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In a stunning turn of events, AgCom, the Italian Communications Authority, has levied a 750,000 euro fine against Meta for brazenly flouting the country’s strict ban on gambling advertising.
We have already discussed the Italian ban on advertising games with cash winnings provided by the so-called Dignity Decree and what is possible to do and what is prohibited under the relevant regulations (read on the topic “Italian gambling advertising ban: Do’s and Don’ts“).
This legislation has been highly criticized because it does not achieve the goal of reducing gambling addiction. On the contrary, it fuels distortive behaviors and takes away a significant source of revenue from, for example, sports clubs.
Enforcing the current legislation on the ban on gambling advertising, AgCom has taken the first action against a social media platform. In the present case, AgCom found the existence of 5 sponsored contents (videos, images, and hyperlinks) present on the social media Facebook, having the nature of advertising communications of gambling and betting activities with cash winnings.
Below is our analysis of the dispute:
Meta’s defenses against the violation of the ban on advertising gambling with cash winnings
Meta Platforms Ireland Limited argued that, as a foreign legal entity having its registered office in an EU state other than Italy, the ban on the Italian gambling advertising ban does not apply to it pursuant to the provisions of Article 4 of the AgCom Guidelines on the topic under which the ban rove to entities:
- having their registered office, including branch offices, in Italy; or
- with a registered office abroad, if they have received a gambling license in Italy from ADM, the Italian gambling authority, or have been authorized to provide audiovisual media services in Italy.
The company then noted that, as a passive hosting provider, it is not legally required to monitor content on the social media Facebook prior to its publication and consequently cannot be held responsible for content disseminated through it. In this regard, the company referred to the court case according to which Google Ireland Limited is exempt from liability for ads, the contents of which were found to be in violation of the ban on gambling advertising, hosted on its platform, considering it also applicable to its own scenario due to the status of passive hosting provider recognized by national courts to Facebook under the EU eCommerce Directive.
In addition, Meta stated that it had removed all the content as the same violated the regulations of its social media, Facebook, and is willing to initiate a dialogue with AgCom to identify mechanisms that would allow them to more quickly and easily report content deemed to be in violation of the Italian ban on gambling advertising. Meta has therefore made itself available to in connection with any future requests or queries submitted to it through the appropriate channels regarding potentially illegal content regarding games with cash winnings.
AgCom’s position on Meta’s violation of the Italian ban on gambling advertising through Facebook
AgCom disagreed with Meta’s findings on the non-violation of the Italian ban on gambling advertising via the social media, arguing that
- the aforementioned Agcom Guidelines have the sole role of an interpretative circular – as such lacking the nature of a preceptive administrative act – “whose indications, although aimed at uniformly directing the activities of the offices, may be reasonably disregarded by the issuing authority itself, at the outcome of a different assessment […]” and
- the recipients of the ban on advertising of games with cash winnings are, therefore, all those involved in the promotional communication: the principal, owner of the medium or site of dissemination or destination, and the organizer of the event.
This is, therefore, a general prohibition that introduces a strict liability on the part of a plurality of subjects all equally responsible for the Italian legal system. It was then clarified that the legislation introduced by the eCommerce Directive does not apply to the matter of gambling, since it expressly excludes them from its perimeter.
With reference to the contested conducts, the videos and images related to games with cash winnings found by AgCom in its monitoring activities concern content sponsored by Meta against payment from business users i.e., pages of commercial companies, and the sponsorship is a real advertisement of the platform, aimed at reaching people who might interact with the commissioning companies based on their location, interests and other factors.
Since the advertisement is never immediate but is only made public after at least 24 hours, which is the time it takes Meta to conduct a check on it to ensure that it complies with the platform’s advertising regulations, Meta does not assume the role of a passive hosting provider.
Finally, Agcom noted how Meta allows its customers the possibility of directly promoting gambling sites. In detail, in the special section dedicated to its advertising service Transparency Center, Meta explains its advertising “regulations.” Within that section, it is explicitly stated that “advertisements promoting gambling and online gaming where monetary value is required to play (including cash or digital/virtual currencies, e.g., bitcoins) and there is monetary value of any kind up for grabs are permitted only with our prior written permission.”
AgCom’s sanction against Meta for violation of the Italian gambling advertising ban
In relation to the size of the administrative fine for violation of the Italian ban on gambling advertising, it is equal to 20 percent of the value of the sponsorship with a minimum amount of 50,000 euros for each established violation and, therefore, for each contested sponsored content.
AgCom, however, deemed it necessary to increase the sanction imposed up to three times for each established conduct due to (i) the seriousness of the same, (ii) the size of the platform, and (iii) the very nature of the sponsorship mechanism such as to spread the advertising content to a large number of users. As a result of this, the sanction reached the amount of €750,000.
The lessons learned from the dispute
AgCom intended to sanction the promotional nature of the messages conveyed through the content on the social media Facebook operated by Meta. As a result, it is all the more necessary for gambling operators to reformulate their claims to emphasize the purely informative content in compliance with the principle of non-misleading, continence, and transparency, avoiding any reference to call to action since in this case, the consumer could be displaced by the so-called “surprise effect.”
On a similar topic, one can read, “Google is NOT liable for breach of the Italian gambling advertising ban.”