• An influencer is facing a $1 million fine after Italian authorities said she misled consumers.
  • It pertains to a partnership with a pastry brand to sell a limited edition cake last Christmas.
  • Authorities say consumers thought they were donating to charity, but that wasn't the case.

An Italian influencer could be on the hook for a $1 million fine over a pink branded Christmas cake she advertised to followers last year suggesting the proceeds would go to charity. But Italian authorities say the donation never materialized.

Chiara Ferragni is an internet mega-star. She has almost 30 million followers on Instagram, owns a fashion brand and a marketing agency, and in 2021 starred in "The Ferragnez," an Amazon Prime reality TV series about her life with her husband.

In November 2022, she launched a cake product in partnership with the Italian pastry brand Balocco. The pandoro, a traditional Italian Christmas dessert similar to a panettone, was packaged in a pink box, rather than the typical festive red, and featured an illustration of Ferragni as well as her name and logo. The partnership was advertised on her Instagram at the time as a charity project to benefit children treated for bone cancer at the Regina Margherita Hospital in Turin, Italy.

The Italian Competition Authority launched an investigation into the campaign in June, and shared its findings in a public statement on December 15. It said the limited edition cake was priced at 9 euros, or just under $10, as opposed to the classic version which costs around 3.70 euros, or $4.10. It also alleged that the press release, labeling, and social media posts at the time were "misleading" consumers into believing that the higher cost would result in a donation to the hospital.

Instead, the Authority stated that two companies associated with Ferragni received over 1 million euros, or $1.1 million, from the deal, and the only donation was 50,000 euros from the cake brand, Balocco, the previous May.

The statement said, "This practice significantly limited consumers' freedom of choice by leveraging their sensitivity to charitable initiatives," adding that it violated its consumer code.

Both parties received a fine as a result of the findings — Balocco of 420,000 euros, or $460,000, and Ferragni's companies of 1.075 million euros, or $1.1 million.

On December 18, Ferragni addressed the findings in an Instagram post. According to the Associated Press, she apologized and pledged to donate 1 million euros to the hospital, although she said she would be challenging the fine itself, saying it was disproportionate.

She said that she did not oversee the information that was given to consumers regarding the product, and that in future she wouldn't mix a commercial partnership with a charity project, the outlet reported.

Italian Prime Minister Giorgia Meloni appeared to allude to the scandal in speech over the weekend, referring to social media content creators promoting "expensive panettone making believe that they are for charity, when the price only pays for millionaire's fees," per the AP.

Representatives for Ferragni and Balocco did not immediately responded to Business Insider's request for comment.