PRESS RELEASE

E-COMMERCE: ANTITRUST ACTION TO PROTECT CONSUMERS WITH SAFE AND TRANSPARENT OFFERS, TWO COMPANIES SANCTIONED FOR UNFAIR PRACTICES

Fines totaling 440 thousand euros. To protect the health of citizens, the owner of a website (closed permanently) for on-line drug sales is being fined 200 thousand euros. A total of 240 thousand euros in fines for the companies that manage the Private Outlet website. These are the first two cases in which the Authority has applied, thanks to the collaboration of Special Units with the Guardia di Finanza (Italian Tax Police), the law that makes it possible to require Internet Service Providers to block access to websites that infringe on the rights of consumers.

Safer and more transparent E-commerce for consumers. This is the aim of the Antitrust action that concluded two proceedings on unfair commercial practices with fines totaling 440 thousand euros for the owners of two internet sites. One of the two websites had already been blocked by a precautionary measure last June because it was selling drugs illegally on line and, more specifically, medicines requiring a doctor's prescription and whose consumption without a physician's supervision could pose serious health risks.

These two investigations are the first times the Authority has ever applied, thanks to the collaboration of the Special Market Protection Unit of the Guardia di Finanza (Italian Tax Police), the law that provides for the possibility of requiring Internet Service Providers to block access to websites. The Antitrust, in fact, strives to make it possible for citizens to use electronic commerce, which represents an important form of leverage for economic growth, without incurring the risks of potentially dangerous purchases or improper practices by the operators. The same approach was used last week when the Authority, as already announced, accepted and made binding the commitments proposed by the Groupalia website.

The two measures just adopted by the Authority are as follows.

ON-LINE DRUG SALES THAT ARE ILLEGAL AND DANGEROUS FOR HEALTH

Prior to the investigatory proceedings, the Antitrust had already blocked access to an internet website, traceable to Alex Broek, that permitted Italian consumers to purchase drugs on line, with the professional being fined 200,000 euros at the conclusion of the investigation.

The professional had used the now blocked internet website to allow Italian consumers to buy medicines under the mistaken assumption of the lawfulness and complete safety for health of the on line drug sales, even without the intermediation of a pharmacist and, in the case of so-called 'ethical' drugs, without the necessary doctor's visit and medical prescription. The owner of the blocked website, more specifically, leveraged the particular psychological, social and relational discomfort of subjects afflicted with certain specific pathologies, convincing them that there was no need for in-depth medical testing: people affected by psychological disturbances, obesity or impotence, therefore, were more inclined to buy on line, preferring more privacy but putting their health at serious risk.

The Antitrust reminds us that on line drug sales are illegal, since the remote commerce of medicines is prohibited by Italian law, but even more importantly they are dangerous.

The investigation was triggered by a joint report from the AIFA (Italian Drug Agency) and the NAS (Anti-fraud and Health Units of the Carabinieri) within the context of a broader collaboration with the Ministries of Health and Economic Development, and by additional elements that the Antitrust acquired as a matter of course with the investigative collaboration of the Special Unit of the Guardia di Finanza (Italian Tax Police), which also, following the provisional measure of last June, fulfilled the requirements for proceeding to shut down the website.

CLEAR INFORMATION FOR ON-LINE BUYERS

The Authority's second measure concerns the commercial practices of Private Outlet, a French website dedicated to wholesale and retail sales, via websites that can be accessed from various countries in the European Union in various languages, of famous brands of clothing items for men, women and children at reduced prices with discounts up to 70% compared to those used in normal distribution.

According to the Antitrust, which had closed the website provisionally before reactivating it to allow for the management of consumer complaints, the companies that manage the Private Outlet Srl and Private Outlet SaS websites:

1) provided consumers with false information about the delivery times for the products sold via Internet: many consumers complained of deliveries of items they did not order, or that arrived long after the agreed dates;

2) hindered the exercise of the consumers' contractual rights: a variety of reports told of difficulties in contacting the service providers or failures in getting products replaced following the delivery of products that had never been ordered;

3) invited to purchase products at a specific price, without noting the existence of predictable reasons for why they could never actually be delivered at that price. The companies restock directly from the manufacturers by purchasing limited numbers of items: from the outset, therefore, they were well aware that they might be unable to satisfy every request, despite the fact that payment is due at the time of ordering.

In light of these practices, the Antitrust has sanctioned the two companies with fines totaling 240 thousand euros and a warning against the perpetration of any similar behaviors.

Rome – 29^th December 2012