Business practices on the Internet: the regulatory and legal

The Internet has now established itself as an essential tool for global trade and as an extraordinary means of dissemination of commercial communications and advertising.

The most recent research (1) show a continuing trend of development of the online advertising phenomenon, so much so that in 2008 is expected to grow by 40% compared to last year, with a turnover in Italy intended to touch a record $ 1 billion euro.

In particular, it is expected that 7% of the advertising budget is intended to be invested in the network, while in 2010 the proportion will be waiting in the order of 10%.

Compared to the traditional, online advertising offers the undeniable advantages, especially in terms of flexibility and dynamism.

It exploits certain factors inherent in the characteristics of the medium used that contribute to its success, attracting the attention of investors:

1. the "open" nature of the network that dispenses with any notion of geographical borders

2. measurability, understood as the ability to evaluate the popularity of the public to individual messages and to trace the path

3. the technological potential of the medium that allow you to connect the time of communication to the possible purchase of the product by means of an almost immediate

4. the emergence of Web 2.0 is revolutionizing the business models of the network while ensuring users the ability to become an active part of a process of continuous research and selection of information, rather than passively latter

Faced with the prospects of the online ad market, however, we must not forget the need to protect users, especially if consumers against possible abuses and misconduct, in parallel with those of certainty and regulatory clarity of companies willing to invest in the sector.

This contribution is devoted to the analysis of the main legal aspects related to the phenomenon of online advertising, in particular as regards the requirements of legality and fairness required by law, including those relating to business practices, and the remedies which are realized through the forms protection journalism.

National regulatory framework and Community

At present, after the recent legislative action in 2007, advertising, including misleading and comparative form of unfair trade practices, is governed by the following sources:

1. Legislative Decree 2 August 2007, n. 145: implementation of Article 14 of Directive 2005/29/EC on misleading and comparative advertising

2. Legislative Decree 2 August 2007, n. 146: implementation of Directive 2005/29/EC on unfair commercial practices between businesses and consumers in the internal market

3. Legislative Decree 206/2005 (Consumer Code): Articles 18 to 27, as amended by Legislative Decree no. 146/2007

4. 10 October 1990, n. 287 Institution of competition and market

5. AGCM resolutions of 15 November 2007, n. 17589/17590: Regulations on procedures for investigating unfair commercial practices and misleading and unlawful comparative (Official Gazette of 5 December 2007, n. 283)

At Community level, instead the general regulatory framework consists of the following directives:

1. 2006/114/EC concerning misleading and comparative advertising

2. 2005/29/EC on unfair commercial practices between businesses and consumers in the internal market

3. 1997/55/EC on comparative advertising

It 'should be noted that the previous Directive 84/450/EEC on misleading advertising, as amended by Directive 2005/29/EC, was subsequently repealed by Directive 2006/114/EC which brought together therefore into one place all changes occurred over time.

The concept of advertising and the question of the law applicable

Starting from the original definition contained in Legislative Decree no. 74/92, and now fully revived in Article 2, paragraph 1, lett. a) of Legislative Decree no. 145/2007, it can be seen that the concept of advertising is very wide (2) and, above all, separated from the medium by which it is spread, being only relevant for the functional connection with the exercise of an entrepreneurial activity, business, craft or profession and the aim pursued, namely the promotion:

1. the sale of movable or immovable property

2. the creation or transfer of rights with respect to assets

3. the provision of works or services

This allows you to successfully resolve the first question of the possible allocation of an advertising nature, even at promotional communications disseminated through the internet that are, therefore, subject to the provisions cited above, provided that they meet the requirements and provided that, in the early stages of their preparation and disclosure, to be engaged Italian operators.

However, given the global nature of the network can not be excluded that, outside of these cases, the advertising circuit intended for the Italian market are also involved foreign operators, thereby placing the problem of verifying what the law applicable to such relationships , given the inevitable differences that may exist between the different national laws, in spite of all the attempts made to harmonize at European level (3).

From this point of view, the natural solution would be to invoke the mechanisms of private international law (Rome Convention of 1980), allowing the parties the limits and charges related to the choice of law from which you want to set a certain ratio.

However, it is precisely the absence of such a choice that gives rise to major difficulties since the reference to the criterion of supplementary state law with which the contract is most closely connected and, therefore, the law of the party who is to effect the characteristic performance , implies the need to identify which is the place where those services should be developed or enforced, which is not easy given the characteristics of the medium used.

Legality and recognition of advertising and the protection of professionals

The Legislative Decree no. 145/2007, implementing Article 14 of Directive 2005/29/EC establishes provisions for the protection of traders against misleading advertising and the unfair consequences thereof and to lay down the conditions under which comparative advertising (Art. 1, paragraph 1).

The scope of protection is limited only to professional traders who, by virtue of the definition contained in Art. 2, paragraph 1, lett. c) may be identified in the natural or legal persons acting within the scope of their trade, business, craft or profession and those who act in the name and on behalf of a professional (agents or representatives).

Unanimously (4) it is believed that the protection also extends to those entities which, although not natural or legal persons, are still devoted to the exercise of a business activity (eg. Partnerships).

Article. 1, paragraph 2, reiterates the idea that advertising should be clear, truthful and correct: the first requirement insists then the provision of Article 5, entitled to transparency, understood as the condition for which the advertising nature of a message must be made clearly recognizable through the use of appropriate methods of presentation.

In some cases the principle of recognition may raise doubts about the formal legality of online advertising because of the particular way in which they are sometimes released.

Consider, in this regard, on cd. banner, graphic objects of varying sizes often embedded in web pages with the purpose of promoting products or services: it is not uncommon to come across elements of this type that are not identified as such, placing the problems especially when their characteristics are such as to create confusion with the context in which they become present.

Similar considerations may then be formulated with reference to other forms of online advertising (sister windows, interstitials, etc ...) (5).

Misleading advertising

Contrary to the requirements of lawfulness just mentioned is, first of all, misleading advertising, the definition of which is found in art. 2, paragraph 1, lett. b).

A preliminary interpretation of the rule can be drawn confirmation that the misleading nature of the message comes on the attitude to mislead the persons to whom it is intended, or that fails, however, to achieve, since it was irrelevant that the induction occurs in because of its content or the specific mode of presentation.

From this assumption must also result in a potential detriment of the economic behavior of individuals or as a result of the latter, the ability to injure a competitor.

What matters, therefore, is not so much the damage in and of itself, but rather, the danger of an impaired decision-making process of the subjects, such as reflected in a significant choice in economic terms, or an alteration of the normal relationships of market competition to the detriment of a competitor.

According to art. 3 evaluation of the deceptive nature can not be separated from the consideration of all the constituent elements of the message, in particular as regards:

1. the characteristics of goods or services

2. the price and the criteria by which it is calculated

3. qualifications and rights of the advertiser

Do not forget, finally, that the combined provisions of art. 6:07 provides a special form of protection against the advertising of products hazardous to the health and safety of persons and for children and adolescents.

With regard to the former, the misleading nature is FOUND in the omission of an adequate information about the potential danger when this might induce subjects to disregard the normal rules of prudence and vigilance, while in the second case must be distinguished:

1. if the advertising is directed at children and adolescents it is necessary that there is an abuse of their natural credulity or lack of experience or a threat, even indirectly, for their safety

2. whether advertising affects children or adolescents should be an abuse of the feelings that adults naturally feel towards younger

The need to ensure these individuals greater protection should apply, a fortiori, to the forms of promotion disseminated on the Internet, where the characteristics of extreme dynamism and development of the medium can make it much more problematic and difficult to identify content not respect these requirements, compared to what happens with more traditional media such as television and newspapers.

Comparative advertising

Since the Legislative Decree no. 67/2000, issued in implementation of Directive 97/55/EC, in our legal system is permitted comparative advertising, the notion of which is revived in art. 2, paragraph 1, lett. d) of Legislative Decree no. 145/2007.

Even this form of communication, whose peculiarity is inherent in a comparison of the characteristics of two or more products or services of competitors, is subject to certain requirements of lawfulness, which are defined by art. 4.

In practice, the eligibility is subject to the absence of unfair and deceptive nature and the fact that the comparison is relative to goods or services meeting the same needs and is done in an objective manner, taking into consideration the essential characteristics and verifiable.

On the latter point, paragraph 2 of that article which believes that the verifiability is satisfied when the data concerning the comparative feature will allow a demonstration.

The following paragraph 3 is in charge instead of the case where the comparison is on a special offer imposing clearly indicate the initial and final date or other conditions of applicability.

Unfair commercial practices

The Legislative Decree 146/2007, implementing Directive 2005/29/EC, amended Articles 18 to 27 of the Legislative Decree no. 206/2005 (Consumer Code) introducing into our legal system a new discipline for unfair trade practices .

The scope of the rules is limited to practices that exist between companies or professionals, including those who act in the name and on behalf of the latter, and consumers before, during and after a commercial transaction concerning a product.

The ability to feel the applicable law even against forms of online advertising stems from the concept of commercial practice, identifying in any activity relating to the promotion, sale or supply of products, is so broad as to include "any act, omission, conduct or representation, commercial communication including advertising [...] "(Article 18, paragraph 1, lett. d).

After stating, in paragraph 1, the prohibition of unfair practices the art. 20, paragraph 2, identifies the characteristics of impropriety of a practice in:

1. opposition to professional diligence

2. falsehood or fitness to distort to an appreciable extent, the economic behavior of a subject - the consumer or the average member of a group - in relation to the product.

The condition is really essential that there is a clear alteration of the decision-making capacity of the subjects protected as to push them, even at the potential level only, to a transactional decision that otherwise would not be taken into account (Article 18, paragraph 1 , letter. e).

More specifically, the choices that are important, according to Art. 18, paragraph 1, lett. m), are those that produce, as a result, an act or omission of the consumer in relation to:

1. purchase of the product

2. terms or conditions of purchase

3. pay all or part of the price

4. preservation or return of the product

5. exercise of a right arising from the contract

Remains excluded from the so-called normative. "Hyperbolic advertising", that is, the common practice of making exaggerated statements or that are not meant to be taken literally (article 20, paragraph 3).

Among the unfair commercial practices should be, first, to distinguish those deceptive, in turn divided into actions and omissions, and aggressive.

Added to this are those laid down in art. 23:26 considered, respectively, misleading and aggressive in any case, regardless, therefore, from any specific evaluation.

In particular, under the first includes various types of conduct consistent in making claims to the contrary is true that, of course, are well suited, by their very nature, to be included in messages of an advertising nature.

Misleading actions

Article. 21 of Legislative Decree no. 206/2005 qualifies as unfair actions in two specific cases: in the first case, referred to in paragraph 1, it is necessary that the character is not true of the communication or the manner of presentation of the same are such as to cause a error related to one or more of the elements provided (eg. existence, nature, characteristic of the product, price, consumer rights, etc ...), in other cases however, pursuant to paragraph 2, the practice must produce as a result :

1. the marketing of a product or unlawful comparative advertising which causes confusion with the products, or the distinguishing marks of a competitor

2. failure on the part of a professional code of conduct that he referred to as binding

In addition there are also the provisions of paragraphs 3 and 4, relating to the products hazardous to the health and safety of consumers and children and adolescents, recalling, in large part, what has already been said about the misleading advertising.

The misleading omissions

The following art. 22, on the other hand, some types of nature omission, such as:

1. the omission of relevant information, including the same consumer needs in order to be able to make an informed decision (paragraph 1)

2. the concealment of material information or presenting them in an unclear, unintelligible, ambiguous or untimely, or failure indication of the commercial nature of a practice, provided that these elements are not evident in relation to the context (paragraph 2)

Sub-paragraph 4, concerning the situation in which there is an invitation to purchase, gives an important issue to some specific information while in all other cases, however, are considered relevant information requirements established by Community law associated with the communications business, including advertising or marketing the product (Article 20, paragraph 5).

It follows, therefore, that the omission concerning the information required by art. 8 of Legislative Decree no. 70/2003, relating to commercial communications, it may well pose to omission misleading in the sense just explained.

Such a prediction, when viewed in isolation, would make it practically illegal different forms of online advertising (6): for this reason paragraph 3 provides that, if the means used means of restrictions, both spatial and temporal, to assess the occurrence of a failure it is necessary to consider such restrictions and any other measures taken to make the information available to consumers anyway.

So in the final assessment will not be possible regardless of the intrinsic characteristics of the instrument used and even the effort made by the practitioner to ensure that consumers have access to information, however, really necessary.

The aggressive commercial practices

Even more penalizing seem to be the cd. aggressive, those that are likely to limit or restrict, notably, freedom of choice or conduct of the average consumer, by harassment, coercion, including the use of physical force or an undue influence (Article 24, paragraph 1).

However, because of their nature coercive, it is unlikely that such practices may emerge with reference to traditional forms of advertising and marketing online, at least in the case where they are circulated through a web site or a resource other similar such as, for example, a weblog.

In these cases, in fact, the coercive aspect appears difficult to implement since the user should retain the freedom to decide whether to accept a particular advertising context, including through the exercise of a negative choice (eg. Did not visit more that particular resource).

Some doubt may arise, however, in terms of harassment, in relation to certain cases: consider, for example, the case of a web site where advertising of products is displayed with techniques so aggressive and intrusive it could be considered harassing, inducing that undue compression of the freedom of choice or conduct to which it applies to the specified norm.

Moreover, even leaving aside for a moment these considerations, it must be remembered the case provided for by art. 26, paragraph 1, lett. c) that considers aggressive in re ipsa, regardless of any further specific evaluation, execution and repeated unsolicited commercial solicitations via e-mail or any other means of communication at a distance, without prejudice to the provisions of art. 58 of the Consumer Code and art. 130 of the Privacy Code (Legislative Decree no. 196/2003).

The scope of this provision is likely to raise the legal relevance of the phenomenon of spam to the point that the latter, in addition to being unlawful conduct, in terms of amounts of personal data that follows, is also an aggressive commercial practice , with all the consequences of the case, including those relating to a possible listing of responsibility.

The protection journalism

In this context, the powers of the competition and the market, already recognized by the law establishing 287/90 and, subsequently, by the Legislative Decree no. 67/2000 concerning misleading and comparative advertising illegal, were repeated, and indeed extended from both legislative decree no. 145 and 146 of 2007, both in scope, since now also investing unfair trade practices, both in the power to drive the view that the authorities can intervene ex officio, as well as on the application of "every entity or organization that has a stake. "

With this last phrase refers not only to individuals, as individual consumers and professionals, but also to their representative associations, to competitors of that on behalf of whom we disclose the offending posts or make unfair commercial practices and Finally, the public administration in areas where this is the bearer of interests in relation to its institutional purposes.

It should be noted that, in commercial practices, the Authority shall exercise the powers of investigation and enforcement resulting from the settlement 2006/2004/CE and its intervention independent of the fact that consumers are in the territory of the Member State in which the trader is or in another member state.

In particular in relation to the conduct of proceedings in which we treat, for which reference should be made in detail to the resolutions of 15 November 2007, n. 17589/17590 containing regulations on investigative procedures, the authority is invested with the following powers:

1. have justified reasons, in cases of particular urgency, the temporary suspension of the unfair trade practice or the unlawful advertising

2. in cases where the customer is not known, ask the owner of the vehicle who popularized the practice or advertise any information needed to identify

3. require any person subject to the information and documents relevant to a finding of infringement

4. provide that the trader to furnish evidence of the facts relating to the commercial practice or in advertising, when there is a specific need in relation to the circumstances of the case (7)

5. request an opinion to the Authority in communications when the medium is represented by diffusive periodical or daily press, radio, television or any other means of telecommunication

6. obtain from the responsible hiring a commitment to put an end to the infringement by amendment or termination of its spread (8)

7. prohibit the dissemination or the continuation of the practice of advertising or, in the case of known impropriety or illegality, and have the same decree the application of an administrative penalty, but their significance varies depending on the severity and duration of the event, as well as the publication at the expense of the professional, of the resolution or other appropriate corrective statement

Against the measures of authority is always subject to appeal, on an exclusive basis, the administrative judge.

(1) Boom of online advertising a billion euro in 2008

(2) That as to cover the packaging, ie packaging of products, merchandising and promotional activities ie at the points of sale of the product

(3) L. Furlanetto, Online advertising and business practices, in Altalex

(4) G. Visconti The discipline of misleading advertising and comparative one: Legislative Decree n. 145 of 2007

(5) Interactive Advertisizing Bureau Italy, Advertising on the Internet

(6) Think of banner ads that, due to the space they have, they certainly can not contain all the information relevant to a consumer

(7) In the case where the test is omitted or is deemed insufficient the facts are considered inaccurate

(8) In this case, in relation to the suitability of the commitments made, the authority may make

 

23/07/2008

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Translated via software

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Source:

Italian version of ReteArchitetti.it