirms that awards of punitive damages are non-enforceable in Italy because they are contrary to public policy. However, it is possible to seek the enforcement of a judgment awarding punitive damages when purely compensatory damages can be separated from the punitive element and the punitive damages can therefore be set aside.
Media & Entertainment
DTT frequencies to be allocated
A public consultation on the scheme of the new regulation for the allocation of available digital terrestrial television (DTT) frequencies recently closed. Once the European Commission approves the regulation, the Ministry of Economic Development will launch an auction for six DTT multiplexes. However, the upcoming general election could trigger some delay.
The Court of Milan has referred to the European Court of Justice (ECJ) for a preliminary ruling in connection with technological protection measures applied to video game consoles. The ECJ referral follows a dispute between Nintendo and PCBox Srl, which produces and markets devices aimed at bypassing the technological protection measures applied to Nintendo's consoles.
On-demand streaming of audiovisual content has raised several questions regarding proper compensation due to authors, producers and performers. Among these questions are how to apply both the term 'communication to the public' under the Copyright Law and the private copy exemption to streamed content, and how cloud services fit in with current regulations and guidelines.
In statements to Parliament, the former chairman of the Communications Authority has stressed that stakeholder agreements are crucial in making non-infringing media content available online. Commenting on the position of the content industry in regard to so-called 'over-the-top' operators, he cited an initiative by a group of Italian publishers to create a multi-device platform for the purchase of digital publications.
ECJ rules on Italy's gaming regulations
The Court of Justice of the European Union (ECJ) has issued a preliminary ruling on the compatibility of Italy's legal framework for gaming with the right of establishment and the freedom to provide services. Although the short-term impact on the industry may be limited, in the long term the State Monopolies Authority will be forced to adapt the framework to the principles indicated by the ECJ.
In January 2012 the grounding of the cruise ship Costa Concordia attracted intense media interest in Italy and abroad. Several issues have arisen in connection with a documentary that includes footage filmed by those onboard and a recording of a telephone call between the captain and the coastguard. Moreover, the incident is the subject of a criminal investigation and legal actions by many of the survivors.
Offshore Services
Tax Authorities Clarify Rules on Trusts
A circular letter recently issued by the Italian tax authorities sheds light on the application of new income tax and indirect tax rules to trusts. The circular letter includes guidance on establishing the place of residence of a trust and considers the application of the 'look-through' rule.
Product Liability
Vendors' and producers' duties to consumers
Italy's comprehensive product liability regime sets out the relationship between consumers, vendors and manufacturers in respect of goods. This update outlines the main rules on a producer's liability for defective products and a vendor's warranties for products under the Consumer Code.
Two decisions by the joint divisions of the Supreme Court have laid down significant principles on causation and limitation. Although the claims involved treatment with blood derivative products, the court's reasoning is likely to affect a far wider range of cases.
The Italian legislation that implements the EU Product Liability Directive specifies that a producer is not liable for damage caused by a defect in a product if the consumer is aware of the defect and of the ensuing risk, and accepts such risk. A recent decision is one of the first in Italy to consider in detail the standards that product information must meet in order to warn consumers adequately.
The EU Product Liability Directive and Italy's implementing legislation establish that an injured party bears the burden of proving the defect in the product, the damage and the causation between the two. However, manufacturers have been found liable solely on the basis of damage and causation, the alleged defect in their product being inferred. A Supreme Court ruling sheds new light on the issue.
A case involving a distributor's liability for the inaccurate labelling of an alcoholic beverage raises the question of whether a mere distributor - which is not involved in the production process and has no influence on what information appears on the label - may be held liable for incorrect labelling under national legislation.
The Antitrust Authority, the body in charge of enforcing the laws relating to misleading and comparative advertising, has fined an Italian producer of frozen pre-fried potatoes for using a nutritional claim which was considered to be misleading to consumers. This decision partly foreshadowed the nutritional claim provisions in the recently enacted EU Nutrition and Health Claims Regulation.
Shipping & Transport
No arrest of ship for shipyard subcontractor
The recent decision in Chuang's China Treasury Ltd v Euronavi srl addressed the application of the 1952 Arrest Convention to circumstances where the credit for which security is sought is that of a subcontractor towards a shipyard for works performed when building a vessel. The judgment is of practical application and is relevant to most cases of shipyard insolvency.
The Court of Genoa has issued a decision regarding interpretation of both contracts for the supply of food to ship crew members and of the applicable rules in the related collective bargaining agreement. It is the first time that an Italian court has taken a view on the construction of such a contract. The decision shows that food quantity and quality provisions should be taken as general guidance, not as strict parameters.
The Genoa Court of Appeal recently issued an interesting decision on the scope of application of the Hague-Visby rules. In particular, the court was asked to decide on the application of the limit of liability set down by the rules in circumstances where the cargo to be carried suffered damages during loading operations and before the relevant bill of lading was issued.
A Tribunal of Genoa decision has affirmed that damage claims against carriers for full liability must prove not only that the carrier's behaviour had been grossly negligent, but also that the carrier or its agents acted recklessly and foresaw that damage would result from their act or omission.
A judgment issued by the Court of Ravenna poses complex legal questions about the application of the concept of 'undue hardship' to charterparties and the obligation to renegotiate. It also raises significant problems about the relationship between English and Italian jurisdiction.
A recent Supreme Court decision has refocused attention on the issue of incorporating arbitration clauses by reference to common charterparty forms contained within fixture recaps. This has been a point of contention for many years within the shipping industry, giving rise to numerous disputes and great uncertainty in the interpretation of charterparties and fixture recaps.
Telecommunications
Telecommunications investment holds steady
Due to its emphasis on innovation, the telecommunications sector has remained relatively stable throughout the ongoing economic crisis, with largely steady growth in recent years. However, the telecommunications market has always been volatile, so before investing capital, it is important to carry out a detailed analysis of both the standing of the business in question and the market forecast for the coming years.
The telecoms sector is attracting increasing attention in Italy. With the so-called Decreto Sviluppo 2.0, the government has adopted legislation supporting innovative start-ups and certified incubators. The new law aims to promote sustainable growth, technological development and new entrepreneurship and employment, which would be particularly beneficial for telecoms operators and investors.
GARR-X: the first next-generation network
GARR-X (the Italian University and Research Network) is the first next-generation network to be released in Italy. The new network was launched by the Ministry of Education, Universities and Research. It will allow Italian researchers to connect with the wider community of international researchers. This is a first, significant step towards digital innovation in the context of schools, universities and research.
'Crescita 2.0' is the body of rules comprising the second Growth Decree that was proposed by the minister for economic development, infrastructure and transport and recently approved by the Council of Ministers. The decree aims to make Italy a place where innovation is the driving force behind sustainable growth and one of the key factors of its industrial competitiveness.
The creation of the Digital Agency for Italy is a key step towards a governance framework for the digital agenda. However, it is only part of a development programme which will have an impact on Italy's telecommunications industry and infrastructure. Among other things, the prime minister and EU minister are seeking a partial exemption for broadband investments from Italy's deficit and fiscal compact arrangements.
Telecommunications companies have long been waiting for a credible strategy to support digital innovation in Italy. The news that the Monti government is accelerating the implementation of Italy's digital agenda, through its approval of a new working group, gives them good reason to hope for a more positive future.
White Collar Crime
In recent years, several courts have asserted the criminal liability of entrepreneurs who fail to pay taxes. This was supported by a Supreme Court decision holding that despite a company's economic crisis, the debt owed to the government prevailed over that owed to its employees. However, two recent decisions of the Court of Milan have diverged substantially from this position.
Parliament passes Anti-corruption Act
The Anti-corruption Act was recently approved by Parliament. The act introduces the crimes of "illicit trafficking of influences" and "private corruption", and establishes the National Anti-corruption Authority, which will undertake multiple inspection, control, study and consultation tasks to ensure compliance.
Parliament set to approve anti-bribery law
After much debate over the need to toughen Italy's anti-bribery laws, an important legislative initiative to fight national and international corruption is set to be approved by Parliament in the coming weeks. The Penal Code will be amended to include the crime of "illicit trafficking of influence". This provision is already enforced in numerous other jurisdictions.
Both the State Audit Court and the Organisation for Economic Cooperation and Development have recently highlighted the need for reform of Italy's national and international corruption legislation; a new bill would reinforce the efforts of prosecutors and law enforcement officials. The justice commissions are also discussing the possible introduction of a new criminal offence of corruption between private individuals.
The Supreme Court recently held that a judge may issue a pre-judgment order that prohibits a company from carrying on business if the company's managers are alleged to have committed international bribery. The court overturned a Court of Milan decision that such orders do not apply to offences with an international dimension.
Over the past few years the Italian courts have significantly changed their view of the principles on which non-executive directors can be convicted of corporate crimes and bankruptcy offences. The issue was analyzed in Bipop-Carire Bank and Parmalat, two cases arising from financial scandals that had far-reaching repercussions abroad.
