Influencers treated equal to commercial agents: Commercial and Labour Law implications in Italy

published on 22 July 2024 | reading time approx. 5 minutes

In its sentence of 4 March 2024, the Court of Rome -section for labour law matters- (R.G. 38445/2022), ruled that influencers who work on a stable and continuous basis are to be treated as a company with commercial agents. This is an unprecedented ruling with consequences in many respects.

The facts

The plaintiff, a company active in the online trade of dietary supplements, used various professionals, including so-called influencers, to promote its products on social media, providing them with a customised discount code to share with their followers. According to the contractual provisions, the influencers were entitled to a fixed fee for publishing content and a percentage fee each time their discount code was used by consumers.

After an inspection the Enasarco -the National Assistance Entity for Commercial Agents and Representatives- claimed that the relationships between the company and the hired influencers qualified as agency contracts pursuant to Article 1742 of the Italian Civil Code. Therefore, Enasarco demanded payment of the due social security contributions and a penalty in the amount of 70,264.94 Euro.

The company appealed against this measure.

The judgment of the Court of Rome

The commercial agency contract is governed by Article 1742 et seq. of the Italian Civil Code: it is a contract regulating that 'one party undertakes, on behalf of the other party, on a continuing basis, to promote the conclusion of contracts in a specified area, in return for remuneration'.

The Court, after a brief examination of the essential features of the commercial agency contract and of what distinguishes it from “occasional business finders” (procacciatore d’affari) - namely the continuity and stability of the commercial agent's activity and the activity carried out by the influencers - pointed out that:

a stable, non-occasional and non-episodic relationship was discernible in this case. In fact, the contracts with the influencers were of indefinite duration and Enasarco proved, by means of statements of account of commissions and by the systematic issuing of invoices for business procured through their marketing activity, that they had also been in existence for several years;
the purpose of the contract with the influencer was not merely marketing but the sale of the promoted products to the followers of that influencer. The presence of a customised discount code (a very common practice), that can only be reached through the influencer's social pages, means that this order is directly traceable to the influencer and therefore the order can be considered as directly procured by him. According to the Court, for the purposes of the 'promotion and conclusion of contracts', a causal link between the commercial agent's promotional work and the conclusion of the deal is sufficient, whereas the actual seeking of the customer or an act with predetermined content (such as, for example, marketing or the preparation of contracts) should not be considered essential;
"the failure to allocate a specific area cannot exclude the existence of a commercial agency contract" (Court of Cassation 18303/2007) and, in any case, as a "specific area" not only the geographical area is to be understood, but also the portion of the market which, in the case of influencers, is determined by the community of followers;
it is irrelevant that influencers were not the recipients of directives and instructions, since the market in the web world is highly standardised and purchasing is done with a 'click' on standard terms;
the absence of the exclusivity bond provided for in Article 1743 of the Italian Civil Code is irrelevant, because the exclusive right is not an essential element of the commercial agency contract and may well be waived by the parties.

Consequently, the Court recognised the existence of the typical elements of a commercial agency contract pursuant to Articles 1742 et seq. of the Italian Civil Code.

Considering the above, it seems appropriate to highlight in the following the necessary requirements for influencers/commercial agents and for companies wishing to make use of such figures, as well as to indicate general precautions, which should however be assessed on a case-by-case basis, to be taken in order to avoid incurring sanctions or litigation.

Commercial Law implications

To be authorised to carry out commercial agency activities, the agent must meet certain moral and professional requirements and notify the beginning of the activity with the competent Chamber of Commerce. The moral requirements must be possessed by the agent cumulatively and are: enjoying the exercise of civil rights, not having been convicted for offences against the public administration, not being interdicted or incapacitated and not having been declared bankrupt. The professional requirements, on the other hand, are alternatively: (i) having obtained a secondary school diploma with a commercial orientation or a degree in commercial or legal subjects or another suitable qualification; (ii) having successfully attended a specific professional course recognised by the Region; (iii) having worked in the trade/sales sector for at least 2 years.

These requirements are obligatory for all forms of the commercial agency activity, i.e. as natural person, sole trader or via a company.

The Company Registry verifies the fulfilment of the requirements and the self-declarations made. In addition, at least once every five years, it verifies the continued fulfilment of the eligibility requirements.

The exercise of the activity of commercial agent and sales representative without notification of the activity for the declaration of possession of the requirements is punished with an administrative sanction from Euro 516.00 to Euro 2,065.00 pursuant to Article 9 of Law 204/85 and with a sanction from Euro 103 to Euro 1,032 pursuant to Article 2630 of the Civil Code. The same sanction applies to principals who enter into an agency or sales representative contract with a person who does not possess the relevant qualification certified by registration with the Company Registry (Article 9 L. 204/85).

Therefore, if influencers are not in possession of the necessary requirements for the commercial agent activity they cannot register as such and this entails the impossibility of entering into commercial agency contract pursuant to Article 1472 of the Italian Civil Code without a possible penalty for both parties. To this adds the issue of non-payment of Enasarco contributions by both parties.

Labour Law implications

From a contribution perspective, it should be recalled that all sums paid to a commercial agent (excluding the reimbursement of expenses) are subject to a contribution levy by Enasarco.

In cases such as the one examined, the reclassification of the relationship automatically triggers the obligation to pay contributions to Enasarco, as well as the application of interest and penalties.

It is worth mentioning that the current rate for sole traders or partnerships acting as commercial agents is 17 per cent, of which half rate (8.5per cent) must be borne by the principal and the other half by the agent.

The Enasarco rate in the case of a commercial agent acting in corporate form is 4per cent, of which 3 per cent must be borne by the principal and 1per cent by the agent.