eToro Fined €1.3 Million by Italian Watchdog for Misleading Ads

eToro Europe, the European subsidiary of the trading platform, has been fined 1.3 million euros by the Italian Competition Authority (AGCM) for allegedly providing deceptive information about its services. The AGCM initiated an investigation into eToro, which ultimately led to this decision.

The Italian Competition Authority (AGCM) announced today (Monday) that eToro Europe has been accused of violating consumer code articles 20, 21, and 22. According to the AGCM, the trading platform failed to provide users with clear information regarding the financial terms and technical aspects of its products and services.

Disclosure of Product and Services

In a translated statement, the Italian Competition Authority (AGCM) highlighted concerns regarding the information provided on eToro's website. The AGCM pointed out that the website suggested users could trade shares without incurring any commission charges but failed to disclose other associated costs. Additionally, the authority noted that the risks associated with exchange rates and the limitations on users' rights, such as transferring shares to other brokerage firms, were not adequately disclosed. As a result, users may have made investment decisions without being fully aware of these factors.

The AGCM has a track record of initiating investigations into prominent companies across diverse sectors. For instance, in May, the authority launched an investigation into Apple, alleging the abuse of its dominant position in the apps market.

Likewise, in 2021, the AGCM imposed a substantial fine of $1.3 billion on Amazon, marking one of the largest penalties levied against a US technology company in Europe. The competition watchdog has also scrutinized other multinational corporations, including McDonald's, in previous investigations.

eToro Expands Services

Amidst its efforts to attract more investors, eToro recently faced fines while expanding its range of services. The company introduced extended hours of stock trading through contracts for differences (CFDs), granting users an additional three hours each day to engage in trading.

Dan Moczulski, eToro's UK Managing Director, expressed enthusiasm about the launch, stating that it exemplifies the company's commitment to providing clients with the necessary tools to meet their investment requirements. By expanding market accessibility, eToro aims to democratize services that were previously limited to a select few.

Furthermore, eToro has ventured into sports sponsorship to enhance its marketing efforts. The brokerage firm recently announced partnerships with four UK football clubs—Arsenal, Crystal Palace, Everton, and West Ham—to further promote its services.

eToro is currently reviewing the decision made by the AGCM, according to a spokesperson from the brokerage firm. The spokesperson emphasized eToro's commitment to empowering users within a global community of investors, underscoring the company's belief in the significance of consumer protection and the provision of comprehensive information to consumers.