We need to move it, move it

Have you watched the animation movie "Wall-E"? If yes, you should remember the sad prediction of the human kind's future made by the movie makers: obese people being carried everywhere by automated chairs/vehicles, playing games from these chairs, consuming more and more while in these chairs, etc. This picture may not be as far from what lies in our future as we'd like. It doesn't surprise then that the European Commission announced yesterday a first ever proposal for a Council Recommendation on sport. The goal is to try to enhance sport participation and physical activity of European consumers, in order to improve their health prospects by avoiding obesity etc. Currently, 2/3 of Europeans never or seldom exercise or play sport. (!) Since the promotion of physical activity depends on the Member States, the European initiative may only invite them to develop certain strategies and action plans that would be harmonised across the EU. ("Getting people out of their chairs: new initiative to promote physical activity in Europe") Interestingly, the European Commissioner, Androulla Vassiliou even said specifically: "Much more can be done through our policies to encourage people to get out of their chairs.". I think she watched "Wall-E".

Misleading offers: too profitable to quit

A recent article in the Guardian nicely points out that even though certain unfair commercial practices may be prohibited in Europe, even if such a prohibition is then enforced by national consumer protection agencies and courts against a particular trader, this may not discourage other traders to continue using such practices. (OFT crackdown on dodgy deals won't stop retailers from cashing in) No. 7 on the blacklisted unfair commercial practices by the Directive 2005/29/EC is to falsely create an impression that a particular product will be sold only for a limited time or that it will be available at a specific price for a limited time. I'm sure many of our readers were confronted with signs in shops stating 'Final sale', '70% off everything', etc. Often the 'final sale' sign is displayed for weeks, and prices showed as discounted are rather original goods' prices (since they often apply to goods for longer than the 'original' price). Such practices are used to mislead consumers into thinking that they have to buy a product rather than miss on a really good deal and unfortunately consumers tend to be very easily led into such a reasoning. The Office of Fair Trading in the UK had a few successful cases against traders making such misleading claims, e.g., recently Tesco was fined for displaying strawberries' price as half-priced, while these strawberries were sold at original price for only two weeks, and at a discounted price for more than three months (Plucky pensioner costs Tesco £300,000 in victory from beyond the grave). Unfortunately, often the profit made from such controversial sale practices will be much higher than a potential fine placed on a trader by the authorities. In the Tesco case it is estimated that the profit the company made from the sale of 'not-really-discounted' strawberries was 8 times higher than the fine. It seems, therefore, that we may have reached a stalemate in consumer protection. Unless the enforcement agencies and courts would control more of the market for such practices and be willing/ have authority to take away all of their profit (if not more), it is hard to see why the traders would start complying more with unfair commercial practices rules.

Retail therapy in Europe

I've stumbled upon some articles regarding European consumers attitude to shopping online. A study by Bazaarvoice suggests that there is a significant difference between behaviour of English, French and German consumers. While browsing through the websites of potential retailers of a product they intend to buy, English consumers would focus on websites of recognised and trusted retailers, French shoppers on respected manufacturing brands and German consumers would just search for the cheapest deal. This means that for German consumers the most relevant websites would be the price comparison ones, and that only French consumers would pay special attention to branding of products. French consumers were also identified to read more product reviews and to be more likely to give feedback themselves. German consumers were in turn more likely to purchase products on their phones, if they found a good deal for it. (The continental divide: Deep divisions and distinctions among European shoppers) Another study by Pitney Bowes showed that French, German and English consumers would rather leave social media, like Facebook, than be confronted by too much marketing and advertising online. If the mass marketing would start to dominate personal walls of consumers, they'd be likely to feel overwhelmed by it, which communication specialists take as a sign to that personalized, targeted advertising should dominate online world. (Marketing via social media channels can have counterproductive effect on consumers)

EU consumer law in the age of the image

What views on consumers inform the development of the law in the EU? Professor Stephen Weatherill and Dr Dorota Leczykiewicz are starting a research project on this theme, the results of which are planned to be presented at a conference in Oxford next year. The project is summarised as follows:

'The purpose of the project is to invite experts in EU, consumer and competition law to explore the different "images" of the consumer in different contexts of EU law. The project’s theme is inspired by the persisting questions about how many visions of the consumer there are in EU law, and whether they are consistent and sincere, or merely instrumental to the achievement of other goals. Are the different types of "consumer" we find scattered across EU law apt reflection of rich diversity or do they create a troublingly chaotic landscape? Discussing these questions is particularly timely a few years after the Treaty of Lisbon, which reformed Union objectives to include a "social market economy" and vested the Charter of Fundamental Rights, elevating "consumer protection" to the status of a fundamental right, with a binding force. The project will culminate with a conference to be held at St Anne’s College, Oxford, on 27-28 March 2014.'

For more information, please refer to the University of Oxford's website.

Math problem - calculating phone fees

A few weeks ago, we've mentioned that the EU Commission intends to further strengthen and harmonise the telecommunication market so that the mobile fees in various European countries are at a similar level. (Discon-nect/tent) Unfortunately, it seems that the national regulating agencies so far have made a mess from trying to lower fees that are charged by telecommunication operators, e.g., for carrying calls by other operators. The Irish ComReg required Vodafone to lower its fees to a certain amount, based on the calculation of average fees in seven European countries. The Irish court determined, however, that ComReg had no authority to use such a calculation method for application of the EU law. (Blow for consumers as Vodafone wins court case over mobile fees) It remains to be seen, however, what the next course of action in this particular issue would be. One way forward would be for the national regulating agencies to take into account current fees in all EU countries and to try to average costs based on more available data, to avoid further accusations of randomness and unreliability. The other solution could be for the European Commission to set a particular limit for these fees in a regulation. Even though the phone operators claim that such fees, as being charged between the operators, don't impact consumers, it's hard to imagine that they would not influence consumer prices.

Less TV ads in the consumers' interest - CJEU in Sky Italia (C-234/12)

18 July 2013: CJEU in case Sky Italia (C-234/12)

One of the goals of the Audiovisual Media Services Directive (2010/13/EU) is to protect consumers as television viewers from excessive television advertising. Therefore, the Member States are allowed to set their own rules and also differentiate in broadcasting rights granted to TV broadcasters under their jurisdiction. (Recital 83 Directive, Par. 17 judgment) In Italy, pay-TV broadcasters were given shorter hourly advertising limits than those of free-to-air broadcasters. (Par. 6) In the case in front of the CJEU the Italian court asked whether such a distinction was compatible with the principle of equality, rules of free movement of services and the principle of pluralism in media. (Par. 10)

The CJEU notices that the Directive is of a minimum harmonisation character and where it requires the Member States to set the limit of broadcasted advertisements to 20% of a given clock hour (Art. 23(1) Directive), this limit could be lowered on national levels in the interest of consumers as television viewers, as long as the EU principles are observed. (Par. 14) The interests of pay-TV broadcasters and free-to-air broadcasters are not seen as comparable by the CJEU which means that the infringement of the principle of equal treatment cannot be invoked: "Whilst the former generate revenue from subscriptions taken out by viewers, the latter do not benefit from such a direct source of financing, and must finance themselves either by generating income from television advertising, or by other sources of financing." (Par. 20) This difference could justify other rules for hourly broadcasting limits on television advertising. (Par. 23) While the provision of services by pay-TV broadcasters could be limited by such a special treatment, the need for the protection of consumers' interests could take precedence here, as long as the adopted rules were seen as proportional, which is for the national courts to determine. (Par. 25) There was not enough material submitted to the CJEU to determine whether such a national rule could distort competition on the media market. (Par. 32)

Using a specific domain name or metadata as misleading advertising - CJEU in BEST (C-657/11)

11 July 2013: CJEU judgment in case Belgian Electronic Sorting Technology (C-657/11)

In this judgment the CJEU determined what could be perceived as advertising for the purposes of determining its misleading or comparative character, taking into account modern forms of expression, that is: registration of a domain names, use of a domain name, use of metatags in a website's metadata. (Par. 32)

BEST and Visys are both producers and distributors of sorting machines and sorting systems using laser-technology, with the second company having been established by a former employee of BEST. In 2007 Visys registered a domain name 'www.bestlasersorter.com' and hosted a website under that domain name which was identical to the usual website of Visys - 'www.visys.be' and 'www.visysglobal.be'. Additionally, Visys used for its websites various metatags that referred to the products offered by BEST. As a result, upon entering in the search engine words 'best laser sorter', the website of Visys showed as a second result directly beneath the result for BEST's website. BEST considered the registration and the use of the domain 'bestlasersorter.com' as well as the use of these metadata as infringing rules of misleading and comparative advertising.

The CJEU reminds the definition of advertising from Art. 2(1) of Directive 84/450 and Art. 2(a) of Directive 2006/114 namely as 'a representation in any form made in connection with a trade, business, craft or profession in order to promote the supply of goods or services'. (Par. 34) It is a broad definition, not limited to traditional form of advertising. (Par. 35) In general, advertising is supposed to allow 'competitors to highlight objectively the merits of the various comparable products in order to stimulate competition to the consumer’s advantage while, at the same time, prohibiting practices which may distort competition, be detrimental to competitors and have an adverse effect on consumer choice'. (Par. 37) It is undisputed that the registration and the use of 'bestlasersorter.com' domain as well as the use of metatags was part of the commercial activity of Visys. (Par. 40) 

In its judgment the CJEU decides that while the registration of a domain name cannot be seen as advertising, the use thereof as well as the use of metatags could be perceived as advertising. The registration of a domain name is a purely formal act, which does not necessarily lead to any website's creation and may not influence internet users awareness of that domain name. (Par. 42) In that respect, consumers' choice may not be influenced by domain's registration and therefore, it does not need to promote the supply of goods or services of the domain name holder which does not make it an advertisement. (Par. 43) At best, it could limit competitor's communication opportunities, which, however, could be prohibited under different laws. (Par. 44) On the other hand, the use of a domain name to host a website, identical to a website of a company, is clearly a commercial activity focused on promoting companies' goods or services. (Par. 46) In that respect a use of a specific domain name could be perceived as advertising since 'it is not only by means of a website hosted under the domain name that that holder seeks to promote its products or its services, but also by using a carefully chosen domain name, intended to encourage the greatest possible number of internet users to visit that site and to take an interest in its offer. Furthermore, such use of a domain name, which makes reference to certain goods or services or to the trade name of a company, constitutes a form of representation that is made to potential consumers and suggests to them that they will find, under that name, a website relating to those goods or services, or relating to that company.'. (Par. 47-48) The court had also no doubts that the metatags' use influences promotion of companies' goods or services, since it influences the ranking of the sites by a search engine. (Par. 53-54) As a result consumers looking for a specific goods of a competitor entering a certain (trade) name into a search engine will get results of the search that have been changed to the advantage of the metatags' user, which falls under the definition of advertising. (Par. 57) It does not matter that these metatags are not visible to internet users. (Par. 58)

Regulating beauty industry

On July 11, 2013 the new EU Cosmetics Regulation (1223/2009 of 30 November 2009) came into force with an aim to strengthen existing safety standards and better inform consumers. As of last month cosmetics' manufacturers (i.e., not only producers of perfumes or make-up products, but also toothpaste, sunscreen, etc.) need to comply with strengthened requirements for product safety control before placing the product on the market. (From today new EU Rules are combating misleading information and putting safer cosmetics on EU shelves)

PRODUCT SAFETY

Cosmetics may only be introduced to the EU market by 'responsible persons' - clearly identifiable legal or natural persons, who are responsible for keeping an information file on the product, making it available for inspections, reporting any serious undesirable effects etc. A central database has been created - Cosmetic Products Notification Portal (CPNP) - to which cosmetics' manufacturers need to notify their products. Any use of colorants, preservatives and UV-filters, including nanomaterials, requires explicit authorisation. The list of cosmetics' ingredients need to clearly state which ones are nanomaterials (by adding word 'nano' in brackets after the substance). 

INFORMATION DUTIES

To avoid misleading consumers with cosmetics claims, common criteria for such claims have been adopted: legal compliance, truthfulness, evidential support, honesty, fairness and informed decision-making. Any claim placed on a cosmetic will need to withstand a test against these criteria.

Tourism business to the rescue

Summer holidays are almost behind us and accordingly tomorrow is the last day for completing a European Commission's survey regarding the needs of elderly, disabled and otherwise requiring special help while traveling (e.g., because they travel with small children) consumers. The survey is anonymous and its results are supposed to help the European Commission to draft new policy with respect to accessible tourism. The survey may be completed either by travelers who have special accessibility needs or by tourism businesses about their experience with accommodating such travelers.

Food scandals under control

On the 6th of May 2013 the European Commission announced its plan to change some of the existing measures with respect to health and safety standards in the agri-food chain. This review has been fuelled by the recent food scandals, e.g., the horse-meat scandal. As a result of revealed threats to consumer health and safety and obvious gaps in inspecting food products, it was obvious that the new system should be enforced. The new measures would give more power to the authorities allowing them to conduct more controls, inspections and tests by establishing new rules on carrying out official controls. 

 

BEUC published its assessment of the proposed rules on the 2nd of July. It demands from the European Commission to ascertain that the new rules would guarantee the independence of the control authorities (p. 3), as well as to make sure that the standard for inspection is unannounced inspections (p. 4) and that the inspection results are published (p. 5). The food business operators should, therefore, be ready for an inspection at any time. Among other requests, one stands out clearly: to secure the transparency of food business operators' brokers and suppliers. One of the problems of the horse meat scandal was that it was really difficult to establish a contractual chain in certain cases which would allow to find a culprit who changed the labels. If there is a clear registration system for brokers, it would help competent authorities to trace any potential food scare to its source. (p.5-6)