The Italian Competition Authority, AGCM, fined eToro Europe 1.3 million euros claiming the European subsidiary of the trading platform provided misleading information about its services. The decision reportedly followed an investigation launched against eToro by the authority.
In a statement released by the AGCM today (Monday), the antitrust authority claims that eToro Europe violated articles 20, 21, and 22 of the consumer code by not disclosing to users the monetary terms and the technical aspects of its products and services.
Disclosure of Product and Services
According to the statement, which was translated from Italian, the AGCM cited the information on eToro's website, saying that it caused users to make investment decisions they would not have otherwise made.
"The information on the company's website suggests that consumers can trade shares with no commission charged on their transactions but does not state that there are other costs," the AGCM explained. "The risks linked to the exchange rates, and the limitation of the rights of the users, particularly the constraints to transfer shares to other brokerage firms, were not disclosed."
The AGCM has launched similar investigations in the past against large corporations in various industries. Though. the authority launched an investigation against Apple in May for alleged abuse of its dominance in the apps market.
Similarly, the AGCM fined Amazon $1.3 billion in 2021, one of the largest penalties fined against a US technology company in Europe. Amazon and McDonald's are the other multinationals that have been investigated in the past by the competition watchdog.
eToro Expands Services
The latest fines against eToro arrived when the company is expanding its services to attract more investors. Finance Magnates reported a week ago that eToro had launched contracts for differences (CFDs) for extended hours of stock trading. The service provides users with an additional three hours to trade on a daily basis.
Commenting about the launch, Dan Moczulski, the UK's Managing Director of eToro, said: "This launch is another example of eToro providing clients with the tools to meet their investment needs. By further opening up markets, more people will now have access to services which were previously limited to a few."
On top of that, eToro has expanded its marketing efforts by utilising sports. The brokerage firm announced earlier this month that it had signed sponsorship deals with four football clubs, Arsenal, Crystal Palance, Everton, and West Ham, in the UK.
In an email sent to Finance Magnates, a spokesperson from eToro said that the brokerage firm was reviewing the decision by the AGCM. "eToro's goal is to empower our users to grow their knowledge and wealth as part of a global community of investors," the spokesperson said. "We firmly believe in the importance of consumer protection and providing consumers with exhaustive information."
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