Opinion of the Advocate General — ECLI:EU:C:2024:367
Date: 2024-04-25
Language of the case: Italian
Procedure: Reference for a preliminary ruling
Origin: Italy

Summary C-646/22 – 1 
Case C-646/22 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
13 October 2022 
Referring court: 
Consiglio di Stato (Italy) 
Date of the decision to refer: 
10 October 2022 
Appellant: 
Compass Banca SpA 
Respondent: 
Autorità Garante della Concorrenza e del Mercato 
  
Subject matter of the main proceedings 
Appeal against a judgment of the Tribunale amministrativo regionale per il Lazio 
(Regional Administrative Court, Lazio, Italy) delivered in proceedings centred on 
the question of the possible aggressive nature of a commercial practice in which a 
consumer is made to take out an insurance policy when entering into a credit 
agreement. Question related to the previous question, regarding the extent of the 
powers of intervention of the Autorità garante della concorrenza e del mercato 
(Italian Competition Authority; ‘the AGCM’). 
Subject matter and legal basis of the request 
Pursuant to Article 267 TFEU, the Court of Justice is requested to interpret 
Directive 2005/29/EC, in particular Article 2(d) and (j) of that directive, as well as 
Articles 4, 6, 8 and 9 thereof, and Directive (EU) 2016/97, in particular 
Article 24(3) thereof. 
Questions referred for a preliminary ruling 
EN 
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‘1. Should the concept of “average consumer” referred to in Directive 
2005/29/EC, understood as a consumer who is reasonably well informed and 
reasonably observant and circumspect – given that it is vague and flexible – be 
worded according to the best science and experience and thus refer not only to the 
classic concept of homo economicus, but also to the findings of the latest theories 
on bounded rationality, which have shown how people often act by limiting the 
information they need through decisions which appear “irrational” when 
compared with those that would be taken by a hypothetically observant and 
circumspect person; findings that impose a need for greater consumer protection 
where – as is increasingly the case in modern market dynamics – there is a risk of 
cognitive influence? 
2. Can a commercial practice in which, due to the framing of the information, a 
choice may appear obligatory and with no alternatives be considered inherently 
aggressive, taking account of Article 6(1) of [that directive], which regards as 
misleading a commercial practice that in any way, “including overall 
presentation”, deceives or is likely to deceive the average consumer? 
3. Does [Directive 2005/29/EC] justify the power of [the AGCM] (once the risk of 
psychological influence has been identified in relation to (i) the fact that a loan 
applicant is normally in need, (ii) the complexity of the contracts presented for 
signature by the consumer, (iii) the concurrent nature of the combined offer and 
(iv) the short period granted to take up the offer) to allow a derogation from the 
principle of the possibility of cross-selling insurance products and unrelated 
financial products by requiring a seven-day period between the signing of the two 
contracts? 
4. In view of the repressive power of aggressive commercial practices, does 
Directive (EU) 2016/97, and in particular Article 24(3) thereof, preclude [the 
AGCM] from adopting a decision on the basis of Article 2(d) and (j) of Directive 
2005/29/EC, Articles 4, 8 and 9 thereof and the national implementing legislation 
after a loan application is rejected following the refusal of an investment services 
company, in the case of the cross-selling of a financial product and an unrelated 
insurance product (and where there is a risk of the consumer being influenced 
owing to the actual circumstances of the case, which can also be inferred from the 
complexity of the documents to be examined), to grant the consumer a seven-day 
cooling-off period between the combined offer being made and the insurance 
contract being signed? 
5. Could the characterisation of the mere combining of two products – one 
financial product and one insurance product – as an aggressive practice result in 
an unlawful regulatory measure, and would this place on the trader (rather than on 
the AGCM, as it should be) the burden – a difficult one to discharge – of 
demonstrating that that combining of two products is not an aggressive practice in 
breach of Directive 2005/29/EC (especially as, under that directive, Member 
States may not adopt stricter rules than those provided for therein, even in order to 
achieve a higher level of consumer protection), or, on the contrary, does such a 
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reversal of the burden of proof not exist, provided that, on the basis of objective 
evidence, there is deemed to be a real risk that the consumer in need of a loan will 
be influenced by a complex combined offer?’ 
Provisions of European Union law relied on 
Article 114 TFEU. 
Directive 2005/29/EC of the European Parliament and of the Council of 11 May 
2005 concerning unfair business-to-consumer commercial practices in the internal 
market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 
98/27/EC and 2002/65/EC of the European Parliament and of the Council and 
Regulation (EC) No 2006/2004 of the European Parliament and of the Council 
(‘Unfair Commercial Practices Directive’): in particular recital 18 of that 
directive, as well as Article 2(d) and (j) and Articles 4, 5, 6, 7, 8 and 9 thereof. 
Directive (EU) 2016/97 of the European Parliament and of the Council of 
20 January 2016 on insurance distribution: in particular Article 24 thereof. 
Commission Notice of 29 December 2021, ‘Guidance on the interpretation and 
application of Directive 2005/29/EC of the European Parliament and of the 
Council concerning unfair business-to-consumer commercial practices in the 
internal market’ (OJ 2021 C 526, p. 1): in particular section 2.5. 
Commission Staff Working Document of 25 May 2016, SWD(2016) 163 final, 
‘Guidance on the implementation/application of Directive 2005/29/EC on unfair 
commercial practices’: in particular footnote 109, which demonstrates the interest 
of the European institutions in the most recent studies on the subject. 
Commission Staff Working Document of 4 December 2009, SEC(2009) 1666 
final, ‘Guidance on the implementation/application of Directive 2005/29/EC on 
unfair commercial practices’; the referring court quotes the following passage, 
which appears on page 31 of that document: 
‘The definition of a misleading action used in the Directive has taken into account 
the current state of knowledge of how consumers take decisions in the market 
space. For example, new insights from behavioural economics show that not only 
the content of the information provided, but also the way the information is 
presented can have a serious impact on how consumers respond to it. The 
Directive has therefore explicit provisions to cover situations of practices which 
are capable of deceiving consumers “in any way, including overall presentation”, 
even if the information provided is factually correct’. 
Judgments of the Court of Justice of 16 July 1998, Gut Springenheide, C-210/96, 
EU:C:1998:369; of 23 April 2009, VTB-VAB, C-261/07 and C-299/07, 
EU:C:2009:244, paragraph 43; of 14 January 2010, Plus 
Warenhandelsgesellschaft, C-304/08, EU:C:2010:12, paragraph 41; of 12 May 
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2011, Konsumentombudsmannen v Ving Sverige AB, C-122/10, EU:C:2011:299; 
of 18 October 2012, Purely Creative Ltd v Office of Fair Trading, C-428/11, 
EU:C:2012:651, paragraph 38; of 19 December 2013, Trento Sviluppo srl v 
Autorità Garante della Concorrenza e del Mercato, C-281/12, EU:C:2013:859; of 
19 October 2017, Europamur Alimentación, C-295/16, EU:C:2017:782, 
paragraphs 39, 41 and 42; of 25 July 2018, Dyson Ltd and Dyson BV v BSH Home 
Appliances NV, C-632/16, EU:C:2018:599; and of 13 September 2018, Autorità 
Garante della Concorrenza e del Mercato v Wind Tre SpA, C-54/17, 
EU:C:2018:710. 
Provisions of national law relied on 
Decreto legislativo del 6 settembre 2005, n. 206, Codice del consumo (Legislative 
Decree No 206 of 6 September 2005; ‘the Consumer Code’). In particular, the 
following articles are cited. 
Article 20 (Prohibition of unfair commercial practices): ‘A commercial practice 
shall be unfair if it is contrary to the requirements of professional diligence and it 
materially distorts or is likely to materially distort the economic behaviour with 
regard to the product of the average consumer whom it reaches or to whom it is 
addressed, or of the average member of the group when a commercial practice is 
directed to a particular group of consumers’. 
Article 21 (Misleading actions): 
‘1. A commercial practice shall be regarded as misleading if it contains 
information which does not correspond to the truth or which, even if factually 
correct, in any way, including overall presentation, deceives or is likely to deceive 
the average consumer in relation to one or more of the following elements, and in 
either case causes or is likely to cause him to take a transactional decision that he 
would not have taken otherwise: 
(a) the existence or nature of the product; 
(b) the main characteristics of the product, such as its availability, 
benefits, risks, execution, composition, accessories, after-sale customer 
assistance and complaint handling, method and date of manufacture or 
provision, delivery, fitness for purpose, usage, quantity, specification, 
geographical or commercial origin or the results to be expected from 
its use, or the results and material features of tests or checks carried out 
on the product; 
(c) the extent of the trader’s commitments, the motives for the commercial 
practice and the nature of the sales process, any statement or symbol in 
relation to direct or indirect sponsorship or approval of the trader or the 
product; 
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(d) the price or the manner in which the price is calculated, or the 
existence of a specific price advantage; 
(e) the need for a service, part, replacement or repair; 
(f) the nature, attributes and rights of the trader or his agent, such as his 
identity and assets, his qualifications, status, approval, affiliation or 
connection and ownership of industrial, commercial or intellectual 
property rights or his awards and distinctions; 
(g) the consumer’s rights, including the right to replacement or 
reimbursement under Article 130 of this Code. 
2. A commercial practice shall also be regarded as misleading if, in its factual 
context, taking account of all its features and circumstances, it causes or is likely 
to cause the average consumer to take a transactional decision that he would not 
have taken otherwise, and it involves: 
(a) any marketing of a product which creates confusion with any products, 
trade marks, trade names or other distinguishing marks of a 
competitor, including unlawful comparative advertising; 
(b) non-compliance by the trader with commitments contained in codes of 
conduct by which the trader has undertaken to be bound, where the 
commitment is firm and is capable of being verified, and the trader 
indicates in a commercial practice that he is bound by the code. 
3. Any commercial practice that, with regard to products that could endanger the 
health and safety of consumers, omits such information such as to cause 
consumers to neglect the normal rules of care and vigilance, shall be considered 
unfair’. 
Article 22 (Misleading omissions): 
‘1. A commercial practice shall be regarded as misleading if, in its factual context, 
taking account of all its features and circumstances and the limitations of the 
communication medium, it omits material information that the average consumer 
needs, according to the context, to take an informed transactional decision and 
thereby causes or is likely to cause the average consumer to take a transactional 
decision that he would not have taken otherwise. 
2. It shall also be regarded as a misleading omission when, taking account of the 
matters described in paragraph 1, a trader hides or provides in an unclear, 
unintelligible, ambiguous or untimely manner such material information as 
referred to in that paragraph or fails to identify the commercial intent of the 
commercial practice if not already apparent from the context, and where, in either 
case, this causes or is likely to cause the average consumer to take a transactional 
decision that he would not have taken otherwise’. 
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Article 24 (Aggressive commercial practices): 
‘1. A commercial practice shall be regarded as aggressive if, in its factual context, 
taking account of all its features and circumstances, by harassment, coercion, 
including the use of physical force, or undue influence, it significantly impairs or 
is likely to significantly impair the average consumer’s freedom of choice or 
conduct with regard to the product and thereby causes him or is likely to cause 
him to take a transactional decision that he would not have taken otherwise’. 
Decreto legislativo del 7 settembre 2005, n. 209, codice delle assicurazioni private 
(Legislative Decree No 209 of 7 September 2005; ‘the Private Insurance Code’). 
Article 120-quinquies is cited: 
‘Cross-selling 
1. Any distributor who offers an insurance product together with an ancillary 
product or service which is not insurance, as part of a package or the same 
agreement, shall inform the policyholder whether it is possible to buy the two 
components separately and shall provide an adequate description of the different 
components of the agreement or package as well as separate evidence of the costs 
and charges of each component. 
2. In the circumstances referred to in paragraph 1, and where the risk or the 
insurance coverage resulting from the agreement or package offered to a 
policyholder is different from the components taken separately, the insurance 
distributor shall provide an adequate description of the different components of 
the agreement or package and the way in which their interaction modifies the risk 
or the insurance coverage. 
3. Where an insurance product is ancillary to a good or a service which is not 
insurance, as part of a package or the same agreement, the insurance distributor 
shall offer the policyholder the possibility of buying the good or service 
separately. This paragraph shall not apply where an insurance product is ancillary 
to an investment service or activity as defined in Article 1(5) of the testo unico 
dell’intermediazione finanziaria (consolidated law on financial intermediation), a 
credit agreement as defined in Article 120-quinquies(1)(c) of the testo unico 
bancario (consolidated law on banking), or a payment account as defined in 
Article 126-decies of the consolidated law on banking. 
4. In the cases referred to in paragraphs 1 and 3, the insurance distributor shall 
explain to the policyholder why the insurance product that forms part of the 
overall package or the same agreement would meet the policyholder’s demands 
and needs. 
5. In the cases referred to in paragraphs 1 and 3, in view of the aim of protecting 
policyholders, [the Istituto per la vigilanza sulle assicurazioni (the Italian 
Insurance Supervisory Authority; “IVASS”)], in relation to the activity of 
insurance distribution, may apply the precautionary and disqualifying measures 
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provided for in this Code, including the power to prohibit the sale of insurance 
together with a service or product which is not insurance, as part of a package or 
the same agreement, regardless of whether the ancillary nature pertains to the 
insurance or to the service or product which is not insurance, when such practice 
is detrimental to consumers. For insurance investment products, the 
abovementioned powers shall be exercised by IVASS and by [the Commissione 
Nazionale per le Società e la Borsa (Italian Securities and Exchange Commission; 
“CONSOB”)] in accordance with their respective powers. 
6. The provisions of this article shall not apply to the distribution of insurance 
products which provide coverage for various types of risks. 
7. The provisions of the Consumer Code set out in Legislative Decree No 206 of 
6 September 2005 shall continue to apply where applicable’. 
The referring court also considers it appropriate to cite paragraph 5.3 of 
Schedule 1 of Direttiva del presidente del Consiglio dei ministri, del 16 febbraio 
2018, recante ‘Approvazione della Guida all’analisi e alla verifica dell’impatto 
della regolamentazione, in attuazione del decreto del Presidente del Consiglio dei 
ministri 15 settembre 2017, n. 169’ (Prime Ministerial Directive of 16 February 
2018; ‘Approval of the Guidance on the analysis and verification of the impact of 
the regulation implementing Prime Ministerial Decree No 169 of 15 September 
2017’), since, in its view, that paragraph demonstrates that there is also awareness 
at the regulatory level of the relevance of the bounded rationality of individuals 
and because it captures the essence of such bounded rationality. The paragraph 
reads as follows: ‘Numerous experiments have shown that an individual’s choices 
can be significantly influenced by the way in which a certain problem is explained 
to them or by the way in which they are presented with a series of alternatives 
(“the framing effect”)’. 
Succinct presentation of the facts and procedure in the main proceedings 
1 Between January 2015 and July 2018, the appellant – Compass Banca – offered its 
customers, in addition to various types of loans, insurance policies which covered, 
inter alia, personal events not directly related to credit, to be taken out in 
conjunction with the loan products. In September 2018, the respondent – the 
AGCM – initiated proceedings with a view to finding the existence of an alleged 
unfair commercial practice, consisting, in its opinion, of ‘consumer loans other 
than mortgages (personal loans) being approved on condition that those 
consumers also took out insurance cover’ for personal events unrelated to credit. 
2 During the proceedings, to avoid being fined by the AGCM, the appellant 
accepted some of the measures proposed by the AGCM, such as the extension, to 
all customers, of the unconditional right of cancellation, without affecting the loan 
in any way, with the consequent termination of the policy and the reimbursement 
of unused premiums, and permission for the customer to pay the policy premium 
not by making use of the loan, but by using alternative methods. Conversely, it 
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rejected the AGCM’s request to introduce a grace period of ‘at least seven days 
between the signing of the loan agreement and the signing of the insurance 
contract’, considering this measure to be disproportionate. Instead, the appellant 
proposed introducing, in the post-contractual phase, an obligation for it to contact 
the customer seven days after the policy was taken out to confirm that the 
customer still wished to keep it, with Compass [Banca] covering the cost of the 
insurance premium for the initial seven-day period prior to the telephone call with 
the consumer. 
3 The AGCM deemed the appellant’s counterproposal to be insufficient and 
concluded the proceedings with a decision finding the existence of an aggressive 
unfair commercial practice, describing it as the ‘obligatory combination of 
personal finance agreements and insurance products not related to credit, for 
which that financial institution acts as intermediary’, prohibiting their distribution 
or continuation and fining Compass [Banca] EUR 4 700 000. 
4 Compass [Banca] brought an action before the Regional Administrative Court, 
Lazio, challenging the outcome of the procedure, and, since that court dismissed 
its action, brought an appeal against that judgment before the Consiglio di Stato 
(Council of State, Italy), the referring court. 
The essential arguments of the parties in the main proceedings 
5 The appellant submits that the AGCM only proved the existence, at all material 
times, of a commercial practice consisting in the cross-selling of loans and 
insurance policies, taking it for granted that, by the mere fact of not allowing a 
grace period between the signing of the respective contracts, that combining of 
products inherently led to undue influence over consumers, without furnishing any 
evidence of Compass [Banca]’s aggressive commercial conduct, according to the 
principles of the standard of proof for aggressive practices. This had resulted in a 
reversal of the burden of proof, such that it was for Compass [Banca] to 
demonstrate that it had not committed any impropriety in engaging in a 
commercial practice that was in itself entirely lawful. This presumed reversal of 
the burden of proof is particularly serious, since Directive 2005/29 does not allow 
Member States to adopt stricter measures than those provided for therein, even in 
order to achieve a higher level of consumer protection. 
6 The AGCM contends that the financial company has significantly influenced and 
limited the freedom of choice of consumers in relation to its loan products. In one 
of the case documents, it stated that: ‘The documents on record show how the 
company has sold policies using such methods as to lead the consumer to believe 
he has to take them out in order to obtain the loan: for example, by signing 
insurance contracts that were not included when the loan was arranged, or through 
misleading conduct and the “forced” sale of insurance products, or without 
providing any information about the optional nature of the insurance products or 
issuing the contractual policy documents at the time when the insurance was taken 
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out’. According to the AGCM, the practice would not have been aggressive had a 
seven-day period been granted between the loan agreement being signed and the 
insurance policy being taken out. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
7 The referring court points out that the implicit assumption of the objection raised 
by the AGCM in respect of Compass [Banca] seems to be that the concept of 
‘average consumer’, understood as a consumer who is reasonably well informed 
and reasonably observant and circumspect, although still valid and acceptable, 
must now give due consideration to the theories on bounded rationality, which 
have shown how people often act without obtaining all the necessary information, 
making decisions that appear irrational when compared with those that would be 
taken by a hypothetically observant and circumspect person. The large number of 
studies and the research supporting those theories have long been of interest to the 
legislature, both at Member State and EU level. To achieve effective consumer 
protection, the AGCM considers that a standard should be created which is more 
in keeping with the reality of transactions and which takes account of the 
irrationalities inherent in human actions. One example of bounded rationality is 
represented by the effects produced by the way in which information is framed 
(‘the framing effect’): people change their preferences according to the different 
ways in which the material information is labelled in the communication, or 
according to how the various possible alternatives are presented. In the present 
case, the offer of both a loan and an insurance policy was framed in such a way 
that the consumer ended up believing that it was not possible to obtain the former 
without also taking out the latter, even though it had nothing to do with the loan 
but instead covered risks unrelated to credit (such as health, to be covered by 
taking out medical insurance) which might affect the consumer’s ability to repay 
the debt on time and in the proper manner. 
8 Directive 2005/29 also seems to take account of the framing effect when, in 
Article 6(1) thereof, it acknowledges the possibility that an offer, ‘including 
overall presentation’, may mislead an average consumer. The case in the main 
proceedings could clearly be resolved if it were necessary to draw all the 
appropriate consequences from the concept of bounded rationality and to regard 
the practice of framing information as aggressive by definition. 
9 In opposition to this, the appellant correctly submits that Article 120-quinquies of 
the Private Insurance Code (Legislative Decree No 209/2005), which essentially 
reproduces Article 24 of Directive 2016/97, permits the cross-selling of an 
insurance product together with an ancillary product or service other than 
insurance. 
10 The other important question that arises in the proceedings at issue is the 
interpretation of the content of the right that Article 24(7) of Directive 2016/97 
confers on Member States to maintain or adopt additional stricter measures or 
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intervene on a case-by-case basis to prohibit the sale of insurance together with an 
ancillary service or product which is not insurance, as part of a package or the 
same agreement, when they can demonstrate that such practices are detrimental to 
consumers. This is because the outcome of this will determine whether the AGCM 
has the power to allow a derogation from the principle that cross-selling is 
possible, by requiring a seven-day period between the signing of the two 
contracts, and to characterise the mere combining of the two products as an 
aggressive practice. With regard to the latter aspect, the referring court notes that 
the appellant has complained of an alleged infringement of the principles 
governing the burden of proof, since the AGCM considered that the existence of 
the aggressive practice was proved solely on the basis of the complaints received 
and the allegedly compulsory inclusion of the policy premium in the monthly loan 
instalment.