Two measures recently approved by the government which will come into force on 12 December 2007 to bring Italian rules into line with EU directives on misleading advertising addressed to consumers and businesses assign greater powers to the Authority (freedom to act ex officio, carrying out specific inspections when required, and an increase in fines from the present 100,000 euros up to 200,000 euros) and, once internal regulations have been approved, will allow the Authority's departments to carry out faster and more effective interventions on behalf of consumers.

Based on the experience from 2005 to today, the following list has been compiled of industries where there is the greatest risk of violation, with an indication of the fines levied up to the present time (Table 1).

In two years, from the time the Giulietti law came into force in 2005, the Antitrust Authority has dealt with 385 cases of misleading advertising, has discovered 344 violations and has imposed fines totalling Euro 7,729,500.00, of which Euro 2,186,000 just in the period January-June 2007. The following is a summary of the industries most at risk.

TELECOMMUNICATIONS

There is still too much misleading advertising in fixed and mobile telephony. This is a particularly serious phenomenon given the extreme variety and rapid evolution of industry offerings which cause disorientation in the consumer. The Authority will continue to keep a watchful eye on the industry and reiterates the need for operators to send out clear and complete messages. The Authority has identified the major gaps in information that give the advertisements their misleading nature. These are: ‘camouflaged’ costs (the costs and conditions relating to the offer that are omitted in the advertisement); the technological expertise necessary to use certain services (need to verify signal coverage for the service offered, as in the case of UMTS or for viewing TV on a mobile phone); so-called “forever” offers which are misleading because in reality there is a deadline by which the service, at that price, must be used; and finally, hidden obligations (for instance, it must be made clear when, in order to take advantage of an offer or of a cell-phone at the advertised conditions one must subscribe to a given tariff plan for a specified period of time).

The Authority handled 124 cases of misleading advertising in telecommunications in the period from 2005 up till June 2007 and levied fines totalling Euro 2,782,500. In only 11 cases was no contravention found, such was the high level of “misrepresentation” in this industry's advertising.

From January to June 2007, 19 cases were dealt with; of these, 17 were adjudged to be misleading and the Authority imposed fines totalling Euro 696,500.

TOURISM

From 2005 until the present, the Authority has intervened on a number of occasions in tourism following complaints from individual consumers and consumer associations.

These are widely-used services for which there is a high level of misrepresentation in advertising that may be prejudicial to the economic behaviour and wellbeing of consumers. Indeed, of the total of 20 proceedings relating to the tourism industry as broadly defined, 19 ended in a finding of misleading advertising in the last year and a half.

The findings of misleading advertising mostly had to do with advertisements for hotel facilities, tourist villages, wellness centres, the cost of flights, cruises and packaged holidays. The most widely used medium for these advertisements is the internet. The description of the facilities on these sites is often defective or completely false; in any case, liable to mislead the consumer who either has no elements whereby to assess the offer or has even been provided with false information.

Some of the most frequent cases have to do with facilities that have given themselves more “stars” than those properly assigned by the tourist promotion board.

Many other procedures have to do with the description of tourist villages in tour operators' catalogues which often diverge radically from the reality.

The fines imposed by the Authority from 2005 to June 2007 for misleading advertising in the tourist industry totalled Euro 201,600.

SLIMMING PRODUCTS AND PSEUDO-PHARMACEUTICALS

The censured advertisements generally have in common the characteristic that they propose products capable of producing slimming or tonic effects without the need for dieting or physical exercise.

Many of these advertisements omit information: in the Authority's view, the absence of indications regarding the need for a prior consultation with a doctor and other directions such as keeping to the recommended dose and not making prolonged use of the pharmaceutical might induce consumers to overlook normal rules of prudence, thus endangering their health. In one particular case, the Authority, in arriving at the fine, also established the principle that consumers having problems of weight or cellulite find themselves in a situation of “particular psychological weakness”. They are therefore weak consumers to be protected with higher fines.

The Authority imposed a total of over Euro 1,140,000 in fines in no fewer than 35 cases for misleading advertising of slimming products, food supplements and pseudo-pharmaceuticals in the period 2005-June 2007.

Rome, 13 August 2007

TABLE 1