TripAdvisor has been sanctioned by the Italian competition authority (AGCM) for the misleading advertising claims relating to the truthfulness of the reviews published by their users on the site that according to the AGCM cannot be guaranteed.  This case might trigger considerable risks also for other social media and fashion blogs.

The dispute against TripAdvisor

The Italian competition authority (AGCM) has jurisdiction also on unfair commercial practices and as part of such activity challenged some of its advertising claims used by TripAdvisor which referred to the fact that the reviews on the site are true and reliable.  Indeed, even though TripAdvisor puts in place quite stringent measures in order to ensure that the published reviews are not fake, the AGCM deemed such checks not to be sufficient to support the challenged claims.

Likewise, the AGCM argued that the liability exemption for hosting providers prescribed by the EU E-Commerce Directive was not applicable to TripAdvisor.  The social media was not deemed to merely provide a platform where its users could publish their reviews, but an essential component of the platform was its ranking tool managed by TripAdvisor that excluded the applicability of the liability exemption referred above.  And this position further narrows down the applicability of the liability exemption for hosting providers which was considered to be an essential principle of European Internet law, but as also experienced by Yahoo! and YouTube recently, authorities are limiting its scope.

Because of the breach mentioned above, the AGCM issued convicted TripAdvisor to pay a fine of € 500,000.

What consequences for social media and blogs?

We had already discussed in this post about fashion blogs (the so called flogs) and social media and the legal issues that they can face in case of reviews, articles, posts or messages that support brands in a manner that is not transparent.  And I also discussed about the topic in a recent webinar whose slides are available here.

The main issue pertains to the liability of the advertised brand and the advertiser (i.e. the social media and the blogmaster themselves) for messages that appear truthful and spontaneous to consumers but are either fake or the result of a financial contribution.  And the position recently taken by the AGCM might represent a further threat since it creates a precedent in which the social media platform has been deemed to be liable for the fake contents published by its users.  This precedent occurs a few months after a dispute between a restaurant arguing that a social media user had defamed them through his TripAdvisor review which shows how social media are increasingly becoming the potential source of disputes.

The issue is therefore on whether the AGCM and other competent authorities will further expand the principle set out in this last decision and this will require a further level of transparency also by social media and blogs.