Social media terms of service are deemed unfair according in Italy

The terms of service of a famous social media were considered unfair in Italy by the Italian antitrust authority that forced the company to change them.

Almost a year after the beginning of the investigation procedure, the Italian antitrust authority (“AGCM“) issued a recent ruling regarding the unfair nature of the “Terms of Service” of a famous social media platform.  The proceeding was concluded with the presentation, by the social media, of a commitment to implement a revised version of the censured clauses to remedy the unfairness found by AGCM.

Before analyzing which clauses were considered unfair by the Italian antitrust authority and the related commitments proposed by the social media, let us review the main stages of this case.

The Case

Following some complaints from consumer associations, AGCM initiated an investigation procedure against the social media in relation to the content of their “Terms of Service (For users resident within the EEA, Switzerland and the United Kingdom)“.

In fact, from the outset, this matter has seen the active involvement of consumer associations, which took part in the public consultation called by the authority.  In particular, the consumer associations complained about the poorly comprehensible wording of the Terms of Service, due to a series of factors, such as

  • the literal translation of the contractual conditions drafted in English, the meaning of which did not correspond with the Italian legal expressions;
  • the disorganized dissemination of the clauses on exclusions and limitations of liability within the text; and
  • the excessively general wording of specific clauses attributed unilateral powers to the company, resulting in a significant imbalance in relations between professionals and consumers.

According to the associations, these aspects were aggravated by the platform’s target audience, which in their opinion consists primarily of young people, generally with a limited grasp and knowledge of their rights as consumers.

The unfair terms of service challenged by AGCM to the social media in Italy

AGCM ascertained the unfairness of a series of clauses contained in the Conditions of Service of the social media since they (i) resulted in a significant imbalance in the contractual rights and obligations of users and (ii) were formulated in a non-transparent and ambiguous manner, especially for the specific category of users of the platform.

In light of the above findings, the social media presented a series of commitments regarding substantial and formal amendments to the clauses under censure, which the AGCM positively assessed.  In particular, the clauses initially deemed to be unfair and subsequently revised by the company are those relating to:

  1. Unilateral changes to conditions and services: the clause – as originally formulated – attributed a generic and discretionary ius variandi to the company, providing generic reasons or mere examples in relation to the right to unilaterally modify the Conditions of Service, the social media limited the scope of this provision, (i) specifying that it will inform users reasonably in advance and clearly about the main changes that could affect him/her and (ii) clarifying the date on which the changes will come into force and that they are not retroactive;
  2. Termination, use of services and exclusion of warranties: according to the Italian antitrust authority, these clauses gave the social media the generic and discretionary power to suspend or terminate the users’ accounts and impose restrictions on the use of the platform’s services.  Therefore, since the user was not in a position to know the reasons for the disabling of his profile and to contest such decision, the social media has finally introduced some “procedural” guarantees, such as the motivation of the decision and the possibility to file a complaint;
  3. Content uploaded by users on the platform: according to AGCM, the social media imposed, on the one hand, excessively broad waivers on users, which also extended to personal and moral copyrights, exceeding how the social media operates and is shared with other users, and, on the other, required consumers to de facto guarantee the absence of economic claims by third parties.  To remedy this circumstance, the rights over the content attributed to the social media have been circumscribed, in that the scope of the clause – initially all-inclusive – has been limited, removing references to (i) waiver and assignment of personal rights (for example, user name, image, voice and physical appearance) and moral rights, as well as (ii) guarantees of the absence of economic claims by third parties, including businesses;
  4. Indemnity and limitations on the company’s liability: the Italian antitrust authority found these clauses to be particularly problematic in that they (i) were worded in an ambiguous and contradictory manner and (ii) disclaimed most of the responsibilities deriving from the performance of the contract, including those arising from the social media’s breach of contract, also providing for an inadequate compensation limit of 100 euros, given the significant economic value of the personal data and content provided by the user.  In relation to this issue, the social media has limited the (partial) exemption from liability of users to the generated content;
  5. Applicable law and forum selection: AGCM, in addition to considering the wording ambiguous and challenging to understand, objected to the unfairness of this clause in that, although it was without prejudice to the applicability of Italian law and courts, it did not recognize the mandatory nature of the jurisdiction of consumers’ residence.  Therefore, the social media modified the text, expressly providing that the contractual conditions are subject to the law of the country of residence of the user and that, in the event of disputes, the court of the place of residence of the consumer has jurisdiction.

The commitments mentioned above are also relevant for other companies that offer online services and/or carry out eCommerce activities, requiring them to pay attention to the formulation and localization of their general terms and conditions of service under Italian legislation, in particular considering the applicable regulations in relation to consumer protection which, among other things, as we know, have been the subject of recent and important interventions by the legislator.

This decision confirms a trend that sees, on the one hand, a high level of activism on the part of consumer associations and, on the other, a growing sensitivity on the part of independent authorities towards the main digital platforms, especially in cases where the average users of these platforms are minors.

On a similar topic, it is possible to read the article “New rules on European consumer sale and warranty terms effective from Jan 2022 need urgent actions“.

Photo by Free Walking Tour Salzburg on Unsplash

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