The Italian Competition Authority imposed to Facebook a fine of Euro 7 million for non-compliance.

The Italian Competition Authority (“ICA”) ascertained that Facebook did not comply with a previous ICA’s decision (2018); in particular, Facebook kept providing its customer with non-complete information concerning the exploitation of their data for commercial purposes, thus breaching the Italian Consumer Code. ICA underlined, consistently with it previous caselaw, that all information and elements concerning the consideration for a given product or service must be showed/communicated to the consumers immediately, clearly, and completely.

THE FACTS

On February 17, 2021, the Italian Competition Authority (“ICA”) published the decision imposing a fine of seven million Euro to Facebook for its non-compliance (“Decision”) with the previous ICA’s  decision of November 2018 which ascertained the existence of two unfair commercial practices, already sanctioned Facebook (for a total of ten million Euro), prohibited the continuation of both practices and imposed the publication of a rectifying statement.

The Decision ascertains that Facebook, in addition to not having published the rectifying statement, keeps not informing the customer, with clarity and immediacy before registration, of the collection and use, for remunerative purposes, of the data/information of its customers and, thus, of the commercial intent pursued by Facebook aimed at monetizing them.

In particular, already in its 2018 decision, the AGCM noted, inter alia, that “The information provided is generic and incomplete, it does not adequately distinguish between, on the one hand, the use of data which is functional to the personalization of the service with the aim of facilitating socialization with other “consumer” users, and, on the other hand, the use of data needed to create targeted advertising campaigns”; Accordingly, the AGCM challenged that “given the claim “Facebook helps you connect and stay in touch with the people in your life”, there was no adequate alert to inform users, immediately and effectively, about the centrality of commercial value of their data compared to the social network service offered[…]”, since Facebook merely underlined that the subscription was free forever.

In the Decision, given the lack in the registration phase of a clear and immediate information regarding the collection and use of user’s data for commercial purposes, the ICA deemed that the removal, by Facebook, of the claim regarding the freeness of the services “is not sufficient” to overcome the illegitimacy profiles already ascertained in 2018, thus reiterating that the existence of more detailed information in the conditions of use and in other contractual documentation accessible through hyperlink on the registration page is of no importance, regardless of their location within the latter.

In particular, the ICA, supported by administrative case law related to its 2018 decision, clarifies that the information in question is “absolutely necessary” to undertake an informed decision on joining the platform, “in light of the economic value gained by Facebook due to the data transferred by the user, which, therefore, constitutes the consideration for using the service”. The AGCM also specifies that it might be possible to consider legitimate “cases in which the information recalled through the link concerns (concerned) elements which are ancillary to the main performance of the professional (the legal warranty of conformity with respect to the sale of goods)”, nevertheless, the reference to a link can never relate to the price, or its elements, or in any case to the consideration that must be paid by the consumer.

WHY IT IS IMPORTANT

In addition to the widespread diffusion of Facebook, which makes of general interest any decision related to it, the Decision strictly reiterates ICA’s established case-law: in particular, in the context of the on-line supply of goods or services, the information relating to the consideration (even non-pecuniary) requested to the consumer must always be immediate, clear and complete.

Furthermore, similarly to the  domestic and European case-law related to antitrust infringements, the Decision states that the parent company (Facebook Inc., in the case at hand) is assumed to exercise a decisive influence upon the totally controlled subsidiary’s business (Facebook Ireland Ltd.), such as to make the parent company to be held liable and, therefore chargeable, for the infringements materially committed by the subsidiary, (also) with reference to unfair commercial practices pursuant to the Italian Consumer Code.

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