New rules on unfair commercial practices and misleading advertising
The Competition Authority has adopted Regulations 17589 and 17590 on unfair commercial practices and comparative and misleading advertising. The new regulations set out the procedural rules to be followed by the authority in assessing the conduct of companies.
The authority has also recently adopted Legislative Decrees 145/2007 and 146/2007, which amend the Code of Consumers in order to implement the Comparative Advertising Directive (2006/114/EC) and the Unfair Commercial Practices Directive (2005/29/EC).
With regard to misleading and comparative advertising, the new rules provide a form of protection to traders in their commercial relations, following the general provisions that already apply to consumers. Legislative Decree 145/2007 defines 'advertising' as the making of a representation by a professional (or by a third party on the professional's behalf) in connection with a trade, business, craft or profession in order to promote the supply of goods or services. In order to assess whether a commercial communication is deceptive, account must be taken of all the relevant features, including:
- the nature of the product;
- its availability;
- its composition;
- its price or quantity;
- the results to be expected from its use;
- the results of tests carried out on the product; and
- the identity and qualifications of the advertiser.
Under the new rules, the Competition Authority may investigate cases of misleading advertising ex officio; it is no longer necessary that an external complaint be submitted. The authority has the power to access any document or request any information that is relevant to the investigation. The authority may impose fines if the information submitted is false. It may also conduct inspections if necessary. Once the authority has established that a violation has occurred, it may order that the trader stop the unlawful conduct and issue fines of between €5,000 and €500,000.
In addition, Regulation 17590 provides that the director of a division of the authority will be appointed to start proceedings. The director will be in charge of:
- providing information to the consumers and companies which were allegedly misled by the advertisement; and
- collecting all the documents necessary to start the proceedings.
The director must notify the parties of the start of the proceedings and ensure that the whole process is completed within a period of 120 days. If the authority finds that an advertisement is misleading, it will notify its decision to the parties. The decisions of the authority may be published.
Margherita Bariè and Pietro Pouchè, Carnelutti Studio Legale Associato, Milan, Italy
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