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Higher Mitigation of Fines Due to Prompt Implementation of Measures Addressing Authority’s Concerns in Unfair Commercial Practices Investigations

In a decision published on 10 February 2017, imposing Samsung Electronics Italia S.p.A. (“Samsung”) fines totaling € 3.1 million for alleged aggressive unfair commercial practices, the Italian Competition Authority (the “Authority”) confirmed that the prompt implementation of measures aimed at addressing its concerns regarding alleged unfair commercial practices leads to a higher mitigation of the fine.

According to the Authority, Samsung would have: (i) provided consumers with incomplete and misleading information on the terms and conditions of the promotions; and (ii) forced consumers to provide their consent to the processing of their personal data for marketing purposes, as a condition to obtain the premiums related to the purchase of the product. In setting the amount of the fine, the Authority took into account the measures implemented by Samsung before and after the beginning of the proceeding. Indeed, in relation to the second allegation, the Authority considered the importance of the measures implemented before the opening of the proceeding and granted a significant reduction of the fine (25%). In relation to the first conduct, the Authority granted a lower reduction of the fine (15%), given that the measures aimed at addressing its concerns were adopted only after the opening of the investigation.

On 4 May 2016, the Authority opened the investigation following several complaints received from consumers and consumers’ associations. In particular, Samsung would have used claims aimed at promoting prize-giving events without providing consumers with all relevant information and using a font style, which would have been too small or difficult to read. The Authority also considered that the access to promotions’ rules in each point of sales or through the website was not sufficient in order to overcome this lack of information. Furthermore, as mentioned above, according to the Authority, Samsung would have forced consumers to provide their consent to the processing of personal data for purposes other than the ones necessary for obtaining the premium. During the proceeding, Samsung voluntarily submitted and implemented measures aimed at improving consumers’ awareness on the terms and conditions of the promotions. These measures included simplification of consumers’ involvement in prize-giving events, verification of consumers’ satisfaction, improvement of systems aimed at monitoring whether employees would effectively provide all the relevant information to consumers, streamline procedures for obtaining the premium, a more efficient handling of consumers’ complaints. Furthermore, Samsung also submitted that it had implemented other measures aimed at addressing the concerns related to the provision of the customers’ consent for the processing of their personal data. The Authority fined Samsung of € 3.1 million for alleged unfair commercial practices consisting of aggressive and misleading promotions related to the purchase of smartphone, smart TV and other Samsung’s products. However, in the calculation of the fine, the Authority acknowledged the relevance of the above mentioned measures granting a significant reduction of the applicable fine.

Gabriele Giunta (Trainee) contributed to this blog post.




Misleading Terms & Conditions and Unfair Contract Terms: The Italian Competition Authority Opens Two Investigations against WhatsApp Inc.

On 28 October 2016, the Italian Competition Authority (the “Authority”) opened two investigations against WhatsApp Inc. for alleged unfair commercial practices. The first investigation by the Authority alleges that WhatsApp Inc. would have forced users to subscribe to new terms and conditions, in particular, a clause on the sharing of data with Facebook, by making users believe that, otherwise, they would have not be able to use the service. On another other side, the Authority opened a second investigation regarding other alleged unfair commercial practices. According to the Authority, WhatsApp Inc. would have included in its “Terms of Use” unfair contracts terms, including the exercise of the right of withdrawal granted exclusively to the company, the limitation on liability in favor of the company and the identification of the competent court for disputes resolution (currently only US Courts). Finally, the Authority also opened a consultation on these alleged unfair contract terms.

These investigations emerged after the Italian Data Protection Authority, on 27 September 2016, opened an investigation on WhatsApp’s new privacy policy and the data flow from WhatsApp Inc. to Facebook. In particular, the Italian Data Protection Authority asked WhatsApp Inc. to clarify certain aspects regarding the communication of data to Facebook, such as the typology of data communicated, the modality for the acquisition of consent for the communication and the measures adopted to ensure the compliance with data protection laws.

Gabriele Giunta contributed to this blog post.




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