Unfair Commercial Practices Directive, Chapter 2, Article 5, 2. Unfair Commercial Practices Directive, Chapter 2, Section 1, Article 6, 1., (b) Unfair Commercial Practices Directive, Chapter 2, Section 1, Article 7, 1.

Offering a service to consumers, even when the service is free of charge, constitutes a misleading commercial practice when the consumer has not ordered this service and the service was automatically activated.

This case concerned the possible unfairness of the commercial practice allegedly consisting in the activation of the service "Alice Pay" in the absence of consumers' order. Following several complaints reported by several consumers on 14 June 2010 the Italian Competition Authority decided to start an investigation proceeding against the defendant (telecom operator).

The service concerned allowed consumers that were owners of an ADSL connection to pay for the online e-content. The content itself was purchased from content providers (third parties) - partners of the defendant. The defendant was only charging the relating costs to consumers via invoices.

The complaints of several consumers held that:

1) the defendant omitted material information (price, terms & conditions) relating to the concerned service that was automatically activated in the absence of consumers' order;

2) the trader did not protect the access to the service through a certification procedure;

3) the trader did not allow consumers to use the customer help-line to disable the service.

Conversely, the defendant held that it provided a clear and complete description of the concerned service through a special section on its website. In particular, the trader claimed that consumers were aware of each purchase made through the disputed service before the conclusion of each transaction, by accepting the contract terms and conditions and immediately after its conclusion, by written confirmation through e-mail.

However, the defendant held that it established a new model of "Welcome Letter" for the service.

Regarding the omission of protective measures, the defendant demonstrated that it put in place some specific measures to prevent the possible misleading uses of the service by other parties (e.g. pre-defined settings of all wi-fi modems provided by the defendant).

Regarding the alleged obstacles to the deactivation of digital content, and the disabling of the service, the defendant argued that the possibility of deactivation of the service was always available to consumers (e.g. Customer Service).

(1) The Italian Competition Authority ascertained the unfair commercial practice regarding the marketing of the service "Alice Pay".

According to the Italian Competition Authority, the defendant omitted material information (price, terms and conditions) relating to the service by activating the service in the absence of a consumer order and, therefore, did not protect the access to the service through a certification procedure.

In particular, the defendant had: (i) automatically enabled all activated consumer ADSL lines for the use the disputed service, and in the same time omitted to adequately inform consumers of such lines, (ii) failed to draw up a specific procedure for certification, authentication or security of the service in order to exclude the possibility of access to it by parties other than the owner of the phone line.

The Italian Competition Authority further stated that the sole fact that a service is free of charge does not exclude liability for an economic injury caused to the consumers, that are unaware of the possibility of being exposed to unfair uses from third parties.

Regarding the measures taken by the defendant in order to exclude the possibility of unauthorized use of the service, the Authority concluded that these measures could not exclude undesired use of the service by persons other than the owner of the phone line (e.g., family), and that these were therefore insufficient.

 

Under which circumstances can a commercial practice be considered unfair?

URL: http://www.agcm.it/ricerca-avanzata/open/C12560D000291394/5D317C653265D39FC12577EB005415BA.html

Full text: Full text

No results available

No results available

The Italian Competition Authority decided to fine the trader and it issued a cease-and-desist order regarding the criticized practices