On 2 April 2023, a major amendment to the Italian Consumer Code entered into force, implementing the EU consumer protection “Omnibus Directive”, and more broadly modernizing and enhancing the existing consumer protection framework in Italy. Companies will have to assess their conduct against newly introduced types of unfair commercial practices and information requirements, particularly in online markets. Most importantly, the Italian Antitrust Authority (IAA) is empowered to issue significantly higher fines in case of infringements.
One key change is a significant increase in the level of fines that the IAA can impose, alongside new fines for abusive contractual terms:
- the maximum fine for unfair commercial practices has doubled, going from EUR 5 million to EUR 10 million;
- for conduct with a European dimension (i.e. harming the collective interests of consumers in at least two-thirds of EU Member States, accounting for at least two-thirds of the population of the EU), the IAA may fine a company up to 4% of its annual turnover in Italy or in the Member States involved;
- abusive contractual terms now become sanctionable and the same maximum amounts apply: this is a significant shift compared to the previous regime whereby the only consequence of an infringement finding by the IAA consisted on the clause being null and void.
Lastly, it has been formalized that consumers can bring damages follow-on actions, potentially reinvigorating consumer protection private enforcement in Italy.
New types of unfair commercial practices
New types of unfair/misleading practices and omissions are introduced, and the ‘blacklist’ of commercial practices presumptively considered unfair (i.e. without the need for a case-by-case assessment) is extended. These include:
- presenting goods for sale as being identical to something sold in another Member State, when it is significantly different (unless objectively justified);
- providing results in response to a consumer’s online search query without clearly disclosing that the ranking is influenced by sponsorship or payment from an advertiser;
- so-called “secondary ticketing” - namely reselling to consumers tickets for events which the professional seller obtained through automated tools designed to circumvent quantitative limits imposed on the number of tickets that could be bought by a single person (already a focus of the IAA in the past);
- submitting false reviews or misrepresenting consumers’ reviews in order to promote products (another area already under the IAA spotlight).
New contractual information requirements
Consumers are now entitled to more pre-contractual information on warranties, functionality and compatibility, as well interoperability of goods with digital elements/content and of digital services. Providers of online marketplace services are thus subject to additional information requirements. With respect to the right to terminate contracts for digital services or content, the professional reseller may prevent further use of the digital content/service by the consumer, including by deactivating its account. Content other than personal data provided or created by the consumer may not be re-used (with limited exceptions). Lastly, under certain circumstances, the rules on the right of withdrawal will not apply to contracts for the provision of digital content. These new rules will apply alongside the GDPR and - for those who will be qualified as gatekeepers - the Digital Market Act.
New rules on presenting discounted prices
Lastly, price reduction announcements (with limited exceptions) must indicate the lowest price charged by the seller to consumers in the 30 days prior to the discount.
Impact on business
The new provisions are in force as of 2 April 2023, except for those on price reduction announcements, which apply from 1 July 2023. Companies will have to navigate rules aimed at enhancing safeguards for consumers as the focus increasingly shifts towards online transactions. Much higher fines by the IAA and a potential uptick in follow-on enforcement before civil courts may also be on the way.
Please contact us or your usual contact in our Antitrust, Competition and Trade team if you would like to discuss this update further. To read more about other antitrust developments, refer also to our Global antitrust in 2023: 10 key themes report.