Sunday, 16 March 2014

B2C vs. B2B unfairness – CJEU in case C‑52/13 Posteshop

The judgment in case C-52/13 Posteshop seems to have nothing in common with consumers. Until you notice that it supplies the old discussion on the distinction between B2B and B2C regulations with new arguments.

This request for a preliminary ruling concerned the interpretation of a B2B directive - Directive 2006/114/EC on misleading and comparative advertising. Posteshop advertised its franchise network, which B2B advertisement was assessed misleading. Posteshop brought an appeal against that decision.
The national court decided to refer the following question to the Court of Justice for a preliminary ruling:
With regard to the protection to be afforded to traders, is Directive [2006/114] to be interpreted as referring to advertising that is misleading and at the same time based on unlawful comparison, or to two separate offences, each of which may be relevant in its own right, namely, misleading advertising and unlawful comparative advertising?’. (Paragraph 18)
The referred question is extremely simple and so is the answer. The CJEU decided that Directive 2006/114/EC:
is to be interpreted as referring to misleading advertising and unlawful comparative advertising as two independent infringements and to the effect that, in order to prohibit and penalise misleading advertising, it is not necessary that that latter at the same time should constitute unlawful comparative advertising’. (Paragraph 28)
The question of the national court may have resulted not only from some linguistic inaccuracies in the Italian version of the Directive, but also from the lack of transparency in the division between a B2C and a B2B directive. The CJEU had to explain the fundamental rules of the prohibitions of unfair practices under EU law:
Directive 84/450, in its original version, concerned only misleading advertising. Regulation of comparative advertising was inserted into that latter directive by Directive 97/55/EC (…) amending Directive 84/450 concerning misleading advertising so as to include comparative advertising (…). The objective of Directive 97/55, pursuant to recital 18 in the preamble thereto, was to establish the conditions under which comparative advertising is permitted. On the other hand, that directive did not in any way amend the provisions of Directive 84/450 on misleading advertising. Next, (…) Unfair Commercial Practices Directive (…) limited the scope of Directive 84/450 to the protection of traders. Lastly, codified that latter directive. It follows that the European Union legislature did not intend, in adopting Directives 97/55 and 2006/114, to amend the rules relating to misleading advertising as provided for in Directive 84/450, except by restricting their scope.’ (Paragraph 27)
So, 9 years after the adoption of the UCP Directive even the most basic rules remain enigmatic for the national courts. Therefore, one may ask again if the distinction between B2C and B2B unfairness was necessary taking into account that the unfair B2C and B2B practices are closely linked (see my paper in Journal of Consumer Law, volume 36, issue 3, September 2013, pp. 329-342). 
Leaving aside the answer to this question, the impact of the Directive on misleading and comparative advertising on the UCP Directive is evident (e.g. with regards to the average consumer test). It is likely that in the coming years we will find out if the solutions of the UCP Directive have an inverse impact on the B2B acts: the revised Directive 2006/114/EC [see Communication from the Commission ‘Protecting businesses against misleading marketing practices and ensuring effective enforcement. Review of Directive 2006/114/EC concerning misleading and comparative advertising’, COM (2012) 702 final] and on a directive (regulation?) on unfair trading practices in the B2B supply chain [see Green Paper on B2B Unfair Trading Practices in the Business-to-Business Food and Non-Food Supply Chain in Europe, COM (2013) 37 final]

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