Scrutiny of Italian influencer's charity-cake deal leads to proposed law with stiff fines

ROME (AP) — A scandal over an Italian influencer’s Christmas-cake deal that authorities alleged misled consumers into thinking sales proceeds were going to charity inspired Italy's government on Thursday to approve stiff fines for insufficient product labeling.

The Cabinet approved proposed legislation that would provide for fines as high as 50,000 euros ($55,000) in cases where manufacturers don’t clearly label products to indicate just what percentage of the sales would go to charity.

Recently, Italy’s antitrust authority fined fashion-blogger-turned-influencer Chiara Ferragni 1 million euros ($1.1 million) and cake-maker Balocco SpA 420,000 euros for allegedly leading consumers to believe that by buying the sweet they would be contributing to an Italian hospital.

Italy's industry minister, Adolfo Urso, told reporters that the law would oblige manufacturers and professionals to put specific information on labels, including just how much of the proceeds, either in terms of a percentage or a flat amount, would go to charity.

"This way the consumer will know with certainty which part of the proceeds will go to solidarity initiatives,'' the Italian news agency LaPresse quoted the minister as saying.

Italian media quoted Ferragni as praising in a statement the Cabinet’s action, which she said filled “a legislative void.”

"What happened to me made me understand how it is fundamental to discipline with clear rules the activities of charity linked to commercial activities,'' Ferragni was quoted as saying.

Ferragni and Balocco President Alessandra Balocco are also being investigated by prosecutors in Milan for alleged aggravated fraud.

The antitrust authorities said that the cake-maker had made a one-time donation of 50,000 euros to a hospital in Turin in 2022, before the Ferragni-branded Christmas cakes were launched and didn't make any further donations. It said Ferragni's companies made 1 million euros to license her logo for the initiative, which saw the Ferragni-branded cakes sell for a higher price than usual.

The cake-maker said that it acted in “absolute good faith” in offering the special edition sweet known as a pandoro.

Ferragni has said she trusts that the criminal probe will show that she acted in good faith.

Since the Christmas cake flap erupted, a growing list of other deals involving the influencer with various companies has come under scrutiny.