Advertising claims of TripAdvisor on reviews are misleading since they cannot guarantee them to be truthful according to the Italian Administrative Supreme Court.
The dispute on claims of TripAdvisor on available reviews
As covered in a previous article, the Italian competition authority (AGCM) that has jurisdiction on unfair commercial practices issued a fine of € 500,000 against TripAdvisor. The challenge related its advertising claims referring to the fact that the reviews on the site are truthful and reliable.
Indeed, even though TripAdvisor puts in place quite stringent measures to ensure that the published reviews are not fake, AGCM deemed such checks not to be sufficient to support the challenged claims.
The Administrative Court of First Instance then overturned the decision, but AGCM appealed the decision to the Administrative Supreme Court.
The € 100K fine against TripAdvisor
The Italian Administrative Supreme Court (the Consiglio di Stato) upheld AGCM’s position holding that advertising claims as to the reliability of reviews published on TripAdvisor could not be adequately balanced by a disclaimer which was not clearly visible.
- referred to its consolidated position requiring that the average consumer, must be put in a position of self-determination from the first advertising contact;
- held that TripAdvisor’s behavior was not in line with the principle of professional diligence since they adopted the challenged claims, despite their awareness of the limits applicable to their verification system; and
- deemed not relevant the limited number of complaints received from consumers, since the conduct is challenged because of the potential risks for individuals, rather than the actual damages suffered.
However, the amount of the fine was reduced from the initial € 500,000 issued by AGCM to € 100,000 since, according to the Court, AGCM had
- not adequately motivated the impact of the disclaimers published by TripAdvisor to mitigate the risks deriving from the potentially misleading reviews;
- not considered the absence of any prior breach of consumer laws by TripAdvisor; and
- not assessed the economic effect of the challenged unfair practice.
My takeaways on the impact of the decision on social media and websites?
The risks deriving from the breach of rules on unfair commercial practices and misleading advertising are often underestimated. But the potential fines in Italy are up to € 5 million per breach. And this is a valid reason to carefully review marketing claims and initiatives that marketing managers sometimes adopt without any legal scrutiny.
The dispute concerned a misleading advertising claim. But there is in general a tendency of Courts to expand the definition of the content Internet provider to limit the scope of the liability exemption applicable to hosting providers. This expansion now includes operators that have an active role in managing the site (Read on the topic Internet liability on Fan pages: who can be blamed?). And the scenario might even become stricter for copyright related breaches following the implementation of the new EU Copyright Directive (Read on the topic The new EU Copyright Directive will change the Internet?).