All posts by Filippomaria Leone Valle

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About Filippomaria Leone Valle

Filippo mainly focuses on commercial agreements and regulatory issues, especially in the Life Sciences sector. Filippo graduated from the University of Pavia in 2018, discussing a thesis on comparative civil procedure law entitled: “Civil Justice in the Russian Federation and in Italy. Ideas for a comparison”.

Effectively Implemented “231” Model Exempts Italian Company from Criminal Corporate Liability

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A recent decision of the Milan Court exempted an Italian company from criminal charges under law 231, even while it found its employees guilty of a 231 financial crime.

The Court held that the company’s managers abused of their override powers to systematically ignore internal control systems. Nonetheless, the court found that the company had effectively implemented its compliance 231 model, although such model was fraudulently circumvented by the managers.

The Court confirmed, as already established in the Impregilo case, that the occurrence of a crime does not automatically prove the non-completeness and non-effectiveness of a company’s compliance program. A separate analysis of the compliance program must instead be carried out, even if a crime has occurred and individuals are found guilty.

Under Italian law 231, companies are liable for employees’ crimes when the crime is committed in the interest or to the advantage of the company. Such 231 liability can be lifted if the company has effectively implemented a compliance program aimed at preventing such crime. Despite the incentive built in in 231 law for companies to set up and effectively implement a compliance program, past case law has not been generous in granting such exemption from liability. The recent Milan court case may open a new path.

The Italian Government Fund for the Governance of Medical Devices

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With Ministerial Decree dated December 29, 2023, the Italian Ministry of Health has established criteria and methods for feeding the fund dedicated to the governance of medical devices, the so-called “Fondo per il governo dei dispositivi medici” (Fund for medical devices governance, “Fund”).

Key Features

  • Annual payment obligation.  Companies manufacturing or distributing medical devices, large medical equipment and in vitro diagnostic medical devices must pay a sum equal to 0.75% of the company’s previous year turnover from the sale of such devices to the National Health Service, net of VAT.
  • Annual Declaration Requirement.  Companies must submit an annual statement to the Ministry of Health regarding:
    • The estimated amount of 0.75% of the above-mentioned turnover.
    • The company’s previous year turnover to the National Health Service, net of VAT;
  • Use of the Fund. The Fund will be used for various activities related to Health Technology Assessment and governance of medical devices (including the management of the National Price Observatory, the vigilance system and the market surveillance system).
  • Deadlines and next steps. The first deadline for compliance with the fund regulations is set for December 31, 2024.

Companies are currently assessing whether the Fund can be challenged in court with arguments that may be similar to those raised in the so called “payback” litigation, which will see its day in Court (namely, the Italian Constitutional Court) on May 22, 2024.

New Obligations for Companies Under the Proposed CS3D

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The proposed Corporate Sustainability Due Diligence Directive, so-called CS3D, may set new rules binding large EU or non-EU companies aimed at preventing adverse impacts on the environment and human rights resulting not only from their own operations, but also from those of their business partners.

CS3D has been criticized for its strong impact on the whole supply chain. While only large companies are in scope, vendors of such obligated entities will need to comply with such entities’ policies inspired by CS3D.

What Are the Proposed Obligations?

New due diligence requirements are supposed to be established by CS3D and may subsequently be implemented by each member state. According to the text under discussion, companies will have to identify, prevent, stop, mitigate and account for the adverse impacts on the environment and human rights caused by their activities. In addition, they will need to have a plan to ensure that their business strategy is compatible with limiting global warming to 1.5°C in line with the Paris Agreementand the climate neutrality goals set by Regulation (EU) 2021/1119.

Which Companies are In Scope of CS3D?

CS3D would apply to European companies that:

  • have, on average, more than 250 employees and a global net turnover of more than EUR 40 million in the last financial year for which the annual accounts were drawn up;
  • even if they do not meet the minimum thresholds, are the parent company of a group that had 500 employees and a global net turnover of more than EUR 150 million in the last financial year for which the annual accounts were drawn up.

It would also applty to third-country companies that:

  • generated a global net turnover of more than EUR 150 million, provided that at least EUR 40 million of that turnover was generated in the European Union in the financial year preceding the last financial year, including turnover generated by third-country companies with which the company and/or its subsidiaries have concluded a vertical agreement in the Union in exchange for licensing rights;
  • even if they do not meet the minimum thresholds mentioned in point (a), are the parent company of a group that had 500 employees and a global net turnover of more than EUR 150 million, of which at least EUR 40 million was generated in the European Union in the last financial year for which the annual accounts were drawn up, including turnover generated by third-country companies with which the company and/or its subsidiaries have concluded a vertical agreement in the Union in exchange for licensing rights.

When Will It Enter into Force?

CS3D is still under discussion. The proposal for the Directive was presented by the European Commission on February 23, 2022, and the Parliament adopted the amended text on December 14, 2023. The proposal must be formally approved by the Commission, the Parliament and the Council before it can officially enter into force.

The Data Act: a New European Regulation on Data Sharing in the EU

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Today, January 11, 2024, marks the entry into force of EU Regulation 2023/2854, better known as “Data Act”.

The new regulation sets forth new rules on B2B and B2C data access and provides a regulatory framework for sharing data generated by the use of connected devices and related services. In addition, the Data Act contains measures to restrain economic operators from abusing contractual imbalances in data-sharing contracts.

The new regulation’s declared goals are to:

  • stimulate a competitive and fair data market;
  • foster data-driven innovation;
  • boost data accessibility;
  • make it easier to switch between data processing service providers;
  • protect data from unlawful transfers;
  • develop interoperability standards for data to be reused between sectors.

Art. 50 of the regulation provides that the new set of rules shall apply from September 12, 2025; however, certain articles, shall apply at a later stage.

New Rules on Corporate Sustainability Reporting

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On November 28, 2022, the European Council approved the corporate sustainability reporting directive (CSRD). The CSRD strengthens the existing sustainability reporting requirements under the EU legislation and broadens their scope of application. It does so by modifying directives and regulations containing the current sustainability reporting rules, including the Non-Financial Reporting Directive (“NFRD”).

Under the CSRD a company must report the company’s impact, as well as how its development, performance and position is affected by sustainability matters. Such information shall be included in a dedicated section of the management report.

The CSRD requires an increasing number of companies to report sustainability information. While the NFRD reporting requirements are currently mandatory for large public-interest companies with more than 500 employees, the CSRD enlarges the list of entities subject to those requirements to:

  • companies with more than 250 employees and a turnover of 40 million euros (so called large companies);
  • all companies listed on regulated markets, including SMEs and with the sole exception of microenterprises; and
  • non-EU companies generating a net turnover of 150 million euro in the EU and which have at least one subsidiary or branch in the EU exceeding certain thresholds.

In light of the above, the CSRD is expected to impact nearly 50,000 companies in the EU, compared to the approximately 11,000 companies already covered by the NFRD.

The new requirements will not be immediately mandatory, as the CSRD provides that the new sustainability reporting requirements will be implemented in a four-stage process here below summarized:

Starting dateFinancial YearEntities subject to reporting requirements
January 1, 2025Financial years starting on or after 2024Companies already subject to the NFRD
January 1, 2026Financial years starting on or after 2025Large companies that are not currently subject to the NFRD
January 1, 2027Financial years starting on or after 2026Listed SMEs (with the sole exception of micro undertakings) and the remaining European companies that fall under the CSRD application
January 1, 2029Financial years starting on or after 2028Non-EU companies that fall under the CSRD application

The European Commission, with the technical support of the European Financial Reporting Advisory Group (EFRAG), will adopt sustainability reporting standards.

The CSRD still needs to be signed and published in the Official Journal of the European Union and will enter into force 20 days afterwards. After that, each Member State will need to implement the CSRD into local law within 18 months.

Abuse of Economic Dependence: Digital Platforms with a Key Role

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Italian law now includes a new provision on abuse of economic dependence with a special focus on digital space. Abuse of economic dependence is prohibited and triggers nullity of the agreement concerned and, if the abuse is considered to be affecting competition on the market, additional administrative sanctions issued by the Italian antitrust authority.

The Italian annual bill on competition modified Article 9 of Italian law no. 192/1998 and introduced a presumption of economic dependence applicable to contractual relationships where digital platforms play a “key role” in reaching end users and/or suppliers. The presumption shifts to digital platform operators the burden of proving the absence of economic dependence.

The law does not offer a specific definition of “digital platform”, therefore a wide range of entities, including marketplaces and search engines, can be included in the scope of the rule. For the provision to apply, however, a “key role” of the digital platform in reaching end users or suppliers must be proven. “Key role” is a concept that lends itself to multiple interpretations, but some commentators suggested that said criterion could be referring to the gatekeepers as defined by the Digital Markets Act (Regulation (EU) 2022/1925), even if it does not seem to exclude other “minor” operators.

The newly introduced provisions are expected to have a huge impact on relationships between digital platforms operators and their business partners.