Thursday, 19 December 2013

CJEU on the scope of unfair commercial practices - Case C‑281/12 (Trento Sviluppo en Centrale Adriatica)

Can incorrect advertising with the only effect of making consumers visit a certain shop be sanctioned as an unfair commercial practice?

Today, the Court of Justice decided that this is actually the case under European law.

The decision was rendered in the case Trento Sviluppo srl, Centrale Adriatica Soc. coop. arl v Autorità Garante della Concorrenza e del Mercato, case C‑281/12. An Italian consumer had complained to the local consumer autority (Autorità Garante per la Concorrenza e il Mercato, AGCOM) about a folder spread by a supermarket. The folder showcased an attractive offer concerning a laptop; when the consumer went to the shop and tried to by the product, however, it was not available. AGCOM opened an investigation and decided to fine the supermarket for attracting customers on its premises through an enticing yet bogus offer.The defendant challenged the fine and brought an action which finally ended up in front of the CJEU.

The Court in this context had to assess whether the relevant European instrument, ie the Unfair Commercial Practices Directive, allows national authorities to include a similar advertising technique within the scope of forbidden commercial practices. 

The Directive (article 5) prohibits practices which are likely ‘to materially distort the economic behaviour of consumers’. Two main categories of practices are forbidden, namely aggressive and misleading practices. According to article 6 of the Directive, a practice is misleading 

"if it contains false information and is therefore untruthful or in any way, including overall presentation, deceives or is likely to deceive the average consumer, even if the information is factually correct, in relation to one or more of the following elements, and in either case causes or is likely to cause him to take a transactional decision that he would not have taken otherwise:
(b)      the main characteristics of the product, such as its availability …

The core question before the CJEU was, accordingly, whether  the decision to visit a shop can be considered as a "transactional decision" which the concerned advertisement was likely to affect. This requires to interpret the wording in a rather extensive way: the definition of transactional decision contained in the directive's art 2(k), however, is quite broad, covering ‘any decision taken by a consumer concerning whether, how and on what terms to purchase’

Interpreting the Directive, the Court esteemed that the definition "covers not only the decision whether or not to purchase a product, but also the decision directly related to that decision, in particular the decision to enter the shop."

The practice of enticing consumers by advertising attractive offers with (very limited) availability is hardly rare in many sectors. Therefore, it is likely that the impact of this decision will mostly depend on national authorities and their willingness to sanction similar cases every time they come under their attention.

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