Friday, 4 October 2013

BKK Mobil Oil: public law body can be seen as ‘trader’ in the context of the Unfair Commercial Practices Directive

Can public law bodies fall under the personal scope of the Unfair Commercial Practices Directive? Since yesterday’s judgment in BKK Mobil Oil we know the answer is yes. Also the practices of public law bodies can thus qualify as unfair commercial practices. But what the criteria to determine public from commercial practices are in the end remains unclear.

BKK Mobil Oil is a German health insurance fund established as a public law body. BKK published on its website a message targeted at its own customers, trying to convince them not to switch to another health insurance. Without going into the details, the message contained false information and thus was found to mislead BKK’s customers. According to BKK, however, the German Gesetz gegen den unlauteren Wettbewerb (Act against unfair competition, UWG) nor the Unfair Commercial Practices Directive applied to this case, because BKK could not be seen as trader.

The Bundesgerichtshof filed a preliminary question at the CJEU, asking how the Unfair Commercial Practices Directive should be interpreted on this point: should BKK be seen as a proper business, or is it a body that pursues a social objective and the behaviour of which is thus not covered by the Directive?

In its answer, the CJEU emphasizes that this matter should be seen from a European perspective and that the question on whether an organization such as BKK should be seen as a ‘trader’ does not depend on its legal status in national law (par. 25-26).

In the Directive, ‘trader’ is defined as ‘any natural or legal person who, in commercial practices covered by [that] Directive, is acting for purposes relating to his trade, business, craft or profession and anyone acting in the name of or on behalf of a trader’ (Article 2(b)).

The CJEU emphasizes that the term ‘trader’ should be seen as the diametrically opposed concept of ‘consumer’ (par. 33) and that BKK’s members can in fact be seen as consumers, taking into consideration that BKK’s misleading information prevent them from making an informed choice (par. 37). In line with this, the CJEU argues, BKK should be seen as a trader (par. 38).

This does not stand out as an example of clear legal reasoning. The definition of consumer tells us equally little as the term trader in this context. The Court (perhaps deliberately) does not give actual criteria to determine the border between ‘public’ and ‘commercial’ practices, which in the end seems to be the essential – and admittedly, difficult – question.

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