Careful with your claims when offering Internet connection plans!

The Italian Market and Competition Commissioner serves hefty fines to all major providers

Italy used to be one of the countries in Europe with a relatively ‘low’ Internet penetration rate. However, over the last years, Italians have rapidly changed their attitude, are now spending a significant amount of time on the Internet and are on their way to recovering the gap towards the most advanced European States (in 2017 a 10% increase was reported).

Hence, all major players providing Internet access are constantly bombarding the local people with their marketing campaigns, diffused through different media, and offering appealing connection plans. The focus – and the hype - of these offers usually lies on two key factors, i.e. ‘speed’ and ‘pricing’, obviously considered as particularly efficient to lure new clients into signing up a plan (or to shifting from a previous to a new one).

Competition in the specific area is fierce, marketing results quite aggressive and all major players – as well as consumer protection advocacy groups – are eager to flag a competitor’s advertising claims to the scrutiny of the competent regulatory watchdog (i.e. the Market and Competition Authority, in charge of supervising advertising claims and of preventing or sanctioning misleading or unfair commercial communication).

The first quarter of 2018 turned out as a sort of ‘peak season’ for approaching the Authority with complaints about claims used for promoting Internet access (especially via optic fiber), its connection speed and stability. Everybody turned out unhappy when competitors hyped superior performance, efficiency, stability, and data transportation capacity of fiber over a copper wire connection. Specifically, the claims were questioned with respect to promotional messages such as: ‘Hyper-fiber, up to 1 gigabyte per second’, ‘Download a movie in HD in 16 seconds’, ‘To fly like an arrow, you need our fiber, which always gives you the fastest connection possible’, ‘What you see is what you pay for’, ‘XYZ Unlimited (up to a 1000 MB and unlimited calls 50 Giga full speed)’, ‘Your home at maximum speed with fiber of XYZ. Discover the advantages of ultra-speed browsing”.

The Regulatory Authority dwelled into the marketing of the four major Italian Internet and phone connection providers and took issue with several aspects of their advertising. After a thorough investigation, the Market and Competition Commissioner questioned the scrutinized promotional messages as misleading and unfair it had found that:

- the up/download speed, announced in general terms and without limitations, turned out (from information provided either in small print or through information buried deep down in the internal pages of the provider’s website) to be on offer available only over a limited period and not nation-wide, but only in certain cities or in areas covered by FTTH or FTTC MAKE technology,
- the same – quite hidden – information revealed that maximum speed indications referred to ‘theoretical potential, while actual speed’ was dependent on several factors such as: coverage, technological capacity available within a certain area, network congestions, server capacity, availability of Wi-Fi connection and distance between access point and the central server or distribution cabinet,
- the reference to ‘Hyper-fiber’ conveyed a message – and expectation – of top-level performance, not supported by the service provided, where limitations and restrictions came into play,
- another provider had failed to make sufficiently clear the technical characteristics, features and limitations of the promoted ‘Ultra-fiber’ offer as well as to illustrate the exact meaning of the announced end-to-end and exclusive use of optical fiber in its Internet connections,
- a third provider’s advertising was misleading as to the headline “Free Unlimited Plus”, as it omitted to make immediately perceivable the additional costs clients would incur, once their Internet traffic exceeded a certain limit (where further browsing at maximum speed would not occur “Without any worries”, but involve significant expenses),
- finally, a fourth provider had also missed to offer detailed indications as to the technical characteristics, limitations, coverage restrictions and costs of its services promoted as a top-speed or ultra-fast fiber connection, conveying the impression of a general top-level performance of the latter, while such performance could be obtained only in a limited number of locations.

On such premises, the Commissioner held the advertising of the four providers as misleading, and as resulting in an unfair marketing practice. Hence, he served the four providers with fines amounting to Euro 4.800.000, 4.250.000, 4.400.000 and 4.600.000.

Marketers will be well advised to carefully consider that overly aggressive commercial communication, creating false expectations or conveying misleading messages as to the promoted products’ / services’ characteristics, may easily expose them to a hefty bill. It goes without saying, that multiple infringement will have such bill increase as watchdogs do not appreciate having their indications ignored.