Unfair Commercial Practices

1
Unit B2 Consumer contract and marketing law
THE UNFAIR COMMERCIAL PRACTICES
DIRECTIVE Ankara, 7 December 2009 Karine
Maillard Consumer contract and marketing law
2
Why EU legislation for consumer protection ?

• Achievement of the internal market to move
  forward, consumers and businesses have to engage
  in cross-border trade
• First step EU directives on consumer
  protection, based on minimum harmonisation
• But still legal fragmentation across the EU

3
Why EU legislation for consumer protection ?

• Stimulate consumers confidence in the internal
  market and in cross-border transactions
• Provide business with better regulatory
  environment
• Legal certainty, transparency, effective
  enforcement in cross-border cases
• Consumers and businesses have to take advantage
  of the European internal market.

4
The Directive on unfair commercial practices

• Simplification and clear rights for consumers
• Better protection (consumers more confident)
• More predictable environment for businesses
  operating cross-border

B2 - Unfair commercial practices
5
A broad scope

• B2C, before, during and after a commercial
  transaction in relation to a product
• Protection of consumers economic interest
• Does not regulate
• non-economic interests (health and safety /taste
  and decency)
• contract law
• authorization regimes, deontological rules
• B2B, business economic interests (competition)

6
NEW APPROACH

• Many consumer Directives deal with
• Specific products (e.g. timeshare, package
  travel, consumer credit)
• Specific sales methods (e.g. distance selling,
  doorstep selling)
• And are based on minimum harmonisation
• UCP
• Horizontal Directive
• Maximum Harmonisation

7
MAXIMUM HARMONISATION

• One set of rules for all unfair
  business-to-consumers commercial practices across
  the EU
• MS cannot retains or introduce stricter rules to
  regulate unfair commercial practices on consumer
  protection grounds
• Except
• national rules on financial services and
  immovable property
• temporary derogation

8
Internal market clause

• Member States shall neither restrict the freedom
  to provide services nor restrict the free
  movement of goods for reasons falling within the
  field approximated by this Directive

9
STRUCTURE

• General prohibition of unfair commercial
  practices (general clause)
• Misleading and agressive practices
• Black List, 31 commercial practices banned
  upfront

10
Structure in practice

• Does the commercial practice

fall in the black list of unfair commercial
practices (Annex I)?
Practice is prohibited
yes
no
constitute a misleading (Art 6 and 7) or an
aggressive practice (Art 8 and 9)?
yes
no
infringe professional diligence and materially
distorts the economic behaviour of the average
consumer (Art 5(1))?
yes
11
THE GENERAL CLAUSE

• GENERAL PROHIBITION
• Contrary to the requirements of professional
  diligence
• Likely to distort the behaviour of the Average
  consumer
• Future proof
• Vulnerable consumers practices only
  distorting a clearly identifiable group of
  consumers who are particularly vulnerable (age,
  credulity, mental or physical infirmity) in a
  way that a trader could reasonably expect to
  foresee

12
Misleading practices

• Misleading actions deceiving commercial
  communication
• Misleading omissions material information
  needed by the consumer

13
Misleading practices Invitation to purchase

• What is an invitation to purchase ?
• What are the traders obligations ?
• Flexibility  if not apparent from the
  context  main characteristics  to an extent
  appropriate to the medium and the product 

14
AGRESSIVE PRACTICES

• new at EU level
• freedom of choice significantly impaired
• harassment
• coercion, including physical force
• undue influence

15
BLACK LIST Unfair in all circumstances

• Invitation to purchase at specified price (trader
  not able to supply bait and switch)
• Airline tickets non availability of tickets at
  the promoted price
• Big stores or commercial centres which advertise
  illusory promotions just to attract customers on
  their premises
• Falsely stating that a product is available for a
  limited period of time
• Only for today in order to deprive the
  consumer of sufficient opportunity or time to
  make an informed choice
• False free offers
• Falsely claiming that a product is able to cure
  illnesses, dysfunction or malformation
• Direct exhortation to children to buy or persuade
  others to buy
• Pester power

16
UCP Timeline

• Adopted in May 2005
• Transposition deadline 12 June 2007
• Enforcement deadline 12 December 2007
• 26 Member States have transposed (NO, IS), 1 is
  late
• Literal/verbatim transposition in a significant
  number of countries

17
Transposition Cooperation

• Working group discussion days (peer pressure)
• Contacts with stakeholders, with complainants
• Pre-checking drafts and proposals (in national
  languages)
• Bilateral meetings with Member States

18

• Thank you for your attention, and visit our
  website
• http//ec.europa.eu/consumers/rights