Tuesday, 9 November 2010

Can we add a bonus to the goods we have for sale so as to attract more consumers? ECJ case C-540/08 Mediaprint

9 November 2010: ECJ case C-540/08 Mediaprint

This judgment concerned interpretation of the Directive 2005/29/EC on unfair commercial practices, its maximum harmonisation and the subject of combined offers.

The opinion of the Advocate General in this case has been discussed in an earlier post.

As a short reminder, the facts of the case were as follows: The dispute was between two Austrian newspaper publishers. One of them organised the election of the 'footballer of the year' and invited the public to join in that competition, by internet or by means of a voting slip appearing in the newspaper. Participation in that competition carried the prize of dinner with the footballer chosen.

Austrian law lays down a general prohibition on sales with bonuses, which is aimed at ensuring both the protection of consumers and the maintenance of effective competition. Pursuant to that provision it was an unfair commercial practice.

The questions were:
1. Whether the general prohibition in Austrian law is compatible with the regulation of the Directive on unfair commercial practices?

ECJ upheld the view of the AG in this case. Austrian law is incompatible with the Directive enforcing a general prohibition on sales with bonuses.

There is no doubt that: "Promotional campaigns, such as those at issue in the main proceedings, which enable consumers to take part free of charge in a lottery subject to their purchasing a certain quantity of goods or services, clearly form part of an operator’s commercial strategy and relate directly to the promotion thereof and its sales development. It follows that they constitute commercial practices within the meaning of Article 2(d) of the Directive and, consequently, come within its scope (Case C-304/08 Plus Warenhandelsgesellschaft [2010] ECR I-0000, paragraph 37 and case-law cited)." (Par. 18)

The Austrian government argued that national provisions at issue did not fall withing the scope of the Directive in that they were established to maintain pluralism of the press in Austria. However, it was proven during the proceedings that aside that purpose these provisions were to give additional protection to consumers, as well. (Par. 23) Since the Directive introduces full harmonisation measures, Member States are not free to offer more protection to the consumers in their national laws. (Par. 30) This led the ECJ to concluding:

"(...) it is undisputed that practices consisting in offering consumers bonuses associated with the purchase of products or services do not appear in Annex I to the Directive. Therefore, they cannot be prohibited in all circumstances, but can be prohibited only following a specific assessment allowing the unfairness of those practices to be established." (Par. 35)

As far as the second question was concerned:
2. "whether sales with bonuses must be regarded as unfair commercial practices within the meaning of Article 5(2) of the Directive, merely on the ground that the possibility of gain represents, for at least part of the public concerned, the deciding factor which causes it to buy the main product."?

The ECJ reminded that the Directive contains a test for the unfair commercial practices and all elements of this test have to be fulfilled in order for a commercial practice to be prohibited as unfair.

"The fact that, for at least part of the public concerned, the possibility of participating in a competition represents the factor which determines the purchase of a newspaper constitutes one of the factors which the national court may take into account when making such an assessment.

That fact may lead the national court to consider that the commercial practice in question materially distorts or is likely materially to distort the economic behaviour of the consumer, within the meaning of Article 5(2)(b) of the Directive.

However, that fact does not in any way lead in itself to the conclusion that a sale with a bonus constitutes an unfair commercial practice within the meaning of the Directive. For that purpose, it must also be verified whether the practice in question is contrary to the requirements of professional diligence within the meaning of Article 5(2)(a) of the Directive." (Par. 44-46)

ECJ concluded then by saying that possibility of participating in a prize competition, linked to the purchase of a newspaper, does not constitute an unfair commercial practice simply on the ground that, for at least some of the consumers concerned, that possibility of participating in a competition represents the factor which determines them to buy that newspaper.

Sunday, 7 November 2010

Consumers and the big bad wolf (aka internet)

European Comission has recently been paying more and more attention to the fact that online contract law is not sufficiently regulated (that might have something to do with the European Parliament calling for more actions to increase e-confidence of consumers, read more: here). Most of the directives and regulations currently in force have been introduced back in 80's and 90' when internet commerce was just beginning to be developed and no one dreamed of the necessity to protect consumers who would start using this tool daily as one of the common means to conclude contracts. Moreover, cybercrime, like stealing identities, or marketing based on online preferences did not seem very profitable nor likely then. As a result, the laws protecting consumers online badly need an update.

A report on digital content services and how they are regulated in various Member States have been commissioned by the EU and is being prepared by the Centre for the Study of European Contract Law (CSECL) and the Institute for Information Law (IVIR) of the University of Amsterdam as we speak. There is a hope that after the national reports have been analyzed, the EU will see a need for an instrument and would introduce European level regulation of that sector.

A public consultation has also just started on the Commission's comprehensive approach on personal data protection in the EU. One of the issues raised is whether consumers/individuals have their personal data sufficiently protected online (e.g. the right to have their personal data permanently deleted after having them first submitted on a social networking site, the right not to have their personal data gathered while they are browsing online world by e.g. use of cookies).

If you want to take part in this public consultation (citizens, organisations, public authorities are encouraged to do so) you may contribute to it here up to 15 January 2011.

Also: BBC published an article 'EU aims to boost web privacy safeguards' by Ben Shore on Thursday, 4 Nov 2010 on the EC public consultation.

Thursday, 4 November 2010

Conference: The Role of Legal Translation in Legal Harmonisation

On 21 January 2011 the Centre for the Study of European Contract Law and the Amsterdam Circle for Law & Language (ACLL) organise an international interdisciplinary one-day conference on the Role of Legal Translation in Legal Harmonisation.

I'm mentioning this interesting conference on this blog because many times within European Consumer Law we struggle with consumers being victims not only of different regulations but also of different understanding of the same (or at least 'the same-sounding') regulations.

The programme of this conference and full description you may find here.


Tuesday, 2 November 2010

Towards an optional instrument?


Last Wednesday, 27 October, the Legal Affairs Committee of the European Parliament organised an inter-parliamentary meeting on the idea of an optional instrument (OI) for European contract law. On the basis of a number of briefing papers from experts in the field, members of national parliaments and of the EP reflected on the possible advantages and the political attainability of enacting such a facultative set of rules that parties may choose to apply to their contract. The briefing papers can be found on the EP’s website.


Topics that were discussed include:

- the need for an OI, from the point of view of consumers’ organisations, business representatives, judges, and the European Commission;

- the extent to which an OI might increase legal certainty and foster cross-border trade;

- the material, territorial and personal scope of an OI;

- the relation of an OI with substantive rules of national law and rules of private international law.


The workshop was organised with the aim of giving members of national parliaments the opportunity to express their views on the policy direction that the EU should pursue in the field of European contract law, on which the European Commission published a Green Paper and launched a public consultation last Summer (see an earlier post on this blog).


For those of you who are following the discussion on the Green Paper, some upcoming conferences may be of interest:

- 10 November 2010, conference organised by the Centre for the Study of European Contract Law (CSECL) in Amsterdam (in Dutch; the full programme may be found here);

- 3 December 2010, colloquium organised in Brussels on ‘European Contract Law: To an optional tool for the practitioners’ (programme available here)

To be continued...

Thursday, 28 October 2010

Sheena Iyengar on the art of choosing

Consumer should be free to make his own choices.
Consumer should be well informed so that he can make the right choices.
Consumer has too many choices in our society...

Those are just a few of the 'common' statements that refer to the consumers' choice that influenced regulation and creation of many consumer laws (e.g. duties to inform). Since I find it interesting to take a look at what lies underneath the legal instruments, i.e. whether there is really a legitimate basis in consumer behavior that justifies creation of certain legal rules, I was very much interested in the presentation that Sheena Iyengar (from the Columbia Business School, author of the book: The Art of Choosing) gave during TEDGlobal 2010 on the art of choosing.



Tuesday, 26 October 2010

EU collective redress regulation needed? Undoubtedly so.

Joaquín Almunia (Vice President of the European Commission responsible for Competition Policy) gave a speech in Brussels on 21 October 2010 addressing the 'State of Play and Future Outlook'.

In his speech Mr. Alumnia devotes some time to the problem of private enforcement and the lack of effective measures for collective redress.

"All EU citizens and businesses should enjoy the right to obtain compensation for damages caused by a breach of EU law. But in reality, their rights depend on where they live in Europe. About half of the Member States don't have any form of collective action, and even where this right is recognised, its use is very diverse both in scope and effectiveness.

Last week, the College of Commissioners debated these and other issues related to collective redress. The discussion was prepared by an information note I put forward together with my colleagues Reding and Dalli, developing the ideas the three of us had anticipated to the EP during our confirmation hearings last January.

The College agreed on the need for a coherent EU framework to strengthen collective redress across Europe that would draw on the different European national traditions. At the same time, we are committed to avoid the excesses and drawbacks of the US system.

Five principles for group actions across the Union were agreed:

•We should ensure effective compensation for everyone who has suffered damages, recalling that group claims are often cheaper and more practical than individual claims.

•We should put strong safeguards against abusive litigation;

•We should consider settlements or systems in addition to court proceedings to resolve disputes;

•Collective judgements should be enforceable throughout the EU; and

•Finally, we should ensure that adequate financing can be allowed so as to give citizens and businesses – especially SME’s – fair access to justice.

We decided to launch a public consultation from this coming November until the end of February 2011. In light of the replies that we will receive, we will propose a framework for collective redress.

This framework would become the basis for possible legislative initiatives in several policy areas including competition, environment, consumer protection, and others.(...)"


It's good to hear that we are getting closer to having the collective redress actions for consumers sufficiently regulated.

Tuesday, 19 October 2010

13th International Conference on Consumer Law: Protecting Consumers in Economic Recessions

13th International Conference on Consumer Law organized by the IACL (International Association of Consumer Law) will take place at Brunel University, UK, on 27-29 June 2011. Deadline for submission of papers is set for 10th January 2011. The theme of this conference will be: Protecting Consumers in Economic Recessions. To see the call for paper, click here.

Thursday, 14 October 2010

European Consumer Centre Online Survey

European Commission is trying to find out how to get better at informing citizens about the European Consumer Centres. To help them, please answer an online anonymous survey here.
If you don't care about remaining anonymous, you may submit your email address and enter into a competition. You may then win an overnight trip to the next European Consumer Summit in Brussels (planned for March 2011) organised by the European Commission.
I don't know about you, readers, but I'm not going to pass an opportunity to win this prize...

Tuesday, 12 October 2010

European Consumer Centres, happy birthday!

It has been five years now that European Consumer Centres exist that are 'at the service of European consumers'. Whether a problem occurs with goods bought online, holidays are ruined because of cancelled flights, or other consumer problems: the ECC is there to help. 29 Centres exist, one in each of the Member States plus one in Iceland and one in Norway.

To get an idea of the activities undertaken and services offered by the ECC, here you can find the report published at the 5-year anniversary.

Friday, 8 October 2010

Collective redress addressed again by the European Commission?

Yesterday, European Voice published a short note (by Simon Taylor) that talks on group compensation are to resume. Collective redress had been a hot topic in European Commission in the past few years, since it should guarantee consumers to start actions for compensations against companies that might cause no or little loss to an individual consumer while harming significantly consumer interests as a whole. Naturally, the plans of regulating collective redress on EU level have been strongly opposed by the business representatives in Brussels. Now, it has been announced that next week the European Commission will re-open a debate on EU legislation that would allow collectives of consumers to seek compensation from companies found guilty of anti-competitive practices (e.g. price fixing). On 12 October commissioners will hold an orientation debate on whether any action should be taken at EU level. The existing solutions for collective redress actions on national level will be discussed. If commissioners agree to further regulate these actions, public consultation will be launched.