There's a good deal of information about this in the wikipedia page on olive oil:

https://en.wikipedia.org/wiki/Olive_oil#Adulteration

Some excerpts from the article (cherry-picked to be relevant to the conversation):

>> There have been allegations, particularly in Italy and Spain, that regulation can be sometimes lax and corrupt.[75] Major shippers are claimed to routinely adulterate olive oil so that only about 40% of olive oil sold as "extra virgin" in Italy actually meets the specification.[76]

>> On 3 January 2016 Bill Whitaker presented a program on CBS News including interviews with Mueller and with Italian authorities.[85][86] It was reported that in the previous month 5,000 tons of adulterated olive oil had been sold in Italy, and that organised crime was heavily involved—the term "Agrimafia" was used. The point was made by Mueller that the profit margin on adulterated olive oil was three times that on the illegal narcotic drug cocaine. He said that over 50% of olive oil sold in Italy was adulterated, as was 75–80% of that sold in the US. Whitaker reported that three samples of "extra virgin olive oil" had been bought in a US supermarket and tested; two of the three samples did not meet the required standard, and one of them—with a top-selling US brand—was exceptionally poor.

>> A Carabinieri investigator interviewed on the program said that "olive oil fraud has gone on for the better part of four millennia" but today, it's particularly "easy for the bad guys to either introduce adulterated olive oils or mix in lower quality olive oils with extra-virgin olive oil".[88] Weeks later, a report by Forbes stated that "it's reliably reported that 80% of the Italian olive oil on the market is fraudulent" and that "a massive olive oil scandal is being uncovered in Southern Italy (Puglia, Umbria and Campania)".[89]

I'm from Greece; you know, the other major oil producing country :P We, too, like the Italians and the Spanish, value olive oil very highly. I don't know of any adulteration scandals for Greek EVOO, but that doesn't mean it doesn't happen. It's easy to believe that a producer whose oil turns out not very good in a particular year, even if it is normally good-quality would feel rather desperate and it's easy to see how some would be tempted to do something about it. For example, a few years ago in Corfu, there was much anger when much of the olive oil produced on the island were found to be unfit for human consumption because of very high levels of pesticides. That year, the communally organised spraying of olive groves from the air was stopped and produces had started spraying their olives on their own. Apparently many just overdid it, presumably following the age-old wisdom that if a little is good, a lot is better. Even without that little mishap, olive oil from Corfu is normally too acidic, because of the way the olives are collected (they are left to fully ripen on the trees and collected when they fall off naturally). That means that even extra virgin olive oil produced in Corfu may not be the best quality. That in turn means it won't be bought at the same price as better quality oils by the large bottling corporations. So it might well end up sold to the Italians and blended with their own oils, of whatever category. In that case, the consumer may buy "Italian" and "extra virgin olive oil" but even if it is really EVOO, it might still be not the best quality; but it will be sold at a high price anyway.

I have to confess I can't be sure I haven't inadvertently bought second-quality, or even adulterated, EVOO at some point in my life. I consume vast quantities of the stuff. I only cook my food with it, basically, rarely anything else. I am pretty sure I could identify non-EVOO with eyes closed. A couple of weeks ago my partner bought some olive oil and when I went to cook with it, it looked... different? Kind of too thin and too clear. I checked the container and it was blended oil that included refined oils. The container was exactly the same as the one of the EVOO we normally buy so my partner mistook it for our standard. But it was obvious it wasn't our standard. There's a clear difference. On the other hand, I'm not sure that the people who adulterate EVOO make it so easy to tell.