Italy’s Antitrust Authority AGCM has fined eToro Europe 1.3 million euros for allegedly misleading consumers about the cost of its services.
The decision comes as the regulator has increased its scrutiny across various sectors in recent times. The Italian Competition Authority launched an investigation into eToro, leading to this penalty being imposed on the European subsidiary of the trading platform.
In a statement released on Monday, the AGCM stated that eToro Europe violated articles 20, 21, and 22 of the consumer code by failing to disclose the financial terms and technical aspects of its products and services to users. The authority pointed out that the information on eToro’s website suggested that consumers could trade shares without any commission charges, but it did not disclose the presence of other costs. Additionally, the AGCM highlighted that eToro did not inform users about the risks associated with exchange rates and the limitations on their rights, such as constraints on transferring shares to other brokerage firms.
“In fact, through the dissemination of messages on the website www.etoro.com/it, the company suggests that consumers can trade in shares with commissions equal to zero and does not highlight the presence of other costs of various kinds, the risk of additional disbursements linked to changes in exchange rates, the existence of operational constraints and limitations on the rights of the customer who purchases the shares, in particular the impossibility of transferring the shares to other intermediaries.” AGCM, Rome, 17 July 2023
In response to the fine, eToro stated that it firmly believes in consumer protection and providing consumers with comprehensive information. The company is currently reviewing the decision by AGCM and considering its options.
The AGCM has previously initiated similar investigations against prominent corporations in various industries. In May, the authority launched an investigation into Apple, accusing the tech giant of abusing its dominance in the apps market. In 2021, the AGCM fined Amazon $1.3 billion, which stands as one of the largest penalties imposed on a US technology company in Europe. Both Amazon and McDonald’s have faced scrutiny from the competition watchdog in the past.
eToro’s recent fine arrives at a time when the company is expanding its services to attract more investors. The brokerage firm recently launched contracts for differences (CFDs) for extended hours of stock trading, offering users an additional three hours daily to trade. Dan Moczulski, the UK’s Managing Director of eToro, emphasized that this expansion allows more people to access services that were previously limited to a few. Additionally, eToro has ventured into sports marketing, having signed sponsorship deals with four UK football clubs: Arsenal, Crystal Palace, Everton, and West Ham.
