Monday, 29 July 2013

Functional concept of a 'trader' - AG Bot in case C-59/12 (BKK Mobil Oil)

4 July 2013: opinion of Advocate General Bot in case C-59/12 (BKK Mobil Oil)

Due to the holiday period we might have missed a case or two to report to you, dear readers, in the past month. And so on the 4th of July Advocate General Bot gave an opinion in the case BKK Mobil Oil which concerned interpretation of the term 'trader' used in art. 3(1) and art. 2(d) of the Unfair Commercial Practices Directive. The CJEU was asked whether if a public law entity circulates misleading advertising this could be seen as an unfair commercial practice carried out by a trader.

BKK Mobil Oil is a public law entity entrusted with a task of general public importance, namely it is a German sickness insurance fund. In December 2008 this insurance fund circulated an advertisement worded as follows: "Anyone leaving BKK … now will be committed to staying with his/her new [mandatory sickness] scheme for the next 18 months. This means that you will miss out on attractive offers that BKK … will be making next year, and you may end up having to pay more if your new scheme is unable to manage on the money allocated to it and therefore requires you to make a supplementary contribution." (Par. 14) The German Office for the Protection of Unfair Competition claimed that this was a misleading advertising and demanded withdrawal thereof. BKK Mobil Oil did not think it needs to apply provisions of the Unfair Commercial Practices Directive since it is a public law body, not acting for profit, and therefore should not be considered a 'trader'.

Advocate General Bot advises the CJEU to adopt a broad interpretation of the definition of a 'trader', encompassing also bodies governed by public law entrusted with a task of general public importance, such as a sickness insurance fund, as long as they circulate commercial advertising to consumers. (Par. 5)

AG Bot reminds the previous case law of the CJEU in the competition law matters where it was decided that an undertaking should be defined as such when it conducts an economic activity of an industrial or commercial nature consisting of offering goods and services on a given market, regardless of the legal status and the way in which that undertaking is financed. (Par. 25-27) A sickness insurance fund could be excluded from this definition with regards to tasks it performed purely to achieve its social objectives. However, if such an entity conducted various activities, not only of an administrative but also of a commercial nature, a distinction should be made between them. (Par. 29) 

The concept of a 'trader' in consumer law has according to the AG Bot the same functional characteristics as the concept of an 'undertaking' in competition law. (Par. 32) The broad scope of the trader's definition should rely only on the fact that such a body conducts a commercial activity. (Par. 35) Therefore, it should be irrelevant what is the legal status of a trader and what tasks have been entrusted to him. (Par. 39) One of the supporting arguments for this statement is the definition of a trader in the new Consumer Rights Directive which explicitly states that a trader is 'any natural person or any legal person, irrespective of whether privately or publicly owned (...)'. (Par. 41)

Interesting side note: AG Bot notices that the concept of a 'trader' has no uniform meaning in various EU consumer legislation and argues for the adoption of a harmonised meaning of this term since there does not seem to be a justification for any differences therein. (Par. 23)

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