Organized interests and competition policy in Italy: one step forward and two steps back

ABSTRACT

Competition policies are key for every government, the more so in times of economic crisis like the current one, because they foster recovery without having to increase the public debt. However, they imply thinly spread benefits, barely visible to the public, in the face of highly concentrated costs weighing heavily on specific interest groups, with the significant risk that politicians decline to pursue them. Nevertheless, in 2015 the Italian government announced the adoption of a competition reform affecting strategic economic sectors (pharmacies, transport, insurance, energy, postal services, communications, the legal professions). The allegedly wide-ranging consequences of the reform provoked the strong opposition of the interest groups involved, lengthening a decision-making process that only ended in 2017 with the adoption of Law no. 124/2017. This article aims at analysing the role played by the interest groups and their effective impact on the outcome. The work examines which interest groups mobilized during the decision-making process and the strategies they adopted to oppose the reform. It is argued that the type of interest groups involved matters: while, despite the Government’s intentions, the reform’s impacts were neutralized by those interest groups that acquired enough power during the decision-making process to mitigate the pro-competitive objectives of the Government, on the other hand, in some sectors, the interactions between varying interests led to different results.

KEYWORDS:

• Italian government
• interest groups
• lobbying
• competition law
• liberalization
• policy process
• process tracing

Acknowledgments

I wish to thank the anonymous reviewers for their very thoughtful comments on the paper. A special thanks to Federica Cacciatore for her insightful comments and her invaluable help in unraveling some analytical knots.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. http://www.governo.it/sites/governo.it/files/77938-10029.pdf. The preceding governments (2011–2014) sought to regulate competition using different policy tools (Germano 2019).

2. There are different degrees of insiderness (Maloney, Jordan, and McLaughlin 1994): besides core insiders, institutional access may also be granted to those groups acknowledged by policymakers as expert in given topics (specialists). Others are granted limited or formal access (and are peripheral). Outsider groups are denied any access.

3. Through press releases, the mass media, conferences, direct political relationships, mass mobilizations etc.

4. Such medicines are typically used to treat non-serious conditions and they are not publicly subsidized. Currently, only pharmacies can sell them. Their sale generates revenue of around €2.9 billion (AIFA 2018, 16–20).

5. Including motor mechanics, associations of the relatives of accident victims, extrajudicial intermediaries, human rights lawyers, forensic doctors, consumers.

6. The coalition was composed of the Partito Democratico (Democratic Party, PD), the Nuovo Centro Destra (New Centre-Right, NCD); Scelta Civica (Civil Choice, SC); the Partito Socialista Italiano (Italian Socialist Party, PSI), and Democrazia Solidale-Centro Democratico (Solidary Democracy-Democratic Centre, Demo.S-CD). It is worth mentioning that the PD itself, in the period 2013–2017, was split into at least seven internal factions.

7. Which represents a larger array of interests than those of the postal service.

8. Due to the insurance sector’s economic significance, governments generally tend to be very receptive to ANIA’s advice. Of the articles included in Renzi’s draft, almost half concerned insurance providers (Germano 2019).

9. Although the energy market in Italy was liberalized in 2007, a transitional ‘protected’ regime – the enhanced protection service – was assured to those citizens who would not immediately benefit from the free market. The energy provider is a public company charging the most favourable prices to final consumers. In July 2018, the regime was legally wound up.

10. PI monopolizes the delivery of judicial documents, thus subtracting from the free market €300 million per year.

11. Previously, the Monti government had already reduced the ceiling.

12. https://investor.walgreensbootsalliance.com/home/default.aspx

13. Intervention, session no. 354, 27/07/2017: h ttp://w w w.s enato.it/japp/bgt/showdoc/frame.jsp?tipodoc = SommComm&leg = 17&id = 1038569&part = doc_dc-sedetit_isr

14. The governing coalition was dependent on the NCD for the maintenance of its parliamentary majority; and despite its proclaimed defence of liberal values, the party was among the most significant opponents of relevant liberalization measures.

15. Finance Committee (VI) and Industry, Commerce and Tourism Committee (X), 15 June 2015; Poste Italiane (2015).

16. Amendment 18.600 (Camera 2015c).

17. L. 205/2017, G.U. n.302, 29 December 2017.

18. Intervention, session no. 354 of 27 July 2017: h ttp://w w w.s enato.it/japp/bgt/showdoc/frame.jsp?tipodoc = SommComm&leg = 17&id = 1038569&part = doc_dc-sedetit_isr

19. Amendment no. 1.18 (Mucchetti, Buemi) aimed at establishing a safeguard service through a single minimum price and an antitrust threshold of 50%.

20. See https://www.fofi.it/inside.php?notizie_id=5955

21. Assoutenti; OUA, Federcarrozzieri, and AFVIS, see Germano (2019).

22. N.1.69, tabled by the PD in the Finance Committee. Similar amendments were tabled by Forza Italia and SC (Camera 2017a, 25).

23. The Monti government had managed to abolish it for car insurance and to reduce third-party insurance premiums by 22% (ANIA 2018).

24. Whose internal organization includes an office specifically dedicated to the protection of consumers’ rights.

25. The amendment passed by the Chamber could not be further modified by the Senate because the Government had made it a matter of confidence.

Additional information

Notes on contributors

Luca Germano

Luca Germano is Associate Professor of Political Science in the Department of Political Science at the Roma Tre University, where he teaches political science and public policy analysis. His research interests include policy analysis, interest groups, lobbying and comparative politics.