Dutch court upholds Fortnite fine for UCPD violations

 While the "Digital Fairness Act" may or may not become a thing in the near future, it is interesting to see how regulators have started to perhaps gain more confidence in the enforcement of existing rules in the digital context. A most recent example comes from a Dutch decision published today in Epic Game's case against the Dutch Authority for Consumer and Market's decision to fine the Fortnite producer for a number of prohibited practices embedded in the game. 

According to the ACM, Epic Games exposed children to advertisements which directly exhorted them to buy a product (a banned practice under the UCPD's annex) and put them under pressure to decide about a complex and unclear offer within a short time (para 1 decision).

Epic Games had earlier accepted parts of the ACM's decision, in so far as it concerned timers in the Item Shop that created the false impression that an item or offer may soon run out or disappear. They challenged, however, 1) the existence of exhortation to purchase directed at children, as well as 2) the ACM's claim that the game's Item Shop was designed in such a way to create artificial scarcity, putting players under pressure to decide within a short period of time whether to buy certain items. 

As to the first point, this hinged on the interpretation of the text in the annex. From the judgment it appears that Epic Games wanted the District Court to decide on the ACM's assumption that "children" in the UCPD's annex covers all minors, which was challenged on the basis that it failed to differentiate between young children and older teenagers. The court considers that this distinction may matter for the amount of the fine but not for the question of whether the finding of an infringement was justified and hence declines to examine the issue in detail since Epic Games has not challenged the entity of the fine. Even without a detailed examination, this element in the decision may in fact embolden authorities, which have found it tricky to claim that practices constituted direct exhortation to buy directed at children whenever a product was not exclusively marketed to very small children. There was otherwise relatively little in the decision that tried to suggest that the practices at stake (see picture, from decision) did not constitute direct exhortation to purchase.

As to the second point, the ACM (see decision para 17 and sub-paras) was relying not on a direct prohibition but on a savvy reading of the general prohibition of unfair practices which go against "professional diligence" and distort the average consumer's decision making (art 5 UCPD). In this respect, the Court says, the ACM has understood professional diligence through "the principles and international rules on ethical design such as transparency and the avoidance of damaging or misleading design". The ACM also claims that professional diligence requires abstaining from exploiting behavioural pitfalls of consumers through so-called "dark patterns".  In particular, lack of transparency about the offer was due to a mix of several elements:  items potentially disappearing from the item shop, lack of information about the items' significance within the game and their rarity (which all connected to their price), all combined with time pressure (because the Item Shop content was refreshed every 24 hours), made it difficult for consumers/children to decide without excessive pressure. The Court has accepted the ACM's analysis and characterisation of the practice, rejecting Epic Games' contention that the analysis relied on the wrong test. 

A final challenge concerned the burden of proof: did the ACM need to prove that the concerned practices had actually influenced the behaviour of children as a result of the factors that its analysis identified? The Court finds that no proof has to be provided of actual influence: it is sufficient that the analysis makes it sufficiently plausible (aannemelijk) that these effects would occur. Among other things, the court points to ACM relies on research reporting that 37% of the kids playing the concerned version of the game (namely, Battle Royale) do make in-game purchases and that significant numbers of children who make in-game purchases regret their choices afterwards (see decision para 21.1). 

The confirmed fine amounts to 1.1 million euros. It is clear from the points raised in the case that Epic Games was here seeking to establish a principled precedent against the ACM's interpretation of the UCPD and their recent steps in digital enforcement. This may suggest that the decision will be appealed - which we should know within a few weeks. Interesting case in any event!

Deferred payment option as a ‘promotional offer’: CJEU in bonprix (C-100/24)

In bonprix (Case C-100/24), the CJEU was asked to clarify the meaning of ‘promotional offers’ under Art. 6(c) of the E-commerce Directive. According to this provision, any such offers must clearly outline the conditions for eligibility. The disputed practice was an advertising message that bonprix, an online trading company, put on its website: ‘Convenient purchase on invoice’. It was contested that this message is misleading as it leaves out the fact that such a payment arrangement is subject to a prior assessment of the consumer’s creditworthiness. It is thus necessary to establish whether the message on bonprix’ website is a ‘promotional offer’ in the first place – a concept that is not directly defined under the Directive.

First, according to a literal interpretation, ‘promotional offers’ can include ‘any form of communication by which a provider seeks to promote goods or services to the recipient by giving him or her an advantage’ (para 24), which is still rather broad.

Second, according to a contextual interpretation, since Art. 6(c) of the E-commerce Directive included some illustrative examples such as ‘discounts, premiums and gifts’, for ‘reasons of consistency’, ‘promotional offers’ must have ‘the characteristics common to’ these examples (para 25). The CJEU outlined three such characteristics: the conferral of an advantage that is

1. objective, i.e. not left to ‘the subjective assessment of that recipient’ (para 26),
2.  certain, i.e. ‘does not depend on chance or selection’ (para 27, per the distinction between ‘promotional offers’ under Art. 6(c) and ‘promotional competitions and games’ under Art. 6(d)), and that is
3. ‘capable of influencing that recipient’s consumption behaviour’ (para 28).

In response to bonprix’ arguments, the CJEU added that ‘promotional offers’ are neither defined by ‘the existence of a substantial monetary advantage for its recipient’ nor by ‘its exceptional nature’ (paras 29-31). The form and extent of the advantage is ‘immaterial’ and may be ‘monetary, legal or mere convenience, such as to enable the recipient to gain time’ (para 32). In the context of the disputed practice, the CJEU highlighted some potential benefits of bonprix’ offer: the deferral of payment provides the consumer with ‘a cash advance’ and represents ‘a monetary advantage, albeit minimal’ (para 43); in the event of extinguishment of the contract due to withdrawal or termination, ‘the purchaser does not need to claim reimbursement of the price’ (para 44).

Third, according to a teleological interpretation, the CJEU confirmed that subjecting the disputed practice to Art. 6(c) of the E-commerce Directive can ‘contribute to a high level of consumer protection, without, however, entailing unreasonable economic burdens for service providers’ (para 34). By informing the consumer that the deferred payment option is subject to a creditworthiness test and thereby making the consumer realise that they may be refused the option, it ensures consumer protection ‘at all stages of contact between the provider and the recipient of a service’ (para 35). Finally, the CJEU also added that its interpretation of Art. 6(c) of the E-commerce Directive is fully compatible with the Unfair Commercial Practices Directive (particularly its Art. 3(4) and its general prohibition of misleading practices) and the Consumer Rights Directive (particularly its Art. 6(8)).

The Court’s broad interpretation of ‘promotional offers’ should be welcomed as a positive move to strengthen consumer protection through information. It represents a more inclusive understanding of the factors that drive consumers’ purchase decisions, in particular convenience. Of course, it should also be borne in mind that the disputed practice in this case is in any event a ‘commercial practice’ within the scope of EU law.

Comparison websites outside scope of comparative advertising: CJEU in HUK-Coburg (C‑697/23)

For those who are on the lookout for good value for money, price comparison websites are a go-to tool. While ‘comparative advertising’ is regulated by Directive 2006/114/EC, it is unclear whether comparison services offered by third-party websites fall within its scope. The CJEU clarified this point in Case C‑697/23.

The case concerned Check24, a website that compares various products, including insurance packages, by awarding scores based on criteria like price. The website also enables, as an intermediary, the conclusion of contracts between customers and insurance providers. HUK-Coburg, whose insurance products were listed on Check24, sued the platform for violating the objectivity requirement under Art. 4(c) of Directive 2006/114/EC. Though the question pertains to the interpretation of Art. 4(c), the CJEU instead focused on the scope of the Directive, namely its definition of ‘comparative advertising’ under Article 2(c).

The CJEU first recalled that the key element of ‘comparative advertising’ is the identification of ‘a competitor’ – either of the advertiser or of the advertised goods/services. Thus, Check24 must be a competitor of HUK-Coburg to fall under the scope of the Directive (para 28). To assess this, the CJEU proposed ‘an analysis of the possible substitutability of the services offered by the parties […] in order to determine whether they operate in the same market’ (para 34, emphasis added). Pending further verification by the referring court, the CJEU pointed out that Check24 itself does not provide insurance services but merely offers comparison and intermediary services, meaning that it offers non-substitutable services to those of HUK-Coburg and operates in a different service market (para 37). The concept of ‘comparative advertising’ under Article 2(c) thus does not include such an online comparison service or such a mere intermediary service.

While it makes sense that third-party comparison services are not regulated as comparative advertising between competitors, these services are still subject to other consumer protection instruments, such as the Consumer Rights Directive and Unfair Commercial Practices Directive, which, according to the Commission, remain under-enforced.

Hague court upholds a municipal ban on fossil fuel ads: implications for EU (consumer) law

The climate malaise has invited many new regulatory measures in recent years to fight against greenwashing, with advertising bans being particularly noteworthy. In September 2024, The Hague passed a municipal law banning fossil fuel-related advertising in public spaces like billboards and bus shelters (Art. 2:97(7) City Ordinance). The ban outlaws ‘advertising for products and services related to fossil fuels, including air travel, plane tickets, grey energy contracts, gas contracts, cruise holidays or cars with fossil fuel or hybrid engines’ (Art. 1:1(x)). The ANVR – the Dutch trade association for travel agencies – and the travel company TUI filed summary proceedings against the ban. On 25 April 2025, the District Court of The Hague upheld the ban. It thoroughly assessed the measure’s compatibility with the Unfair Commercial Practices Directive (UCPD), EU free movements and fundamental rights (freedom of expression and the freedom to conduct a business).

This ruling is the first time a court reviewed and upheld a municipal ban of this nature, making it a noteworthy legal development for EU (consumer) lawyers in light of the burgeoning regulatory initiatives. Besides the Hague ban, Amsterdam has similarly banned fossil advertising since 2021, while France has introduced a national ban in 2022. The UN Secretary-General, António Guterres, has even called for a global ban on all fossil fuel advertising. Apart from fossil advertising, several Dutch cities, including Haarlem as the world’s first, have banned meat advertising, and France has outlawed advertising for ultra-fast fashion. Building on the Hague decision, this post summarises the legal arguments in favour of the legality of similar advertising bans under EU law.

 

The Court’s Ruling

Compatibility with UCPD (paras 5.11-5.12): According to ANVR and TUI, the UCPD, as a maximum harmonisation instrument, prohibits Dutch law from providing a higher level of protection and thus renders the fossil ads ban incompatible. Referring to the Commission’s UCPD Guidelines, the Hague Court clarified that the UCPD ‘does not cover national rules intended to protect interests which are not of an economic nature’ and thus ‘does not affect the possibility of Member States to set rules regulating commercial practices for reasons of health, safety or environmental protection’. According to the municipality of The Hague, the ban is not intended to protect the economic interests of consumers but aims to prevent the negative effects of climate change and to protect the health of residents and visitors of the city. Therefore, the ban is not contrary to the UCPD.

Compatibility with the free movement of goods (Art. 34 TFEU, paras 5.13-5.15): Following the CJEU’s Keck jurisprudence, national advertising restrictions are only assessed under Art. 34 TFEU, which prohibits discriminatory measures on imported goods. According to the Hague Court, the ban applies indistinctly to Dutch and international market participants, and ANVR and TUI did not demonstrate otherwise. Even if the ban constitutes a restriction under Art. 34, such a restriction can still be justified under Art. 36 TFEU for the protection of health and the environment. The municipality has sufficiently substantiated that the ban is suitable and necessary for achieving said objectives by encouraging residents and visitors to make more sustainable choices and reducing the use of fossil fuels. The measure also remains proportionate, as advertising through other media, such as television and newspapers, is still possible.

Compatibility with the freedom of expression (Art. 10 ECHR and Art. 11 of the Charter, paras 5.16-5.19): Art. 10 ECHR codifies the freedom of expression but allows for restrictions that ‘are prescribed by law and are necessary in a democratic society’. Following the ECtHR case law, the Hague Court referred to the existence of ‘a pressing social need’ to assess whether the ban’s restriction on freedom of speech can be justified. The Court invoked some similar arguments to those under Art. 36 and concluded that the ban complies with Art. 10 ECHR: The advertising ban is relevant for the protection of health and the environment, and advertising for the plaintiffs’ other products or through other media remains possible. In addition, Art. 11 of the Charter does not provide more extensive protection. The municipality also contended that the Charter does not apply as the dispute measure does not concern the implementation of EU law, which the Court agreed. (In a separate section (paras 5.8-5.10), the Court also discussed the freedom of expression under Art. 7 of the Dutch Constitution, but the national provision does not protect ‘commercial advertising’.)

Compatibility with the freedom to conduct a business (Art. 16 of the Charter, paras 5.20-5.21): While the Hague Court stated that the Charter does not apply, for the sake of argument, Art. 16 of the Charter still would not invalidate the advertising ban. The violation of Art. 16 should only be assessed in light of the analysis under Art. 34 TFEU, and a separate assessment is unnecessary.

This analysis should be read in light of the Hague Court’s assessment on the municipality’s competence (paras 5.6-5.7). The Court confirms that the municipality of The Hague is competent to act against climate change and promote public health by setting rules within its boundaries. It is deemed untenable to argue that flying less does not have a direct positive impact on air quality within The Hague. The Court pointed out that reducing flying, ‘in combination with other environmental measures taken by the municipality’, can decrease CO2 emissions. This is not altered by the fact that the contribution of the municipality may be small on a national or global scale. ‘Every little bit helps, and the municipality wants to do its bit’.

The Hague Court also assessed the compatibility of the ban with the general principles of good administration (paras 5.22-5.34), including the principles of lex certa, proportionality, equality and the obligation to state reasons. However, none of these principles are violated.

 

Comments

While scholars have presented convincing arguments that bans on advertising for carbon-intensive products do not violate EU law (see Kaupa; Venzke and Ankersmit; Van de Berg and Eckes), the Hague Court’s decision sets a positive precedent for similar action, especially at the local and municipal levels. The fact that the Hague Court did not even feel the need to ask for a preliminary ruling from the EU Court also indicates the ban’s clear legality under the EU legal framework.

Here are some main lessons from this case. From the perspective of EU secondary law, the UCPD does not pose a legal obstacle insofar as the ban is framed as exclusively for health and the environment, and not for consumer protection. The reference to consumer protection, even as a co-objective for a mixed-purpose measure, will invoke the fully harmonised UCPD, which, despite the recent amendment to upscale its relevance for combating greenwashing, does not square with a comprehensive ban. While this construction nonetheless allows national and local authorities to introduce an advertising ban, it is regrettable that the UCPD views consumer protection of economic interest in such a narrow sense. A more enduring solution would simply be to amend the UCPD (either its harmonisation scope or its objectives) or to interpret its objectives in a more long-term, environmentally friendlier way (for example, in conjunction with Art. 11 TFEU).

Moreover, the Hague Court did not discuss the Audiovisual Media Services Directive (AMSD), which was previously invoked in another case heard by the Dutch Advertising Code Committee. Art. 9(1)(c)(IV) AMSD prohibits advertisements encouraging ‘behaviour grossly prejudicial to the protection of the environment’. The Dutch Advertising Code Committee rejected the reading that this provision justifies bans on fossil advertising, which was based on an artificial distinction between advertisements and the (environmentally harmful) products being advertised. But it has been argued that the AMSD provision not only allows but also demands bans like that of The Hague. Moreover, the fact that the EU legislature has already undertaken a balancing exercise when enacting secondary law, ie weighing the tension between an advertising ban and free speech, provides more concrete guidance for the judicial assessment.

From the perspective of EU primary law, the Hague Court informed us of a twofold legal strategy. First, regarding provisions like Art. 34 TFEU and Art. 16 of the Charter, a comprehensive and non-discriminatory ban simply invokes no violation. While not discussed by the Hague Court, neither is an advertising ban liable for infringing upon property rights (Art. 1 of Protocol 1 ECHR, Art. 17 of the Charter): a contractual right to use advertising spaces can hardly be qualified as a proprietary interest, and its decrease in economic value hardly amounts to an infringement.

Second, even if a restriction of fundamental rights or freedoms is found, such as the freedom of expression, there are almost always exceptions available for such a restriction to be justified for the legitimate aim of public or general interest. This should include the protection of health and the environment (as well as broadly defined consumer protection), given the urgency of climate change (as we trail behind the Paris Agreement goals) and that the ECtHR has interpreted Art. 8 ECHR as encompassing the protection against climate change.

Next, the justification usually concerns a three-step assessment of suitability, necessity and proportionality. We can draw some general lines of argument from the Hague decision. (A lot can also be learnt from the advertising restrictions on alcohol and tobacco.)

• First, an advertising ban is suitable for pursuing the aims of health and environmental protection. In light of the significant carbon impact of private consumption, the IPCC Report has highlighted the urgent need for changes in consumption patterns to achieve climate neutrality. To this end, advertising and other commercial communications play a crucial part in shaping consumer choices and normalising undesirable consumption behaviour. As such, as the Hague Court correctly pointed out, advertising bans can encourage consumers to make more sustainable choices and reduce carbon emissions.
• Second, an advertising ban is also necessary. Here, it is more difficult to generalise the analysis as it usually pertains to the scope and essence of each restricted right or freedom. But the Hague Court helpfully reminded us that the fact that banning fossil advertising within a municipality’s boundaries is insufficient for curbing climate change does not render the measure unsuitable or unnecessary. The necessity of the advertising ban must thus be viewed as part of a broader policy mix in the climate transition.
• Third, regarding proportionality in a strict sense, it is again related to the specific restricted right. This case concerns a ban at a municipal level on advertising in public spaces. Its restrictive scope means that the proportionality test is not hard to fulfil. For bans at the national or EU level, the proportionality test may be more challenging. One approach is through comparison with feasible alternatives. For example, the proposed Green Claims Directive requires ex-ante verification for all explicit environmental claims prior to market access. By comparison, a ban targeting advertising for fossil fuel and other carbon-intensive products should be considered less restrictive and thus proportionate.

 

Overall, the Hague Court’s decision is a positive message for the legal battlefield against climate change. It brings legal clarity and paves the way for further – necessary but insufficient – action against greenwashing and unsustainable market practices.

How the CJEU's ruling in C-604/22 may transform online advertising: a closer look at the IAB Europe case

In March, the CJEU issued a ruling (Case C-604/22 IAB Europe) that has sparked a lot of discussion. The ruling addresses certain practices related to online advertising in Europe, particularly the collection of personal data for the purpose of behavioural advertising.

Facts of the case

The Interactive Advertising Bureau Europe (IAB Europe) is a non-profit association that represents digital advertising and marketing businesses at the European level. IAB Europe's members include companies that generate significant revenue by selling advertising space on websites or applications. Several years ago the association developed the Transparency & Consent Framework (TCF) to promote General Data Protection Regulation (GDPR) compliance when using the OpenRTB protocol (a popular system used for "real-time bidding", which means it quickly and automatically auctions off user information to buy and sell ad space on the internet). The TCF consists of guidelines, technical specifications, instructions, protocols, and contractual obligations. The framework is designed to ensure that when users access a website or application containing advertising space, technology businesses representing thousands of advertisers can instantly bid for that space using algorithms to display targeted advertising tailored to the individual's profile.

Image by "storyset" (Freepik)

The TCF was presented as a solution to bring the auction system into compliance with GDPR (para. 21, 22). However, before displaying targeted advertisements, the user's prior consent must be obtained. When a user visits a website or application, a Consent Management Platform (CMP) appears in a pop-up window. The CMP enables users to give their consent to collect and process their personal data for pre-defined purposes, such as marketing or advertising, or to object to various types of data processing or sharing of data based on legitimate interests claimed by providers, as per Article 6(1f) of the GDPR. The personal data relates to the user's location, age, search history, and recent purchase history (para. 24). In other words - the TCF facilitates the capture of user preferences through the CMP. And these preferences are coded and stored in a "TC string" (which is a combination of letters and characters), and then shared with organizations participating in the OpenRTB system, indicating what the user has consented/ objected to. The CMP places a cookie on the user's device, and when combined with the TC string, the IP address of the user can identify the author of the preferences. Thus the TCF plays a crucial role in the architecture of the OpenRTB system as it is the expression of users' preferences regarding potential vendors and various processing purposes, including the offering of tailor-made advertisements (para. 25, 26).

Since 2019, the TCF model has faced numerous complaints to the Belgian Data Protection Authority (DPA) regarding its GDPR compliance. IAB Europe was criticized for providing users with information through the CMP interface that was too generic and vague, preventing users from fully understanding the nature and scope of data processing and thereby maintaining control over their personal data. Furthermore, IAB Europe was accused of failing to fulfil certain obligations of a data controller, including ensuring the lawfulness of processing, accountability, security, and adhering to data protection privacy by design and by default rules (more details about the proceedings can be found on the DPA's website). Consequently, the DPA concluded that IAB Europe did not meet its GDPR obligations and imposed an administrative fine of €250,000. Additionally, it mandated corrective actions to align the TCF with GDPR standards. 

IAB Europe disagreed with the decision and challenged it before the Belgian court. According to IAB Europe, it should not be considered a data controller for recording the consent signal, objection, and preferences of individual users through a TC string. Thus the association should not be obliged to follow data controllers' obligations under GDPR. IAB Europe also disagreed with the DPA's finding that the TC string is personal data within the meaning of Article 4(1) of the GDPR. Specifically, IAB Europe argued that only the other participants in the TCF could combine the TC String with an IP address to convert it into personal data, that the TC String is not specific to a user and that IAB Europe cannot access the data processed in that context by its members (para. 28).

CJ's ruling

The Court has confirmed the key aspects of the DPA’s decision, emphasizing, among other things that:

1. the TC String holds information that pertains to an identifiable user and, thus, qualifies as personal data under Article 4(1) of the GDPR. Even if it doesn't contain any direct factors that allow the data subject to be identified, it does contain the preferences of a specific user relating to their consent to data processing. This information is considered to be related to a natural person (para. 43). If the information in a TC String is linked to an identifier, such as the IP address of the device, it could be possible to create a profile of that user and identify a particular person (para. 44). The fact that IAB Europe cannot combine the TC String with the IP address of a user's device and doesn't have direct access to the data processed by its members is irrelevant. As the Court stated, IAB Europe can require its members to provide it with the necessary information to identify the users whose data is being processed in a TC String (para. 48). This means that IAB Europe has reasonable means to identify a particular natural person from a TC String (para. 49).

2. IAB Europe, together with its members, is considered a 'joint controller' when it determines the purposes and ways of data processing. Why? According to the Court, the TCF framework aims to ensure that the processing of personal data by certain operators that participate in the online auctioning of advertising space complies with the GDPR. Consequently, it aims to promote and allow the sale and purchase of advertising space on the Internet by such operators. It means that IAB Europe has control over the personal data processing operations for its own purposes and, jointly with its members, determines the purposes of such operations (para. 62-64). Moreover, the TCF contains technical specifications relating to the processing of the TC String, such as how CMPs need to collect users' preferences, how such preferences must be processed to generate a TC String, etc. (para. 66). If any of IAB's members do not comply with the TCF rules, IAB Europe may adopt a non-compliance and suspension decision, which could result in the exclusion of that member from the TCF (para. 65). Therefore, the Court concluded that IAB Europe also determines the means of data processing operations jointly with its members (para. 68), so it meets the criteria of a data controller under Article 4(7) of the GDPR. However, this should not automatically make IAB Europe responsible for the subsequent processing of personal data carried out by operators and third parties based on information about the users' preferences recorded in a TC String (para. 74-76).

What could be the consequences of the ruling? 

The Court confirmed that the IAB Europe, due to the role and significant influence it has over the processing of data by its members for the purposes of creating user profiles and targeting them with personalized advertising, should be held responsible for how this process is organized. And it is organized in a way that is hardly transparent to users. While it is up to the national court to ultimately examine the compatibility of the Belgian DPA's decision, it can be expected that the court will affirm the main conclusions of the Belgian authority's decision. 

It appears unlikely that the CJ's ruling will lead to the elimination of the intrusive pop-ups on many websites, which often rely on dark patterns and manipulative techniques to coerce consent for data processing for marketing purposes. Nevertheless, the advertising industry should place a greater emphasis on enhancing transparency and providing users with more control over their personal data. This could include the development of more user-friendly and informative consent mechanisms, making it easier for users to understand what they are consenting to and how to exercise their rights over their data. The ruling is also expected to impose further restrictions on behavioural advertising practices, particularly those dependent on real-time bidding and the widespread sharing of personal data without explicit, informed consent from users. 

CJEU case C-371/20 and the concept of ‘payment’ in the Unfair Commercial Practices Directive

Case C‑371/20 (here) deals with an interesting question that has been receiving increasing regulatory attention: whether the concept of ‘payment’ in consumer-related contracts covers only monetary consideration or whether other types of counter-performances can also be considered as ‘payment’. We have reported on this issue before (see here). However, the CJEU had so far not discussed this matter so directly, so this case is most welcome. This case concerns the Unfair Commercial Practices Directive, particularly point 11 of Annex I. Annex I of the Unfair Commercial Practices Directive contains a list of practices that are considered unfair in all circumstances. Point 11 of the Annex states that it is not allowed to use editorial content in the media to promote a product if the professional party has paid for that promotion and if that is not made clear to the consumer (known as an ‘advertorial’). In other words, it must be made clear that that editorial content is paid advertising.

The case concerns two competitors in the clothing retail business - Peek & Cloppenburg Düsseldorf and Peek & Cloppenburg Hamburg -, and the main issue at hand was whether to use editorial content as an advertising campaign was an unfair commercial practice. P&C Düsseldorf published a nationwide editorial campaign in a fashion magazine (Grazia magazine). In it, P&C Düsseldorf invited customers to a night of private shopping. The editorial content in question also displayed several images of goods to be sold on the night of the event. P&C Hamburg claimed that this practice was contrary to Point 11 of Annex I of the Unfair Commercial Practices Directive (and to the transposing German legislation) because P&C Düsseldorf used editorial content without disclosing that it had been paid for. The legal issue was therefore whether this campaign could be considered an ‘advertorial’ in the context of Point 11. The referring court’s doubt arose from that fact that, as argued by P&C Düsseldorf, no monetary sum was paid concerning the editorial content in question, as the costs of the event were to be shared between P&C Düsseldorf and the company that publishes the fashion magazine and the pictures used were provided by P&C Düsseldorf free of charge. In other words, P&C Düsseldorf argued that this was not an ad that was paid by them, which meant that it would fall outside the scope of Point 11 of Annex I. As a result, the referring court asked the CJEU whether in the context of the Unfair Commercial Practices Directive the terms ‘paid’ and ‘payment’ must necessarily involve a monetary sum in exchange for the editorial content or whether it also covers the supply of services or assets other than monetary performances. In this case, the pictures provided by P&C Düsseldorf without cost could be seen as non-cash consideration for the advertisement. Furthermore, in case the concept of ‘payment’ should be broadly interpreted, the referring court asked whether there is a payment where there is a joint promotional event intended to promote the sales of both organizing parties (in this case, P&C Düsseldorf and Grazia magazine).

In its reformulation of the referred question, the CJEU already hints at a delimitation of the concept of ‘payment’: in order to be considered ‘payment’, a counter-performance must entail an economic advantage to the party. When answering the questions, the CJEU explicitly took into account other language versions. In fact, it is interesting to note that while some language versions use explicit terms connected with a monetary sum (such as ‘paid for’ in the English version), other versions employ more neutral, broader terms (such as ‘financier’ in the French version). The CJEU clarified that, when interpreting EU law, the literal term only has indicative value since it is also necessary to take into account the context surrounding and the goals of the provision. The CJEU reminded that the goal of the Unfair Commercial Practice Directive is to achieve a high level of consumer protection, particularly when it comes to tackling the frequent information asymmetries between consumers and traders. The CJEU also highlighted that the goal of Point 11 of Annex I is to guarantee consumer protection and consumers’ confidence in the neutrality of the press. According to the CJEU, whether the payment of such editorial content is made through the provision of a monetary sum or through the provision of any other assets is irrelevant when it comes to achieving these goals. In that sense, the CJEU agreed with the Advocate-General and stated that interpreting the concept of ‘payment’ as meaning only the payment of a monetary sum would deprive this provision of effectiveness. This interpretation makes sense. In fact, as pointed out by the referring court, the goal of Point 11 of Annex I is to allow the consumer to identify the promotional character of a commercial practice. This seems to point towards a broad interpretation of the concept of ‘payment’.

Additionally, determining whether the performance at hand consisted of ‘payment’ (or of a performance that carried a benefit for the party) is for the national court to do. However, the CJEU stated that it is important to identify a link between the material benefit provided and the editorial content. In this case, the free provision of copyright protected images by P&C Düsseldorf to the fashion magazine can be considered as payment, since these images are an asset value directly related to the editorial content.

This interesting decision has implications for several other consumer law issues, such as the payment of products with personal data (which is the case mainly in digital content contracts, whereby consumers often acquire products or services apparently gratuitously but while agreeing to disclose unnecessary personal data in return) and influencer marketing (whereby social media ‘celebrities’ often advertise products or brands without making it clear to their followers that this is not a genuine opinion but a paid review). Interestingly, the CJEU referred to the ‘reality of journalistic and advertising practice’ and to how social media comments or posts that appear genuine but are actually hidden advertising or commercial practices are harmful to consumer confidence and competition law. A broad interpretation of the concept of ‘payment’ – not only under the Unfair Commercial Practices Directive but also under other EU consumer legislative instruments – is an important step towards adapting existing legislation to ever-changing digital business models.

Further updates on consumer protection in the digital economy: TikTok, Google and Apple in the spotlight

Yesterday we reported on some encouraging news about online consumer protection coming from Norway. Today we would like to follow up on these reports and briefly review other developments relevant to consumer protection in the digital economy, which caught our attention over past months. All of these developments show how consumer law, competition law and data protection law are all relevant to the protection of consumer interests vis-a-vis major online platforms.

Our readers may have heard about the recent decision of the Italian data protection authority, Garante, ordering Tik Tok to immediately limit the processing of personal data with regard to users whose age could not be established with certainty. The action was taken as a matter of urgency, following a death of a young girl in Palermo who took part in a "black-out" challenge that spread across the platform. While this story understandably captured public attention, it is worth noting that a formal proceeding against TikTok was initiated by the Garante already at the end of last year.

Earlier this week Reuters reported that the search engine giant Google may be facing yet another antitrust probe from the European Commission, this time in relation to its advertising practices. Under examination are among others the integration of DoubleClick (Google's ad serving unit) and the company's plan to phase out third-party cookies on Chrome. Several weeks ago the British Competition and Markets Authority opened an investigation on the same subject. According to Google, greater concentration of its advertising ecosystem (aka "Privacy Sandbox") is supposed to better protect consumers’ privacy (which, of course, remains to be verified, particularly in light of "dark patterns" employed by the trader), yet authorities fear it they may negatively impact other interests (here: commercial interests of the publishers, although one could also think of consumer interests other than privacy). As the CMA notes, the challenge faced by regulators is "to address legitimate privacy concerns without distorting competition". It is worth recalling that online advertising is also part of the proposed Digital Services Act, which envisages e.g. an obligation of very large online platforms to publish ad repositories with information about targeting.

Last but not least, back in November, the data protection organisation NOYB filed a complaint with the Spanish and German data protection authorities against Apple's Identifier for Advertisers, arguing that it allowed for user tracking without consent. Interestingly, the organization - co-founded by the activist Max Schrems - chose to rely on the E-Privacy Directive instead of the GDPR, to avoid "endless procedures" of cooperation between DPAs. Indeed, some of the high-profile cases under the GDPR are still ongoing, including an inquiry into Google’s processing of location data, triggered by - you guessed it - a report by the Norwegian Consumer Council.

New Digital Markets Unit in the UK - putting (some/few) platforms on notice

Another interesting piece of news from the past few days is the UK government announcing the setting up of the Digital Markets Unit ('New competition regime for tech giants to give consumers more choice and control over their data, and ensure businesses are fairly treated') within the Competition and Markets Authority (CMA). The Unit's main task will be to introduce and enforce 'a new code to govern the behaviour of platforms that currently dominate the market'. Is the UK attempting to follow the example of the German Federal Cartel Office (Bundeskartellamt) that has been cracking the whip against the potential abuses of the dominant position on the market of such digital service providers like Facebook (see The Facebook Decision: First Thoughts by Podszun)?

Perhaps, the government's announcement draws attention to the risks associated with the concentration of power in the tech sector, bluntly giving notice to the dominant players on the digital marketplace that they will be under enhanced surveillance in the foreseeable future. They will be expected to follow the new rules for behaviour set out in the code, which will likely require more transparency (as to the use of consumer data?), opt-in options for personalised advertising (the issue that was at play in the German Facebook case), facilitating users' swapping to use any rival platforms.

The DMU is to start their work in April and is supposed to be able to 'suspend, block and reverse decision of tech giants, order them to take certain actions to achieve compliance with the code, and impose financial penalties for non-compliance'. What is of interest to us, of course, is to what extent this new unit will be able to benefit consumer protection in the UK? This is uncertain at the moment, but it seems that any consumer protection benefits may be coincidental rather than intentional here. First, the Guardian reported that the new unit will have oversight only over platforms funded by digital advertising and having 'strategic market status' (Digital Market Unit: what powers will new UK tech regulator have?). This would limit the unit's purview, possibly even only to Facebook's and Google's activities. Second, the DMU will focus on preventing damage to news media... which suggests that the interests of UK news outlets may play out more centrally, over consumers' interests.

A lot will depend on the new code of conduct set by/for the DMU. We will then definitely let our readers know when the new code for the behaviour of these digital platforms is adopted!

Online platforms will be online platforms

As we reported in October last year (Combating online disinformation...), the major online platforms operating in the EU (e.g. Facebook, Google, Twitter) signed a Code of Practice against disinformation and promised to do better in controlling for and eliminating fake news. This interest in increasing information transparency was mainly motivated politically - ahead of the elections to European Parliament in May 2019 - but should have an impact also on transparency of consumer information, e.g. by controlling for advertisement placements and blocking fake accounts. That is, provided that the online platforms actually deliver on their commitments. To ensure they do, the Commission obliged them to report monthly on the undertaken actions. The first reports of January 2019 are not really promising though (Commission asks online platforms to provide more details on progress made). Only Google provided data on actions taken in January to enhance scrutiny of ad placements throughout the Member States, however, even with this report the Commission considers not to have been given enough details to fully understand how the undertaken actions combat disinformation.

AG Opinion on Kirschstein (C-393/17): UCPD is not to interfere with high quality of education

On 15th November 2018, AG Bobek delivered his opinion on Case C-393/17 Openbaar Ministerie v Kirschstein (Hereafter: Kirchstein). The case revolved around the application of the Unfair Commercial Practices and the Services Directive on the sector of higher education. As the AG succinctly points out, the underlying issue of this case is whether higher education programmes can be classified as 'services', and if so, what kind of services?


Facts of the case

Under Belgian law, and more specifically under Flemish law, only higher education establishments that have obtained an accreditation may award certain degrees. Doing so without that accreditation may lead to criminal prosecution resulting in a prison sentence and/or a fine.

Mr Freddy Kirschstein and Mr Thierry Kirschstein are involved in United International Business Schools of Belgium BVBA (‘UIBS Belgium’), a higher education institution that is not accredited by Flemish authorities. UIBS Belgium is affiliated with other education services companies from Switzerland (GES Switzerland) and Spain (GES Spain). UIBS Belgium, supports the courses of GES Switzerland in Belgium by providing courses in their Belgium campuses, with programmes that when completed, diplomas have 'master' in the title.

The Kirschsteins were fined on two occasions for breaking Belgian law by offering Master courses.

Questions referred

The following three questions were referred by the Belgian court to the ECJ, focusing on whether the Belgian law requiring that only accredited institutions contravenes the UCPD and the Services Directive, as being disproportionate.

(1)      Must Directive 2005/29/EC (the Unfair Commercial Practices Directive) be interpreted as precluding the provision in Article II.75(6) of the Codex of Higher Education of 11 October 2013 which imposes a general prohibition on non-accredited educational institutions using the designation “master” on the diplomas they award, where that prohibition is aimed at safeguarding a matter in the general interest, namely, the need to ensure a high standard of education whereby it must be possible to check whether the predefined quality requirements have effectively been met? 

(2)      Must Directive 2006/123 (Services Directive) be interpreted as precluding the provision in Article II.75(6) of the Codex of Higher Education of 11 October 2013, which imposes a general prohibition on non-accredited educational institutions using the designation “master” on the diplomas they award, where that prohibition is aimed at safeguarding a matter in the general interest, namely the protection of recipients of services?

(3)      Does the criminal provision applicable to educational institutions not recognised by the Flemish Government which award “master’s” diplomas pass the proportionality test in Articles 9(1)(c) and 10(2)(c) of [Directive 2006/123?’

AG Opinion

In an unusual turn of events, for preliminary references and AG opinions, there was need for a number of clarifications both in relation to the facts, as well as in relation to the applicable law.

In particular, an issue that is disputed also in the main proceedings was which entity awarded the 'master' diplomas in question. With the caveat that the facts are ultimately for the national court to decide, the AG makes certain assumptions:
1) there is a complex business structure between UIBS Belgium, GES Spain and GES Switzerland but it would appear that the teaching activities are carried out by UIBS Belgium, while the diplomas are administered first by GES Spain followed by GES Switzerland (para 32).
2) These three companies have never received accreditation for their study programmes, neither in Flanders, nor in any other country where they operate (para 33).
3) The study programmes in question did not receive any public funding and were entirely private (para 34).

Another disputed issue was the subject matter of the case; on the one hand it was argued that the questions referred to the ECJ centre around criminal sanctions, and criminal law is outside the scope of the EU law in question. On the other hand, it was suggested that the Court should limit itself to examining the sanctions and not the underlying issue of the accreditation process.

The AG chose a more measured approach admitting that even though the accreditation process and its compatibility with EU law is not the main focus of this case, nevertheless it is not possible to not address the accreditation issue indirectly in order to answer the referred questions (para 44).

The key element of the higher education services provided is the teaching and education activities provided by UIBS Belgium, rather than the issuance of certificates provided by the GES Switzerland (para 51). This is an important remark in terms of scope, as Switzerland falls outside the scope of the Services Directive.

Services Directive

The AG devotes a great part of his opinion in this case to discuss whether higher education qualifies as a service under EU law. One way to do so is using the test established by the Humbel case.
The Humbel case, which referred to secondary education, drew the distinction between publicly and privately funded education, arguing that courses funded entirely or mainly by public funds cannot constitute services, while, on the other hand privately funded education establishments can be classified as services, as their activities are for profit (para 58).
However, the AG points out that criteria of the Humbel test are not well suited for today's higher education which spreads over a range of different activities, blurring the lines of that public-private education distinction.

The Services Directive further complicates the, seemingly clear-cut distinction of the Humbel case with the introduction of the category of non-economic services of general interest in art. 2(2), as an exception from the scope of the Directive.

The meaning of 'non-economic categories of general interest' is unclear as it seems to be another category of non-services (which would be excluded from the scope of the Services Directive in any case). The AG refutes the argument that higher education should fit in this category as that would amount to another block exemption, similar to the one in place for healthcare services, and maintains that the Humbel test would apply to determine whether a higher education programme qualifies as a service or not (para 71).

In the case in question, as UIBS Belgium is entirely privately funded, if the Humbel test were to apply, the courses offered would be considered as 'services' (para 89). The AG takes care to clarify that education has its specificities that can and should be retained, similar to healthcare, and is not in any way a regular service. In a highly polarised issue, such as education, he clarifies that considering some education programmes as services would also infer certain rights to them, such as the right to freedom of establishment, something that could be beneficial (para 99).

The next issue is whether the Services Directive is applicable in this case. The AG answers that in the positive, as the defining element of the service is the teaching, which is conducted in Belgium and according to the Xandvisser judgement there is no need for a cross-border element to engage the services directive in terms of freedom of establishment (para 106). That being said, it can be argued that the case is not purely of internal interest (para 107).

Since the Services Directive is applicable in this case, the substance of the question rests on whether the accreditation system of the Flemish government is consistent with the criteria laid down by art 9 and 10 of the Services Directive on accreditation systems.

According to art. 9(1) of the Services Directive the authorisation scheme need to be non-discriminatory, justified by an overriding reason relating to the public interest, and proportionate. The AG argues that the Flemish scheme in question fulfils all the above criteria and is fully justifiable and consistent with EU law (para 113). There has been no indication the system is discriminatory and ensuring a high level of university education is a legitimate public interest. Furthermore, the relatively low penalties for breach of the Flemish law were found to be proportionate.

Therefore, the answer to the second question must be that 'Directive 2006/123 must be interpreted as not precluding a national provision, which imposes a general prohibition on non-accredited educational institutions using the designation ‘master’s degree’ on the diplomas they award, as long as the accreditation procedure meets the conditions laid down in Article 9(1) of that directive' (para 119).

UCPD

The first question referred to the Court asks whether the accreditation system for higher education in Flanders is compatible with the UCPD.

The Belgian and Norwegian governments argued that the UCPD does not apply to education because the Flemish government is not a trader and because education is not consistent with the main objective of the UCPD as protecting economic interests of consumers (para 131).

However, the AG is clear that higher education does fall within the scope of the UCPD for a number of reasons, even though that may make governments uneasy.

Firstly, it is recognised, as seen above, that higher education programmes may constitute a service, as they have an economic dimension. Therefore it would be difficult to argue that suddenly that economic dimension disappears in the case of applying the UCPD (para 134). The AG argues that for engaging the UCPD the crucial point is whether the regulation in question affects the business-consumer relationship by limiting certain commercial practices (para 137). It is not important whether the primary aim of the regulation is in the public interest or not.

In the case in question, there is also a level of dispute as to which is the practice in question. It seems to focus on the advertisement of UIBS Belgium that they provide Master degrees.

The AG finds the prohibition of such a practice by the Flemish government consistent with the Directive and its aims, as it protects consumers from an unfair practice that is likely to distort their economic behaviour. Furthermore, the practice in question can be caught by Annex I of UCPD and more specifically, by points 2 and 4 on displaying  a quality mark without authorisation and claiming that a product has been authorised by a public body when it hasn't.

Conclusion

 
This case revolved around the controversial topic of higher education and a lot of the opinion was devoted to establishing whether higher education can and does fall within the scope of the Services Directive and the UCPD. This is to be expected as Member States are highly protective of higher education and its special aims. In an eloquent opinion, AG Bobek explains that it is not an all or nothing situation, but there should be a measured approach in deciding when to apply these Directives, and when it is appropriate to consider higher education institutions as service providers engaging in commercial practices. While the objective of maintaining a high level of university education is a noble and necessary one, it is important to recognise that higher education is a sector that is transforming and that EU law will need to catch up with that.

Combating online disinformation (aka fake news)

This week representatives of online platforms (e.g. of Facebook, Google, Mozilla, Twitter), advertisers and advertising industry met with the EU Commissioner, Mariya Gabriel, to present her with their individual roadmaps describing how to limit online disinformation (Code of Practice to fight online disinformation). These roadmaps have been developed pursuant to the self-regulatory Code of Practice to fight online disinformation, agreed on last month. The commitments of the industry go beyond protection of consumers, e.g. against fake online accounts and their practices, towards combating broader understood fake news, e.g. by ensuring also transparency in online political advertising (see further here on the Code of Practices).

Amongst current best practices we may find on the list: 

• in advertising policies: "Facebook's ads policy", which contains examples of prohibited types of content that includes false and misleading content; 
• in service integrity policies: "YouTube spam policy" and "YouTube impersonation policy" - which respectively restrict spam and impersonation
• in policies and actions to empower consumers: "Reporting Twitter Ads" enabling users to report advertising on Twitter.

The list of best practices contains quite a few examples of such self-regulation, however, it does not refer to specific provisions in these policies. It would still require some legwork to then find out which policies have actually been adopted by these online platforms/advertisers. Not to mention that it is another matter altogether to establish to what extent these policies are being enforced.

AG opinion in Wind Tre: aggressive practices require active conduct

On the 31^st of May the AG Campos Sánchez-Bordona's opinion in the Wind Tre cases (C‑54/17 and C‑55/17) was published. This is the first case where the meaning of aggressive commercial practices is discussed, making it highly important. Before Wind Tre the only ECJ case on aggressive practice was Purely Creative (C-428/11), in which one of the blacklisted practices was contested, without invoking art. 8-9 of the Unfair Commercial Practices Directive (UCPD, Directive 2005/29/EC).

In the Wind Tre case the issue of the relationship between sectoral legislation, such as the Universal Service Directive (Directive 2002/22/EC), as lex specialis to the UCPD and the general rules of the UCPD is discussed.

Facts of the case

The dispute concerned the marketing of mobile phones in Italy. The mobile phones came with SIM cards which had answering and internet services pre-installed, of which fact consumers had not been informed. It is important to note that there was no complaint as to the cost of these services or the information provided about their function, the complaint was about telecom companies omitting to inform consumers that these services were pre-installed.

The same practice was used by two companies, Wind Tre and Vodafone Italia, and the Italian Market Authority (Autorità Garante della Concorrenza e del Mercato, hereafter AGCM) imposed fines on the two companies for engaging in an aggressive practice. The telecom companies challenged that decision in court, claiming that the AGCM lacked competency to impose fines stating that the telecommunications authority (Autorità per la Garanzie nelle Comunicazioni, hereafter: AGCom) was responsible instead. This argument was based on art. 3(4) UCPD stating that in case of a conflict between the UCPD and other sectoral rules on unfair commercial practices, the latter will prevail and apply.

The case reached all the way to the Council of State (Consiglio di Stato) which ruled in favour of the competence of the AGCM stating that the practice was aggressive within the meaning of the Italian Consumer Code (transposing the UCPD). It argued that even though sectoral legislation of the telecommunications sector was also breached, the case in question presented a ‘progressive harmful conduct’, which gave rise to a more serious infringement, thus making the application of the Consumer code, instead of the sectoral legislation, appropriate. (para 25)

Questions

     The Italian court referred 7 questions, which the AG Campos Sánchez-Bordona, with the agreement of all parties, summed up into the following two groups (para 32).

1.  Can the conduct of the telephone operators be classified as an ‘unsolicited supply' (as per point 29 of Annex I of the UCPD) or an aggressive commercial practice?
2. According to art. 3(4) UCPD should the UCPD cede to other EU rules, and, if so, to national provisions enacted in implementation of those rules?

The first group of questions refers is of a substantive nature as to whether the practice in question can be characterised as aggressive according to the UCPD; either using the blacklist of the UCPD, or by using art. 8-9 UCPD.

The second group of questions refers to the relationship between the UCPD and other EU sectoral legislation as lex specialis.

AG's Opinion

In answering the first question, AG Campos Sánchez-Bordona provides us with what has been the most detailed analysis of the elements of aggressive commercial practices by the Court to this day. 

Inertia Selling

He begins to first examine whether the practice in question can be caught by the blacklist, and specifically point 29 forbidding inertia selling. According to the AG, there are two conditions to satisfy simultaneously: 1) unsolicited supply and 2) unlawful demand of payment (para 44).

From the facts it can be established that the phone operator had not properly informed consumers on the pre-installed services on the sim card, meaning that consumers could use them without configuring them. AG Campos Sánchez-Bordona examines whether this supply, of which consumers were not informed of, qualifies as ‘unsolicited supply’. In his opinion ‘unsolicited’ means more than not being provided with essential information on a service, it means that the consumer was not aware of its existence (para 48).

The AG finds that a consumer (and not the average consumer) has no reason to expect that services have been preinstalled, if he has not been informed thereof and which he has to opt out of by using a process which he is likely to be unaware of (para 53).

Hence, whilst in this case unsolicited supply is possible, the AG does not find the same for the demand for payment. In his opinion not any demand for payment could fulfil the conditions of point 29, but it needs to be an undue request for payment. The referring court specifies that there was no complaint as to the cost of the services or the information about them, only about the lack of information about the pre-installation.

AG Campos Sánchez-Bordona argues further that the average consumer could expect that the SIM card purchased would be able to provide him with services about the costs of which he has been informed. 
It is worth noting that the AG makes reference to the average consumer in the context of the blacklist, where the average consumer test is not meant to apply. This goes to show that the blacklist does not offer the legal certainty promised.

Based on the above reasoning, point 29 of Annex I of the UCPD on inertia selling is not applicable. The next step is to examine whether the practice can be caught by art. 8-9 UCPD.

Aggressive Practices

The focus is on the practice in question being one of omission of information.

AG Campos Sánchez-Bordona looks to the factors of art. 9 UCPD to determine what would qualify as a practice using the notions of: harassment, coercion or undue influence. Out of art. 9 UCPD the AG deduces that harassment and coercion cannot be applied in this case as they require ‘active conduct, which is not present in the case of an omission of information’ (para 64).

It is not clear how the AG reaches that conclusion, as the factors of art. 9 UCPD apply for all three categories of harassment, coercion and undue influence without distinction. Also, even the omission of information requires an active choice of the trader to omit that information, so one could argue that active conduct is not entirely absent.

The AG continues to examine solely whether the practice can be caught under the concept of undue influence. Undue influence is the only one defined in UCPD in its art. 2(j), unlike harassment and coercion.

Undue influence refers to exploitation of a position of power which significantly limits the ability of the consumer to make an informed decision. The AG differentiates between two different kinds of positions of power (para 67):

1. Exploitation of a position of power which allows the trader to infringe the consumer’s freedom when it comes to buying a product.
2. Position of power held by a trader who, following the conclusion of the contract, may claim from the consumer the consideration which the latter undertook to provide on signing the contract.

Consequently, the AG defines a position of power in undue influence as both applying in pre-sale and post-sale conditions. What is to be noted is the focus on the fact of the conclusion of a contract, of consideration of the terms, that is the use of contract law terms through which aggressive practices seem to be defined. However, aggressive practices are broader than that, to the extent that they cover all transactional decisions of the consumer and are not limited to the decisions to enter into a contract.

The opinion explains that the aim of prohibiting aggressive practises is, in essence, protecting the freedom of contract, as consumers should be bound only by obligations that they freely entered into. So the criterion is whether the omission of information about the pre-installation impaired the freedom of choice of the consumer to the extent, where he accepted contractual obligations he would not have otherwise (para70).

AG Campos Sánchez-Bordona found the practice not to be aggressive, as according to him, the practice was not sufficient to impair the freedom of the consumer to such an extent that he would not have entered the contract. The AG does not elaborate on how he reached that conclusion or what is the standard against which it is weighed. This view of aggressive practices appears to raise the standard, making it more difficult to show that impairment of the freedom of choice of the consumer is indeed significant enough.

Lex specialis

Given the answer to the first two questions, there was no reason to examine the rest, on the conflict of law, yet the AG did submit his observations.

In these he makes the accurate observation that the UCPD is not designed to fill the gaps that sectoral legislation leaves; instead it offers its own stand-alone system of protection which exists in parallel with the sectoral legislation (para 94). This sets the tone also for art. 3(4) UCPD that should be interpreted strictly as focus should be on maintaining a high level of protection. Therefore, art. 3(4) UCPD is better conceptualised as regulating conflict between provisions and not systems of sectoral legislation (para 111). In this case, it means that the existence of sectoral legislation that covers aspects of unfair commercial practices does not preclude the application of the UCPD.

AG Campos Sánchez-Bordona didn’t find a conflict in this case between the UCPD and the Universal Service Directive, but rather the need for them to be applied jointly (para 129). The Universal Service Directive regulates the information requirements, which are crucial for determining whether there was unsolicited supply as per point 29 of the Annex I of the UCPD.

Conclusion

This is an intriguing case, as it is the first of its kind for aggressive practices in the UCPD. It reveals contrasting interpretation of the UCPD notions and objectives between the Member States and AG Campos Sánchez-Bordona. Italian authorities viewed aggressive practices as a tool for penalising the abuse of power by the trader. The AG on the other hand interpreted the same provisions focusing on protecting consumers' contractual freedom, especially as applied to the decision to enter into a contract. It remains to be seen what the Court will decide and this blog will follow the developments with great anticipation.