Wednesday, 25 July 2018

Can excessive information mislead consumers? CJEU rules in Dyson

Earlier today the Court of Justice delivered a judgment in case C-632/16 Dyson. The judgment was a response to a request for a preliminary ruling submitted by the President of the Commercial Court in Antwerp regarding a dispute between two vacuum cleaner producers. The proceedings that gave rise to the legal dilemma appear to have been brought with predominantly competitive motives in mind. The submitted claims were nevertheless based on the national provisions implementing the European consumer acquis, namely Directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market (UCPD) and Commission Delegated Regulation (EU) No 665/2013 supplementing Directive 2010/30/EU with regard to energy labelling of vacuum cleaners. The judgment of  the Court of Justice provides welcome clarification on the information to be - or not to be - provided on top of mandatory EU labelling.

Too little information?

Dyson, a producer of vacuum cleaners operating without dust bags, found it questionable that the tests required under EU law to assess the energy class of vacuum cleaners were performed with empty dust bags. As a result, in its view, the differences between energy efficiency of vacuum cleaners operating with and without dust bags were not adequately reflected by the EU energy labels. This is because energy efficiency of vacuum cleaners that operate with dust bags gradually decreases as their bags become fuller. According to Dyson, for consumers to receive all relevant information, producers of vacuum cleaners that operate with dust bags should additionally inform consumers about testing conditions, which resulted in the energy classification (i.e. that the tests were performed with empty bags). The question thus appeared, in the first place, whether an omission of such information by a competing vacuum cleaner producer - BSH - constituted a misleading omission within the meaning of Article 7 of the UCPD.

The Court did not share the view of the claimant. 

It first decisively rejected the possibility of adding any additional information on the label itself relying on Article 3(4) of Directive 2005/29/EC on conflicts between the provisions of the UCPD and other EU rules regulating specific aspects of unfair commercial practices. According to the Court, such a conflict clearly ocurred in the case at hand (providing information to consumers - even if mandatory - constitutes a commercial practice). Hence, the provisions of Directive 2010/30/EU and the Delegated Regulation No 665/2013, which explicitly prohibit the addition of other information to the EU energy label, should prevail.

The Court also swiftly dismissed the arguments of Dyson regarding the alleged omission of the contested piece of information from places other than the energy label. The decisive finding was that the UCPD proscribes only the omission of material information and the information at hand - related to the vacuum cleaners' testing conditions - could not be considered as such. This is particularly so considering the extensive list of information duties, addressed at these specific products, already in place with none of them relating to the contested matter.

Or perhaps too much?

The dispute between both producers and similarly the request for a preliminary ruling did not end here, however. According to the claimant, BSH's practices were also misleading because excessive information was provided by the company. More specifically, the defendant attached, next to the EU energy label, several labels and symbols that were not provided for in Delegated Regulation No 665/2013, for example, "a green label stating ‘Energy A’, an orange label stating ‘AAAA Best rated: A in all classes’ and a black label with the image of a carpet and stating ‘class A Performance’" (para. 49). The question was therefore whether such a practice was contrary to Delegated Regulation No 665/2013, read in the light of Directive 2010/30/EU.

The judgment does not provide a clear answer why there is no mention of the UCPD in its second part (despite the fact that the Court decided to reformulate the question referred a little bit). Presumably the reason is similar to the one raised in the context of first question - the conflict between the legal acts. Article 3(1)(b) of Directive 2010/30/EU indeed provides that "with respect to products covered by this Directive, the display of other labels, marks, symbols or inscriptions which do not comply with the requirements of this Directive and of the relevant delegated acts is prohibited, if such display is likely to mislead or confuse end-users with respect to the consumption of energy or, where relevant, other essential resources during use" - therefore covering essentially the same matter in a more specific manner than the UCPD.

The Court began its analysis by pointing to the two cumulative criteria that could be read out of the abovementioned provision. As regards the former, it swiftly concluded that the labels and symbols used by BSH did not comply with the requirements of the Directive, considering that the relevant labels and symbols were not provided for in Delegated Regulation No 665/2013. The overall assessment of the practice should therefore depend on the second yardstick: whether the display of information was likely to mislead or confuse end-users with respect to the consumption of energy or, where relevant, other essential resources during use. Here the CJEU, in line with its established practice, left the final assessment to the referring court. It did, however, provide the national court with some important guidance.

Firstly, the Court clearly stressed that the criterion referred to in Article 3(1)(b) of Directive 2010/30/EU was to be interpreted strictly "so as to protect the final consumer against any risk of error or confusion related to the energy consumption during the use of the electric device in question". Interestingly, the Court further observed that "the strict application of that criterion is borne out by that directive’s objective of environmental protection" (para. 55). 

Secondly, the Court decided to extend the benchmark of an average consumer - one who is reasonably well-informed and reasonably observant and circumspect, taking into account social, cultural and linguistic factors - from the UCPD to Directive 2010/30/EU on energy labelling. This is particularly interesting considering that the latter Directive (later repealed and replaced by Regulation (EU) 2017/1369) did not use a traditional status-related concept of a consumer in its normative part, but rather referred to a broader notion of an "end-user". Nevertheless, according to the Court, "the inextricable link between the issues [addressed in the UCPD and Directive 2010/30/EU] justifies the use of that same criterion" (para. 56).

Finally, the judgment also hinted at the Court's view on the likelihood of an average end-user (sic!) being misled in the case at hand. According to the Court, "the mere fact that the labels or the symbols displayed by BSH refer to information already present on the energy label cannot suffice to rule out the existence of such a risk". Quite the contrary, excessive information can be misleading. This is particularly because the symbols used by BSH, while essentially conveying the same message, were not graphically identical to those used on the energy label and could, therefore, "give the impression that they convey different information each time" (para. 58). To what extent this conclusion can be transferred outside the specific context of mandatory labelling is still an open question.

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