Article 5 1.
||National ID||4 Ob 225/07b|
|Common name||Decision type||Supreme court decision|
|Court||OGH (Oberster Gerichtshof), Wien||Plaintiff(s)|
|Court translation||Austrian Supreme Court (Vienna)||Defendant(s)|
|Keywords||B2B, professional diligence, unfair competition|
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The term "professional diligence" is to be understood as the subjective reproach of the infringement to the infringer. When applying the requirement of professional diligence to objective requirements laid down in legal provisions, traders are not obliged to always comply with the strictest possible interpretation in order to achieve fair competition. However, any interpretation of a legal provision must be reasonable from an objective point of view, in order to comply with the requirements of professional diligence.
The plaintiff is a company providing various services to tourists, including the organisation of sightseeing tours.
The defendant is a competitor of the plaintiff and also offers tourist services, in particular sightseeing tours.
Austrian traffic laws state that (1) there are certain parking spaces reserved for certain vehicles, e.g., busses; and (2) when organising sightseeing tours, the tour's point of departure and point of arrival have to be the same.
The defendant's services include the provision of a cash machine situated in a small car; in this card, also tickets for the sightseeing tours offered by the defendant could be purchased. The small car was branded with the defendant's company name and sign, and repeatedly parked at a location in front of the Vienna Opera reserved for "public service vehicles" and "busses with a public parking card". Although the small car was parked there irregularly, there was no objection by the police or other public institutions.
The defendant also offered busses for sightseeing tours, which regularly started at the Southern Vienna Train Station (Wiener Südbahnhof). In order to get tourists to the point of departure, the defendant used other smaller busses, which transported tourists from several collection points (usually located at tourist attraction locations, e.g., in front of the Vienna Opera) to the Southern Vienna Train Station. From there, the sightseeing tour started to end in front of the opera, or in a nearby street.
The plaintiff claimed that the defendant's practice breached the traffic laws and the laws on the organisation of sightseeing tours. By breaching these provisions, the defendant obtained an advantage compared to other competitors, including the plaintiff, which amounts to an unfair competition practice ("advantage by breach of law").
The defendant argued that it was acting in compliance with the law; and that, even if this was not the case, his practice could not amount to unfair competition, as (1) the incriminated behavior had been tolerated by the police and public institutions; and (2) the interpretation of the law was reasonable in light of the wording and purpose of the relevant laws.
Historically, the Austrian Supreme Court held on several occasions that the breach of a provision that is not a competition rule at first instance, may nonetheless constitute an act of unfair competition, if:
(1) the general norm has been infringed; and
(2) the infringer acted with the "intent of gaining an advantage in competition" (Wettbewerbsabsicht). This criteria was partly replaced by the criteria of "appreciably impairing competition"; and
(3) the infringement could be subjectively reproached to the infringer, i.e., the infringer's interpretation of the law could not be defended with good reason, in particular taking into account the wording of the provision, relevant case law, and (in third degree) administrative practice.
Does the professional diligence requirement need to be strictly interpreted, or does it allow for some subjective interpretation?
The court held that the incriminated behavior is prohibited under the Austrian Unfair Competition Act, both before and after the implementation of the UCP Directive.
First, it held that the legal provisions concerned prohibited the defendant's behaviour (both relating to the "cash machine car" and the start/end of the sightseeing tours).
Second, it held that the subjective criterion of the "intent of gaining an advantage in competition" was already replaced in former cases by the criterion that a practice would have to appreciably impair competition. This, in the court's view, certainly applied to the defendant's practice, as the possibility to buy tickets in the car where cash can be withdrawn and the favorable different points of departure and arrival, would be more attractive to tourists than regular offers.
Third, the court concluded that the term "professional diligence", as used in the UCP Directive, and its implementation in the Austrian Unfair Competition Act, is to be understood, essentially, as the subjective reproach of the infringement to the infringer, although from a theoretical point of view this criteria now forms part of the objective elements of the legal provision.
Thus, when interpreting the term "professional diligence", the court reasoned that as regards the interpretation of legal provisions, in order to achieve fair competition, traders are not obliged to always comply with the strictest possible interpretation. However, any interpretation of a legal provision must be reasonable from an objective point of view in order to comply with the requirements of professional diligence as mentioned in article 5.2.a) of the UCP Directive and its implementation in Austrian law in article 1 (1) 1) of the Austrian Unfair Competition Act, taking into account that this is the standard which can reasonably expected from a trader.
|URL Decision||Decision full text|
The plaintiff's request was granted and the business practice was found to qualify as unfair competition.
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