Commentary on Ruling Order No. 17108 of 2024: Non-Compete Agreements and Illicit Agreements

The recent Order No. 17108 of June 20, 2024, issued by the Court of Cassation, offers an important reflection on the limits of non-compete agreements and the agreements prohibited by Article 2 of Law No. 287 of 1990. This ruling, which rejects the appeal filed by V. against D., highlights how anti-competitive agreements can affect the validity of contracts entered into in execution of such illicit agreements.

The Regulatory Framework

The Italian regulatory framework concerning competition is mainly governed by Law No. 287 of 1990, which aims to ensure fair competition in the market. In particular, Article 2 prohibits agreements that may restrict competition. The central issue of this ruling focuses on the effect of such agreements on contracts entered into in their execution.

(NON-COMPETE AGREEMENT) - IN GENERAL Agreements prohibited by art. 2 of Law no. 287 of 1990 - Contracts entered into in execution of the prohibited agreement - Authority responsible for market regulation - Determination of the illegality of the agreement - Relevance for the nullity of the "downstream" contract - Condition - Factual situation. In terms of assessing damages from anti-competitive conduct pursuant to art. 2 of Law no. 287 of 1990, compensation is due for all contracts that constitute the application of illicit agreements, even if concluded prior to the determination of their illegality by the independent authority responsible for regulating that market, provided that the agreement was put in place before the contract declared void. (In this case, the Supreme Court confirmed the ruling of the territorial court which had excluded the nullity of the contract on the grounds that it had been concluded prior to the dissemination of the ABI model and the Supervisory Authority's provision constituting an anti-competitive agreement).

Analysis of the Ruling

In the examined case, the Court confirmed the decision of the Court of Appeal of Rome, excluding the nullity of the contract entered into by V. against D. because the latter had been concluded before the dissemination of an ABI model and the Supervisory Authority's provision. This implies that the contract was not in violation of antitrust regulations at the time of its conclusion, even if it was later found to be part of an anti-competitive agreement.

In this context, it is essential to consider the following aspects:

• The validity of contracts concluded before the determination of illegality.
• The temporal relevance of prohibited agreements with respect to "downstream" contracts.
• The role of the Supervisory Authority in regulating anti-competitive practices.

Conclusions

Order No. 17108 of 2024 represents an important clarification in competition law. It establishes that the validity of a non-compete agreement cannot be automatically considered void if concluded before the determination of an illicit agreement. This offers greater security to contractual parties but also requires attention from legal professionals in drafting and reviewing such agreements. The ruling, therefore, contributes to outlining a clearer legal framework and supporting market competitiveness, with the aim of ensuring fair and transparent business practices.