Italy’s government is on the verge of passing a bill that would demand more transparency from companies that tie product sales to charitable donations. This comes in the wake of a controversy involving top fashion influencer Chiara Ferragni, who was fined for misleading posts about a Christmas cake.
Ferragni, who has close to 30 million followers on Instagram, was fined after Italy’s competition watchdog AGCM discovered that consumers were misled into thinking that by purchasing a Ferragni-branded pandoro cake, they were contributing to a children’s hospital.
Prime Minister Giorgia Meloni was one of the critics of the influencer, who apologized and acknowledged a “communications error.” She has pledged to donate 1 million euros ($1.1 million) to a children’s hospital.
Eyewear maker Safilo terminated a contract with Ferragni, citing violations of good conduct clauses. Additionally, prosecutors in Milan are investigating her for alleged fraud in connection with other campaigns. Ferragni’s lawyers have stated that she will prove her innocence on all charges.
A draft of the bill, set to be approved on Thursday, requires products linked to charity donations to clearly state the purpose and recipient, as well as the share of the price going to charity.
The bill also proposes fines of up to 50,000 euros ($54,500) for those who fail to adhere to these obligations. In the event of repeated violations, their activities can be suspended for up to one year.
Prime Minister Meloni stated this week that the Ferragni case highlighted a lack of transparency in the regulations surrounding commercial activities with charitable purposes, and the government is prepared to address that issue.
Matteo De Angelis, a marketing professor at Luiss University in Rome, noted that while stringent regulations may improve the reliability of charity campaigns in the short term, it will remain difficult to regulate social media advertising in the future.
“It is a world that is difficult to control, there will be grey areas which will make it hard to determine what is sanctionable and what is not,” he told Reuters.
De Angelis pointed out that companies are eager to secure sponsorship contracts with influencers, regardless of their credibility, because they can reach a large number of consumers through their accounts. Offering a charity opportunity gives an added incentive to buy.
“People are not induced to buy just because Chiara Ferragni sponsors (the product), but with the donation you invite them to act,” he said.($1 = 0.9175 euros)
(Editing by Alexandra Hudson)
