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Case detail

B a c k

Directive article Article 5 1.
Annex I al2 28.
National ID 4 Ob 57/08y
Country Austria Decision date 08/07/2008
Common name PonyClub Decision type Supreme court decision
Court OGH (Oberster Gerichtshof), Wien Plaintiff(s) N/A
Court translation Austrian Supreme Court (Vienna) Defendant(s) N/A
Subject children
Keywords black listmisleading commercial practices

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Headnote

A trader must comply with specific requirements from an unfair commercial practices point of view, in order to lawfully advertise towards children.

Facts

The defendant is a company in the books and magazine market offering among others membership to its "PonyClub". PonyClub members receive monthly a package of books, gifts and other surprises for EUR 17,95 or 23,95 respectively. The content of the next package is always presented in the PonyClub-magazine prior to the package being sent and it is possible to refuse the sending of the next package.

The defendant gave advertisement letters to children at schools, containing promotional material for a trial price of EUR 4,95. The full terms and conditions of the offer were indicated in small letters only and were actually hidden. On the advertisement it was stated that the parent's signature was required in order to receive the package.

The plaintiff claimed that the defendant concealed the true price of its offer, which was misleading, particularly as the intellectual capacity of children is limited. According to the guidelines of the Austrian Advertisement Council advertisements to children must not be misleading and contain clear, simple and complete information. Furthermore, no direct or indirect pressure to purchase must be made vis-à-vis children. The plaintiff asked for a declaration to cease and desist this practice.

These allegations were contested by the defendant.

Legal issue

Must a trader comply with specific requirements from an unfair commercial practices point of view, in order to lawfully advertise towards children?

Decision

The first and second instance courts admitted the claim.

The Supreme Court in principle confirmed this decision, arguing that the advertisement was clearly addressed to children. Therefore, the Court held, the defendant used children to influence their parents to purchase the defendant's products.

According to the Supreme Court it is likely that Annex I, item 28 UWG ( which implements item 28 of the Annex I UCP Directive) only applies to direct invitations to purchase (e.g., "Buy this book!" or "Tell your parents to buy this book!") but not to indirect ones.

However, item 28 of Annex I was ultimately not applied as the current practice was already clearly misleading for children as it did not contain all the relevant information in an adequate manner. Furthermore, the Supreme Court held that the children were used to motivate their parents to purchase a certain product based on incomplete (i.e. misleading) information.

The current practice was considered aggressive in the sense of § 1a UWG.
 

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Result

The plaintiff's request was granted.

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