Who: Brands seeking to run prize promotions in Italy after the end of the Brexit transition period
Law stated as at: 3 March 2020.
What happened (will happen):
Prize promotions targeting Italian consumers are regulated by the Decree of the President of the Republic of 26 October 2001 No. 430 (the DPR). The DPR applies to prize promotions carried out by promoters established in Italy or a non-EU Member State. Promoters established in one of the EU Member States other than Italy can apply its local laws instead of the DPR (although Italian consumer laws will continue to apply), which is an exception that many promoters established in the United Kingdom have relied on in order to run prize promotions in Italy in a straightforward way.
However, when the Brexit transition period ends on 31 December 2020 (or later, if this date is extended), prize promoters established in the UK will have to comply with the DPR and no longer be able to rely on the exemption given to EU Member States.
Therefore, from the end of the Brexit transition period, Italy’s requirements will apply to any prize competitions carried out from a promoter in the UK that target Italian consumers, unless this issue is addressed in any negotiations between the UK and the EU. This is important to bear in mind because the DPR is an onerous piece of legislation that is interpreted strictly and has many requirements, including the following obligations:
- all operations within the ambit of a prize competition need to be carried out in Italy, except for the activities relating to the packaging of the products (if any);
- the prize competition terms and conditions must: (i) comply with the Italian regulation; (ii) be filed with the Ministry of Economic Development at least 15 days before the beginning of the prize competition; and (iii) be provided to participants in Italian;
- the promoter has to pay a bond to the ministry equal to the total value of the prizes to be awarded;
- every activity related to the awarding of prizes must take place in the presence of a notary or competent officer of a Chamber of Commerce;
- the promoter established outside of the Italian territory is requested to appoint a fiscal representative in Italy or ask for a direct identification VAT number from the Italian Tax Authority; and
- the server possibly used for a prize competition must be located within the Italian territory or, alternatively, at least a mirror server solution should be arranged within the Italian territory.
Note that the above is only a selection of the requirements under the DPR.
Why this matters
Many promoters have been able to provide prize promotions targeting Italy without complying with the DPR thanks to the exception for other EU Member States. However, as the transition period continues, promoters should bear in mind that it will need to comply with the onerous conditions of the DPR when they wish to target Italian consumers.