On January 13, 2020 the Council of Ministers approved a draft Statutory Provision to fight the practice of "parasitic advertising" (commonly known as "ambush marketing"), i.e. the illegal association of a third party company trademark to an international event, for the mere purpose of exploiting its resonance in the media and without incurring sponsorship costs. This is the first attempt by the Italian Legislator to regulate the phenomenon in an organic manner (and not for individual events), also providing for administrative fines to be directly applied by the Italian Competition Authority (AGCM).

Ambush marketing: definition of the phenomenon

The phenomenon of "ambush marketing" has been defined as the undue advantage acquired by the unfair competitor who unlawfully associates its image and brand to an event of particular media resonance, without being linked by sponsorship relationships (or similar) with the organization of the event. In this way the unfair competitor takes advantage of the media exposure of the event without bearing the costs, with consequent undue hooking up and negative interference with the contractual relations between the event organizers and authorized parties.

According to the doctrine (1), the ambush, planned and conducted by the unfair competitor, can be carried out in the following different ways:

  1. “predatory ambush” or “ambush by association”, consisting of association with the event through the unauthorised use of distinctive or evocative signs of the event, or through indirect recalls;
  2. “insurgent ambush”, through the implementation of surprise initiatives close to the event;
  3. “saturation ambush”, due to the intensification of the unfair competitor's promotional activities until all advertising space left free by the official sponsor is saturated.

Far from being an exhaustive and organic classification, so far the "ambush marketing" phenomenon (and its various practical applications) has found protection in the Italian Courts on the basis of the legislation on unfair competition pursuant to Article 2598 no. 3 of the Italian Civil Code as general professional misconduct of the unfair competitor who parasitically exploits the advertising of others (also as an infringement of Legislative Decree no. 145 of August 2, 2007) (2). With respect to the rules of self-regulation in the field of advertising, the case is frequently referred to as unfair, misleading and in any case clearly parasitic advertising messages (articles 1, 2 and 13 of the Advertising Self-Regulatory Code) (3).

In the past ambush marketing has had temporary regulations that expired at the end of the single event for which such regulations were issued (among these see Law no. 167 of 17 August 2005 issued in view of the "Torino 2006" Winter Games).

The forecasts included in the draft Statutory Provision

For the first time in Italy, the Legislator intends to regulate in an organic manner the phenomenon of ambush marketing, through the creation of a specific administrative violation under the supervision of the Italian Competition Authority (AGCM), which may apply fines up to Euro 2.5 million, without prejudice to other provisions in force (civil and criminal).

However, the draft Statutory Provision at stake intends to regulate only certain types of conduct that are strictly defined as illegal and limited in scope and time. 

Concerning the subject matter, the prohibited conducts - limited to sporting, trade fair or entertainment events of national or international importance - includes the following:

  • to create an indirect link between a distinctive sign and an event likely to mislead the public about the identity of the official sponsors;
  • to state in your advertisement that you are an official sponsor of an event, without being one;
  • promotion of a distinctive sign by any action likely to attract the public's attention, not authorised by the organiser, which is carried out during an event or in places adjacent to the event;
  • to sale and market products or services that are also partially marked with an event logo or other distinctive signs likely to mislead or create the impression of an indirect connection with the event.

Excluded from unlawful conducts are those carried out in performance of contracts concluded with individual athletes, teams, artists or participants in protected events, so as not to frustrate the sponsorship contracts signed by these parties (with clearly) anti-competitive effects.

As for the time’s limitation, it is expected that the prohibitions will operate from the ninetieth day before the official start date of the relevant events until the ninetieth day after the official end date of the events themselves. 

Conclusions:

The draft Statutory Provision at stake has been openly developed in view of the European football competition "EURO 2020" - which will include some matches of the tournament also in Italy - in order to clarify what the Legislator has defined as "grey areas" in the competitive protection against parasitic advertising. The intention seems certainly commendable given that the Legislator, for the first time, intends to typify the conduct considered illegal, providing an additional tool to repress illegal competitive conducts that are often not sanctioned because they occurs in many forms and, many times, considered extraneous to traditional competitive violations. However, the Legislator's tendency to increasingly entrust independent administrative authorities (such as AGCM in the present case) with important tasks could present disadvantages, as, on the one hand, the judicial guarantees are lower (compared to traditional appeal to the Courts) and, on the other hand, adequate resources are not provided for enforcement and thus the effectiveness of the action might be frustrated.

At this stage we shall wait for "EURO 2020" to verify if the measures provided by the Draft Law scheme here in comment will be able to "unmask" the advertising ambushes that - certainly - will be carried out during the competition.

(1)     Among others see Uberti, Concorrenza sleale - l’Ambush marketing come illecito anticoncorrenziale, in Giur. It., 2018, 10, 2159.

(2)     Among others, see the decisions of the Court of Milan, December 15, 2017 and January 18, 2018, both in Foro it. 2018, 7-8, I, 2528

(3)     In particular, see IAP ruling no. 052/2014 of July 8, 2014 in AIDA 2016, 1735