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Case detail

B a c k

Directive article Article 5 4.
Article 7 1.
Article 7 4.
National ID PS333
Country Italy Decision date 22/07/2009
Common name TELECOM-RETENTION INGANNEVOLE Decision type Administrative decision, first degree
Court Autorità Garante della Concorrenza e del Mercato (Rome) Plaintiff(s) Italian Competition Authority
Court translation Italian Competition Authority Defendant(s) Telecom Italia S.p.a.
Subject misleading commercial practices
Keywords inaccurate informationmisleading commercial practicesmisleading omissionsspecial offermobile phone services

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Headnote

 

(1) It constitutes a misleading commercial practice and a misleading omission for a telecom provider to implement a retention strategy to communicate incorrect and/or incomplete information in order to convince the customers not to migrate to a competing provider. 

(2) At the moment a consumer switches from one telecom operator to another, the level of information asymmetry will be higher than in other situations. This fact should be taken into account when assessing the commercial practice. 

Facts

Further to around thirty complaints reported by consumers and competitors between December 2007 and February 2009, the Italian Competition Authority started its investigation proceeding against Telecom Italia S.p.a. on 23 February 2009.

On 16 April 2009, the Italian Competition Authority adopted interim measures in order to avoid the implementation by Telecom Italia of any special promotional activity.

The commercial practices assessed by the Authority consisted of the implementation of retention strategies, including the oral communication to consumers, without any kind of registration and use of binding guidelines or standard forms by the call centers' operators.

Since the practice had been carried out also by using sms and telephone contacts, the opinion of the Italian Communication Authority was also requested on 29 May 2009.

Legal issue

Does it constitute an unfair commercial practice for a telecom provider to implement retention strategies for its customers, by communicating incorrect and/or incomplete information to consumers with the purpose of convincing them not to migrate to a competing provider?

Decision

The Italian Competition Authority decided that such implementation of retention strategies constitutes a misleading commercial practice, as it considerably reduces (or is likely to reduce) the economic choice of consumers. This practice also constitutes a misleading omission, as consumers have not been provided with all material information in order to take a transactional decision.

The Authority specifically took into account the fact that the degree of informative asymmetry, at the moment of the switch from one telecom operator to the other one, is higher than in other circumstances.

Such practice is not in line with the normal professional diligence degree that can be expected.

  URL Decision Decision full text
EN N/A
IT http://www.agcm.it/agcm_ita/DSAP/Dsap_pi.nsf/a0d111d6626f957fc125652a00315873/ae6133a439c98e2ac125761500539011?OpenDocument&Highlight=2,PS333

Result

The Italian Competition Authority decided to fine Telecom Italia S.p.a. on the basis of the gravity and duration of the practice, for an amount equal to 280.000 EUR.

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