Editorial content: paid for? - AG Szpunar in Peek & Cloppenburg (C-371/20)

Let us look at another, more recent, case concerning activities of newspapers. On June 24 AG Szpunar delivered an opinion in the case Peek & Cloppenburg (C-371/20), which looked into practices of Grazia magazine and a possibility of an unfair commercial practice, as defined in Point 11 of Annex I to the Unfair Commercial Practices Directive (UCPD). 

Point 11 of Annex I to UCPD specifically prohibits the use of editorial content in the media to promote products, when a trader paid for the promotion without clarifying this fact in the content/images/sounds. A consumer should be able to easily identify any paid for/advertorial content.

Peek & Cloppenburg Düsseldorf (P&C Düsseldorf) company arranged with the Grazia fashion magazine to publish a double-page article inviting Grazia's readers to an exclusive shopping event called 'GRAZIA StyleNight by Peek & Cloppenburg'. This has been published under the title 'reader offer'. Their competitors - Peek & Cloppenburg Hamburg - claimed that there was an infringement of the prohibition resulting from Point 11 of Annex I UCPD (and as we all know, as long as consumers' interests are exposed to harm alongside the interests of the trader's competitors, UCPD framework may be used by competitors, too - para 33).

In preliminary remarks AG Szpunar first considers the character of the above-described commercial practice. He decides that it qualifies as a commercial practice as the trader - P&C Düsseldorf - initiated the practice and used it to promote its sales (para 22). The fact that they cooperated in organising this activity with the magazine and that magazine could benefit from the activity, as well, does not impact that assessment (para 23). AG Szpunar mentions further that it could be possible for the claim to be raised against both operators, as well as Grazia magazine would qualify as a trader, as well (para 24).

Question 1 - nature of payment

First, AG Szpunar considers whether the payment made by a trader for a promotional editorial content could be non-monetary. As literal interpretation does not provide a clear answer (para 45), AG Szpunar looks at systematic, teleological and historical interpretation next. From the point of protecting consumers against deceptive commercial practices (unidentified advertorial content), it should not matter in what form a trader paid for the editorial content. The possibility of consumer's harm is not influenced by the form of the payment (paras 49-50). Further, if it were possible to pay with non-monetary assets, it would be easy to circumvent the protection of the UCPD framework (para 60) and the scope of the prohibition in Point 11 of Annex I UCPD would be significantly restricted (para 58). The preparatory version of the Annex actually referred to payments or 'other reciprocal arrangement' (para 62) and AG Szpunar does not consider its removal from the final text as opposing a broad interpretation of payment (paras 64-66).

Question 2 - is a non-monetary payment consideration for the advertorial?

In the case at hand P&C Düsseldorf made available to Grazia magazine the rights to use images of its stores in the promotional content, which is what AG Szpunar perceives as the non-monetary payment that qualifies as consideration in the case (paras 73-74). It does not matter here, what was the percentage of the costs of publishing the editorial content that was paid for by a trader vs by a media operator as Annex I UCPD does not require any equivalence (para 75).

AG Szpunar then proceeds to consider whether a definite link between a benefit and promotion that needs to be found needs to be direct or could be indirect. It seems that there is some scope for flexibility in this assessment (para 78). Interestingly, AG Szpunar draws attention to the fact that the notion of 'editorial content' has not yet been interpreted by the CJEU (para 84), which is something for the national court to keep in mind.

One of the interesting elements of this opinion is that it promotes a broad understanding of the notion of 'payment' in the interpretation of yet another provision of European consumer law. Moreover, we should remember current debates on the misleading character of many promotional online activities, where the promotional/advertorial character thereof is not clearly identified (e.g. think of practices of digital influencers). Despite the possibly narrow scope of Point 11 Annex I UCPD (which scope will depend on the interpretation of the notion of 'editorial content'), this opinion and the forthcoming judgment may play a significant role in shaping the response to other promotional practices that could harm consumers.

Consumer law & the Kardashians

The UK’s Advertising Standards Authority (ASA) recently banned three beauty advertisements, since the ads in question misled consumers and breached the UK’s Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (CAP Code). The three ads, originating from three different beauty salons, appeared on Instagram in December 2018/ January 2019 and promoted beauty products and non-invasive cosmetic procedures. The decisions can be found here, here and here.

Besides advertising prescription-only medicines such as Botox, the beauty salons posted pictures of reality TV personalities Kim Kardashian and Kylie Jenner while promoting their own beauty treatments. Furthermore, two of the beauty salons added the terms ‘Kylie Jenner Package’, ‘Win the Kylie Package’ and the hashtag ‘kyliepackage’ to the text next to the photo of Kylie Jenner. According to the ASA, these practices ‘misleadingly suggested the package would give customers lips, cheeks and jawline that closely resembled those of Kylie Jenner’. The ASA concluded that the ads were misleading because the beauty salons did not provide sufficient evidence that substantiated the ads’ implicit claim that Kylie Jenner’s features could be achieved through the use of the advertised products only. Besides, in the ASA’s opinion, these practices misled consumers into thinking those products were used by the celebrities in question.

From a EU consumer law perspective, the act of posting pictures of widely recognized celebrities is an act by a trader directly connected with the promotion of a product to consumers, which would fall under the scope of the Unfair Commercial Practices Directive (UCPD). Under the UCPD, the conduct of the beauty salons would likely be considered an unfair commercial practice, even when based on a more tenuous link than the one mentioned by the ASA. The mere posting of the pictures of Kim Kardashian and Kylie Jenner does not have to cause consumers to think these celebrities used the products in question, but merely that using the products in question would make them look like these celebrities. This practice is likely to materially distort the economic behaviour of the consumer, since it is likely that, because of this practice, the consumer will acquire the product in the hope of looking like a celebrity. Specifically, this practice could be considered a misleading action under Article 6 of the UCPD. This explains why one of the beauty salons’ counterarguments – that it would be almost impossible for a consumer to look like a celebrity after a non-surgical cosmetic procedure – is legally irrelevant; what matters under EU law is how the average consumer perceives the pictures, even if (perhaps especially if) that perception is affected by biases.

The invasion of social media platforms such as Facebook or Instagram by misleading advertising and marketing campaigns raises several consumer law issues, stemming from the protection of children and teenage consumers to the blurred lines between an advertisement and an influencer’s ‘real’ opinion. In fact, the boundaries between what is an ad and what is not an ad are often unclear, so much so that the average consumer (if there is one) severely struggles with realizing when she is being targeted by marketing campaigns. Indirectly, this case also highlights the need to further study advertising and consumer law in the light of influencer marketing.

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.

In the news

Some of the interesting reads we found in the news from last week:

Five misleading pricing tactics to avoid in sales (V. Crowe in Which?) - warns which pricing offers may be misleading considering the rulings of the UK's Advertising Standards Agency from last year

How Airbnb's Tech Is Impacting People's Fundamental Human Rights (L. Coulman in Forbes) - more specifically the right to housing

Blue Planet has "huge impact" on shopper behaviour, finds report (L. Wells in Talking Retail) - Waitrose study shows more sustainable behaviour patterns of consumers and what impacts them

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.

"Food labels: tricks of the trade" - BEUC's report

On the same day that the Commission announces common methodology on comparing quality of similarly packaged food products, BEUC publishes its report "Food labels: tricks of the trade" on misleading labeling practices in the food sector in the EU (see more Food labels can fool you...). Three practices that have been further elaborated on are:

• labeling products as 'traditional' or 'artisanal';
• displaying fruit pictures on packaging for products that have little or no actual fruit content;
• labeling as 'whole grain' products with barely any fibre.

 The result of consumer confusion and misleading advertising practices may be the result of the lack of EU guidelines in this area of food products' advertising and labeling.

BEUC calls for:

• more definitions on the EU level of commonly used terms on food products' labels, such as 'natural', 'traditional' or 'artisanal';
• setting a minimum level of whole grain content for 'whole grain' claims;
• setting a minimum level of content for ingredients pictured on the front of the pack, e.g. fruits;
• obliging traders to display on the front of the pack the percentage of the advertised ingredient.

These recommendations would not only increase transparency of the composition of food products or facilitate better consumer decision-making, but also provide for a more fair food products' market in the EU.

E.g. the report mentions that while this product has many fruits on the packaging, they are only 2.5% of all ingredients

Quality matters

Today the Commission has published a new common methodology that will allow national authorities to compare the quality of food products across the EU, when they compare the composition and characteristics of these food products (Dual quality of food...). The idea behind this project being that currently similarly branded or packaged food products may differ in composition to an extent that is misleading to consumers, but the comparison between these products as well as the finding of misleading action would differ per Member State, leading to different levels of consumer protection. This common methodology emerged from the activities of the Joint Research Centre (JRC), the European Commission's Science and Knowledge service, which facilitate evaluation of differences in the quality of food products in an objective way.

Online sales platforms as consumer information providers - CJEU in Verband Sozialer Wettbewerb (C-146/16)

Misleading omissions are always problematic to define, as it needs first to be decided whether the information that is missing classifies as 'material information'. The case Verband Sozialer Wettbewerb (C-146/16) addressed the issue of misleading omissions, with an additional complication of information being provided within the sharing economy (understood as involving the use of online sales platforms).

DHL Paket has an online sales platform 'MeinPaket.de' (in the meantime it changed its name to de.allyouneed.com) facilitating conclusion of contracts between traders and purchasers, some of whom might be consumers. DHL Paket does not sell any of its own products there, which means that no sales contracts are concluded between them and consumers. In December 2012 DHL Paket took out an advertisement in a weekly newspaper Bild am Sonntag, in which advert they presented five different products available for purchase on their platform and mentioned providing access to over 5 million products and more than 2500 traders. Any person interested in the purchase of these five products could visit the online platform, enter the code corresponding to the product, as referred to in the advert. Only upon entering the product's code on the platform the consumer would be transported to a separate website, which would identify the trader selling this product. Under the heading 'Supplier information' further details of the trader, such as geographical address and the trading name, would be mentioned.

Competitors of DHL Paket complained that the identity of traders and their geographical address should be mentioned already in the advertisement, in order for it not to mislead consumers, on the basis of Article 7(4)(b) Unfair Commercial Practices Directive ("UCPD"). Therefore, they claimed that material information was missing from the advertisement and that the DHL Paket engaged in misleading omissions. One of the arising questions is, however, whether if the advertisement is printed but the product may only be purchased online, it would not suffice to provide this information on the website instead of in print, provided the printed advertisement refers to the website and it was easy to find this information on it. This would depend on whether consumers should receive material information pre-contractually (entering a website does not oblige consumers to conclude a contract) or prior to taking any transactional decision at all (entering a website counts as taking a transactional decision).

The CJEU confirms that an advertisement as mentioned above, clearly identifying the product and its price, should be seen as an invitation to purchase pursuant Article 2(i) UCPD (para 25). This means that it should contain all the material information necessary for consumers to make transactional decisions, provided, however, that there is space to present such information considering the medium used to give it to consumers, pursuant to Article 7(1) UCPD and previous CJEU's case Ving Sverige (paras 26-27). The CJEU confirms in this case that in the sharing economy sphere, where an online sales platform offers many products on sale by different traders and this is advertised in a print medium, there may be limitations of space within the meaning of Article 7(3) UCPD (para 29). In such a case thus, it may suffice for the online sales platform to refer to the website on which the material information will be provided to consumers, rather than to place this information already in the print advertisement (para 30). However, it is for the national court to determine whether the context of the invitation to purchase and the means of communication used for the advertisement justified this delay in providing material information to consumers. The CJEU confirms, however, the obligation of the online sales platform to provide information to consumers on the name and address of the supplier of individual products (para 31). Finally, the online sales platform needs to ensure that the material information on its websites is provided to consumers simply and quickly (para 32). This refers back to the transparency principle, adding a new requirement to the traditional ones, namely of 'quick' provision of information to consumers.

Can a hypermarket compare its prices with those of a supermarket? CJEU in C-562/15

Today, on 8 February 2017, the Court of Justice delivered its judgment in case C-562/15 Carrefour Hypermarchés. The case dealt with an advertising campaign carried out by the French retailer back in 2012. The contested marketing strategy of Carrefour featured a series of TV spots in which the company compared the prices charged in its hypermarkets with the prices of its competitors. Importantly, the advertisement did not make clear that it did not apply to smaller shops from the Carrefour group and that the prices selected for comparison referred to competing supermarkets, not hypermarkets. 

A competing retail chain, Intermarché, challenged the legality of this practice and obtained a favourable ruling in the court of first instance. Carrefour appealed. In these circumstances, the Court of Appeal in Paris decided to stay proceedings and ask the Court of Justice for clarification of Article 4(a) and (c) of Directive 2006/114/EC concerning misleading and comparative advertising. The provision in question lays down conditions under which comparative advertising is permitted. It requires, among others, that advertisement compares prices objectively and is not misleading within the meaning of Article 7 of Directive 2005/29/EC.

CJEU judgment

According to the Court, comparative advertising based on prices charged in shops having different formats and sizes is not in itself prohibited, but has to comply with conditions set out in Directive 2006/114/EC. 

With regard to objectivity, the Court held that where the advertiser and competitors belong to retail chains which each have a range of shops of different sizes and formats and where the advertiser compares the prices charged in shops in its retail chain having larger sizes and formats with those identified in shops having smaller sizes and formats in competing retail chains, without that fact appearing in the advertising, the objectivity of the comparison may be distorted. [para 26]

The Court went on to analyse whether such an advertisement is also liable to be misleading, meaning that it is capable of, firstly, deceiving the average consumer and, secondly, causing him to take a transactional decision that he would not have taken otherwise.

In line with the opinion of Advocate-General Saugmandsgaard Øe, the Court held that advertising, such as the one described in the case at hand, is liable to both deceive the average consumer by giving him the impression that all shops forming part of competing retail chains have been considered in the comparison, and to influence his economic behaviour. This would not have been the case if consumers were informed, in the advertisement itself, that comparison was made between prices charged in shops of different sizes or formats [paras 36, 38].

To conclude, the question posed in the title of this post should be answered in the affirmative. The analysed judgment does not go as far as to say that price comparisons are permitted only if the goods are sold in shops having the same format or size. Such an advertisement may, nevertheless, be classified as non-objective or misleading if conditions set out in Directive 2006/114/EC are not fulfilled. Main consideration for advertisers is thus to make sure that all relevant circumstances are duly disclosed.

Complex pricing in TV and other adverts - CJEU in Canal Digital Danmark (C-611/14)

Clearing up our backlog, on 26 October 2016 the CJEU issued a judgement on the interpretation of Art. 6 and 7 of the Unfair Commercial Practices Directive in the case Canal Digital Danmark (C-611/14).

Canal Digital provides television services to consumers in Denmark, offering them various TV packages. In many of its advertisements in 2009 promoting various TV subscriptions it could have confused consumers as to the real price for its services, considering that it separately showed the monthly price (made more visible by e.g. the use of a bigger font) and the additional six-month 'card service' charge and the full commitment period price (for one year). The last two prices were showed in smaller font, often in white against a light background, at the bottom of the advert, with consumer attention likely being drawn to the monthly price.

Misleading omission and disclosure medium 

The CJEU refers to the requirements of Art. 7(1) and (3) of the UCPD to determine whether a particular information should have been provided to consumers in order not to mislead them. It is, therefore, necessary to consider what method of communication has been used to convey information to consumers, as it could have placed limitations of time and space.  If this is the case, it is necessary to consider whether and what other means trader has used to convey material information to consumers. (par. 35) Art. 7(4) UCPD contains an exhaustive list of material information that has to be provided to consumers when inviting them to purchase, but even if all this information is provided, this does not exclude that this invitation to purchase would be considered as a misleading commercial practices either under art. 6(1) or art. 7(2) UCPD. (par. 71) It seems that the Court suggests that e.g. despite the price being a material information that needs to be provided, it could still be given to consumers in a misleading way if e.g. an important element of this price would not be mentioned or would be confusingly or in an unclear way mentioned, as in this particular case.

In case of TV adverts, consumers  cannot demand the same level of detail as with some other advertisements, and are also given a limited time to assess this information. (par. 60) If not all material information could be provided, commercial information could mention only some of it and the rest could be placed on the website. It is for the national court to ascertain what measures has the trader taken to provide material information to consumers, but it could be considered a misleading omission if the trader splits the price into two elements and only makes one of them visible in marketing materials, if this causes consumers to take transactional decisions, they would not have otherwise taken (par. 64).

Misleading pricing

Could it be consider misleading if the trader chooses a pricing strategy for a subscription that splits the charge into a monthly and six-monthly components, with only the monthly charge being highlighted in marketing, and the six-monthly charge either omitted or inconspicuously presented? Yes, as this would be likely to give average consumers false impression of a favourable price, contributing to consumers taking transactional decisions they otherwise would not have taken, which is for the national court to ascertain (but the CJEU suggests a positive answer to this test referring to the price as a determining factor in the mind of an average consumer - par. 46; esp. if the omitted price component was a significant part of the price - par. 47). The CJEU mentions that offers of TV service providers are often highly structured, both in terms of cost and content - "resulting in a significant asymmetry of information that is likely to confuse consumers." (par.41) Interestingly, for the test of misleading action, contrary to misleading omission, there is no exception made in the UCPD based on the advertisement being made through a limited as to time or space communication medium (par. 42).

Comparing prices in hyper- and supermarkets - AG Saugmandsgaard Øe in Carrefour Hypermarchés (C-562/12)

AG Saugmandsgaard Øe has issued an opinion today in the case C-562/12 (Carrefour Hypermarchés) concerning an issue of a potential misleading and comparative advertising. Carrefour holding consists of many hyper- and supermarkets across France, with supermarkets generally being smaller in size than hypermarkets. One of its main competitors is Intermarché holding that also operates many hyper- and supermarkets. While Carrefour has 223 hypermarkets, Intermarché has 79. 

In December 2012 Carrefour run a new advertising campaign, both on TV and online, in which it compared prices of selected 500 leading brand products in its shops and competitors' shops under a slogan 'Lowest price guarantee'. The comparison was clearly favourable to Carrefour, who also promised to pay twice the price difference if consumers proved that the advertised prices were incorrect. Intermarché questioned the objectivity of this price comparison and its correctness, as well as a possibility of this advertisement misleading consumers, as it wasn't made clear to consumers that the comparison was between prices of consumer products in Carrefour's hypermarkets and Intermarché's supermarkets. Especially, since both Carrefour and Intermarché belong to retail outlets which each have shops of identical format and size, whose prices where then not directly compared with.

The CJEU was asked to answer such questions as (1) whether comparative advertisement referring to prices of consumer goods should be allowed only if the shops are of the same size and format; (2) if the compared shops differ in size and format whether consumers should be informed about this under the UCPD's obligation of Art. 7 to reveal material information to consumers; (3) if (2) is answered positively, how should this information be given to consumers.

The AG advises the Court to answer that indeed (1) comparative advertisement may only compare prices of goods sold in shops of similar formats and sizes but only IF:

"it is found, in the light of all the relevant circumstances of the case, and in particular in the light of the information in or omissions from the advertising at issue, that the transactional decision of a significant number of consumers to whom that advertising is addressed is likely to be made in the mistaken belief that all the shops in those retail chains have been taken into account in calculating the general price level and the amount of savings which are claimed by the advertising and that, accordingly, those consumers will make savings of the kind claimed by the advertising by regularly buying their everyday consumer goods from shops in the advertiser’s retail chain rather than from shops in the competitor’s retail chain"

or 

"the selection of the shops for the comparison has the effect of artificially creating or increasing any difference between the prices charged by the advertiser and by the competitor."

Thus, the national court has to consider the effect of a given advertisement on both consumers and fair competition to assess whether in a given case the comparative advertisement showed by Carrefour has infringed requirements of the Directive 2006/114/EC. If it is not misleading and it is done in an objective way, it should be allowed. 

"In my view, there is in principle no reason to consider that an advertiser’s economic freedom does not also extend to the possibility of comparing prices in shops having different formats and sizes. In so far as an advertiser is capable of benefiting from economies of scale, as a result of the size, format or number of shops available to him, and, consequently, of charging prices lower than those of his competitors, he should be able to derive the benefits therefrom for marketing purposes." (Par. 30)

The discretion of the advertiser in designing his marketing strategies is not unlimited, however, and should consider the need to provide objective comparisons and not to mislead consumers.

The AG expresses also an interesting view on the capabilities of average consumers: "I consider that the average consumer is fully capable of deciding whether a price difference justifies, in his view, purchasing a product in one or other of the shops, when those shops have different formats or sizes, which may also entail differences in terms of the geographical proximity of the shops." (Par. 31) However, in the particular case: "I consider that an asymmetric comparison of that kind might deceive an average consumer as to the actual difference in the prices charged in the advertiser’s shops and in the competitor’s shops, by giving that consumer the impression that all the shops in the retail chains were taken into consideration in calculating the price information presented in the advertising, although that information applies only to certain types of shops in those retail chains." (Par. 42)

Only the second requirement - whether the comparison might artificially create or increase difference in charged prices on the market - should, however, be considered by the national court when assessing (2) whether consumers should have been informed about divergence in size and format of shops compared in this advertising. In general, the AG does not see the information on size and format of shops as always being material to consumers, but in certain circumstances it may become material information. (Par. 68-69)

If the information on the difference between compared shops should have been given to consumers, this would need to occur in the advertisement itself (3), pursuant to the AG. Only such dissemination would assure that the information is provided in a clear, intelligible, unambiguous and timely manner, esp. since choosing to compare prices of goods sold in shops with different sizes/ formats was a voluntary choice of the advertiser. (Par. 78)

Commission's public consultation for the Fitness Check of EU consumer and marketing law

The European Commission has published an online questionnaire as part of the 'Fitness Check' of EU consumer and marketing law. The aim is to evaluate if the following six directives are fit for their purpose on the basis of the criteria of effectiveness, efficiency, coherence, relevance and EU added value:

• Unfair Contract Terms Directive 93/13/EEC;
• Consumer Sales and Guarantees Directive 1999/44/EC;
• Unfair Commercial Practices Directive 2005/29/EC;
• Price Indication Directive 98/6/EC;
• Misleading and Comparative Advertising Directive 2006/114/EC;
• Injunctions Directive 2009/22/EC.

In addition, this consultation also covers the Consumer Rights Directive 2011/83/EU, which is subject to a separate evaluation.

The Commission welcomes contributions from citizens, organisations and public authorities. The responses received will be published on the internet. Click here for more information.

Misleading presentation of lenses as cosmetic products - CJEU in Colena (C-321/14)

3 September 2015: CJEU judgment in Colena (C-321/14)

Directive 1223/2009 on cosmetic products defines as such products that are either substances or mixtures of substances that are intended to come in contact with a part of the human body with a purpose to exclusive or mainly clean it, perfume it, change its appearance, protect it, keep it in good condition or correct body odors (Art. 2 par. 1). A German company promoted lenses that were to change the appearance of their users' eyes, without having any corrective function as to the visual deficiencies. On the outer packaging of these lenses an information was placed "cosmetic eye accessory, subject to the EU Cosmetics Directive". The CJEU decides, however, that presentation of a product as a cosmetic product does not influence its assessment as such. The above-described lenses do not fulfil any of the above-mentioned criteria from the definition of a cosmetic product (e.g. they are placed on the eye's cornea, which is not referred to on the exhaustive list of body parts with which cosmetic products come in contact with) and as such are excluded from having to comply with the rules of the Directive. However, national authorities may consider a practice of marketing a product as a cosmetic product even if it is not such, as a misleading commercial practice and proceed accordingly. (Par. 26)

Raspberry and vanilla adventure - CJEU in Teekanne (C-195/14)

4 June 2015: CJEU in Teekanne (C-195/14)

With healthy lifestyles becoming more en vogue, the popularity of such drinks as fruit teas increases. Still, advertises try to convince more consumers by purchasing them by coming up with attractive packaging, advertisements and product names. One example thereof could be "Felix Himbeer-Vanille Abenteuer" ("Felix raspberry and vanilla adventure") produced by Teekanne. The packaging shows pictures of raspberries and vanilla flowers, mentions it's a "fruit tea with natural flavourings" as well as a "fruit tea with natural flavourings - raspberry-vanilla taste". Moreover, it contains a seal indicating "only natural ingredients" inside a golden circle. Wait for it... it turns out that this fruit tea "does not in fact contain any vanilla or raspberry constituents or flavourings. The list of ingredients, which is on one side of the packaging, is as follows: ‘Hibiscus, apple, sweet blackberry leaves, orange peel, rosehip, natural flavouring with a taste of vanilla, lemon peel, natural flavouring with a taste of raspberry, blackberries, strawberry, blueberry, elderberry.’". (Par. 16) Weird, though to be honest they did mention natural flavourings so maybe consumers should just read more carefully and don't believe that 'natural ingredients' mean actual raspberries are processed in this tea?

German consumer organisation (the BVV) didn't believe that the fault was on the consumers' side and the CJEU agreed. They would even go as far as deny the misleading character of this labelling practice if only the tea contained natural flavouring obtained from raspberries or vanilla and not just natural flavouring "with a taste" of these ingredients. (Par. 29) Directive 2000/13 on labelling, presentation and advertising of foodstuffs aims to enable consumers' informed choice with regard to food products and not mislead them. (Par. 30-32) The CJEU reiterates its previous findings that "consumers whose purchasing decisions depend on the composition of the products in question will first read the list of ingredients, the display of which is required". (Par. 37) However, accurate description of the list of ingredients does not always negate the misleading character of the labelling, taken as a whole. (Par. 38-40) 

"In the event, it is for the referring court to carry out an overall examination of the various items comprising the fruit tea’s labelling in order to determine whether an average consumer who is reasonably well informed, and reasonably observant and circumspect, may be misled as to the presence of raspberry and vanilla-flower or flavourings obtained from those ingredients.

In the context of that examination, the referring court must in particular take into account the words and depictions used as well as the location, size, colour, font, language, syntax and punctuation of the various elements on the fruit tea’s packaging." (Par. 42-43)

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

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

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

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

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

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

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

…

(b)      the main characteristics of the product, such as its availability …

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

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

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