COVID-19: new measures to tackle unfair commercial practices following the pandemic crisis to comply with the Consumer Code

On May 19, 2020, the Italian government adopted decree law no. 34, setting out urgent measures with immediate effect to support health, work, and the economy, as well as social policies related to the epidemiological emergency (the “Decree”).

The Decree contained provisions for the economic and social relaunch of the country following the COVID-19 pandemic and was one of many initiatives enacted by the Italian government to deal with day-to-day matters related to the health emergency (such as the supply of personal protective equipment), but the issues it tackles go way beyond that, as they also pertain to fields other than healthcare (for a complete list of all of the measures enacted by the Italian government on the COVID-19 issue, see here). It could be said that the health emergency led the Italian government to confront pre-existing situations that were heightened by the COVID-19 pandemic.

The Decree was then converted into law no. 77 of July 17, 2020. A number of amendments were made during the process, including, amongst others, the introduction of Article 263-bis amending Section 27 of Italian Legislative Decree no. 206/2005, establishing the Italian Consumers’ Code (the “Consumers’ Code”) by adding new paragraph 3-bis to Section 27 Consumers’ Code.

In detail, Article 263-bis para. 1 Decree Law empowers the Italian Antitrust Authority (“AGCM”) to order – also as a precautionary measure – that (i) suppliers of connectivity services to Internet networks, (ii) operators of other telematic or telecommunication networks; or (iii) operators, which provide telematic or telecommunication services within telematic or telecommunication networks, remove any initiatives or activities addressed to Italian consumers through telematic and telecommunication networks that may constitute an unfair commercial practice. In the event of unjustified non-compliance with such order AGCM may apply an administrative fine of up to € 5,000,000.

Based on the above, the recipients of such orders shall prohibit the use of the networks through which they provide their services as to avoid the continuation of the unfair commercial practice.

Unfair commercial practices are ruled in the Consumers’ Code and can be either misleading or aggressive. Irrespective of whether such a practice consists of an action or an omission, they are all prohibited when: (i) they are contrary to the requirements of professional diligence and (ii) they materially distort or are likely to materially distort the economic behavior of the average consumer they reach or address (to be assessed with an eye to consumers’ vulnerability).

As highlighted by the provision in question, AGCM is the authority given the power to monitor and stop the continuation of unfair commercial practices, as well as to order the removal of their negative effects. AGCM may act ex officio or at the request of an interested subject in exercising its investigative, enforcement, and sanctioning powers in accordance with the provisions of Regulation no. 2017/2394/EU on cooperation between national authorities responsible for the enforcement of consumer protection laws.

In this regard, Section 263-bis para. 1 of the Decree Law aims to align Italian legislation on consumer protection with European rules. In fact, pursuant to Section 9 of Regulation no. 2017/2394/EU, the appropriate national authorities have the power to (a) adopt interim measures to avoid the risk of serious harm to the collective interests of consumers; (b) remove content or restrict access to an online interface or order the explicit display of a warning to consumers when they access an online interface; (c) order a service provider to remove, disable, or restrict access to an online interface; or (d) where appropriate, order domain registries or registrars to delete a fully qualified domain name and allow the relevant authority to register it.

The role of this amendment is clearly even more pivotal now, considering the spike in the use of e-commerce services during the lockdown and after the lockdown when restrictions caused by the pandemic were in place. Many Italian consumers resorted to online purchasing to satisfy their material needs (or to fend off boredom), and many businesses saw remarkable profits by switching from offline to online sales. In this situation, it was urgently necessary to protect Italian consumers from unfair commercial practices in the digital environment.

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