Italy’s Competition Authority sanctioned, by decision taken on the 3rd October 2022, a company specialized in copyright protection, together with its lawyer, for the mass sending of standard compensation requests to Italian micro-companies due to the alleged online copyright infringement of some photographs.
The proceeding started last year on the basis of a report of an Italian micro-company which complained of the reception from the company’s lawyer of the request to pay around 3,200 € for the damages allegedly caused by the use of a photo on its own website and then of another 6,000 € as penalty for the alleged infringement of the transaction, even though the photo under exam was removed from the website.
The company, with headquarters in Warsaw, presents itself on the market as a company that works internationally by assisting photographers in the removal of photographs illegally used online and by obtaining compensation for the damage caused by such use. To carry out these activities, the company informs on its website also about the working relationship with a lawyer of the Court of Berlin, specialized in the protection of copyright on photographs.
During the proceeding, it has been ascertained that the Lawyer, on behalf of the client company, had sent to many Italian micro-companies urgent and standardized payment requests for the alleged online copyright infringement, proposing at the same time the adherence to particularly expensive settlement proposals. In such communications, the lawyer anticipated that, in case of failure to adhere to the proposals, the micro-companies would have been brought before the German Court and warned them that the overall costs would have been much higher, quantifying the possible court costs at thousands of euros.
Thanks to such conducts, the company reached in 2021 a turnover of over 40,000 € regarding only the disputes with subjects who live in Italy (equal to 7% of its whole turnover of 2021), while the Lawyer earned, with regards to the disputes, a turnover of over 11,000€.
At the end of the proceeding, the Authority stated that the requests under exam were formulated with contents and modalities which resulted to be aimed at leading the recipients to adhere to the costly transactions proposed, being afraid of being exposed to higher expenses for an undetailed dispute before a foreign court.
Such behaviors have been found contrary to the professional diligence and suitable to affect the freedom of choice of the recipients, also through an instrumental interpretation of the substantial and procedural law on copyright and related rights.
Moreover, the undue influence of the micro-companies was found also in the contents of the proposed transaction, which imposed an admission of responsibility and the adhesion to clauses which determined a significant unbalance of the contractual obligations at the expenses of the company, providing a penalty of a clearly excessive amount beside the application of the German law and jurisdiction, without clarifying the requirements that the latter prescribes for the termination of the alleged infringement. For example, with regards to the reporting micro-company, the payment of 3,200€ was requested for the illicit use of a single photo, when the license to use a photo similar to the one contested could have been purchased online at a cost comprised between 9,90€ and 360,00€.
In light of the above, the Italian Competition Authority concluded that the payment requests sent “do not appear to be conform to the high level of diligence due from professionals of the field of online copyright legal protection and result suitable to considerably limit the freedom of choice of the recipient micro-companies and to lead them to take commercial decisions which they would not take otherwise. Such conducts integrate therefore an unlawful commercial conduct, in infringement of artt. 20, comma 2, 24 and 25, of the Consumer Code”.
On the basis of such elements, the Authority imposed an administrative fine equal to 10,000€ to the Lawyer and to 35,000€ to the company.
Ilaria Feriti