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Italy extends its reach into intermediation service providers and search engines: What you need to know.

On January 1, 2021, in Italy, a new piece of legislation that will have an economic impact on intermediation service providers and search engines entered into force – Law no. 178/2020 (“2021 Budget Law”).

In the wake of Regulation (EU) 2019/1150 “on promoting fairness and transparency for business users of online intermediation services”, the Italian legislature, with the 2021 Budget Law, identified the Italian Communications Authority (“AGCOM”) as the competent authority and stated that online intermediation service providers will be required to comply with these obligations:

  • Enrollment in the Register of Communications Operators managed by AGCOM (“ROC”)
  • Payment of an annual fee to AGCOM

In a nutshell, ROC is a public registry that has the purpose of guaranteeing the transparency and publicity of ownership structures, allowing the application of the rules concerning anti-concentration, the protection of information pluralism, and compliance with the limits set for the shareholdings of foreign companies. Currently, several companies are enrolled in this registry, such as audiovisual media services providers, call center operators, advertising agencies (including online advertising agencies), newspaper publishers, and companies providing telecommunication services.

With specific reference to the annual fee, the 2021 Budget Law sets the rate at 0.15% of revenues generated in Italy by the online intermediation services and search engines. Companies based abroad are also caught by the scope of the 2021 Budget Law, in reference to the Italian sourced revenue accounted for in financial statements generated abroad. For companies not obliged to draft financial statements, the percentage must be calculated on the same items in other accounting records that certify the total value of production.

The applicable law also provides for an administrative sanction for failure to comply with the above-mentioned obligations.

AGCOM is expected to issue guidelines on this topic, specifying in detail the subjects involved and a deadline for online intermediation services and search engines to carry out enrollment in the registry.

We will review these guidelines when they are issued and follow up with further clarifications.