On 23 September last, for the first time, the Italian Antitrust Authority (hereinafter the “AGCM”) found undertakings guilty for unfair commercial practices and misleading advertising vis-à-vis microenterprises. The decision was published on 21 October 2013.
Since the legislative reform of 2012, it is the first ruling of the AGCM in favour of microenterprises. Indeed, on 20 January 2012 the Italian government approved Law Decree 1/2012 (converted by Law 24 March 2012, no. 27) that extends to microenterprises the protection against unfair commercial practices which, until then, was for “consumers” only. These are defined as “any natural person who is acting for purposes which are outside his trade, business, craft or profession”.
Now, as a consequence of the 2012 reform, microenterprises, as beneficiaries of the law against unfair commercial practices, are defined by Article 18 letter d-bis) of the Italian Legislative Decree 206/2005 (the “Consumer Code”) as “entities, companies or associations that, regardless of their legal form, engage in an economic activity, even as an individual or family, that employs fewer than ten persons and generates an annual revenue or total annual balance sheet not in excess of two million euros, pursuant to section 2, paragraph 3 of the annex to recommendation n. 2003/361/EC of the Commission, dated 6 May 2003”. On the basis of these criteria, in consideration of the Italian economic structure, the vast majority of Italian enterprises would qualify as microenterprises and consequently be eligible for protection against unfair commercial practices.
Going back to the case decided by the Authority, the relevant investigation was propelled by several reports from small companies, such as bars, restaurants and news-stands, mostly family-run businesses. Five companies owned by the Index group, each with a specific role, advertised a computer network which would allow retailers to act as centres for selling services such as phone charge cards, mail delivery and online bets. However the advertising campaign did not mention that some of these services could be unavailable. In a few cases, a disclaimer of such unavailability was present but scarcely readable. As a consequence, those retailers who accepted the offer found themselves often incapable of providing services to their customers (also suffering an harm to their reputation). Moreover, the companies of the Index group operated a complex and carefully planned disclaimer of responsibility, which substantially prevented retailers from terminating their contract.
Under the Consumer Code, the AGCM may impose fines, if unfair commercial practices are found, from 5 thousand to 5 million Euros, commensurate to the gravity and the duration of the violation.
In the case at hand, the AGCM sanctioned the companies of the Index group for unfair commercial practices with a fine amounting to 234 thousand Euros in total. The AGCM, then, condemned the same companies to publish an abstract of the ruling on their websites, as additional remedy.
As mentioned before, the inclusion of microenterprises in the protection against unfair commercial practices is especially important in an economic system such as the Italian one, where small and family-run businesses are extremely common. Moreover, the first case investigated by the AGCM in favour of microenterprises shows that the Authority is keen to apply the law.
Thus microenterprises, placed at the same level as consumers vis-à-vis larger companies, may enjoy wide protection. Indeed, the commercial practices which could be considered unfair and prohibited, pursuant to article 20 of Consumer Code, are “any act, omission, course of conduct or representation, commercial communication including advertising and marketing, by a trader, directly connected with the promotion, sale or supply of a product to consumers”.
Especially large companies have been warned: they will have to shape their policies towards microenterprises in order to make sure that they offer them the same safeguards which consumers already enjoy.