Nightview of Vittorio Emanuele II gallery and the cathedral in Piazza Duomo, Milan, Italy

In brief

The coronavirus outbreak, which hit Italy at the end of February 2020, recorded an exponential increase in the demand for some “essential” goods to cope with the emergency (e.g., protective masks, disinfectant gels, sanitizing products and so on), as well as a simultaneous proliferation of commercial initiatives, especially implemented by online operators, concerning the sale and marketing of these products, not always promoted correctly or under “fair market conditions.”

In this context, the Italian Competition Authority (“ICA” or “Authority“) has proven to be very active in the analysis and repression of the so-called unfair commercial practices put in place by firms active in the digital environment to the detriment of citizens.

In this regard, it should be noted that the ICA’s decisional practice is now consolidated in this field and the procedures for ascertaining any consumer-related infringements are carried out in a regular and rigorous manner.


Contents

The ICA’s activity during the coronavirus pandemic

During the COVID-19 pandemic, the ICA has initiated several investigations and made use of the interim precautionary measures provided for by Article 27 of Italian Consumer Code (Legislative Decree No. 206/2005), temporarily suspending a series of commercial practices deemed harmful to the interests of consumers.

Indeed, in the last two months the ICA has intervened, in particular, in the sector of online sales of products for the prevention and/or diagnosis of SARS-CoV-2 virus contagion. As stated by the Authority itself, these proceedings were “originated from investigations carried out ex officio and are part of the wider monitoring activity that the Authority is carrying out in the e-commerce sector during this specific time of health emergency” (see the press release published on the official web site of the ICA, available here).

The investigations were initiated because, in the opinion of the ICA, the methods of promotion and sale of some products for the prevention (e.g., hand disinfectants and protective masks) and/or diagnosis of infection by COVID-19 (e.g., prevention kits and alleged test kits for home diagnosis of coronavirus) were considered prima facie:

  • misleading, with reference to the way in which the characteristics of products are presented (including the existence of unproven certifications in relation to such products)
  • aggressive, as the websites exploit the consumer’s altered judgment due to the alarm caused by the constant increase in the number of people infected by COVID-19 and the risk of heath as a result of contracting the virus

As mentioned, in some cases, the ICA has ordered the adoption of interim precautionary measures, such as:

  • the shutdown of some websites offering medicines for sale, including Kaletra, without being authorized to supply drugs to the public online, in particular, using claims on the alleged efficacy of the medicinal product — as a remedy to combat the virus — considered suitable to mislead consumers about the actual characteristics and properties of the same, devoid of scientific basis and being particularly insidious, given that they referred to the ability to cure at a critical moment in the COVID-19 health emergency (in this respect, please see Case No. PS11733 and Case No. PS11735, and Case No. PS11723 — English press releases available here and here respectively)
  • the shutdown of a website and the suspension of advertising and marketing activities for the test to self-diagnose COVID-19 infection — “Rapid Test COVID-19” — since the information provided by the professional on the effectiveness of the test, its intended use and its experimental character appears ambiguous, confusing and obscure (in this respect, please see Case No. PS11727 — English press release available here)
  • the suspension of the promotion and sale of individual protective devices (in particular, FFP2 category masks) deemed to be different from those advertised, in terms of quality and technical characteristics, certifications/validations and provenance, and which are not available for delivery within the times indicated (see Case No. PS11736 — English press release available here)
  • the removal of any reference to preventive effectiveness against COVID-19 with respect to the detergents, cosmetics and supplements advertised and marketed on the website (please see Case No. PS11722 — English press release available here)
  • the removal of any reference to the preventive and therapeutic effectiveness against COVID-19 of the products advertised and marketed on certain websites (in this respect, see Case No. PS11732 and Case No. PS11734 — English press releases available here and here respectively)
  • the removal of any reference to the preventive and therapeutic effectiveness against COVID-19 of a bracelet and other anti-COVID-19 devices, misleadingly advertised as “parapharmaceuticals” and sold online (in this respect, see Case No. PS11771 — Italian press release available here)

The Authority has decided to involve the operators of the main search engines and browsers (Google, Apple, Italiaonline, Microsoft, Verizon (Yahoo), Mozilla and DuckDuckGo) in the fight against unfair commercial practices that leverage the ongoing health emergency, inviting them: i) to remove the reported URLs from search results; and ii) not to index the URLs containing links to the websites identified as “abusive pharmacies” (in this respect, see Case No. PS11746 — English press release available here).

The ICA also launched two separate investigations against marketplace platforms with regard to some claims relating to the marketing of hand sanitizing/disinfectant products, respiratory tract protection masks and other health and hygiene products during the health emergency caused by COVID-19, as well as the unjustified and significant increase of the prices recorded for the sale of these products in recent weeks (in this respect, see Case No. PS11716 and Case No. PS11717 — English press release available here).

Always with a view to ensure maximum consumer protection in such a complex period, the ICA launched a preliminary investigation by sending requests for information to numerous operators of the retail sector to acquire data on the dynamics of retail prices and wholesale purchase prices of basic foodstuffs, cleansers, disinfectants and disposable gloves to identify any phenomena exploiting the health emergency by increasing their prices (English press release available here).

Lastly, the Authority made its observations regarding the critical issues of the emergency discipline pursuant to Section 88-bis of the so-called Cura Italia Decree, which allows tourism operators to issue a voucher — instead of reimbursement — for “restoring” trips, flights and hotels canceled due to exceptional circumstances connected with the COVID-19 emergency. In reporting to the Italian Parliament and the Government, the Authority highlighted that Section 88-bis contrasts with the current European legislation, which in the case of cancellation due to unavoidable and extraordinary circumstances provides the consumer’s right to obtain a refund. According to the ICA, in fact, the vouchers should have some characteristics including insurance coverage for the possible bankruptcy of the tour operator or the carrier and the right to a cash refund if the consumer has not used the voucher when the voucher expires (Italian text available here).

Conclusions

From the examination of the recent enforcement activity of the Authority, the choice of the ICA to place consumer protection at the center of its activity in this period is evident. The significant number of proceedings started clearly illustrates how the Authority decided to intervene in a timely and effective manner, making extensive use of the interim precautionary measures to counter commercial initiatives aimed at gaining an undue advantage from the complex situation linked to coronavirus.

In particular, the ICA focused on online operators at the forefront of interacting with consumers in the lockdown period, requesting maximum transparency and clarity in the communication and marketing of products, goods and services.

In this regard, it should be noted that the Authority’s activity has produced positive effects for consumers and the market, inducing various operators — whose activities have been the subject of the proceedings launched — to change their conduct by adopting measures aimed at complying with the indications received.