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20 February 2012

On January 20 2012 the government approved Law Decree 1/2012. Among other things, this package of economic liberalisation measures makes it easier for consumers to bring class actions. It also grants the Competition Authority new powers in respect of standard business-to-consumer contracts and extends the application of certain consumer protection provisions to micro-enterprises.

Class actions

Until recently, the Consumer Code set a high standard for bringing class actions: consumers had to show that their rights were identical in terms of title of claim and type of damage suffered. Accordingly, the courts refused to accept class actions where the claimants' rights were not deemed identical. The decree has amended the code, setting a less stringent standard whereby consumers' rights must be of the same kind, but the claimants need not have suffered the same damage.

Standard business-to-consumer contracts

The decree empowers the authority to investigate unfair contractual terms contained in standard business-to-consumer contracts, acting ex officio or on the basis of consumer complaints. If, following its investigation, the authority finds the terms to be unfair, it will order the company to publish the finding on its website and elsewhere. Companies may pre-empt an investigation by asking the authority to vet their standard consumer contracts.

Under the EU Unfair Terms Directive (93/13/EC), contractual terms are considered unfair if they cause a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer. Unfair contractual terms include the reservation of the right to modify or terminate the contract unilaterally, and terms that limit or exclude liability or the legal rights of consumers.

Extension of consumer protection to micro-enterprises

The decree has extended the scope of application of the consumer protection provisions regarding unfair commercial practices to micro-enterprises. 'Micro-enterprises' are defined to include self-employed persons and family businesses; the preparatory drafts of the decree identify them as enterprises employing fewer than 10 persons and with a turnover not exceeding €2 million. By these criteria, the vast majority of Italian enterprises would qualify as micro-enterprises and be protected against unfair commercial practices. Before the entry into force of the decree, protection against unfair commercial practices was accorded only to consumers.

Under the code and the EU Unfair Commercial Practices Directive (2005/29/EC), the term 'unfair commercial practices' includes misleading and aggressive commercial practices. A commercial practice is considered misleading if it:

• contains false information; and

• is likely to deceive the average consumer and to cause him or her to take a transactional decision that he or she would not otherwise have taken.

A commercial practice is considered aggressive if, as a result of harassment, coercion, or undue influence, it is likely to significantly impair the average consumer's freedom of choice and to cause him or her to take a transactional decision that he or she would not have taken otherwise.

Next steps

The decree entered into force on January 24 2012; however, it will lapse if it is not approved by Parliament within 60 days of entry into force. Parliament is in the process of approving the decree and converting it into law, and may yet amend its terms.