eToro Faces A €1.3 Million Fine Over Misleading Information
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
The Italian competition watchdog, AGCM, has imposed a €1.3 million fine against the social and copy trading platform eToro. The agency has claimed that the European subsidiary of eToro shared misleading information about its services.
eToro faces a €1.3 million fine
The decision that has been made by eToro on this development comes after an investigation was launched against the trading platform by the competition authority. The statement released by the authority claimed that the actions taken by eToro had resulted in the violation of articles 20, 21, and 22 of the consumer code.
The trading platform has been accused of failing to disclose the monetary terms to users and failing to provide clarification on the technical aspects of the products and services offered by the platform.
The statement released by the regulator cited the information available on the eToro website. The AGCM has said that the platform allowed users to make strategic investment decisions that they would not have made if additional disclosures had been provided. The authority noted that the platform failed to mention all the costs involved in transactions done on the platform or the risks related to different activities.
“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 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 statement from the regulator said.
The AGCM has conducted similar investigations in the past, with the focus being on large corporations that operate in different industries. In May, the authority commenced an investigation against Apple over the alleged abuse of dominance in the apps market.
The agency has targeted other tech giants in the past to ensure they abode with the competition guidelines. In 2021, the AGCM imposed a $1.3 billion fine against Amazon. The fine was ranked among the largest fines that have been imposed against a technology firm operating in Europe.
The competition watchdog has also launched investigations against multinationals in the past. It has conducted investigations against Amazon and McDonald’s to ensure that they comply with the set regulatory framework.
eToro is still growing its services
The eToro social trading platform has been expanding its services significantly despite the scrutiny by regulators. The latest fines imposed against eToro came at a time when the company was growing its services to expand the user base.
The copy trading platform recently released contracts for differences (CFDs) for the extended hours of stock trading. This service allows users to access an extra three hours when they trade daily.
eToro has also grown its marketing efforts by securing strategic sports sponsorship deals. Earlier this month, eToro announced securing deals with Arsenal, Crystal Palace, Everton, and West Ham in a bid to promote its services across the UK.
