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Case detail

B a c k

Directive article Article 2 (b)
Article 2 (c)
Article 2 (d)
Article 5 1.
Article 5 4. (a)
Annex I al1 11.
National ID Consumer Rights Protection Centre Decision No. E03-PTU-F271-41
Country Latvia Decision date 05/09/2012
Common name Decision type Administrative decision, first degree
Court Patērētāju tiesību aizsardzības centrs (Rīga) Plaintiff(s) SIA „PIKAL UN PARTNERI”
Court translation Consumer Rights Protection Centre (Riga) Defendant(s) Consumer Rights Protection Centre
Subject pyramid scheme
Keywords advertisementfinancial servicesmisleading advertisingsponsorship

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Headnote

It is a misleading commercial practice to make a statement that a broadcasted program does not promote services of a trader in circumstances where the content of the program evidently contains an advertisement.

Facts

Plaintiff is an undertaking which recorded and broadcasted, on its radio station, a program where a participant of the "MMM-2011" pyramid scheme was being interviewed.

This radio program included the following information: 1) an announcement that the relevant broadcast was not to be considered an advertisement; 2) the explanations of the founder of the "MMM-2011" pyramid scheme about the company and an invitation for consumers to take part in the scheme; 3) the explanations regarding the restructuring of "MMM-2011" into "MMM-2012" 4) the address of the location where the "MMM-2011" services were provided.
 

Legal issue

Does a statement that a broadcasted program does not promote services of a trader, whereas the circumstances are such that the content of the program evidently contains an advertisement, constitute misleading commercial practice?

Decision

The court established that the plaintiff had committed a misleading commercial practice.

The court found that the objective of inviting consumers to participate in the pyramid scheme and telling the address of the trader of the "MMM-2011" scheme, was to promote the services of the trader.

Thus, the relevant radio program was considered to be an advertisement.  By making a statement that the broadcast is not an advertisement, the plaintiff was creating an impression that the relevant broadcast was only an informative announcement, whereas in reality it was a commercial communication. 

Since the advertisement was executed in the form of a radio broadcast, the plaintiff was obliged to provide clear and unambiguous information to consumers of the inclusion of advertising.

The court also held that it was also a duty of the plaintiff to inform consumers that MMM-2011 had paid the plaintiff to promote its services.
 

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Result

The plaintiff was penalized for indulging in unfair commercial practices.

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