European Commission

 

Case detail

B a c k

Directive article Article 5 2. (b)
Article 6 1. (d)
Article 7 2.
Article 7 4.
National ID PS989
Country Italy Decision date 25/02/2010
Common name "AUTHOS-OPERAZIONE IDEA FORD" 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) Ford Italia S.p.A.; Motorstore S.p.A.; Authos S.p.A.; Alpe S.p.A; FCE Bank Plc.
Subject misleading advertising
Keywords advertisementfalse impressionfinancial servicesmisleading actionsprice

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Headnote

 

(1) A trader can, in a case where no evidence is established of the trader's direct involvement in an unfair commercial practice, still be considered responsible for this practice.

(2) The presentation of a financing scheme as a chance for the consumer to buy a product at reduced price, constitutes an unfair commercial practice.

Facts

The present case concerned several advertisings in national press regarding the operation called "Idea Ford". Defendants involved were: the broker FCE Bank Plc, the master dealer Ford Italia S.p.A. and its dealers Motorstore S.p.A., Authos S.p.A. and Garage Alpe S.p.A.

The investigation was launched on 28 September 2008 following several claims reported by consumers and a consumers' association. According to these complaints, the advertising created a false impression that consumers could buy a new car for half of its price. 

After consulting the Ford dealers, the consumers found out that the offer advertised as "Idea Ford" was in fact a financing scheme, which provided the initial payment of 50% of the total price of a new car. A consumer then had a possibility to buy the car and use it, paying the remaining 50% of the price at the end of a 24 month period.

Conversely, the defendants held that the advertising was correct, as the offer allowed consumers to use a new car for two years, paying only half of its cost. Moreover, the advertising concerned was published only by some dealers, in local media and only for a few days.

The defendant Authos claimed, that there was no agreement between the different dealers.

The defendant FCE Bank held that it did not have any role regarding the concerned advertising.

Legal issue

(1) Can a trader, in a case where no evidence is established of the trader's direct involvement in an unfair commercial practice, still be considered responsible for this practice?

(2) Does the presentation of a financing scheme as a chance for the consumer to buy a product at reduced price, constitute an unfair commercial practice?

Decision

(1) According to the Authority, a trader's liability for advertising activities put out by third parties, can be derived from two factors), namely (i) its direct contribution to create the advertising (so-called "editorial responsibility") and (ii) the existence of an economic advantage from the advertising. 

In this case, there were no doubts concerning Ford's and FCE's economic advantage. Therefore, the contracts between Ford Italia, FCE Bank and Ford's dealers required a specific prior approval by both (Ford Italia and FCE Bank), regarding every promotional activity.

The Authority further concluded, that defendants Motorstore, Authos and Garage Alpe directly contributed to the formulation of the disputed advertising.

(2) In its reasoning, the Authority established that the defendants committed an unfair commercial practice. The said practice consisted of misleading advertising regarding the price of a new car.

According to the Authority an average consumer was led to believe, that there was a possibility to buy a new car at half price. It was further established, that the advertising in fact concerned a financial service and possibility to buy a new car through a paid financial plan.

In this respect, the advertised images were considered misleading, especially the one that presented Ford vehicles with half-price tag.

The Authority further found that the defendants also breached the prohibition on misleading omissions concerning the said financial service. The information provided in the advertisement was incomplete, written in lower case and therefore provided in an untimely and ambiguous manner. With this information an average consumer was not able to take an informed transactional decision the Authority held.

The Authority thus concluded that, in addition to the above mentioned confusion regarding the real nature of the advertised service, defendants also omitted information concerning the financial service.

  URL Decision Decision full text
EN N/A
IT http://www.agcm.it/ricerca-avanzata/open/C12560D000291394/A7E9D923E4F917F8C12576E800345A48.html

Result

The Italian Competition Authority decided to fine the defendants and it issued a cease-and-desist order regarding the criticized practices. The fines imposed were:
- Ford Italia S.p.A. - EUR 90.000;
- FCE Bank Plc - EUR 70.000;
- Motorstore S.p.A.- EUR 5.000;
-Authos S.p.A.- EUR 35.000;
- Garage Alpe S.p.A - EUR 55.000.

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