Unfair commercial practices and unfair terms: new penalties and competent Authorities

Legislative Decree no. 26 of 7 March 2023, which implemented Directive (EU) 2019/2161 of the European Parliament and of the Council (so-called "Omnibus Directive"), made significant revisions to the sanctioning system provided for in the event of unfair commercial practices and unfair clauses in contracts concluded with consumers.

• First, the administrative sanctions that can be imposed by the Italian Competition Authority (AGCM) in the event of an unfair commercial practice or the use of unfair clauses, are set between  EUR 5,000 and EUR 10 M. (doubling, therefore, the previous maximum edict, set at EUR 5 M).

Furthermore, in cases of so-called "widespread infringements" – i.e. EU cross-border infringements of consumer rules, pursuant to Regulation (EU) 2017/2934 – the maximum amount of the sanction imposed by the AGCM may be equal to 4% of the professional’s annual turnover in Italy or in the EU Member States concerned; if information on annual turnover is not available, the maximum amount of the sanction will be EUR 2 M.

Finally, the maximum amount of the administrative sanction provided for in the event of non-compliance with the provisions of the AGCM or with the commitments undertaken, is also raised from EUR 5 M to EUR 10 M.  

• When imposing sanctions, AGCM may take into account the following non-exhaustive criteria:

• the nature, gravity, scale and duration of the infringement;
• any action taken by the trader to mitigate or remedy the damage suffered by consumers;
• any previous infringements by the professional;
• the financial benefits gained or losses avoided by the professional due to the infringement, if the relevant data are available;
• penalties imposed on the professional for the same infringement in other Member States in cross-border cases where information about such penalties is available through the mechanism established by Regulation (EU) 2017/2394;
• any other aggravating or mitigating factors applicable to the circumstances of the case.

• Finally, consumers harmed by unfair commercial practices are expressly given the possibility of bringing an action before the ordinary courts, in order to obtain proportionate and effective remedies, including: (i) compensation for the damage suffered and (ii) where applicable, price reduction or (iii) termination of the contract, taking into account, where appropriate, the seriousness and nature of the unfair commercial practice,  the damage suffered and other relevant circumstances, without prejudice to other available remedies.

The above-described provisions will be effective from 2 April 2023.

For further aspects of consumer legislation amended by Legislative Decree no. 26/2023, implementing the Omnibus Directive, please refer to the recently published contributions on e-commerce and new specific information requirements and on the right of withdrawal and new obligations for businesses