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AS864 - Maneuver: Antitrust, decree fosters liberalization but requires adjustments to achieve hoped-for results


PRESS RELEASE


PRESS RELEASE

MANEUVER: ANTITRUST - DECREE FOSTERS LIBERALIZATION BUT REQUIRES ADJUSTMENTS TO ACHIEVE HOPED-FOR RESULTS

Partial repeals in the liberalization of private services require careful scrutiny. Thresholds for public service tenders in need of review. Public tendering procedures must be guaranteed for privatizations. For professions, remove the legal reference to pay rates and shorten apprenticeship periods. Provide for the contemporaneous coordination of State exams and degree programs.

 

Although the financial stabilization decree under review in Parliament takes a step forward by opening up the markets, certain elements require further revision because of how they could result in the opposite of the desired effects. These concerns were voiced by the Antitrust in a report submitted to the Government and the Chambers in view of parliamentary efforts to pass the measure. The decree provides a framework of regulatory principles whose correct interpretation during actual application, according to the Authority, could foster competition in the Italian economic system. To achieve this result, however, changes need to be made in various aspects of the decree.

The Antitrust's observations are summarized as follows.

 

PRIVATE SERVICES

The repeal of restrictions on the access to and exercise of economic activities represents a new regulatory approach with the capacity to promote growth and development. This legislation, however, needs to be reformulated by removing references to permits that are linked (directly or indirectly) to population size or other need-based criteria, which reflect quantitative limitations that threaten to sustain or even re-introduce unjustifiable restrictions on competition. In a similar manner, the paragraph repealing the restrictions on minimum prices needs to be rewritten in order to rule out reductionist interpretations. The abrogation would also be extended to the maximum allowable prices and rates (following an ad hoc assessment) in order to protect consumers. The decree itself also allows for the introduction of various exceptions which, according to the Antitrust, would in any case have to be legitimized in terms of the public order, public safety, public health, protection of the environment or consumer protection.

 

PROFESSIONS

According to the Antitrust, the provision making professional pay rates the legal parameter of reference for determining professional compensation represents a step backwards relative to existing laws. This is an inconsistent law that contradicts the desired objective, which is the market liberalization of professional services. The introduction of disciplinary boards that exclude outside members, furthermore, loses its innovative nature through the continued failure to meet impartiality requirements. The maximum period of apprenticeship still needs to be reduced from three years to two, last of all, although allowing apprenticeships to be performed in parallel with university studies already reflects a positive development. This provision should be strengthened by allowing degrees to be attained contemporaneously with the state exams currently prescribed by the Constitution.

 

LOCAL PUBLIC SERVICES

While the decree can be commended for re-launching the liberalization of local public services to close the legislative gap left over from the referendum, it also introduces a 900,000 EUR threshold below which public tendering for utility managers is not obligatory. In some economic sectors this would mean the almost complete removal of necessary competition-promoting mechanisms from the market. As currently configured, in any case, the system of tendering exemptions leaves maneuvering room for administrations that prefer not to use tendering as the basis for awarding local public service contracts - by subdividing contracts into multiple "slices" valued at less than 900,000 EUR each, the slices could still be assigned directly and controlled in house. The rule on obligatory tendering needs to be reasserted, therefore, with the exception of particular local situations whose special nature would have to be demonstrated by the assigning entity. The system of extensions, furthermore, needs to be limited to cases of strict necessity. The reform process in the local services sector still needs to be coupled with measures that guarantee the quality and efficiency of service management for private as well as public managers.

PRIVATIZATIONS

In the face of growing approval for the discharge procedures contained in the decree, which includes positive and significant economic incentives for local entities, the public nature of the tendering should be emphasized to ensure that procedures like these are conducted in the most competitive manner possible.

 

 

Rome – 26th August 2011