Better late than never – almost a year late – Italy has transposed EU Directive 2019/2161 on the protection of consumers from unfair commercial practices, reforming the Consumer Code.
Legislative Decree. 26/2023 updates the former rules by introducing judicial consumer protection but also new rules on distance and online contracts. And a significant tightening of sanctions.
1) Unfair commercial practices, EU Directive 2019/2161
EU Directive 2019/2161 (Omnibus Directive EU No 2019/2161) acted to amend Directives 93/13/EEC, 98/6/EC, 2005/29/EC, and 2011/83/EU to protect consumers’ rights to the digital age, as noted. (1)
The new rules ensure greater transparency in distance and online contracts, as well as introduce the right of consumers to receive direct judicial protection. (2)
Legislative Decree March 7, 2023 no. 26, effective April 2, 2023-in transposing EU Directive 2019/2161-acts to amend the Consumer Code (3,4).
2) EU Dir. 2019/2161, deceptive trade practices
Misleading commercial practices-already listed in Title III, Chapter II, Section I of the Consumer Code-are supplemented as follows.
2.1) Dual quality, identity of the seller
It is prohibited first of all:
- promote a good as identical to another good marketed in another member state, when in fact its characteristics are significantly different (Art. 21, new paragraph 2-a), (5)
- Omit to declare on ecommerce platforms whether or not the seller is a professional (Art. 22, new paragraph (e-bis). A substantial difference, as far as the exercise of warranty and withdrawal rights is concerned,
- reselling pre-purchased tickets by circumventing the limits imposed by regulations (Art. 23, new (bb-a).
2.2) Results search
Managers of ecommerce platforms where it is possible to search for products from multiple manufacturers through keywords should clarify:
- The general product information,
- the parameters that led to the research result,
- The relevance of the parameters used to other criteria (Art. 22, new paragraph 4-bis)
- the possible contribution of advertising, or other forms of remuneration, to product placement (Art. 23, new paragraph (m-bis).
2.3) Reviews
Online sales platforms that publish reviews should specify:
- Whether the reviews are from actual buyers (art. 23, new (bb-ter), and
- The methods followed to verify this circumstance (Art. 22, new paragraph 5-bis).
It is also prohibited to send or instruct third parties to send false reviews or false positive comments, including on social networks (Art. 23, new (bb-c).
3) Price transparency, the illusion continues
‘ Price reductionannouncements ‘ are subject to a minimal administrative fine, from 516 to 3,099 euros, in cases where:
- the announcement of a price reduction is not accompanied by an indication of the lowest price charged in the previous 30 days. With the exclusion of agricultural products and easily perishable foods (Art. 17-bis),
- the ‘normal’ sale price is not displayed during extraordinary sales and sales below cost (Legislative Decree 114/98, Art. 15).
Ridiculous penalties when referring to large-scale commercial promotions. (6)
4) Extension of the withdrawal period
The withdrawal period for consumers is extended from 14 to 30 days in the case of off-premises contracts, particularly ‘contracts concluded in the context of unsolicited visits by a professional’ (Art. 52.1-bis).
The right to terminate without notice can also be exercised at a later time if the trader provides the information in this regard within 12 months after the conclusion of the contract, within the following 30 days (Art. 53, para. 2).
5) Digital content
Content created or entered by consumers while using a digital good or service–outside of personal data, which is subject to strict protection in the GDPR (7)–cannot be used by the trader. Unless they are ‘without utility,’ aggregated with other data, or created together with other users who continue their use.
Consumers have the right to retrieve such content in a free, readable form and within a reasonable time until termination of the contract, when the trader may prevent access to the profiles and their content (Art. 56, paragraph 3b et seq.).
6) Judicial protection
A consumer who suffers unfair business practices can finally go to the ordinary courts to obtain compensation for the damage suffered, price reduction or termination of the contract. Having regard to the nature and seriousness of the unfair business practice, the damage suffered and other possible circumstances (d.lgs. 206/05, new paragraph 15-bis). An important step forward, considering that:
- the Antitrust Authority, unlike the judiciary, has the arbitrary power to decide which cases to pursue and which to dismiss based on ‘political priorities.’ As evidenced by the shameful dismissal of our repeated complaints against Amazon (8,9),
- the shortage of staff compared to the number of cases handled, in the judiciary, is less dramatic than in AGCM. Where public financing of advertising campaigns to turn to AGCM has led to millions of reports that the Italian Antitrust Authority is unable to handle.
7) Administrative Penalties
The European legislature required member states to introduce ‘effective, proportionate and dissuasive‘ penalties. The extent of which is to be determined, as appropriate, also taking into account the following criteria:
(a) nature, severity, extent and duration of the violation,
(b) any actions taken by professional to mitigate the damage suffered by consumers or to remedy it,
(c) any previous violations committed by the practitioner,
(d) financial benefits achieved or losses avoided by the trader as a result of the violation, if the relevant data are available,
(e) penalties imposed on the trader for the same violation in other member states in cross-border cases (…),
(f) any other aggravating or mitigating factors applicable to the circumstances of the case‘ (EU dir. 2019/2162, Article 13).
The Italian government added the dutiful consideration of ‘the economic and patrimonial conditions of the professional‘ (Consumer Code, revised Article 27.9).
7.1) Draconian Sanctions
Penalties under the Consumer Code are soaring. Under Legislative Decree 26/2023, the Antitrust Authority can now impose a fine of between 5 thousand and 10 million euros in the event of a finding of:
- Unfair business practices. Up to 4 percent of the trader’s annual turnover (or 2 million euros where turnover information is not available) in cases of cross-border infringements (Consumer Code, Article 27, new paragraph 9-bis),
- Unfair terms in contracts between professionals and consumers concluded by signing general conditions or forms. Up to 4 percent of the professional’s annual turnover if the AGCM finds widespread infractions (Art. 37-bis, new paragraph 2-bis),
- in compliance with emergency, injunctive or remedial measures ordered by the Authority, such as temporary suspension or prohibition of the dissemination of unfair business practices (Art. 27(12)).
Dario Dongo and Alessandra Mei
Notes
(1) Elena Bosani. Consumer rights in contracts, the European Commission provides clarity. GIFT (Great Italian Food Trade). 14.4.22
(2) EU Directive 2019/2161, for better enforcement and modernization of the Union’s consumer protection rules. https://eur-lex.europa.eu/legal-content/IT/TXT/?uri=CELEX%3A32019L2161
(3) Legislative Decree. March 7, 2023, no. 26, Implementation of Directive (EU) 2019/2161 for better enforcement and modernization of Union consumer protection rules. https://www.gazzettaufficiale.it/eli/id/2023/03/18/23G00033/sg
(4) Legislative Decree. 206/2005 as amended. Consumer Code https://www.normattiva.it/uri-res/N2Ls?urn:nir:stato:decreto.legislativo:2005-09-06;206
(5) Dario Dongo, Giulia Torre. Dual Quality Food, first analysis of the European Commission. GIFT (Great Italian Food Trade). 29.6.19
(6) Dario Dongo. Promotional sales, poor protection of producers and consumers. GIFT (Great Italian Food Trade). 24.5.22
(7) Fabrizio Zaninetti, Dario Dongo. Privacy and GDPR, the ABCs. GIFT (Great Italian Food Trade). 20.3.19
(8) Dario Dongo, Giulia Torre. Amazon, cyberbullying. GIFT (Great Italian Food Trade). 23.4.18
(8) Marta Strinati. Amazon, too much malfeasance in food sales. GIFT appeals to antitrust.. GIFT (Great Italian Food Trade) 15.12.17
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
Graduated in Law from the University of Bologna, she attended the Master in Food Law at the same University. You participate in the WIISE srl benefit team by dedicating yourself to European and international research and innovation projects.
