Chiara Ferragni, a social media influencer, started her journey by taking selfies at fashion shows, starting out as an uninvited attendee, Ferragni is now deemed to be one of the most influential figures in the Italian fashion industry. Ferragni is known for prioritising publicity over privacy and has over the years built an empire of over 30 million followers over various social media platforms and was able to generate a fortune of millions in monetary terms by doing so. She started her own business, an agency, and indulged in such activities, which gave her a boost towards the overall success of her career. However, as it says with great success comes great responsibility, Ferragni recently ended up facing legal consequences and was charged with unfair commercial practices for one of her social media campaigns.
The Chiara Ferragni Charity Scandal Explained
Ferragni was accused of indulging in a vague commercial activity where she previously engaged with a candy company, namely Balocco, to launch a Christmas cake, typically a “Pandoro”, with her logo slapped on the cake. It was claimed that the charitable campaign was launched so that a sum of money could be raised for the purpose of a donation to Regina Margherita Hospital in Turin, and adding her logo to it would triple the product value. It was noted that Balocco had donated $55,000 before the commencement of the sales operation. Thus, Ferragni was accused of misleading her followers, and the participants of the charity campaign netted her a total of €1 million from the promotion campaign which was not used for the donation as alleged in the case filed against the influencer.
Under the circumstances, both Chiara Ferragni and Alessandra Balocco, president and CEO of the company that produces the typical “Pandoro” Christmas cake, are currently being scrutinized for aggravated fraud. The Antitrust Authority imposed over one million euros as a fine on Ferragni’s businesses, while Balocco was fined 420,000 euros.
AGCM, one of the prominent regulatory bodies in Italy that has been ensuring fair play in market competition, has recently made a derogatory remark against Ferragni in the purview of engaging her in such an advertisement that has misled the mob by encouraging false pricing and advertising in regards to the Christmas cake. Yet another big-time criticism was by Prime Minister Giorgia Meloni herself; she indirectly communicated that one who contributes such a product to the market for a cause adds up more value than those who generate profit. Her view likely further states that such people should be looked upon as they are contributing towards making Italy a better place, which contradicts Ferragni’s style of work. In light of the harm and damages caused by Ferragni’s product, even the Consumer Protection Association has filed a case against her, and Milan’s prosecutors have put her under investigation for tax evasion. Renowned brands and companies like Safilo and Coca-Cola have loosened ties with Ferragni after the incident.
International Laws Against Dubious Charity Campaigns
Key International Laws Protecting Donors
In recent times, it has been widely observed that various cases of dubious charity campaigns, not only at national but also at international platforms shed light on widespread fraud and mismanagement, which has led to the development of international laws to ensure transparency and accountability and prevent the misuse of charitable funds globally.
Some of the major international laws, treaties, and guidelines that have been playing a crucial role in dealing against such dubious charity campaigns include – The Convention on the Rights of the Child(CRC), one of the most important international treaties that focuses on children’s human rights including the abolishment of child’s exploitation. It is one of the prominent conventions that deals with dubious charity campaigns that may exploit or harm children. Followed by FATF standards, also known as the Financial Action Task Force, lays down standards, globally recognized and fights against taboos like terrorist financing, money laundering, and various threats that dilute the integrity of the international financial system negatively. It provides guidelines which are crucial because they shed light on financial misconduct in relation to dubious charity campaigns. The guidelines by the OECD provide the framework in regards to multinational enterprises against corporate responsibility, which includes rules in relation to charity donations.
The Treaty of International Covenant on Civil and Political Rights (ICCPR) lays down the protection of individuals’ rights to freedom from various forms of deception, fraud, and abuse, which ensures transparency and honesty in fundraising efforts for charity campaigns. The UNCAC addresses similar attributes by putting its sight over various categories of corruption, such as misappropriation of funds, money laundering, and many more, through which a framework for combating illegal activities related to dubious charity campaigns is dealt with. Also, various other conventions, such as the Palermo Convention, have been playing an important role when it comes to preventing and fighting effectively against the trafficking of persons, mainly in relation to women and children, and thus this convention shows relevancy where any dubious charity campaign is involved where offenses such as human trafficking and exploitation come under light.
Charity Regulations in Italy and India
ITALY
In Italy, there’s no legal definition provided directly in relation to charity other than the concept of ONLUS, which clarifies that it’s a specific tax regime. These associations are person-based non-profit organizations established by at least two associated persons with commonly defined non-profit persons. In Italy, laws against dubious charity campaigns are robust, combining national acts and European regulations to ensure transparency and accountability. The Codice Civile (Civil Code) provides the framework for non-profit organizations (NPOs), with Article 2043 addressing liability for fraud and misrepresentation.
Further, Article 20 of the Consumer Code lays down combined violations of their duty of professional diligence and unfair commercial practice, characterized by elements of deceptiveness, which are mentioned under Articles 21 and 22 of the Consumer Code. The Codice Penale (Penal Code) criminalizes fraudulent activities under Article 640 and addresses the misappropriation of funds in Articles 316 bis and 316 ter. There are several Presidential decrees that regulate numerous realms, such as tax codes, procedures concerning recognition by state private legal entities, and legislative decrees dealing with tax regimes in general and specific conduct, such as legal and tax regimes applicable to entities operating over a third sector that lay down a legal and regulatory framework regarding charitable organizations. Also in regard to Ferragni’s case, AGMC is looking forward to regulating charity campaigns in significant ways by implementing such rules to make them much more transferrable and accountable.
INDIA
In India, a set of legal frameworks work together to address dubious charity campaigns. National laws, regulations, and international treaties govern the establishment, operation, and oversight of charitable organizations, as well as address fraud and misrepresentation, ensuring transparency and ethical operations.
The prominent laws that are crucial to regulating such charitable trusts and campaigns include the Income Tax Act of 1961, which lays down that in order to be recognized as a charity, an organization must adhere to the guidelines provided under Clause 12A, and Section 2 (15) of the same act lays down the purpose of the charitable trust.
There are different ways in which a charitable trust may be registered such as the Trusts registered under various state governments, registered under the Societies Registration Act, Section 8 companies under the Companies Act 2013 and Other various acts such as the Indian Trust Act, the Foreign Contribution Regulation Act, and the Consumer Protection Act regulate various laws, provisions, rules, and regulations that deal with registration, incorporation, and governing various rules and regulations to abolish misconduct, thus bringing a safeguard to the contributors.
The law in India on charitable trusts and non-profit organisations is quite comprehensive and detailed and looks into multiple facets such as tax, foreign contributions, rights of religious groups to form trusts etc. in order to ensure that the beneficiaries of the trust are actually benefitted.
From media fame to legal scrutiny, Fergani’s career as an influencer has been through a rollercoaster ride. However, it serves as a beacon to the influencer industry as nothing is unseen to the eye of the law. Her cases underline a dynamic view of the fashion industry bringing in various elements that play an important role in conducting transparent, accountable, and ethical conduct. Various laws, institutions, and organizations play an important role in giving out a message to the industry, safeguarding the charitable donations in this case, which has been recognized not only in Italy but internationally thus preventing fraudulent activities and safeguarding charitable causes and consumers. This brings a cause to the market that would develop a notion of ethical standards and ensure fair competition, diminishing misconduct.
