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Case detail

B a c k

Directive article Article 6 1. (a)
Article 6 2.
Article 7 1.
Annex I al1 20.
National ID Administratīvās rajona tiesas spriedums lietā Nr. A420592710
Country Latvia Decision date 07/03/2012
Common name Decision type Administrative decision, first degree
Court Administratīvā rajona tiesa (Rīga) Plaintiff(s) AS “Balticom”
Court translation District Court of Administrative Cases (Rīga) Defendant(s) Consumer Rights Protection Centre
Subject misleading advertising
Keywords administrative authorityadvertisementaverage consumercompetitioncomplaintsfreeinformation requirementsinvitation to purchasematerial informationnational lawprecontractual information

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Headnote

(1) A national administrative authority may validly decide to apply the regulations on unfair commercial practices, in cases where both the legal provisions on unfair commercial practices and the provisions on advertisements may be applied.
(2) It is possible for a competent administrative authority to initiate investigation proceedings in the event only a competitor of a trader has filed a complaint, hence in absence of any consumer complaint.
(3) Not all criteria under the UCP Directive must be considered to establish whether a practice should be assessed as an unfair commercial practice.
(4) A national administrative consumer authority has the competence to interpret the notion "average consumer" with regards to specific sectors, such as  in relation to internet/telecommunications services.
(5) The fact that a consumer has the possibility to preliminarily try out a product free of charge, and that the consumer has the possibility to find more information through other sources than the advertisement, does not justify the failure to provide full information on advertisements.
 

Facts

The plaintiff had distributed some advertising materials which allegedly failed to provide all necessary information on the offers advertised (i.e. a package of internet and telecommunications services at a given monthly subscription fee). For this reason, it had been held by the Consumer Rights Protection Centre (CRPC) that the Latvian Unfair Commercial Practice Prohibition Law (UCPPL) was breached by the plaintiff, due to misleading advertisements. The plaintiff appealed the decision of the CRPC, based on the following arguments.
The plaintiff first stated that the CRCP had to assess the advertisement in light of the Latvian Advertising law, not the UCPPL. Next, it was the plaintiffs view that the case should not even have been initiated, since the complaint was not filed by a consumer, but by a competitor. Moreover, while adopting its decision, the CRPC had not considered all criteria and circumstances as defined in UCPPL and that in fact the advertising, in the way it was presented, did not mislead the average consumer since more extensive information was available for consumers upon request or on the website of the plaintiff. Finally, the plaintiff  argued that the consumer was offered the possibility to try out the service free of charge.
 

Legal issue

(1) Does a national administrative authority may validly decide to apply the regulations on unfair commercial practices, in cases where both the legal provisions on unfair commercial practices and the provisions on advertisements may be applied?
(2) Is it possible for a competent administrative authority to initiate investigation proceedings in the event only a competitor of a trader has filed a complaint, hence in absence of any consumer complaint?
(3) Must all criteria under the UCP Directive be considered to establish whether a practice should be assessed as an unfair commercial practice?
(4) Does a national administrative consumer authority have the competence to interpret the notion "average consumer" with regards to specific sectors, such as  in relation to internet/telecommunications services?
(5) Does the fact that a consumer has the possibility to preliminarily try out a product free of charge, and that the consumer has the possibility to find more information through other sources than the advertisement, justify the failure to provide full information on advertisements?
 

Decision

(1) The court ruled that in cases where both the Advertising law and the UCPPL can be applied, the CRPC correctly had applied the UCPPL. Application of both laws is not permissible, stated the court.
(2) The court found that, pursuant to recitals 7 and 8 to the UCP Directive, the primary purpose of the UCP Directive is to safeguard consumers. However, the UCP Directive also safeguards traders from other traders that do not obey the provisions set out in the UCP Directive. Since the different aims of the UCP Directive need be considered when applying the UCPPL, the CRPC is free to initiate UCPLL cases not only following complaints by consumers, but also on its own initiative and following complaints by competing trader.
(3) The court further agreed with CRPC that it is not necessary to consider all elements as set out in the UCP Directive, article 6, part 1, as transposed in the UCPLL article 9, part 2 in order to find that a practice is misleading. It is sufficient when only one element is present.
(4) Although, the court held, pursuant to the case law of the European Court of Justice, the average consumer is well informed, cautious and observant, taking into account social, cultural and linguistic aspects, pursuant to recital 18 to the UCP Directive, the assessment of the average consumer is not a statistical test and national courts and competent bodies have to exercise their own faculty of judgment. The CRPC therefore has the competence to determine the concept of average consumer in the area of electronic communications services so as to establish how an average consumer perceives the advertising in question. 
(5) Having evaluated various elements of the advertising of the plaintiff, the court agreed that it was misleading and prohibited by UCPLL. The court held that the fact that the consumer had a chance to try the service beforehand and that additional information could be found elsewhere, did not justify the omission of material information on the advertisement disseminated.
Advertising itself is a commercial practice and the fact that the consumer would look for additional information or try the service would already be a result of the advertising. The advertising failed to state that the special offer is valid only when an agreement is concluded for two years. The advertising claimed that the offer comes with certain free of charge services, despite that subscription fees were payable. The court found it to qualify as misleading commercial practice in any circumstances in accordance with UCP Directive, Annex I, point 20.
 

  URL Decision Decision full text
EN N/A
LV http://www.tiesas.lv/files/AL/2012/03_2012/07_03_2012/AL_0703_raj_A-00224-12_2.pdf

Result

The appeal lodged by the plaintiff was dismissed.

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