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Case detail



Directive article Article 5 2. (b)
Article 6 1.
National ID 4 Ob 42/08t
Country Austria Decision date 08/04/2008
Common name Decision type Supreme court decision
Court OGH (Oberster Gerichtshof), Wien Plaintiff(s)
Court translation Austrian Supreme Court (Vienna) Defendant(s)
Subject product origin
Keywords average consumerfalse informationmisleading commercial practicesmisleading statementsproduct characteristicsproduct origin

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Headnote

(1) The question of how the average consumer perceives an advertisement, can be answered by the court when every day experiences and knowledge are sufficient to do so (no external expert required).

(2) It is misleading for a trader to state that it has produced a product itself, when the production was actually partially outsourced to a low-cost country. In such case, it is not misleading, however, to state that a product is produced in a particular EU Member State, because it is commonly known that production is outsourced.

(3) Generally, the qualification of a behaviour as "misleading" or "aggressive" is sufficient to qualify the behaviour as an act of unfair competition; it is generally not required that such behaviour is also materially distorting the economic behaviour of an average consumer and contrary to the requirements of professional diligence.

Facts

Both the plaintiff and the defendant are traders in pianos. The defendant is a traditional Austrian family business existing since 1910 and selling both its own brands of pianos and other brands of pianos. At least two types of the own-branded pianos are produced by a Chinese company for the defendant. One type  was completely produced by the Chinese company, while the other one was also partially developed by the CEO of the defendant.

The defendant used "guarantee bills", which state that the pianos are produced by the defendant. These guarantee bills are usually provided to consumers only after the conclusion of the sales contract. However, some of them were also available in the sales office of the defendant for information and taking away. The fact that the pianos were actually produced by a third company in China was not indicated, although the pianos contained a reference indicating a partnership with a Chinese company.

The plaintiff asked:

(1) to prohibit the use of the guarantee bill indicating that the pianos were produced by the defendant; and

(2) to prohibit the defendant to state that the pianos were produced in Austria, arguing that the statement "pianos produced by (Austrian) defendant" implies that the pianos were produced in Austria.

Legal issue

(1) Can a court decide which behaviour qualifies as the behaviour of the average consumer?

(2) Is it misleading to state that a product is produced by the seller, when the production is in fact (partially or completely) outsourced to China?

(3) In order to qualify a behaviour as an unfair act of competition, is it necessary to also meet the "material distortion" and "professional diligence" criteria, when it is determined that the behaviour is misleading?

Decision

(1) The question of how the consumer understands a certain (advertising) statement is to be viewed as a legal issue, and thus has to be answered by the court when every day experiences and knowledge are sufficient to do so. Otherwise, and in particular if the advertisement is addressed to experts, this question is a factual question (and generally requires the court to check for professional expertise).

(2) As regards the actual statement by the piano producer, the court concluded that the act of indicating that the piano is produced by a certain company implies that the company actually produces the piano itself (or at least major parts of the piano). Thus, the information provided on the guarantee bills was wrong, as the pianos had been developed/designed by the CEO of the Austrian company, but were actually produced in China. Conversely, the statement to produce certain pianos in Austria does not imply that the pianos are fully produced in Austria, as it is commonly known that Austrian companies outsource (parts of) their production to low-cost countries (e.g., China).

(3) The court held that the incriminated behaviour did not amount to a blacklist behaviour (Annex I of the UCP Directive), but is misleading as to the nature and the main characteristics of the product, because the information provided regarding the commercial origin of the goods was wrong. Thus, the behaviour qualifies as misleading commercial practice as defined in § 2 of the Austrian Unfair Competition Act (similar to article 6 (1) of the UCP Directive).

However, § 2 of the Austrian Unfair Competition Act does not contain a provision on the consequences of the qualification of a behaviour as misleading practice. Thus, the court concluded that the legal consequences are to be found in the general clause § 1 (which implements article 5 of the UCP Directive). According to § 1, a behavior is to be qualified as unfair, if it is either misleading or aggressive and materially distorting or likely to materially distort the economic behaviour of an average consumer and contrary to the requirements of professional diligence. The court argued that according to the system of the UCP Directive and the Austrian Unfair Competition Act , generally the qualification of a behaviour as misleading or aggressive is sufficient to qualify the behaviour as an act of unfair competition. It is usually not required to revert to § 1 (and its own conditions as mentioned above) as a general clause, if a behaviour already qualifies as misleading or aggressive.

Thus, despite the wording of the relevant provisions of the Austrian Unfair Competition Act, it is generally not required that such behaviour is – in addition to being misleading – materially distorting the economic behaviour of an average consumer and contrary to the requirements of professional diligence. The court noted that generally a misleading or aggressive behaviour would also fulfil the further requirements of § 1 of the Austrian Unfair Competition Act, i.e., to be materially distorting average consumers and to be against requirement of professional diligence.

  URL Decision Decision full text
DE http://www.ris.bka.gv.at/Dokument.wxe?Abfrage=Justiz&Dokumentnummer=JJT_20080408_OGH0002_0040OB00042_08T0000_000 Click here
EN N/A

Result

The request to prohibit the statement that the pianos were produced by the defendant, was granted. The request to prohibit the statement that the pianos were produced in Austria was dismissed.

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