PRESS RELEASE

FINES OF €6.0 MILLION TO 7 COMPANIES PROVIDING ELECTRICITY AND GAS SERVICES FOR THE ACTIVATION OF UNSOLICITED SUPPLIES

During the month of November, the Italian Antitrust Authority closed seven cases about procedures for the offer and conclusion of distance contracts in electricity and natural gas in the free market, namely those raised through the network of door-to-door agents and through a telephone channel (the so-called teleselling). The companies involved are: ENEL Energia, ENI, ACEA Energia, Hera Comm, GdF Suez Energie, Green Network and Beetwin. Overall, fines in excess of €6.0 million were applied.

During preliminary proceedings – launched between October 2014 and April 2015 on the basis of several reports by individual consumers, consumer associations, competing service providers – the Authority for Electricity, Gas and Water System (Autorità per l’energia elettrica, il gas e il sistema idrico) issued a detailed opinion in the context of the cooperation envisaged in the Memorandum of Understanding between the two authorities. The investigations of these companies also made use of the collaboration between the Special Antitrust Unit of the Financial Police (Guardia di Finanza).

According to the Antitrust Authority, the seven operators altered considerably the freedom of choice of consumers, adopting contractual procedures in violation of the Consumer Code. These practices took advantage of the context of “information asymmetry” in which consumer choices are made because of the inherent complexity of commercial offers for electricity and natural gas on the open market.

In particular, the practices that were investigated concerned:

1. the conclusion of supply contracts without the consumer’s consent and, therefore, in the case of activation of unsolicited supplies, the unjustified request for payment for the provision of unsolicited supplies by the seller;
2. the conclusion of supply contracts without adequate knowledge and information about the identity of the operator, the nature and purpose of the contact, the characteristics and the contractual conditions of the offer such as to limit considerably their ability to make an informed decision about the offer, even in relation to the time and place of the contacts;
3. the opposition by means of various obstacles to the exercise of the right of withdrawal, by limiting the ways in which this right could be exercised up to the failure to handle complaints for unsolicited activation;
4. failure to comply with contractual procedures for sales outside commercial premises or by distance selling introduced by the Consumer Rights Directive (transposed by Legislative Decree No 21/2014): in particular, for telephone sales, the choice of procedures for the conclusion of contracts and for the confirmation of consent by consumers and for the systematic availability of a durable medium containing the recording of phone calls before the contractual obligation arises.

Investigations were concluded with the application of penalties proportionate to the size of the individual companies and to the seriousness of the violations of the Consumer Code that had been established. In detail:

Throughout the proceedings, operators proposed significant changes to procedures currently in use to conclude supply contracts in order to overcome consumer problems that emerged throughout the investigations. In particular, even with different methods and timings, the interested companies will make available to consumers the contractual documentation (or at least the pre-contractual details envisaged in the Consumer Code) before the client will be contractually bound, in such a way as to ensure a more knowledgeable and informed consent at the conclusion of the new contract. All the operators will, moreover, carry out a second telephone call to check that the contractual documentation and the consent of the consumer were actually received, in the absence of which the contract proposal will be cancelled.

The Antitrust Authority, acknowledging that the envisaged measures can contribute significantly to allow consumers an intelligent and informed choice about new supplies and consequently render the activation of unsolicited requests, or of requests that consumers are unaware of, a mere accident, took into account the joint attitude of the enterprises and reduced the amount of the fines in relation to the extent of the effective implementation of the proposed changes.

Rome, 2 December 2015