Misleading advertising - unfair trade practices
A commercial practice is unfair if it is contrary to professional diligence, and is false or likely to appreciably distort the product-related economic behaviour of the average consumer whom it reaches or to whom it is addressed or the average member of a group if the commercial practice is directed at a particular group of consumers.
Relevant rules are designed to protect an average “normally informed” and “reasonably cautious” consumer.
The evaluation regarding the misleading nature or its lack of a commercial practice is derived from an “all-encompassing” evaluation relating to both the content of the information provided by the professional as well as the manner of presentation of such information. The unfair commercial practice can be augmented either by an action or an omission.
The legislator has listed (c.f. also Art. 21 of the Italian Consumer Code) a series of elements such as:
- characteristics of the goods or services (such as availability, nature, execution, composition, etc.);
- price (or the manner in which it is calculated) and conditions of delivery of the goods or services provided;
- category, qualification and rights of the advertiser (such as identity, assets, intellectual property rights).
The determination of the deceitfulness or its lack of the advertisement must be carried out according to objective parameters, and thus regardless of any evaluation of the psychological elements of the advertiser’s wilful misconduct or fault.
In Italy, the law relating to unfair or deceptive trade practices is included in the Consumer Code.
Promotional communication is an essential part of the life of a business; however, the risk of incurring in restrictions is high for business persons.
The law firm MiLex provides expert advice to companies from its Milan and Moscow branches, for implementing marketing strategies, which is the revision of existing ones to ensure compliance with applicable regulations.
Whether it is traditional or digital marketing, the professionals of the law firm MiLex have proven experience in analysing the fairness of commercial practices carried out by companies.
The professionals of the law firm MiLex also have significant experience in assisting companies in proceedings before the Italian Authority for Competition and Market (AGCM).
The AGCM has specific competence regarding misleading advertising and unfair commercial practices, as defined by Articles. 21 et seq. of the Consumer Code, as established by the “Regulations on preliminary procedures concerning misleading and comparative advertising, unfair commercial practices and violations of consumer rights in contracts, breach of the prohibition of discrimination, unfair terms” as set down by the Authority vide resolution no. 25411 of 01/04/20151. Additionally the importance of the AGCM is central for the protection of consumer rights, which have been addressed recently in the 2011/83/EU Directive mentioned here.
The lawsuit begins via an application to intervene and consists of several phases: the pre-trial phase, essentially aimed at verifying the correctness and completeness of the application to intervene and to obtain all useful information for the assessment of the case, the investigative phase (where the person in charge of the lawsuit checks for the existence of illegal misleading or comparative advertising, or unfair commercial practices) and the sanctions phase (the Authority may order the payment of an administrative fine ranging from 5,000 to 5,000,000 EUR, depending from the severity and duration of the infringement).
The law firm MiLex offers advice and assistance in the field of unfair commercial practices and, in particular:
- assistance to companies being investigated by the Authority for Competition and Market concerning infringement of the Consumer Code to the detriment of consumers (the so-called unfair commercial practices) or misleading and/or comparative advertising cases
- consultancy in relation to commercial practices carried out by companies in order to assess the risk profiles as well as the potential vexatious extent of related clauses as per the Consumer Code;
- review and integration of the company’s terms and conditions and professional counsel regarding compliance with current regulations.