THE UNFAIR COMMERCIAL PRACTICES DIRECTIVE Ankara, 7 December 2009 Karine Maillard Consumer contract and marketing law

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 consumer’s 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 … 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 Does the commercial practice:

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 trader’s 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