Ignacio Alonso recently posted his interesting article “Spain – Can an influencer be considered a “commercial agent”” where he discussed the elements that – in some specific circumstances – could lead to considering an influencer as a commercial agent, with the consequent protections that Directive 86/653/CE and the individual legislation of the EU Member States offer, and the related costs to be borne by the companies that hire them.
Ignacio also mentioned a recent ruling issued by an Italian court (“Tribunale di Roma, Sezione Lavoro, judgment of March 4th 2024 n.2615”) which caused a lot of interest here, precisely because it expressly recognized the qualification of commercial agents to some influencers.
Inspired by Ignacio’s interesting contribution, this article will explain this ruling in more detail and draw some indications that may be useful for companies that want to hire influencers in Italy.
The case arose from an inspection conducted by ENASARCO (social security institution for Italian commercial agents) at a company that markets food supplements online and which had hired some influencers to promote its products on social media.
The contracts provided for the influencers’ commitment to promote the company’s branded products on its behalf on social media networks and on the websites owned by the influencer.
In promoting the products, the influencers indicated their personalized discount code for the followers to use. With this discount code, the company could track the orders from the influencer’s followers and, therefore, originated from him, paying him commissions as a percentage of these sales once paid for. The influencer also received fixed compensation for the posts he published.
The compensation was invoiced monthly, and in fact, the influencers issued dozens of invoices over the years, accruing substantial compensation.
The contracts were stipulated for an indefinite period.
The inspector had considered that the relationships between the company and the influencers were to be classified as a commercial agency and had therefore imposed fines on the company for failure to register with ENASARCO and pay the contributions for social security and termination indemnity for rather high amounts.
The administrative appeal was rejected, therefore the company took legal action before the Court of Rome (Labour and Social Security section), competent for cases against ENASARCO, to obtain the annulment of the fines.
The company’s defense was based on the following circumstances, among others:
- the online marketing activities were only ancillary for the influencers (in fact, they were mostly personal trainers or athletes)
- they promoted the products only occasionally
- they actually had no direct contact with customers, so they did not actually promote sales but only did some advertising
- they did not have an assigned area or any obligations typical of the agent (e.g. exclusivity).
The Court of Rome rejected the company’s arguments, stating that the relationships between the company and the influencers were indeed to be considered as agency agreements, thus confirming ENASARCO’s claims.
These were the main points in the courts’ reasoning:
- the purpose of the contracts stipulated between the parties was not mere advertising but the influencer’s promotion of sales of the company’s products to his followers, as confirmed by the discount code mechanism. Promotional activity can in fact, be performed in various ways, in this case, also considering the peculiarity of the web and social networks
- there was an “assigned area”, which the Court identified precisely in the community of the influencer’s followers (the area is not necessarily geographical but can also be identified with a group or category of customers)
- the relationship between the parties had proven to be stable and continuous, as evidenced by the quantity and regularity of the invoices for commissions issued by the influencers over the years for an indeterminate series of deals, documented with regular account statements
- the contract had an indefinite duration, which highlighted the parties’ desire to establish a stable and long-lasting relationship.
What considerations can be drawn from this ruling?
First of all, the scope of the agency contract is becoming much broader than in the past.
Nowadays, the traditional activity of the agent who physically goes to customers to solicit sales, collect orders, and transmit them to the principal is no longer the only method to promote sales. The qualification as an agent can also be recognized by other figures who, in different ways – taking into account the specific industrial sector, the technology developments, etc.- still carry out activities to increase sales.
What matters is the agreed purpose of the collaboration, if it is aimed at sales, and whether the activity actually carried out by the collaborator is consistent with and aimed at this purpose.
These aspects need to be carefully considered when studying and drafting the contract.
Other key requirements for establishing an agency relationship are the “stability and continuity”, to be distinguished from occasional activity.
A relationship may begin as an occasional collaboration, but over time, it can evolve and become an ongoing relationship, generating significant turnover for both parties. This could be enough to qualify the relationship as an agency.
Therefore, it is necessary to monitor the progress of the relationship and sometimes evaluate the conversion of an occasional relationship into an agency if circumstances suggest so.
As can be seen from the judgment of the court of Rome, relationships with Italian agents operating in Italy (but in some cases also with Italian agents operating abroad) must be registered with ENASARCO (unlike occasional relationships), and the related contributions must be paid, otherwise the principal may be fined.
Naturally, qualifying a relationship with an influencer as an agency agreement also means that the influencer enjoys all the protections provided for by Directive 653/86 and the legislation implementing it (in Italy, articles 1742 and following of the Civil Code and the applicable collective bargaining agreement), including, for example, the right to termination notice and termination indemnity.
A company intending to appoint an independent person with commercial tasks in Italy, including now also influencers under certain conditions, will have to take all of this into account. Of course, the case may be different if the influencer does not carry out stable and continuous promotional activities and is not remunerated with commissions on the orders generated by this activity.
I am unaware whether the ruling analysed in this article has been or will be appealed. If appealed, staying updated on the developments will certainly be interesting.