Council of State

Maxi fine for social media advertising from fake satisfied consumers

A company selling slimming products online was fined by the Antitrust Authority for unfair practice. But pyramid selling was ruled out

by Patrizia Maciocchi

Credits: Deise Elen (Pexels)

2' min read

Translated by AI
Versione italiana

2' min read

Translated by AI
Versione italiana

Posts on Facebook and Instagram recounting the satisfyingpersonal experience of consumers of body care or slimming products. Advertising the qualities of the recommended supplements or creams, however, are often sellers and not buyers.

 An unfair commercial practice that the Council of State, in its ruling 2871, stigmatises in upholding the Antitrust sanction against two online sales companies.

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Unlawful sharing of false experiences

In the judges' crosshairs ends the strategy of encouraging the sharing of not always authentic consumer experiences. Personal paths by alleged consumers that make the commercial purpose of the 'advice' unclear to the average consumer. A hidden advertisement that, recalls the Council of State, is forbidden and is much more insidious than the overt commercial, in which the guard of possible buyers is higher in the face of a clear purpose, while the critical spirit decreases in the case of a message that apparently comes from someone who claims to have personally tried the products, drawing benefits from them.

Council of State Guidance

The Council of State, therefore, emphasises that surreptitious advertising - proposed as apparently neutral and disinterested information - falls within the unfair and misleading commercial practices provided for by the Consumer Code (Legislative Decree 206/2005 Articles 20(2) and 22(2)).

On this occasion, the administrative judges emphasised that also editorial advertising, which addresses the public in the misleading guise of a normal journalistic service "conveying the advertising message surreptitiously, in an apparent context of exclusive informative or entertainment value, must be brought within the scope of the prohibition of surreptitious advertising". Even in this case, 'the critical resources to which the average consumer is accustomed when faced with overt advertising pressure' are lacking.

In the case examined, the appellant's invitation to the sellers to present themselves essentially as consumers, making extensive use of their social profiles, "constructing their public image as sellers/consumers, without clarifying the commercial and advertising purposes pursued", in order to recruit new members, is of particular importance. "From the sellers' use of communicative registers that created a mixture between the private and professional spheres," reads the ruling, "aimed at concealing the promotional intent of the information shared on social media, the unfairness of the practice described emerges, which was qualified as misleading.

Pyramid selling excluded

The Council of State reduced the penalty initially imposed from 200,000 euro to 160,000 euro, after excluding "pyramid selling", which is carried out by operating a sales network in which consumers act as agents and recruiters of other consumers.

Specifically, there was no evidence that the income from recruitment and self-consumption was prevalent in the remuneration plan, over that from direct sales.

Nor that the appointees were 'primarily induced to recruit new consumers, also in order to recover what was initially paid'.

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