Unfair Commercial Practices Directive, Chapter 2, Article 5, 2. Unfair Commercial Practices Directive, Chapter 2, Section 1, Article 7, 1.

The omission to provide correct and up-to-date information and tools to consumers regarding their amount of data exchange, thus allowing them to prevent a substantial increase of their bills for mobile services, constitutes a misleading commercial practice. 

The present case concerns a substantial increase of consumer bills for mobile services, after subscribing to a mobile-data service provided by the defendant (so called "shock billing"). Following several complaints reported by consumers on 18 May 2010 the Italian Competition Authority decided to start an investigation proceeding against the defendant (telecom operator), concerning the consumers who activated one of the subscription options "Tre dati", "Tre Dati time" or "Naviga 3" with the aim to browse the internet via mobile phone or internet key.

According to the complaints of various consumers, the defendant omitted to provide them with the information that could prevent them from exceeding the data traffic threshold linked to their subscriptions.

Conversely, the defendant held that these subscriptions provided a more convenient tariff rate for data traffic in the defendant's network. However, the application of this tariff rate was limited to data traffic below a certain threshold (amount of data transferred per month or week). The defendant pointed out, that only data traffic in its network or in its partners' network was taken into account to reach the said thresholds (i.e., data transferred through different networks, e.g. roaming in foreign countries, counted as being outside the threshold).

Regarding measures available to users to verify the amount of their data traffic, the defendant argued that all its modems had a software (called "Dashboard") that indicated the generated data traffic. However, this amount of traffic was only approximate and it could have been different from the one used for the final invoice. Additionally, the defendant claimed that the data traffic could be verified on a specific web page and a data counter on users' compute. Moreover, the defendant sent SMS alerts to consumers who exceeded the approximated data traffic threshold.

 

1) The Italian Competition Authority investigated several conducts with possible relation to an unfair commercial practice. According to the Authority, the defendant omitted to provide information that an average consumer would need in order to prevent unaware exceeding of the data traffic threshold of his subscription (and related charges).

In this context, consumers did not have sufficient reliable information regarding the amount of data traffic, and their level of spending. The practice was more dangerous taking into account that several claims involved browsing through international roaming networks, where the charged tariffs were higher and the monitoring procedures more difficult.

In more detail, the defendant admitted that the amount of traffic indicated by the given software differed from the information used for the final invoice. Therefore, the Authoruty concluded, this was not a reliable benchmark.

Regarding the dedicated web page, the Authority pointed out that it was a tool that an average consumer could consider ultimate, and that the data indicated were not updated real time.

Regarding the counter in consumers' computer, the Authority found that it was not useful, since it requires a familiarity with the data units system and an ability to calculate that cannot be considered typical for an average consumer.

Regarding the SMS alerts, the defendant was not able to establish it sent the above mentioned SMS alerts to consumers, because the data were deleted from the defendants systems after six months (pursuant to the privacy discipline).



Finally, the authority emphasised that the defendant had not implemented a single one of the measures the Authority retained useful to limit the "shock billing" (e.g. SMS alerts, cost thresholds).

Does the omission to provide correct and up-to-date information and tools to consumers regarding their amount of data exchange, thus allowing them to prevent a substantial increase of their bills for mobile services, constitute a misleading commercial practice?

URL: http://www.agcm.it/ricerca-avanzata/open/C12560D000291394/AE2624F53BE05542C12577D0003DBBDD.html

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