With provision of December 15th 2023, the Italian Competition Authority (AGCM) fined Balocco S.p.A and the companies managing the trademarks and image rights of Chiara Ferragni (Fenice s.r.l. and TBS Crew S.r.l.) for the unfair commercial practice implemented, on the influencer’s social media accounts also, to promote “Pandoro Pink Christmas”, an Italian Christmas dessert.
The Case
The initiative “Pandoro Pink Christmas” established the commercialization of a limited edition pandoro, made by Balocco under license of the companies referable to the influencer and bearing the Chiara Ferragni trademark. The initiative would have been aimed at supporting a research project in favour of Regina Margherita Hospital of Turin but, based on the investigation carried out, it turned out that it was essentially a marketing operation conducted by Balocco to reposition its own pandoro on the market.
In addition, it turned out that the donation to the Hospital, which it was advertised as associated to sales of the pandoro, was not related to sales. As a matter of fact, the donation was made only by Balocco months before the beginning of sales, while the license deals between Balocco and the companies referable to Chiara Ferragni did not include any clause that would impose a relation between the sale trends and the amount of the donation.
How the initiative and the promotion on Chiara Ferragni’s social accounts was presented
All protagonists of the story had agreed and published the text of a press release to advertise the initiative, specifically associating the proceeds of the sales to the retrieval of the funds useful to the donation (“Chiara Ferragni’s Pandoro, whose sales will help to finance a research project promoted by the Regina Margherita Hospital of Turin”).
The content published on the social accounts of Chiara Ferragni were more ambiguous, as the initiative was never explicitly presented as associated with the sales of the pandoro (for example: “This Christmas @Balocco and I came up with a charity project in favor of the Regina Margherita Hospital of Turin. Together with @Chiaraferragnibrand, we created a limited edition pandoro and we support together a research path for new therapeutic cures for children with Osteosarcoma and Ewing’s Sarcoma”).
The position of the Italian Competition Authority on social communication strategy
Chiara Ferragni’s companies tried to defend themselves arguing that posts and stories were not in any way misleading because, unlike the press release, they did not include any explicit reference suggesting to the consumer that s/he could contribute to the charity initiative by buying the pandoro. Therefore, given that the target consumers of the Chiara Ferragni branded products are mainly the followers of the account @chiaraferragni (almost 30 million people), there would not be any unfair conduct towards them, because these followers would have heard about the initiative thanks to the content published on Instagram and not through to the press release.
Nevertheless, the Authority did not accept this defensive argument, considering that the high number of followers of Chiara Ferragni gave her a particular relevant role in directing the choices of the consumers.
According to the Authority, in their whole, the contents created to advertise “Pandoro Pink Christmas” were suitable to generate in the message recipients the idea that by purchasing the pandoro one could contribute to the donation, even if there was not an explicit reference that would associate the proceeds of the sales to the donation.
Moreover, all messages published on social media were created by qualifying Chiara Ferragni as co-creator of the charity project and active party of the donation, fact that did not even reflect the truth. As matter-of-fact, Chiara Ferragni’s companies cashed in more that 1 million euros as license fee for the trademarks “Chiara Ferragni” and for the creation of the advertising content, without paying Regina Margherita Hospital of Turin.
Therefore, the Italian Competition Authority (AGCM) considered that the messaged diffused to the public were suitable to provide an incorrect representation – and contrary to the duty of professional diligence – of the charity initiative, imposing a total penalty of 1,075,000.00 euro on the companies Fenice S.r.l. and TBS Crew s.r.l.
Ilaria Feriti