The "Pink Christmas Pandoro" case: the deceptiveness of new media communication in the food and beverage industry
By Angelo Rainone
On December 15th, 2023, the Italian Antitrust Authority (also known as AGCM) sanctioned the companies Fenice S.r.l. and TBS Crew S.r.l., which manage the rights to the trademarks and image of the well-known Italian influencer Chiara Ferragni, as well as the Piedmontese company Balocco S.p.A. Industria Dolciaria for 400 thousand euros, 675 thousand euros and 420 thousand euros, respectively, contesting the actuation by the three companies of unfair commercial practices related to the advertising of the "Pandoro Pink Christmas," branded with the "Chiara Ferragni" trademark.
This co-branding initiative, presented to the public during the winter of 2022 and named "Chiara Ferragni e Balocco insieme per l'ospedale Regina Margherita di Torino", consisted in the creation of a "limited edition" Balocco pandoro featuring a packaging containing a pink-colored icing sugar bearing the "Chiara Ferragni" trademark, the revenues of which would be partly donated to the Regina Margherita Hospital of Turin in order to support an innovative research project in the field of pediatric oncology.
However, on June 14th, 2023, the AGCM opened an investigation against the three companies involved in the project, following a series of reports received by the Authority on January 19th, March 10th and April 17th, 2023 from the "Associazione Utenti dei Servizi Radiotelevisivi", complaining the deceptiveness of the initiative.
After the investigation, the AGCM concluded that the "Pandoro Pink Christmas" had in fact been marketed in a deceptive manner, suggesting to consumers that by buying it (moreover, at a price of more than 9 euros, instead of about 3.70 euros for the "non-branded" pandoro) they would directly contribute to a donation to the Piedmontese hospital, aimed at the purchase of an innovative machine for the therapeutic treatment of children with osteogenic sarcoma and Ewing's Sarcoma.
In actuality, the donation (of 50 thousand euros) had already been made by Balocco during the month of May 2022 (before the marketing of the "Pandoro Pink Christmas" even began), while the companies Fenice and TBS Crew had actually donated nothing to the hospital, while earning about 1 million euros in royalties and for the realization of advertising content. Therefore, there was no correlation between the purchase of the pandoro and the amount of the donated sum, which had already been decided before the operation.
Specifically, the advertisements "incriminated" by the Antitrust Authority include a joint press release dated November 2nd, 2022, released to the public to present the initiative, which explicitly reported that the sales of the "branded" Pandoro would be used to raise funds for the donation (which had actually already been made 6 months earlier), stating: "The historic Piedmontese brand Balocco, recognized and appreciated worldwide for the excellence of its Christmas offerings, presents an exclusive novelty: the Chiara Ferragni Pandoro, the sales of which will be used to fund a research project promoted by the Regina Margherita Hospital in Turin, through the purchase of a new machine that will allow the exploration of new avenues for the therapeutic treatment of children suffering from osteogenic sarcoma and Ewing's sarcoma."
This communication strategy was deemed to be unfair and contrary to the information and professional diligence obligations set forth in Articles 20 paragraph II, 21 and 22 of the Consumer Code, which regulate unfair business practices and, in particular, misleading omissive and active business practices. In summary, in order to best protect the consumer, the Code stigmatizes the absence of clarity in business communication in all its declination: in fact, while "active" misleading practices (Article 21 of the Consumer Code) consist of giving untrue information or worded in such a way as to mislead the consumer, "omissive" deceptive business practices (Article 22 of the Consumer Code) are those in which the professional omits useful information, presenting the consumer with information in an ambiguous manner.
In the case at hand, the conduct of the three companies was found to be deceptive insofar as it affected consumers' freedom of choice and information both through misleading statements and ambiguous omissions, not only by appealing to their sensitivity to charitable initiatives, but also by exploiting the attractive power of the "Chiara Ferragni" brand for this purpose, with a deceptive effect. The Authority also found that the higher price of the "branded" pandoro, amounting to about two and a half times the price of the "Pandoro classico Balocco," also contributed to misleading consumers, reinforcing - in the absence of contrary indications - their perception that they could directly contribute to the donation by purchasing the "Pandoro Pink Christmas." The infringement was, therefore, derived from a combination of both active and omissive conducts, which contributed to appreciably distort the economic behavior that the consumer assumed in relation to the product in question, whereas, according to the Antitrust Authority, truth and, above all, clarity should be valued as indispensable elements in corporate marketing.
In any case, the AGCM's decision is still appealable before the Regional Administrative Court of Lazio, which is functionally competent to decide on the antitrust authority's measures. The Piedmontese company has, in fact, stated that it does not agree with the decision and that it reserves "the right to take action in the appropriate venues to protect its rights"; Chiara Ferragni has also declared her intention to challenge the decision, defending her good faith in organizing this initiative. The three companies involved may, however, not only have to defend their positions in administrative, but also in criminal court: on December 16, 2023, in fact, CODACONS stated that it intends to file a complaint with 104 Public Prosecutor's Offices, so that they may consider opening preliminary investigations for the possible commission, by the individuals involved, of the crime of aggravated fraud.
At any rate, the AGCM's measure compels the business world to consider the risks associated with marketing operations aimed at influencing consumer choices in the absence of adequate guarantees of transparency and information, as well as the importance of truth and clarity in business communication: such reflection should not be limited only to advertising initiatives, but - from a systematic perspective - also to a correct and non-misleading use of corporate trademarks, in light of their attractive and no longer merely distinctive function in today's market dynamics. The approach must be even more rigorous when communication takes place in sectors which are crucial to the national economy - such as the agri-food sector - through social media, where information is condensed into the few characters of a tweet or a story, and with recourse to the figure of influencers, in whom followers place their trust, thus lowering the threshold of diligence: under these conditions, it is absolutely necessary that information is easily interpretable, clearly presented and unambiguous, in order to protect consumers' rights to information and free self-determination of their economic behavior.