Abstract
The Italian Competition Authority ruled that Volkswagen AG and Volkswagen Group Italy S.p.A. had jointly breached the Italian provisions concerning unfair commercial practices, implementing EU directives, and convicted the two companies to pay the maximum fine provided by Italian law (5 million euros). For the Italian Authority such practices, expressly admitted by VW after the scandal with specific advertisements published on Italian newspapers, were unfair, contrary to the requirements of professional diligence and were likely to distort the economic behavior of consumers. The Italian Authority stated that the conduct of Volkswagen AG and Volkswagen Group Italy S.p.A. was unfair, as the “green claims” or “environmental claims” used in their advertisements were in contrast with the evidence of real NOx emissions manipulated by the illegal defeat device. Also in the US similar proceedings are pending. After this decision the Italian consumers’ will be able to sue VW at the competent Courts claiming damages through specific follow-on actions.
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Notes
- 1.
Law 10 October 1990 No. 287.
- 2.
Legislative Decree 6 September 2005 No. 206 (Consumers’ Code) and Legislative Decree 2 August 2007 No. 145.
- 3.
Law 20 July 2004 No. 215.
- 4.
Art. 5ter of Legislative Decree No. 1/2012, as amended by Law 18 May 2012.
- 5.
O.J. L 149/22 (2005).
- 6.
O.J. L 364/1 (2004).
- 7.
Art. 5 of Directive 2005/29/EC.
- 8.
Arts. 6 and 7 of Directive 2005/29/EC.
- 9.
Arts. 8 and 9 of Directive 2005/29/EC.
- 10.
As explained below, it will be very relevant for the VW Dieselgate case in the final decision of the Italian Competition and Market Authority (AGCM) as misleading conducts: (2) displaying a trust mark, quality mark, or the equivalent without having obtained the necessary authorization; (3) claiming that a code of conduct has an endorsement from a public or other body, which it does not have; (4) claiming that a trader (including his commercial practices) or a product has been approved, endorsed, or authorized by a public or private body when he/it has not or making such a claim without complying with the terms of the approval, endorsement, or authorization.
- 11.
See Gagliardi A F (2009).
- 12.
As defined by Commission Recommendation of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises (2003/361/EC).
- 13.
- 14.
The Centre for Studies and Statistics of UNRAE (the Italian association of foreign carmakers) has produced a study published on 23 December 2015 (http://www.unrae.it/sala-stampa/altri-comunicati/3318/160400-privati-possessori-di-partita-iva-hanno-acquistato-unauto-nel-2014), which shows that in the year 2014 (just when it was sold a large number of VW vehicles with diesel engines Euro 5), 160,406 customers-owners of a microenterprise bought a car. This number represents the 18.8 % of total registration to noncompany buyers (854,665 units). Of those cars, 78,054 were purchased by self-employed; 34,289 by professionals; 31,030 by sales agents; and 17,033 by farmers. In addition, regarding the 34,289 units sold to professionals, 22.8 % were sold to lawyers, 16.4 % were sold to accountants, 15.5 % were sold to consultancy firms. The 2014 revenue in Italy of those 160,406 buyers was 3.7 billion euro (22.9 % of the total revenue of the sales to noncompany buyers). The diesel engine is always the favorite, with a share of almost 64 % of the market between microenterprises, 14.5 points higher than consumers that are not owners of microenterprises. Considering that the market share of the Volkswagen Group in Italy is about 13 % of the total, it yields that in Italy there are at least 50,000 owners of Euro 5 diesel models of the VW group bought between 2012 and 2015 (perhaps more, considering that the VW group’s brands are among the most common in the Italian microenterprises) that may be recipients of the consequences of the Authority's decision and that would not have protection under common European rules on misleading advertising.
- 15.
- 16.
- 17.
- 18.
- 19.
This rule prohibits to assert falsely that a professional, its commercial practices, or its products have been authorized, accepted, or approved by a public or private body or that the permit conditions and acceptance or approval receipt have been complied with.
- 20.
O.J. L 171/1 (2007).
- 21.
Green Claims or Environmental Claims is the term used for recent marketing campaigns based on environmental protection and reduction of pollutant emissions and in general on the environmental impact of the purchased product because these issues are even more popular to the consumers and are able to direct or change the buying trends of the people.
- 22.
The Italian Authority affirms that by the inquiry of EPA, Environmental Protection Agency of the U.S.A., the defeat device is able to reduce more than 40 times the emissions of NOx during the laboratory tests compared to normal road use.
- 23.
As mentioned in the final decision of AGCM, during the proceeding before the Authority, VW contradictorily has rejected all charges of violation of regulations and denied having violated any rule related to the obligation to declare the level of pollutant emissions in their advertising campaigns.
- 24.
Translation by the author.
- 25.
This rule allows the professional to require from the Authority an authorization to voluntarily eliminate the negative consequences of unfair commercial practices, obtaining the interruption of the proceeding, and therefore avoiding the imposition of a penalty. However, this is not allowed under the law when the commercial practices are manifestly unfair and grave.
- 26.
See Mari (2011).
- 27.
Art. 1337 of the Italian Civil Code—Negotiations and pre-contractual liability—The parties, making negotiations and during the closing, have to be in good faith (translation by the author).
- 28.
Art. 1439 of the Italian Civil Code—Willfull fraud—Willfull fraud make void the contact when the scams used by one of the contractors were such that, without them, the other party would not have closed the contract. When the deception were used by a third party, the contract is voidable if they were known to the contractor who benefited ot it (translation by the author).
- 29.
Art. 1440 of the Italian Civil Code—Incidental fraud—If the scams were not such as to determine the consent, the contract is valid, although without them the agreement would be concluded on different terms; but the contractor in bad faith is liable for damages (translation by the author).
- 30.
Art. 1453 of the Italian Civil Code—Cancellation of the breached contract—In contracts with reciprocal givings, when one party is not fulfilling its obligations, at his discretion, the other party may claim the fulfilment or the resolution of the contract, and, in any case, his right to claim the compensations for damages. The resolution of the contract may also be claimed when the lawsuit began to seek enforcement of the contract; but it’s not possible to ask the fulfilment when resolution was asked. From the date of the claim for resolution, the other party may not fulfil his obligation any more (translation by the author).
- 31.
For the general principles of Italian law, the connection between contracts occurs when two or more contracts, separate and independent, are directed to the same purpose so that they are portions of a single operation; in such cases, the voidance of one of the related contracts may also lead to the invalidity of the other contract. See Gazzoni (2015).
- 32.
Art. 125quinquies of TUB—Breach of the contract by the seller—In connected financing contracts, when the seller of goods or services is in breach of the contract, the consumer, after the intimation of the seller, may apply for the termination of the financing agreement if the contract of goods or services selling is void according to art. 1455 of the civil code (id est, for a serious breach of the contract). The termination of the financing contract involves the obligation for the lender to give back to the consumer all the installments and all other fees already paid. With the termination of the credit agreement the consumer may not pay to the lender the amount that the lender has already paid to the seller of the goods or services. The lender has the right to claim that amount to the seller. In case of leasing, the consumer that has already intimated the seller of the goods or services, may ask to leasor to bring a dispute against the seller to cancel the contract of purchase. The request to the leasor determines the suspension of payment of lease fees. The judicial termination of the contract of purchase determines the legal termination of the leasing agreement without penalties and charges for the consumer. In this case the second period of this article is applicable. The rights of this article for the consumer exist also against the third party to which the lender selled the rights arising from the credit agreement (translation by the author).
- 33.
O.J. L 133/66 (2008).
- 34.
The general principle of relativity of the effects of the contract derives from Roman law and is summarized in the maxim res inter alios acta tertio neque nocet neque prodest. It means that a contract generally is not able either to harm or to benefit a third party since he is not related to the contractual relationship.
- 35.
I think that the legal basis for a similar conclusion could be given in Italy pursuant to Art. 1381 of the Italian Civil Code, which affirms: “who promises the obligation or a conduct of a third party, have to indemnify the other party if the third party refuse to obligate or miss to do what was promised” (translation by the author). In the VW Dieselgate case, it is reasonable to assume that the car dealers promised that VW vehicles had the homologations declared by VW as true and that consequently the car dealers must indemnify the final buyers of the cars because of the installation of the defeat device.
- 36.
Art. 129 of the Italian Consumer Code—Conformity to the contract—The seller has the obligation to deliver goods in conformity with the sales contract. It is assumed that the consumer’s goods comply with the contract if, where relevant, the following circumstances exist: (a) they are fit for the purposes for which goods of the same type are normally used; (b) they comply with the description given by the seller and have the qualities of goods held out by the seller to the consumer as a sample or a model; (c) they show qualities and performances which are normal in goods of the same type and which consumer can reasonably expect by the nature of good and, eventually, by public Statements on specific characteristics of the goods made about them by the seller, by the manufacturer or his agent or representative, particularly in advertising or in labels of the goods; (d) they also are particularly suitable for use wanted by the consumer and known and accepted by him (in fact too) at the closing of the purchase as declared by the seller (translation by the author).
- 37.
Art. 130 of the Italian Consumer Code—Rights of consumer—The seller is liable to the consumer for any non-conformity which exists at the time the goods were delivered. In case of non-conformity, the consumer has the right to obtain the restorage of the conformity without any charge, by repair or replacement, in accordance with paragraphs 3, 4, 5 and 6, or to obtain an appropriate reduction of price of purchase or the termination of the contract in accordance with paragraphs 7, 8 and 9. The consumer may, at its option, pretend from the seller to repair the goods or to replace them without any charge in both cases, unless the remedy requested is impossible or too expensive. For the purposes of paragraph 3 should be considered too expensive one remedy in comparison to another, considering: (a) the value of good without non-conformity; (b) the grade of non-conformity; (c) the possibility that the alternative remedy could be completed without significant inconvenience to the consumer. Any repair or replacement shall be completed within a reasonable time from the request and without any significant inconvenience to the consumer, considering the nature of the good and the purpose for which the consumer purchased the good. The consumer may, at his choice, obtain an appropriate reduction of the price or the termination of the contract in case of one of the following situations: (a) if the repair or the replacement are impossible or prohibitively expensive; (b) the seller failed to repair or replace the good within the appropriate period referred to in paragraph 5; (c) the replacement or repair previously carried out caused significant inconvenience to the consumer.
- 38.
Art. 106 of the Italian Civil Procedure Code—Participation (in the trial) by request of one party (of the trial)—Each party may summon (in the same trial) a third party if the main party believe the dispute common with the third party or if the party wants to be guaranteed by the third party (translation by the author with his explications in brackets).
- 39.
Art. 2043 of the Italian Civil Code—Compensation in case of tort—Any fault or negligence which causes unfair damages to others, obliges the one who committed the tort to pay compensation (translation by the author).
- 40.
Art. 33 of Law 10 October 1990 No. 287.
- 41.
- 42.
Tribunale di Venezia, sec. III, 12 January 2016, in http://www.foroitaliano.it/wp-content/uploads/2016/01/trib-venezia-12-1-16.pdf. That decision was afterward reformed by the Court of Appeal of Venice, Sez. IV, with the ordinance No. 298/2016 RG and No. 1915/2016 Cron, in https://www.altroconsumo.it/organizzazione/~/media/lobbyandpressaltroconsumo/images/media-e-press/comunicati/2016/consumi%20bugiardi%20ammessa%20class%20action%20contro%20volkswagen/ordinanza/ordinanza%20corte%20appello%20venezia%20class%20action%20vw%20ammessa%2017_06_2016.pdf.
- 43.
See Libertini (2011).
- 44.
See Negri (2006).
- 45.
See Scuffi (2009).
- 46.
See Court of Cassation, Sec. I, No. 3640/2009 in Il civilista, 2011, 5, p. 65; Court of Cassation, Section III, No. 5941/2011, in Diritto e fiscalità delle assicurazioni, 2012, 1, I, p. 190; Court of Cassation, Sec. III, No. 5942/2011, in Foro italiano, 2011, 6, I, p. 1724; Court of Cassation, sec. III, No. 7039/2012, in Diritto e fiscalità delle assicurazioni, 2012, 3, p. 603.
- 47.
See Court of Cassation, sec. VI., No. 5327/2013 in Diritto & Giustizia.
- 48.
- 49.
After all, in European antitrust matter, from which derives all the national matters we are discussing, Art. 16 of Council Regulation (EC) No. 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty said: “1. When national courts rule on agreements, decisions or practices under Article 81 or Article 82 of the Treaty which are already the subject of a Commission decision, they cannot take decisions running counter to the decision adopted by the Commission. They must also avoid giving decisions which would conflict with a decision contemplated by the Commission in proceedings it has initiated. To that effect, the national court may assess whether it is necessary to stay its proceedings. This obligation is without prejudice to the rights and obligations under Article 234 of the Treaty. 2. When competition authorities of the Member States rule on agreements, decisions or practices under Article 81 or Article 82 of the Treaty which are already the subject of a Commission decision, they cannot take decisions which would run counter to the decision adopted by the Commission.”
- 50.
In fact, according to Italian jurisprudence, the plaintiff always needs to show the damage suffered because under the Italian law there does not exist a concept of damage in re ipsa or punitive damages.
- 51.
See Court of Cassation, sec. III, No. 27527/2013.
- 52.
See Court of Cassation, sec. III, No. 2305/2007.
- 53.
Art. 115 of the Italian Civil Procedure Code—Disposability of proofs—Except in the cases provided by the law, the judge must base his decision on the proofs proposed by the parties or by the prosecutor or on the facts that are not specifically rejected by the defendant. However, the judge may take his decision without proofs using factual notions known in the common experience (translation by the author).
- 54.
As permitted in Italy by the general law on administrative rule. See Law 7 August 1990 No. 241.
- 55.
See Art. 213 of the Italian Civil Procedure Code.
- 56.
See Art. 210 of the Italian Civil Procedure Code.
- 57.
See Art. 7 of the Italian Civil Procedure Code.
- 58.
Disputes concerning Art. 33, second period, of Law 10 October 1990 No. 287, as mentioned in Art. 3 of Legislative Decree No. 168 of 27 June 2003.
- 59.
- 60.
- 61.
- 62.
- 63.
- 64.
- 65.
- 66.
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Posio, G. (2017). Italy. In: Frigessi di Rattalma, M. (eds) The Dieselgate. Springer, Cham. https://doi.org/10.1007/978-3-319-48323-8_3
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