A perceived increase in misleading or ambiguous advertising and a lack of transparency regarding charitable contributions has raised concerns in Italy about the credibility of companies engaged in cause-related marketing initiatives. Precipitated by the 2023 ‘Pandoro-gate’ scandal, Italy has introduced some changes to its laws and regulations regarding influencers and charitable promotions, in the form of new guidelines from Agcom and the draft DDL Beneficenza law. The changes highlight growing attention by Italian regulators towards the need for transparency, accountability, and integrity of marketing practices in the digital age.  Brands and influencers will need to adapt quickly to meet these new standards, to avoid penalties and maintain consumer trust.

Existing legal framework for charity and cause-related marketing

The relevant legal framework for cause-related marketing is set out in Legislative Decree No. 206/2005 (the “Italian Consumer Code”), Legislative Decree No. 145/2007 and the Code of Self-Discipline for Commercial Communication, which govern advertising practices and guard against consumer deception. Some of the key general requirements are that:

• advertising must be transparent, truthful, and accurate; 
• companies must make the promotional nature of their messages clear; 
• all conveyed information must be reliable and not lead consumers into error, especially when making choices regarding products or services; and
• relevant information that could influence consumer choice must not be omitted.

In the context of charity and cause-related promotions and advertisements, Italy’s laws require:

• communication of all pertinent details to ensure that consumers have a clear understanding of to what they are contributing and the specific actions to be undertaken by the donor; 
• comprehensive information regarding the product or service cost, the specific percentage to be allocated to charity (or the donation mechanism to which the consumer will contribute), and other relevant details;
• disclosure of the identity of the donor, the recipient of the donation, and the intended social objective of the donation, without overestimating the specific or potential value of the contribution; and
• that companies align their public messaging with their actual conduct, including relevant aspects of the promotion crucial for consumer decision-making, such as the timing of donations. 

‘Pandoro-gate’ 

A recent case involving well-known digital entrepreneur Chiara Ferragni and the Italian confectionery company Balocco demonstrates the consequences of unfair and misleading advertising. According to a decision of 14 December 2023 of the Italian Advertising and Antitrust Authority (the “AGCM”), the involved parties led consumers to believe that by purchasing a co-branded "Ferragni/Balocco” "Pandoro Pink Christmas" pandoro, they would contribute to a donation to the Regina Margherita Hospital in Turin. However, the donation, amounting to EUR 50,000, had in fact already been made by Balocco months before the campaign’s launch. The AGCM found that the involved companies had engaged in unfair commercial practices, by falsely suggesting to consumers that buying the co-branded pandoro would contribute to a donation to the hospital. Consumers were misled into thinking that the more pandoro they bought, the higher the donation would be. The unfair commercial practices included the following elements:

• the co-branded "Pandoro Pink Christmas" was sold at the relatively high price of EUR 9 (compared to a non-co-branded Balocco pandoro sold at the lower price of EUR 3.70); 
• the labels on the co-branded pandoro which contained the false suggestion that a purchase would contribute to the advertised donation; and
• stories posted on Chiara Ferragni's social media channels, falsely suggesting that by purchasing the "Pandoro Pink Christmas", consumers could contribute to the donation and, further, that Chiara Ferragni was directly involved in the donation.

According to the AGCM, this practice significantly restricted consumers' freedom of choice by leveraging their sensitivity to charitable initiatives. As a result, AGCM imposed fines based on the companies’ respective profits: Fenice S.r.l. and TBS Crew S.r.l., the companies in charge of Chiara Ferragni’s image and trademark, were respectively fined EUR 400,000 and EUR 675,000, while Balocco S.p.A. Industria Dolciaria was fined EUR 420,000.

New Agcom guidelines for influencers

Given the proliferation of advertising content published online via video-sharing and social media platforms, the Italian Communications Authority (“Agcom”) in January 2024 introduced guidelines to regulate influencers’ activities (resolution No. 7/24/CONS, the “New Guidelines”). The New Guidelines are in line with the existing legislation and soft-law provisions already in place, including the Italian Consumer Code and the Digital Chart of the Italian Advertising Authority (“IAP”).

The New Guidelines apply only to influencers falling within a certain definition, namely subjects that publish audiovisual content on social channels provided the following three conditions are met:

• they have at least one million followers, taking into account all subscriptions they have accumulated on all of the platforms and social media on which they operate;
• they have published in the preceding year at least 24 pieces of content that include commercial communications, on the basis of an agreement of any kind, in return for remuneration or the supply of goods or services; and
• they must have, on at least one platform, exceeded an average engagement rate in the last six months of 2% or more.

Subjects not meeting these conditions are not subject to the New Guidelines. 

The New Guidelines deem certain influencers (including at a minimum those with one million followers) as Audiovisual Media Services, making them equivalent to publishers under the Consolidated Law on Audiovisual Media Services (Legislative Decree No. 208/2001). 

The New Guidelines provide a list of requirements that influencers must comply with when publishing content, namely that such content must:

• respect intellectual property rights;
• not contain any incitement to commit crimes;
• respect human dignity and not in any way minimize, propagate, justify or legitimize violence, hatred, or discrimination and offend human dignity, including against minorities;
• not present elements that minimize the responsibility of the perpetrator of a crime, or delegitimize victims of violence, hatred, discrimination, or any other form of secondary victimization; 
• comply with the principles relating to the correct representation of the image of women (as set out in by Agcom in Resolution No. 442/17/CONS);
• comply with the rules on the protection of minors and not publish content that is seriously harmful to the physical, psychological or moral development of minors. In particular, influencers must use features provided by the platforms to indicate that they contain content that is potentially harmful to minors; 
• must comply with the IAP Digital Chart including the disclosure rules provided for paid activity and product placements. Influencers are thus required to include in their content immediately recognizable wording, such as the hashtag #adv; and
• avoid the use of subliminal advertising techniques, both in relation to informative or entertainment content and in relation to commercial messages included in the content itself, in compliance with the rules on commercial communications, teleshopping, sponsorship, and product placement (Articles 43, 46, 47 and 48 of the Consolidated Law on Audiovisual Media Services) and the ban on hidden advertising. 

In the New Guidelines, Agcom has introduced the concept of “editorial responsibility”, under which influencers must undertake "to guarantee the truthful presentation of facts and events and to verify the correctness and objectivity of information, also by mentioning the sources used, as well as to take action to combat online disinformation". To reinforce this, the New Guidelines also provide that the penalties in Article 67 of the Consolidated Law on Audiovisual Media Services shall apply. In particular, in case of a breach of the provisions on audiovisual advertising communications and advertising, penalties range from EUR 10,000 to 250,000, while for violations concerning the obligations to protect minors, penalties range from EUR 30,000 to 600,000.

Agcom notes the need for specific codes of conduct to address the evolving nature of influencer activity and ensure compliance with the provisions of the Consolidated Law on Audiovisual Media Services. These codes of conduct will need to provide technical measures tailored to the unique characteristics of various social media platforms, reflecting the dynamic landscape of influencer marketing. For now, the New Guidelines serve as an initial framework, with potential for further refinement through consultation with stakeholders, including platforms. The New Guidelines may be expanded by Agcom in future; for example, creative and talent manager agencies are currently excluded. 

The DDL Beneficenza: Italy’s new draft charity law

Following the AGCM’s Pandoro-gate decision, on 25 January 2024 Italy’s Council of Ministers approved the “DDL Beneficenza”, a draft law aimed at imposing duties on entities who intend to allocate part of the proceeds (in whole or in part) from the sale of a product to charity, alongside a new set of penalties. The current text of the DDL Beneficenza is very brief (containing only five articles), and as of May 2024, the law remains in draft only. However, there are several limitations that entities will eventually have to comply with or risk financial penalties.

To satisfy the right of consumers to adequate information, entities will have to indicate on the relevant product packaging of products the following information (Article 2, paragraph 2):

1. the recipient of the charitable proceeds;
2. the purposes for which the proceeds are intended; and
3. the total amount intended for charity, if predetermined, or the percentage of the sales price or the amount intended for charity per unit of product.

The above information must be shown in communications from both the manufacturer and by any entity that advertises that product (such as an influencer). Furthermore, even before the products are put on sale, the above information must be sent to the AGCM, together with the deadline by which the amount intended for charity will be paid. Within three months of this deadline, the entity must inform the AGCM that payment has been fulfilled. It is not clear whether the rule also applies to charitable transactions performed by entities but not advertised as such to the public.

As anticipated, in the event of a violation of the DDL Beneficenza, the AGCM may fine the entity responsible. The amount will be determined on a case-by-case basis according to the list price of each product and the number of units sold, and will be between EUR 5,000 and EUR 50,000, with the possibility of increasing or decreasing the amount by up to two thirds in cases of greater or lesser gravity. For a repeat offence, the AGCM may also order the suspension of the activity for a period ranging from one month to one year.

For the sake of fully informing consumers and the public, the AGCM may order the publication, in full or in part, of the penalty measures imposed against an entity. Such publication may be placed on the entity’s website or in one or more newspapers, but the AGCM may stipulate other channels it deems more appropriate.

If you have any queries on these topics or anything relating to advertising, marketing and promotions, please do not hesitate to contact the authors or your usual DLA Piper contact.