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Case detail



Directive article Article 6 1. (b)
Article 6 1. (d)
Article 6 2. (b)
Article 7 4. (a)
Annex I al1 20.
Annex I al2 31. -
National ID CA/NB/544/10
Country The Netherlands Decision date 21/09/2010
Common name Consumer Authority, 21 September 2010, Garant-o-Matic B.V. Decision type Administrative decision, first degree
Court Consumentenautoriteit Plaintiff(s) Consumentenautoriteit ("consumer authority")
Court translation Consumer Authority Defendant(s) Garant-o-Matic B.V.
Subject misleading commercial practices
Keywords code of conductfalse impressionfreemisleading commercial practicesprice informationprizesproduct characteristics

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Headnote

(1) When a consumer must take the necessary steps to win a prize, i.e. by paying within two days after receiving the notice of the promotional action, although the false impression is created that the consumer has already won the prize (by making use of expressions such as "guaranteed winning", "we already paid this product for you"), such commercial practice is contrary to the prohibition of creating the false impression that the consumer has already won, will win, or will on doing a particular act win, a prize or other equivalent benefit, when in fact taking any action in relation to claiming the prize is subject to the consumer paying money.


(2) The consumer is not fully informed with respect to the main characteristics of a product, in particular relating to the availability of the product, when an electronic communication creates the impression that the consumer has the right to react within 7 days after receiving the communication to win a prize, while in fact the consumer must react within 2 days (as stated in the general terms and conditions as published elsewhere).
 

(3) When a trader states that the consumer will receive a product "free of any charge", while the contribution asked from the consumer, allegedly for administration and transport costs, outweighs the unavoidable cost of responding to the commercial practice and collecting or paying for delivery, such a commercial practice is contrary to the rules on describing a product as "free" or "without a charge".

(4) Constitutes a misleading commercial practice,  when a trader does not comply with a code of conduct by which the trader has undertaken to be bound, and which sets forth firm commitments capable of being verified.

Facts

Defendant is a mail order company regularly sending promotional advertising to consumers via mailing per post ("mailing"). In its decision of 30 May 2008, the plaintiff had already concluded that the defendant did not comply with the provisions of the Dutch Civil Code concerning distance selling, and in particular, did not inform the consumers sufficiently. Defendant agreed to sign an undertaking in which it was stated that the defendant would inform the consumer clearly and comprehensibly on promotional games announced in its mailing, the price and the terms and conditions of the promotional game. Nevertheless, the plaintiff again received complaints from consumers and started investigations.

In this case, the defendant had sent mailing to its consumers offering them a free CD-player and the possibility to win one of 4 other electronic devices (television, iPod, etc.). In order to win these electronic devices, the consumers had to respond to the mailing within two days after they received such advertisement. Further, the consumer had to pay 19,99 EUR, allegedly to cover administration and transport costs.

The additional general terms and conditions to participate in the promotional game, to which the mailing referred, set forth several additional requirements.

Moreover, it should be noted that the defendant announced to be bound by a code of conduct relating to the organization of promotional games. 

Legal issue

(1) Is Dutch legislation breached prohibiting to deceptively give the impression that a consumer already won a price?
(2) Is Dutch legislation breached prohibiting to misleading omission, in particular with respect to the main characteristics of a product?
(3) Is Dutch legislation breached prohibiting to describe a product as "free" if the consumer has to pay anything other than the unavoidable cost of responding to the commercial practice and collecting or paying for delivery of the item?
(4) Is Dutch legislation breached prohibiting non-conformity with a code of conduct?
 

Decision

(1) The plaintiff points out that the commercial mailing to the consumer states amongst others that the consumer "is guaranteed 100% that he/she is one of the selected people to receive an electronic product ... This product is free of charge! … We have already paid for your prize!". The impression is created that the consumer has already won the free prize by simply paying 19,99 EURO (allegedly for administration and transport costs) within two days after receiving the mailing, while in fact payment of this sum is a condition to participate in winning one of the electronic products. Hence, the consumer must take the necessary steps to win the prize, although the false impression is created that the consumer has already won the prize.

It is held that such commercial practice is contrary to the prohibition of creating the false impression that the consumer has already won, will win, or will on doing a particular act win, a prize or other equivalent benefit, when in fact taking any action in relation to claiming the prize is subject to the consumer paying money.

(2) The mailing is considered a commercial communication which should mention the main characteristics and the price of the products to which it refers. In order to participate in the promotional action of winning one of the electronic devices, the electronic communication creates the impression that the consumer has the right to react within 7 days after receiving the communication, while in fact the consumer must react within 2 days.

The plaintiff concludes that the consumer is not fully informed with respect to the main characteristics of the product, in particular relating to the availability of the product.

(3) In the mailing, the defendant states that the consumer is 100% guaranteed to receive an electronic device, free of any charge. In addition it is stated that the defendant has already paid for the product and the consumer solely has to pay 19,99 EURO for administration and transport costs. Overall, the impression is created that the consumer only has to contribute the symbolic sum of 19,99 EUR in order to receive the free product.

During the proceedings, the plaintiff noted that the contribution demanded from the consumer to participate in each case outweighed the unavoidable cost of responding to the commercial practice and collecting or paying for delivery. Hence, it was held that this commercial practice was contrary to Dutch legislation setting forth the rules on describing a product as "free" or "without a charge".

(4) In the regulation applicable to the promotional action of the defendant it was stated that the defendant organised the action according to the principles as set forth in the "code of conduct on promotional games" ("Gedragscode Promotionele Kansspelen"). A provision of this code sets forth that promotional games may only be organised for purposes of promotion and not as an independent activity. Further, any appeal to participate in a promotional game may not be misleading or may not be incomplete nor can it raise false expectations.

As regards the first provision (no independent activity), it is held that the defendant has not breached the code of conduct as the purpose of the promotional game is obviously for commercial purposes. As regards the provision relating to the misleading character of the games, the plaintiff holds that it is sufficiently established that the promotional action was misleading and incomplete (see above (1)-(3)).

As a result, the defendant has breached Dutch legislation by not complying with a code of conduct by which the trader has undertaken to be bound, and which sets forth firm commitments capable of being verified.

  URL Decision Decision full text
EN N/A
NL http://www.consumentenautoriteit.nl/pv_obj_cache/pv_obj_id_3B2323DEC877A51BB57283DB3735802E2F801C00/filename/Sanctiebesluit_Garant-o-matic_0.pdf

Result

Plaintiff imposed an administrative fine of 120.000,00 EUR.

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