On July 24, 2019, the Italian Competition Authority (the “ICA”) issued a decision[1] (the “Decision”) finding that the Milan Notarial Board had violated Article 2 of Law No. 287/90 (the “MNB”). According to the ICA, the MNB allegedly collected disaggregated data on the performance of notaries in the Milan district in order to monitor their economic activity and discourage aggressive competition. However, the anticompetitive use of the data stopped when the ICA started the proceedings and, thus, the cartel did not have any anticompetitive effect. As a consequence, the ICA did not impose a fine.

The role of the MNB and the opening of proceedings

The MNB is an organization that supervises the activity of roughly 480 notaries active in the Milan district. According to Law No. 89/1913, Notarial Boards of each Italian district have specific monitoring and disciplinary powers, which enable them to control notaries’ performance and compliance with deontological requirements.

In February 2016, one of the notaries in the Milan district reported to the ICA that the MNB had allegedly misused its monitoring powers with a view to discouraging competitive pricing and aggressive business strategies by some notaries. In January 2017, the ICA opened investigation proceedings on MNB’s alleged anticompetitive practices.

The proceedings

During the proceedings, the ICA found that, in several annual reports, the MNB had raised concerns regarding the “disproportion” between the high volumes of work of a few notaries and the lower volumes of the rest. According to the ICA, the MNB tried to restrict or prevent the initiatives of notaries who by offering competitive prices based on innovative methods caused “a high level of contraction of the volumes of other notaries” in the district.

The MNB sent out questionnaires in 2014 and 2015 to collect data on the number of documents prepared by each notary and the timing of the execution of the formalities for registrations. In 2016, the MNB decided to request more data on the notaries’ economic activity and their organization. In particular, in the questionnaire sent out on September 21, 2016, the MNB specifically requested the notaries to provide information on: (i) fees for each type of document prepared; (ii) operating costs (e.g. rent, employees’ wages, and payments made to external partners); and (iii) total revenues.

On the basis of the data collected, the MNB estimated the average time taken by each notary to prepare documents and the average number of documents prepared, and compared this data to the average of the district. In addition, it estimated the average price charged by each notary by calculating the ratio of turnover to notary fees of each notary. The MNB then held hearings during which it reproached the notaries who deviated from the average district values in terms of quantity of work, prices charged and innovative ways to offer the services.

The ICA’s assessment

According to the ICA, collection and knowledge of detailed information on the quantity of services

provided, the turnover achieved, the prices charged and the costs incurred were not related to the institutional objective of the MNB, which is to monitor the proper functioning of the profession.

In the ICA’s view, the MNB had put in place several initiatives that constituted an anticompetitive decision of an association of undertakings in violation of Article 2 of Law No. 287/90. In this respect, the ICA points out that the notion of decision of an association of undertakings under EU and national competition law is very broad, as it includes any institutionalized form of cooperation between undertakings acting through a collective structure, on the basis of a common interest. As a consequence, the MNB’s conduct constituted a single, complex and continuous restrictive practice.

However, the MNB stopped using the data it collected through the questionnaires when the ICA opened the proceedings. Therefore, the ICA considered that the MNB’s conduct did not constitute a serious infringement because it had not had, de facto, any anticompetitive effect. For this reason, the ICA decided not to impose any fine on the MNB.

[1]              ICA Decision of July 24, 2019, No. 27874, Case I803, Condotte restrittive del Consiglio Notarile di Milano.