Misleading advertising leads to record fines in Italy

Francesca Sutti and Federich Romby

16 aprile 2018

In late February 2018 the Italian Competition Authority (“ICA” or the “Authority”) set a precedent in a case involving the provision of telecommunications services with specific reference to the supply of fibre optic communication networks. The ICA determined that claims by operators concerning the exclusive use of optical fibre connectivity services must fully inform users of (i) the actual characteristics of the service offered, and (ii) the underlying limitations (i.e., geographical limits, differences between the services, restrictions linked to the type of infrastructure which is used to deliver the service).

The ICA’s decision made reference to diverse types of advertising campaigns (online, TV spots, below the line, billboards) that may be used to promote optical fibre, noting that claims referencing top performance and no limitations must be qualified.

In the specific case at hand, the ICA concluded that the company under investigation had omitted or at least did not provide complete information about the fact that, following an initial incentive period, an additional service had to be purchased in order to obtain full speed services. This practice, in fact, misled users as to the price indication included in the main claim and, as such, blurred the content of the offer. In particular, by using the generic term “ fibre”, consumers were not in the position to identify the full extent of the offer. In addition, the company would have omitted adequate clarifications as to the need to verify the features and effective functionality of the offer in the various geographic areas where the service was being offered. This lack of clarification, according to the ICA, resulted in consumer choices being severely affected as to the characteristics and quality of the service.

In its decision, the ICA stressed the importance of the digital sector, a sector that nowadays presents constant changes and evolving user needs (e.g., internet of things, could computing, streaming, etc.) which must always be prioritized. The Authority, in this regard, made reference to the European Commission Communication on “Gigabit Society” for which digital services require improved quality and speed of response in terms of network connectivity.

Such features, as underlined by the European Commission, must always be clear to users, also with respect to the type of connectivity service offered by each single operator. 

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