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Italy’s Competition Authority gave Ariix a fine of €960,000 for cheating customers (AGCM).

In 2018, Italian authorities started looking into Ariix and its parent company, NewAge, after a consumer protection group called “Il Cattto e la Volpe Nel Web” filed a complaint.

On May 24, 2022, AGCM filed a lawsuit against Ariix Italy S.r.l.

During its investigation, AGCM found that Ariix made between 30 and 40 million euros in sales in Italy in 2021.

Ariix was promoted in Italy by Unstoppable Generation, which AGCM at first linked to Unstoppable Generation S.r.l.

Claudio Capozza is in charge of the group Unstoppable Generation. In 2020, BusinessForHome said Ariix was the “no. 1 next-generation leader in the world”

Capozza calls himself an “Officer” on Ariix’s corporate team on LinkedIn.

The AGCM investigation found that Unstoppable Generation brought in 118,000 euros for Capozza in 2021, even without Ariix.

When AGCM looked into Ariix, they checked to see if:

Ariix’s “sales system” was a pyramid scheme. When Unstoppable Generation promoted Ariix’s products on social media, they didn’t tell people about the business or how they were connected to it. Also, Ariix’s “Slendeeriz Gocce Day&Night” and “Tahitian Noni” were sold without permission from the Ministry of Health.
AGCM went to Italy to visit the registered offices of Ariix and Unstoppable Generation as part of the investigation.

In June 2022, Ariix and Unstoppable Generation gave AGCM the extra information they had asked for.

On November 7, AGCM’s investigation came to an end.

Based on the information given, AGCM found that distributor purchases would make up 50% to 55% of Ariix’s sales volume in 2021.

AGCM came to this conclusion after more research:

Ariix’s marketing materials focused more on getting more affiliates than on selling products. “Over half” of Ariix’s sales volume came from distributor purchases, not from sales to retail customers. The retail sales Ariix did have weren’t enough to keep the business going. Ariix’s “economic sustainability” was “directly related to the number of (distributors)” it has.
Based on these findings, AGCM concluded that “conditions for a pyramid sales system existed” and that “Ariix’s sales system has the traits of a pyramid scheme.”

In terms of social media, AGCM found that #ariix was the only thing that could be linked to Ariix.

Ariix’s sales strategy encourages sellers not to say what their business is for (of their posts).

Ariix’s rules encourage people to talk about their experiences or how they use products, even if they might not be authentic.

Based on the rules that Ariix gives to its sellers, it seems that they are encouraged to present themselves as consumers, using social networks a lot to build their public image as a seller/consumers without insisting on the need to say that the content is for commercial purposes and is advertising, to get new members.

A hashtag is not a good way to show what is going on when people talk to each other.

AGCM found that the posts Ariix distributors made on social media were false, which is against the Italian Consumer Code.

On the issue of Ariix’s products being registered with the Ministry of Health, AGCM said there wasn’t enough evidence to show a violation.

AGCM took Unstoppable Generation S.r.l. out of the case when it decided Ariix’s punishment.

Unstoppable Generation S.r.l.

does not sell Ariix or New Age products and is a separate legal entity from the “Unstoppable Generation” community, which is made up of Ariix sellers.

AGCM decided that Ariix would have to pay a total of €1.2 million in fines. Due to the recent bankruptcy of NewAge in the US, this amount was cut to EUR 960,000.

The 960,000 EUR fine was broken down as follows:

They were fined EUR 800,000 for running a pyramid scheme and EUR 160,000 for using social media to trick people.
On December 13, 2022, AGCM’s decision about Ariix was made public.

The decision was written in a bulletin from January 2, 2023, and it was on page 212.

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