Why the Antitrust pinches Xiaomi in Italy by Chiara Rossi

The Antitrust Authority has imposed a fine of 3.2 million on Xiaomi. According to the Authority, the Italian company of the Chinese group of the same name has hindered consumers in trying to take advantage of the legal guarantee of conformity. All the details Salty fine for Xiaomi in Italy. The Italian Competition Authority (Agcm) has imposed a fine of 3.2 million euros on Xiaomi Technology Italy Srl, an Italian company of the homonymous world group. This was announced by the antitrust. The agcm investigation has in fact ascertained a series of conducts held by Xiaomy Italy that constitute an incorrect commercial practice. According to the Authority chaired by Roberto Rustichelli, the Italian branch of the Chinese smartphone manufacturer has hindered the exercise by consumers of the rights deriving from the legal guarantee on Xiaomi-branded electronics products. So Xiami Italy now has sixty days to communicate to the Authority the initiatives taken in compliance with the warning. All the details. MISCONDUCT Specifically, the Antitrust Authority has verified the conduct of Xiaomi Italy on the occasion of the provision of the guarantee. First: refusal of free repair under legal warranty in the presence of other damages and conditions qualified as not under warranty. Secondly: carrying out repeated repairs, limiting the replacement of the product through the imposition of very restrictive conditions and third, requiring consumers to pay the costs of verification and shipping, under penalty of failure to return the product, when the provision of the legal guarantee has been requested in the first period of the same. THE OFFENSE ESTABLISHED BY THE ANTITRUST In particular, the proceedings showed that the company refuses legal warranty repair in the presence of other product defects, even if only aesthetic – for example if the surfaces and / or other external parts of the product have more than one scratch on the screen, of dimensions not exceeding 5 hundredths of a millimeter in width and 5 millimeters in length -, making warranty service subject to repair of out-of-warranty damage. In addition, Xiaomi makes repeated repairs instead of replacing the product, thus repeatedly depriving the consumer of the purchased good. THE AUTHORITY'S CLARIFICATION The Authority recalls that the "repair" intervention can constitute a remedy only if it promptly resolves the lack of conformity. WHAT XIAOMI TECHNOLOGY IYALY CLAIMS Finally, Xiaomi Technology Italy S.r.l. – in case of negative verification of a lack of conformity of the goods – asks to pay the costs of verifying the defect and shipping the product, under penalty of non-return, if the consumer refuses the estimate of the out-of-warranty repair. Instead, it is up to Xiaomi to verify the possible existence of the reported lack of conformity without charging any verification or shipping costs. THE PERIOD OF THE VIOLATION As for the duration of the violation, it appears that Xiaomi Technology Italy S.r.l. has adopted the unfair commercial practice starting from the first half of 2018. Moreover, according to the Antitrust, the practice is still ongoing, since the measures proposed and adopted by the company during the proceedings are not such as to determine its termination. THE FINANCIAL PENALTY Therefore, the authority has resolved to impose a pecuniary administrative sanction applicable to Xiaomi Technology Italy S.r.l. in the amount of 3.2 million euros. Instead of the basic amount of 4 million euros, given that the Agcm has ascertained the presence of the mitigating circumstances consisting in the implementation, during the investigation, of some improvement measures by Xiaomi Italy.