The Italian government on Thursday proposed new rules for companies and influencers promoting products that raise money for charity in the wake of celebrity Chiara Ferragni’s endorsement scandal.
Prime Minister Giorgia Meloni first fined Ferragni, a blogger and Instagram star, for promoting a holiday “Pandoro” cake that purported to raise money for children’s hospitals. He said he took action after being investigated on suspicion of fraud.
But Italy’s competition watchdog revealed in December that while the cake manufacturer had paid a certain amount to the hospital months before its launch, Ferragni’s company had made more than 1 million euros without contributing anything. revealed.
Under the proposed law, producers of products and “professionals in the marketing and promotion of products” will be able to match the amount donated to charity by either the total ticket price or some other amount, according to Business Minister Adolfo Urso. Regardless of the percentage, it must be stated on the package.
Before a product is launched, parties must also inform competition watchdogs of their plans and when they intend to pay out the funds raised to charities.
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Urso told reporters after Prime Minister Meloni’s cabinet meeting that the watchdog could impose fines of between 5,000 euros and 50,000 euros on those who do not comply.
He said half of the funds raised will be donated to charity, but a decision has not yet been made.
The competition watchdog has fined two companies owned by Mr. Ferragni 1 million euros ($1.1 million) for “unfair commercial practices” over endorsement deals for Barocco’s Pandoro cake. Barocco itself was also fined 42,000 euros.
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Milan investigators launched an investigation into Ferragni earlier this month over suspicions of contract irregularities, but her other endorsements have also come under scrutiny.
Meloni said this week that the case highlights the need for greater transparency.
“This story shows that there are indeed holes in this law,” he said on Monday’s “Cuarta Repubblica” program.
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Ferragni has built a business empire estimated to be worth $8 million a year, including his own brand, according to Forbes magazine. She has received lucrative sponsorship deals from various brands, but reportedly lost some of them after her scandal broke.
She insists she has “always acted with integrity.”
Italy’s communications authority announced earlier this month that it would extend its reach to social media influencers, warning that they needed to be transparent about paid content.
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