Italy's Court of Pistoia: AI-Generated Content Does Not Exempt Deployers From Unfair Competition Liability (March 2026)

On March 19, 2026, the Court of Pistoia (Italy) issued a landmark interim order addressing civil liability for generative AI-generated content in commercial and advertising activities. The ruling establishes a critical precedent for European AI liability, holding that the use of automated AI systems does not exempt an entrepreneur from legal liability and does not eliminate the duty of human oversight over public-facing messages.

1. Case Background and Facts

The ruling arose from an action for parasitic unfair competition and misleading advertising brought by an Italian mattress and sleep products manufacturer against an e-commerce competitor.

• The Infringement: The plaintiff company had an exclusive sponsorship contract with well-known television testimonials. The competitor utilized search engine optimization (SEO) tactics and Google redirects to misappropriate the plaintiff's distinctive signs and testimonials. Anyone searching for the testimonials was redirected to the competitor's e-commerce page. Furthermore, the competitor published promotional messages attributing scientific and health benefits to its sleep products without proven scientific validity (misleading advertising).
• The Defense: The defendant company argued that the disputed promotional content, keywords, and redirects were the result of an automated generation process using generative AI, executed without direct human review. Consequently, the defense argued there was no specific "editorial intent" to refer to the plaintiff’s testimonials or to engage in unfair competition.

2. The Court’s Ruling and Legal Reasoning

The Court of Pistoia rejected the defendant's automated-process argument, issuing an interim injunction that prohibited further use of the plaintiff's distinctive signs and testimonials, ordered the immediate cessation of the misleading advertising, and commanded the defendant to cease all confusing conduct.

The court rested its decision on several foundational principles:

• No AI Autonomy or Legal Personality: The court asserted that an AI system is not autonomous in legally relevant decisions and cannot be considered a liable entity, noting that "at least for now, it is not capable of taking any initiative."
• The Duty of Human Oversight: Because the AI system lacks legal personality, the entrepreneur remains fully responsible for its commercial strategies and the outputs it generates. The use of AI does not eliminate the duty of effective human supervision to ensure the legality, accuracy, and fair competition of market communications.
• Application of Existing Civil Law: Rather than waiting for AI-specific liability legislation (such as the now-withdrawn EU AI Liability Directive), the court successfully applied existing Italian laws:
  • Article 2598 of the Italian Civil Code (governing unfair competition).
  • Legislative Decree 145/2007 (regulating misleading advertising).
  • The Italian Consumer Code.

3. Key Takeaways for Enterprise Risk Teams

The Court of Pistoia ruling provides a clear judicial window into how EU member-state courts will handle the developer/deployer liability boundary in civil disputes:

1. "The AI Did It" is Not a Valid Defense: Courts will not accept the lack of direct human review or "editorial intent" as a shield against civil liability for misleading, infringing, or anti-competitive outputs.
2. Deployer Strict Responsibility: The entity that deploys the generative AI tool for commercial gain (the deployer) bears the ultimate risk of its outputs under existing unfair competition, trademark, and consumer protection laws.
3. Mandatory Human-in-the-Loop: Enterprise risk teams must implement mandatory human-in-the-loop review processes for any AI-generated marketing, SEO copy, or public-facing communications. Relying on fully automated pipelines without a human gatekeeper creates severe, unmitigated operational and legal risk.