On 29 July 2025, the Italian Competition Authority (“ICA”) fined PAC 2000A Soc.coop. (“PAC” or the “Company”), the largest cooperative within Italy’s leading retail chain, CONAD, for providing untruthful, inaccurate and misleading information during a merger control proceeding.

This case mirrors the European Commission’s recent scrutiny of FiberCop and KKR, where selectively presented market data triggered regulatory concern. 

Background

On 3 September 2024, PAC notified the ICA of its intention to acquire thirteen retail stores operating in central Italy. 

The ICA initiated Phase II proceedings on 24 September 2024, having determined that the acquisition was likely to significantly impede effective competition in retail markets for food and non-food consumer products in certain geographic areas.

The Error

On 11 November 2024, during a hearing, PAC stated that market shares provided at notification should be adjusted to exclude shares of stores belonging to Conad Nord Ovest (“CNO”), which PAC claimed constituted a distinct competing entity, and produced a table containing new market share estimates net of CNO sales.

The new estimates included 1,651 points of sale compared to 1,222 originally notified - that is, over 400 additional points of sale (approximately 33% more). ICA sample verifications revealed that points of sale had been included with travel times of 35 minutes (isochrone no. 11, more than double the time estimated by PAC), 24 minutes (isochrone no. 12), and 22 minutes (isochrone no. 13) from centroids, far exceeding the 15-minute driving parameter used to define relevant geographic markets in the retail sector.

Following the ICA’s request for information, PAC admitted that the market share estimates are not to be considered reliable due to a material error in the data extraction code via the Google Maps API, that led to travel times that were not always correct and to the inclusion of points of sale with travel times from the centroid exceeding 15 minutes.  Specifically, PAC’s analyst, after setting the departure date and time, erroneously selected the “duration” option (average travel time) instead of “duration_in_traffic” (estimated travel time accounting for predicted traffic conditions) by placing a hash mark ("#") in front of the wrong line of Python code. This resulted in underestimating travel times and overestimating the number of points of sale included in the isochrones. 

The ICA’s Assessment

The ICA rejected PAC's characterisation of the error as a mere typo, finding instead that it constituted a true methodological error. The correct use of actual traffic conditions constitutes one of the main variables for defining relevant markets and the parameter used by established ICA practice in the large-scale retail sector, which PAC had correctly used when completing the notification form.

The ICA emphasised that Italian competition law establishes a presumption of fault for administrative offences, with the burden on companies to prove they acted without fault. Since the new estimates presented obvious inconsistencies and led to significantly different results, using normal diligence, PAC could and should have carried out adequate checks before providing them to the ICA. Sample checks produced by PAC showed a deviation between the “duration” and “duration_in_traffic” variables in 47% of cases, confirming that the error would have been easily detectable with adequate verification.

The ICA found that the untruthful information, had it not been detected, could have concretely affected the assessment of the operation. A deviation of approximately 3-4 percentage points could certainly have modified the decision whether to authorise the operation with or without corrective measures. The new shares provided by PAC were close to or below the critical 30% threshold and close to the shares ultimately authorised following divestitures ordered by the ICA.

The ICA determined that €50,000 constituted a proportionate sanction, far lower than the maximum of €35-100 million (1% of PAC’s 2023 turnover). However, in consideration of PAC’s collaborative conduct - including responding quickly to information requests and immediately acknowledging the error once identified - the ICA halved the sanction to €25,000.

Takeaways

The ICA’s decision confirms that:

• parties have a strict obligation to provide accurate and reliable information throughout merger proceedings, whether in response to formal requests or during hearings;
• Italian competition law establishes a presumption of negligence for administrative offences, with the burden on companies to prove they acted without fault;
• technical complexity does not excuse errors - companies must implement adequate verification procedures when dealing with critical competitive data; and
• the ICA recognises and rewards prompt acknowledgment of errors and corrective action.

The ICA’s decision (in Italian only) is available at the following link.  

For more information, please contact Federico Marini Balestra and Bianca Maria Gorlero.

VISIT OUR COMPETITION LAW HOMEPAGE