Wednesday, 24 March 2010

Contests are fair game - opinion of AG in ECJ case Mediaprint (C-540/08)

24 March 2010: ECJ Advocate General's opinion in case C-540/08 Mediaprint
An opinion of AG in the ECJ case C-540/08 - Mediaprint - has been published today. This is another case concerning not only the interpretation of the Directive 2005/29/EC on unfair commercial practices but also the subject of combined offers.

The parties in these proceedings are two competing Austrian newspaper/magazine publishers. The defendant published an article in his newspaper announcing the election of 'Best Footballer of the Year'. Readers who would buy the newspaper, cut out a coupon and send it with their vote, would participate in the contest to win a dinner with the winner of this election. However, there was also an option not to go online and cast a vote online (without having to buy the newspaper). (Par. 11)

The Austrian law contains a general prohibition of advertising, offering and giving away of gifts by newspapers and magazines. On the basis of this provision, the practice such as described above - offering a chance to play in a contest with purchase of a newspaper - would be prohibited. Two questions have been asked by the Austrian court:
1. Whether the general prohibition in Austrian law is compatible with the regulation of the Directive on unfair commercial practices?
2. In case the Austrian law was not compatible with the provisions of the Directive on unfair commercial practices - can a commercial practice of combining a possibility to take part in a contest with a sale of a newspaper be seen as unfair because even if it is not the only reason it is definitely one of the decisive reasons to buy this newspaper?

In the opinion of the Advocate General, the Austrian law is indeed not compatible with the provisions of the Directive on unfair commercial practices.

Firstly, the scope of the Directive concerns not only the B2C practices which affect consumers but also those which might affect competitors as long as they remain a threat to the protection of consumers. The only exclusion from the scope of the application of the Directive is for practices which harm only economic interests of the competitors and do not influence consumers at all. (Par. 47, 51, 54) This means that the prohibition in Austrian law, even if it's aim is to protect free media and fair competition at the newspapers market, when it influences consumers has to be in accordance with the provisions of the Directive on unfair commercial practices. (Par. 54)

The AG considered then the character of the prohibition in Austrian law and whether it could be compatible with the provisions of the Directive. The Directive assumes that commercial practices are fair and accepts the freedom of conducting business that should not be limited unless the requirements for such a limitation as described in the Directive are fulfilled. (Par. 74) The Austrian law, however, prohibits all combined offers for two separate products or services that could raise the sale of one of them. (Par. 71) While the Directive assumes that a practice is fair until proved otherwise, the Austrian law takes a contrary stand. This general prohibition knows its exceptions in Austrian law, these exceptions are not so broad, however, as to justify the prohibition on the basis of the Directive on unfair commercial practices. (Par. 76-77)

Already in the previous judgments of ECJ it has been stated that combined offers are not blacklisted in the Directive on unfair commercial practices and therefore should not be prohibited in all circumstances. They may be seen as unfair only on a case by case basis and when all the requirements listed in the Directive on unfair commercial practices are fulfilled. (Par. 83 ff)

Having established the lack of compliance of the Austrian provision, the AG turned to the second question: whether contests offered by newspapers should be seen as unfair commercial practices since they influence the decision of the consumer to buy the newspaper? The AG stated here, that more conditions would have to be fulfilled to see such commercial practices as unfair - from Article 5 sub 2 of the Directive. Firstly, one would have to look at an average consumer and whether he would be moved to buying a newspaper in case it gave him a possibility to participate in a contest. (Par. 131-132). Secondly, the commercial practice would have to be contrary to the requirements of professional diligence. (Par. 133) The AG concluded that there are no grounds to see such commercial practices as unfair in any circumstances. (Par. 134)

If ECJ follows the same reasoning that would be good news to all us consumers enjoying participation in a contest every now and then...

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