Italy Authority AGCM fines eToro for misleading consumers

The Italian Competition Authority, AGCM, recently imposed a fine of 1.3 million euros on eToro Europe, the European subsidiary of the trading platform eToro, for allegedly misleading consumers about the true cost of its services. AGCM's decision came after a thorough investigation into eToro's practices.

In a statement released on Monday, AGCM accused eToro Europe of violating articles 20, 21, and 22 of the consumer code by failing to disclose crucial monetary and technical details about its products and services. The antitrust authority pointed out that eToro's website provided incomplete information, which led consumers to make investment decisions they otherwise wouldn't have made.

eToro on WikiFX

WikiFX has given this broker a decent score of 7.52/10. eToro is a multi-asset social trading platform that has gained widespread popularity among investors, traders, and social media enthusiasts since its inception in 2007. It offers users access to a wide range of financial instruments, including stocks, cryptocurrencies, forex, indices, and commodities, among others. The platform provides a user-friendly interface that caters to both novice and experienced traders alike, making it one of the most popular trading platforms on the market.

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https://www.wikifx.com/en/dealer/0001283907.html

The misleading information primarily revolved around eToro's claims of offering commission-free trading on shares. However, the company did not clarify the existence of other costs involved in the transactions, such as potential risks linked to exchange rates and limitations on users' rights, especially concerning transferring shares to other brokerage firms.

This is not the first time AGCM has scrutinized prominent companies across various sectors. In May, the authority launched an investigation against Apple, accusing the tech giant of abusing its dominant position in the apps market. Additionally, in 2021, AGCM fined Amazon a staggering $1.3 billion, making it one of the largest penalties ever imposed on a US technology company in Europe. Other multinational corporations, including McDonald's, have also faced investigations by the competition watchdog in the past.

Interestingly, the fine against eToro comes at a time when the company is aggressively expanding its services to attract more investors. Just last week, eToro launched contracts for differences (CFDs) for extended hours of stock trading, providing users with an extra three hours each day for trading. This move was seen as an effort to give clients more investment options and access to markets that were previously limited.

Furthermore, eToro has been actively marketing its services through sports sponsorships. The brokerage firm recently announced sponsorship deals with four UK football clubs—Arsenal, Crystal Palace, Everton, and West Ham—to extend its reach and brand visibility.

It remains to be seen how eToro responds to the fine and rectifies its practices to ensure transparent and accurate information is provided to its consumers in the future. The AGCM's actions highlight the importance of regulatory oversight in protecting consumers and maintaining fair competition in the marketplace.