Category: unfair commercial practices

The Italian Competition Authority fines Facebook for misleading practices regarding data, chapter two

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Today, the Italian Competition Authority (ICA) issued a 7 million euro fine to Facebook Ireland Ltd and Facebook Inc for failing to comply with the request to end their unfair practice regarding the use of users’ personal data, and to publish a due rectification (full text in Italian here).

Indeed, in November 2018 the ICA found the information given by Facebook to the users at the moment of the creation of the account misleading, due to the lack of adequate disclosure about the economic value of their personal data, which are monetized through the supply of targeted advertising (case PS1112). On the contrary, the ICA found that Facebook emphasized the free nature of the service, inducing users into making a transaction that they would not have taken otherwise. The misleading nature of such practice has also been confirmed by the Italian administrative judge (T.A.R. Lazio, decisions nn. 260/2020 and 261/2020).

The ICA advances that Facebook, despite having removed the claim about the free-of-charge nature of the service, still fails to provide users with clear information on the role of data as a means of payment in the exchange.

Alessandro Cavalieri

Italian Competition Authority, decision of 17 February 2021, ICA v. Facebook Ireland Ltd and Facebook Inc

MISLEADING FOOD (WINE) INDICATIONS STIGMATIZED BY THE ITALIAN COMPETITION AUTHORITY

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In a recent decision (full text in Italian here), the Italian Competition Authority (“AGCM”), which is competent also for misleading advertising under the Italian Consumer Code, sanctioned the famous Italian high-quality food retailer Eataly, the wine distributor Fontanafredda, and the association Vino Libero for having marketed a series of wine bottles bearing the sign Vino Libero (“Free Wine”).

Vino Libero is an association promoted by Eataly which counts a series of wine producers, with an alleged “ethic” project of sustainable agriculture and oenology. Actually Vino Libero wines are not sulphites-free, however the maximum dosage thereof is lower by at least 40% than the limit set by EU Regulation 606/2009 (in fact, sulphites limits set by Vino Libero disciplinary are quite similar – a little lower – to those of the organic wine set out by EU Regulation 203/2012).

During a preliminary phase the AGCM considered the expression Vino Libero misleading and invited the parties to adopt an additional claim that must follow each mark Vino Libero: “free from synthetic fertilizers, free from herbicides and free from at least 40% of sulphites than the limit set by law”. After having found that Eataly and Fontanafredda failed to fully respect the commitments on the additional claim, the AGCM issued a final decision and fined them.

Indeed, the AGCM held that the expression Vino Libero on a wine bottle, without further specifications, can effectively lead consumers to believe the wines bearing that mark are totally absent chemical fertilizers, herbicides and – above all – sulphites. Thus misleading them about the initiative Vino Libero and the actual presence of sulphites. In this regard, the AGCM excluded that the mere mandatory indication on the label about positive presence of sulphites (required by EU Regulation 1169/2011) is able to reduce the deceptive effect of the sign Vino Libero.

The AGCM’s reasoning is well grounded and stands against marketing initiatives playing with organic evocations. However, the optimal solution to put an end to the debate on sulphites would consist in imposing on wine producers stricter obligations to list ingredients and dosage on the labels.

Francesco Banterle

Italian Competition Authority (“AGCM”), decision No. 25980 of 13 April 2016, bulletin n. 15 of 9 may 2016