The Antitrust Class Action Comes To Italy
Italian consumer rights group Codacons has filed class action lawsuits against Italy’s two largest banks – Intesa Sanpaolo SpA (ISP.MI) and UniCredit SpA (UCG.MI) – for banking fees paid by more than 25 million customers.
The cases are the first to be brought under a new law permitting class action suits in Italian courts, and could force the two banks to pay up to 6.25 billion Euros (approximately nine billion dollars) to their customers.
In December 2009, an antitrust regulator ruled that the Italian banks charged higher fees on loans and credit lines to recover part of the overdraft fees canceled by the government in July. In some cases the bank overdraft fees were 15 times higher than under the old system which was abolished with the aim of lowering charges.
The 25 million customers of Intesa and UniCredit who paid the banking fees can file a request for reimbursement of 250 Euros each, resulting in an overall total of 6.25 billion Euros.
The new law, effective as of January 1, 2010, allows collective lawsuits against any unfair commercial practice from August 16, 2009 onward. However, unlike in the United States, the Italian law only allows for compensation to victims, not punitive damages against companies.
Other class actions to be brought under the new law are expected to follow quickly, including several within the next few days by an Italian consumer association against computer manufacturers over the pre-installation of Windows. More than 2,000 Italians – most of them Linux users – are seeking to recoup the extra costs of buying a PC with Microsoft’s operating system. As the new Italian law does not provide for punitive damages, the plaintiffs would not be able to win more money than Windows is worth – between 150 and 250 Euros.
Punitive and/or treble damages awards are key features of antitrust enforcement laws in the United States under the theory that such damages serve as a needed deterrent to anticompetitive conduct. Multinational and European companies in particular should watch closely to see whether laws such as the new Italian law discussed here will have the same deterrent capacity as American laws, and if not, whether national legislatures will ultimately amend these laws to provide for some form of punitive damages.
Tagged in: Antitrust Enforcement, International Competition Issues, Price Fixing,