Unfair Commercial Practices Directive, Chapter 2, Article 5, 2., (b) Unfair Commercial Practices Directive, Chapter 2, Section 1, Article 6, 1., (d) Unfair Commercial Practices Directive, Chapter 2, Section 2, Article 8 Unfair Commercial Practices Directive, Chapter 2, Section 2, Article 9, (e) Unfair Commercial Practices Directive, Annex I, 20.

 

(1) Redirecting consumers, looking for free products/services, to the website of a trader on which these products/services are paying, constitutes a misleading practice.

(2) The requirement to enter personal data on an online form of the trader and, at the same time, require them to pay for a service/product, does not constitute an unfair commercial practice.

(3) Sending various emails to consumers, urging them to pay the trader within a period during which they can withdraw from a transaction, constitutes an aggressive commercial practice.

The present case relates to online sales of software provided by the defendant, an English company based in Germany. Following several complaints reported by consumers and their associations on 12 July 2010, the Italian Competition Authority decided to start an investigation.



According to the complaints of various consumers, the trader carried out an unfair commercial practice due to the following circumstances:

 (i) The defendant did not inform consumers that some of its software was not a freeware (i.e. was not offered for free). In particular, the defendant created a false impression that the software sold on its webpage was offered for free. In fact, after searching (through a web search engine) for the name of the software together with the term "free", several consumers were directed to the website of the defendant. After accessing the given link, consumers were not directed to defendant's home page, but to another page with a registration form that requested to insert personal data. On the side of this form, the terms and conditions of the contract were displayed in a small formatting. The above mentioned registration led consumers to sign a subscription for an online software supply and to pay a monthly fee in advance for the first year by a bank transfer.

 (ii) Later, the defendant sent e-mails stating that the software was offered for free only for a trial period of two weeks within which the consumer could exercise the right of withdrawal. These emails were followed by two other e-mails requesting a payment, in absence of which legal proceedings could be initiated.



Conversely, the defendant claimed that the information provided on its website and in the registration form (containing the summary of the terms and conditions) was linear and clear for an average consumer. According to the defendant, the use of a page different from the "home page" of its website was a common marketing practice in e-commerce, aimed to allow consumers to easily access desired products. The defendant also presented the large number of attempts of fraud, set up by consumers through the insertion of false data. According to the defendant, all these circumstances showed that consumers were aware of the obligation to pay for its service.

Regarding the requests for payment, the defendant claimed that the threat of bringing a legal action represented the legitimate exercise of a right of the creditor (the defendant).

The Italian Competition Authority ascertained two different unfair commercial practices.

(1) According to the Authority, the defendant infringed the prohibition on misleading commercial practices by redirecting a consumer (who was searching for a free software) to its website, whereas the software on the website of the defendant was in fact not offered for free.

Further, the Authority held, the requirement to accept the general terms and conditions of a contract is not sufficient to create awareness of the paying nature of the service/product.



(2) Concerning the requirement to enter personal data on the defendant's registration form, the Authority found that it is not incompatible to sell a non-free software and, in the same time, require consumers to enter their data in a form on the web page of the defendant.

According to the Authority it is usual that a trader asks for a personal data, regardless whether it offers free or paid services/products.



(3) The Authority finally concluded to an aggressive commercial practice consisting of the various emails the defendant sent to consumers following the two weeks within which consumers could have exercised the right of withdrawal.

The investigation established that the defendant used these emails to persuade consumers to pay, rather than exposing themselves to economic and reputational risks. In particular, the charge of 5 euros for a few weeks of delay in the payment, which the defendant described both "request fees" and "interest" in the same communication, represented a further element of psychological pressure. In this respect the defendant threatened the possibility to inform debt recovery agencies.

 

(1) Does redirecting consumers, looking for free products/services, to the website of a trader on which these products/services are paying, constitute a misleading practice?

(2) Does the requirement to enter personal data on an online form of the trader and, at the same time, require them to pay for a service/product, constitute an unfair commercial practice?

(3) Does sending various emails to consumers, urging them to pay the trader within a period during which they can withdraw from a transaction, constitute an unfair commercial practice?

 

URL: http://www.agcm.it/ricerca-avanzata/open/C12560D000291394/E6B40C7F41D89968C12577E50033A00E.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. The fine imposed for the unfair commercial practice was: EUR 480.000. The fine for the aggressive commercial practice was: EUR 480.000.



Consequently the Italian Competition Authority ordered the defendant to publish an extract of the Authority's resolution to ensure that the unfair commercial practices do not continue to procure any effects.