Chiara Ferragni, a prominent Italian influencer, built a substantial fortune by sharing seemingly effortless moments of her life and offering guidance on cultivating an "effortlessly cool" lifestyle to her vast online audience. However, her influence is now under scrutiny, and her empire faces a precarious situation following a scandal involving a Christmas cake and allegations of fraud, serving as a cautionary tale for other social media stars.
The controversy traces back to late 2022 when the 36-year-old Ferragni collaborated with Balocco, a Piedmont-based company, to promote its pandoro Christmas cake. Branded with Ferragni's name, the cake was priced at €9 (£7.70), nearly triple the cost of the standard version. Both Ferragni and Balocco, leveraging her 29.4 million Instagram followers, asserted that the proceeds would be donated to a children's hospital in Turin.
However, investigations revealed that Balocco had contributed €50,000 to the hospital before the campaign's launch and made no additional donations. Ferragni, on the other hand, earned over €1 million from the initiative, according to Italy's anti-trust authority. In December, fines of €1 million and €420,000 were imposed on Ferragni and Balocco, respectively, for misleading consumers.
In a video apology, Ferragni acknowledged a "communication error" and pledged to donate €1 million to the hospital. Despite this, the fallout continued, with prosecutors in Milan announcing an investigation into Ferragni and Balocco for aggravated fraud. Ferragni has lost 200,000 followers, and major clients like Coca-Cola have severed ties with her.
The scandal triggered a response from Italy's communications authority, which approved stringent new rules for influencers with more than 1 million followers, similar to regulations for traditional media outlets. Advertisements must be clearly labeled to enhance transparency, with potential fines of up to €600,000 for non-compliance.
This crackdown mirrors actions in France, where a law governing paid content was introduced. Giacomo Lasorella, Agcom's president, emphasized the eventual extension of these rules to smaller influencers, stating that it's a crucial step in regulating the rapidly evolving digital sector within a European framework.
Despite the challenges, Ferragni remains confident in her good faith but has enlisted a team of spin doctors to salvage her image. Industry experts differ on the future impact, with some predicting the end of Ferragni's reign, while others argue that influencers face disproportionate criticism. The ongoing investigation's outcome and Ferragni's crisis management will ultimately determine the long-term repercussions.
Born in Milan, Ferragni rose to fame through a fashion blog and eventually established herself as an influencer with a diverse business portfolio. Despite the current storm, she has been recognized for positive contributions, such as encouraging museum visits and promoting pandemic safety measures. The outcome of this crisis, however, hinges on Ferragni's ability to navigate and learn from the controversy, potentially influencing the broader regulatory landscape for influencers in Italy and beyond.