AGCM

PRESS RELEASE

Alert by Pitruzzella, the Antitrust Guarantor:
“New instruments to combat counterfeiting and commercial piracy”

“New instruments are needed to strengthen the possibility of a prompt intervention against the infringements to the detriment of consumers carried out through the use of Internet”. At a hearing before the parliamentary investigation Commission on counterfeiting and commercial piracy, the president of the Antitrust Authority, Giovanni Pitruzzella, has sounded the alarm on the extensiveness and growth of the phenomenon in the last years, especially among the new generations: “Based on the 2014 Censis Report on this issue, 75% of the young subjects interviewed in the course of the investigation – Pitruzzella stressed – consciously buy counterfeit products, out of an intentional and reiterated choice”. Hence, according to the Antitrust Guarantor, the need for “other interventions, especially educational and informative ones, so as to divulge not only a broader culture of legality, but also knowledge of the damages which an illusory saving in the short term might occasion to the economic conditions of the larger community in the long term“.

“Counterfeiting – the president of the Competition and Market Guarantor Authority (Agcm) explained – is a commercial practice which strikes the correct functioning of the market at the heart. It depresses the incentives to improvements, disorientates consumers, and prevents competitors from producing their own benefits”. During the last two years, thanks to the Financial Police’s support, the Authority has sought to react to a “gap” in the protection afforded to all those consumers rightfully entitled to make safe and conscious purchases, by exercising a role of repression through the sanctioning instrument, and thus a deterrent function as well.

Pursuant to feedback from various consumer associations, the Competition and Market Guarantor Authority has firstly obscured 20 online sites which were marketing products with various brands, seemingly original, and belonged to a physical person residing in China; and later initiated two proceedings against other 33 sites selling counterfeit shoes, likewise traceable to other Chinese operators: in some wholesale stores and factories in Toscana, Lazio, Lombardia and Puglia, 1 million and 700.000 shoes, valued at around 20 million Euros, were confiscated, as they contained a cancerous substance (hexavalent chromium) in alarming proportions.

In 2012, moreover, the Antitrust had intervened against two sites offering online drugs without medical recipe, in respect of which prescription had instead been requested. Overall, in the course of 2013 the Authority has attended to the task of obscuring 165 sites relating to brand products traceable to persons residing in China or in Malaysia. The disputing activity continued in 2014, through the initiation and finalization of 3 proceedings which led to 50 sites being obscured.

As for the extent of the phenomenon, in the course of the parliamentary hearing the Antitrust’s president reminded that, according to Censis’ study conducted on behalf of the Ministry of Economic Development, the business volume of counterfeit products in Italy amounted in 2012 to a 6.5 billion turnover. The phenomenon has produced a decrease in available job estimated to be around 100.000 units, with a concomitant lower tax revenue of some 1.6 billions for direct taxes and 3.6 billions for indirect ones. Lastly, at a European level, 40 million products, valued at approximately 1 billion Euros, have been blocked at customs in 2012.

Rome, 27 November 2014