European Commission


EC Guidance contents

  1. 1. The scope of application of the directive
    1. 1.1. : After-sales practices are covered by the definition of commercial practices
    2. 1.2. : Online commercial practices occurring on social media or comparison websites are covered by the definition
    3. 1.3. : Does the concept of the commercial practices cover situations of traders buying products from consumers?
    4. 1.4. : Sales promotions fall within the scope of the Directive
    5. 1.5. : Commercial practices occurring in the financial sector fall within the scope of the Directive
    6. 1.6. : Commercial practices which do not affect the consumer's economic interests do not fall within the Directive's Scope
    7. 1.7. : Commercial practices which harm only competitors' economic interests or which relate to a transaction between traders do not fall within the scope of the Directive
    8. 1.8. : The concept of trader
    9. 1.9. : The Relationship between the Directive and national law and other provisions of Community law
    10. 1.10. : The Relationship between the Directive and self regulation
  2. 2. The general provisions of the directive
    1. 2.1. : The concept of "transactional decision"
    2. 2.2. : The average consumer
    3. 2.3. : Vulnerable consumers
    4. 2.4. : Misleading actions
    5. 2.5. : Misleading environmental claims
    6. 2.6. : Invitation to purchase
  3. 3. The Black List (Annex I Practices)
    1. 3.1. : The "black list" general considerations
    2. 3.2. : Annex I, N. 9 - Products which cannot legally be sold
    3. 3.3. : Annex I, N. 17 - Products which cure illnesses, dysfunctions and malformations
    4. 3.4. : Annex I, N. 20 - Use of the word "FREE"
    5. 3.5. : Annex I, N. 31 - Prizes

EC Guidance

2. The general provisions of the directive

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2.1.1. Definitions and general considerations

The Directive's general provisions on misleading and aggressive practices (Articles 5, 6, 7, 8 and 9) cover unfair commercial practices which are capable of distorting the consumers' economic behaviour.

According to Article 2 (e) of the Directive material distortion of the consumer's behaviour means:

" appreciably impair the consumer's ability to make an informed decision, thereby causing the consumer to take a transactional decision that he would not have taken otherwise;"

To materially distort the consumer's economic behaviour means that a commercial practice impairs the average consumer's ability to make an informed decision and, in addition, that such impairment is significant enough to change the decisions the average consumer makes.

The concept of transactional decision is crucial in applying the material distortion test to real cases and it is defined in Article 2 (k) of the Directive:

" 'transactional decision' means any decision taken by a consumer concerning whether, how and on what terms to purchase, make payment in whole or in part for, retain or dispose of a product or to exercise a contractual right in relation to the product, whether the consumer decides to act or to refrain from acting;"

The wording used by the Directive in Art 2 (k) ("any decision...") suggests that the definition should be interpreted in a broad manner and that the concept of transactional decision should cover a wide range of decisions made by the consumer in relation to a product or a service.

2.1.2. Decision to purchase

The undisputed category of decisions covered by the Directive is decisions to purchase a product or contract a service or decisions not to do so. But placing an order, making a reservation, accepting a commercial offer are also actions which clearly require a transactional decision in the sense of the Directive.

On this point, it should be noted that a decision to purchase taken by a consumer will qualify as a transactional decision even if such determination does not lead to or is not followed by the conclusion of a valid transaction between the consumer and the trader (i.e. a binding purchase or service agreement under the national contract law of a Member State).

Example: A consumer sees a very attractive promotional offer to buy a digital camera. This is exactly the type of camera he has been looking for and he decides to buy it. He goes to the shop where he finds out, to his disappointment, that the camera is available at that price only if he subscribes to a photography course. He then changes his mind and decides not to purchase the camera any longer. He complains to the local authorities claiming that the advertisement was misleading. The trader claims that, although in the initial advertisement there was no mention of the specific conditions of the offer (i.e. the need to subscribe to a photography course), all the information was available at the store and that, since the consumer did not buy the camera, the initial advertisement did not cause the consumer to take a transactional decision (i.e. the material distortion test is not met).

In the example above there are three transactional decisions which the consumer took prompted by the information provided by the trader: the decision to purchase, the decision to travel to the shop and finally the decision not to purchase. The above shows that a consumer does not need to make a purchase (e.g. by placing an order) in order to take a transactional decision in the sense of the Directive. First of all, based on the Directive, the decision not to purchase also constitutes a transactional decision. Secondly, as it is explained below, the consumer may take several decisions other than a decision to purchase (or not to purchase) but which can, nevertheless, qualify as transactional decisions (e.g. travelling to the trader's premises).

2.1.3. The meaning of transactional decision

The Directive stipulates in very plain language that it applies " unfair business-to-consumer commercial practices...before, during and after a commercial transaction in relation to a product" (Article 3).

There is a wide spectrum of transactional decisions which may be taken by the consumer in relation to a product or a service other than a decision to purchase (or not to do so). These transactional decisions may result in actions which have no legal consequences under national contract law and may be taken at any time between the moment the consumer is initially exposed to the marketing and the end of the a product's life or the final use of a service.

Pre-Purchase decisions

As shown in the example above, most common activities which consumers carry out in a "pre-purchase" stage are to be considered transactional decisions. These include, for instance, a decision to travel to a sales outlet or shop, the decision to enter a shop (e.g. after reading a poster on the shop window or a billboard in the street), the decision to agree to a sales presentation by a trader or his or her representatives and the decision to continue with a web booking process. Further examples include a consumer's decision to agree to a "free security survey" of his home, which is genuinely free, but whose sole purpose is to allow the trader to persuade the consumer to buy an alarm system.

Post-Purchase decisions

Decisions which consumers take after having purchased a product or contracted/subscribed for a service can also qualify as transactional decisions. The main category of post-purchase transactional decisions are those which relate to the exercise of consumers' contractual rights, such as the right of withdrawal, cancellation, the right to terminate a service contract or the right to change the product or switch to another trader.

For example, a consumer purchases a product and the trader makes him believe that he must purchase a warranty to have rights in case of defects.

The implications of having this broad concept of transactional decision are significant. It allows an extensive application of the Directive to a variety of cases where the impact of the unfairness of the trader's behaviour does not cause the consumer to enter a transaction or a service contract. Following this approach, a commercial practice may be considered unfair not only if it is likely to cause the average consumer to purchase or not to purchase a product but also if it is likely to cause the consumer to enter a shop, spend more time on the Internet engaged in a booking process or decide to not switch to another trader or product.

As such, the Directive does not limit the transactional decision test to the evaluation as to whether the consumer's economic behaviour (i.e. its transactional decisions) has actually been distorted. It requires an assessment of whether that commercial practice is capable (i.e. "likely") to have such an impact on the average consumer.

National enforcers should therefore investigate the facts and circumstances of an individual case (i.e. in concreto), but assess only the "likelihood" of the impact of the practice on the transactional decision of the average consumer (i.e. in abstracto)[32].

For example, the fact that there is no evidence that a misleading commercial communication has actually induced consumers to make a further click to proceed with an online booking does not prevent a national authorities from considering the transactional decision test as fulfilled if the likelihood of that happening (i.e. the risk) is real.

2.2.2. Case law and Guidance

The Directive takes as the benchmark for assessing the impact of a commercial practice the notion of the average consumer, a concept developed by the Court of Justice.

The Court of Justice, when weighing the risk of misleading consumers against the requirements of the free movement of goods, has held that, " order to determine whether a particular description, trade mark or promotional description or statement is misleading, it is necessary to take into account the presumed expectations of an average consumer who is reasonably well informed and reasonably observant and circumspect."[34]

The average consumer, in the case law of the Court of Justice is a critical person, conscious and circumspect in his or her market behaviour. He or she should inform themselves about the quality and price of products and make efficient choices. For example, the "reasonably circumspect consumer" will not believe that the size of a promotional marking on a package corresponds to the promotional increase in the size of that product[35]. The average consumer will not attribute to goods bearing the marking "dermatologically tested" any healing effects which such goods do not possess[36]. However, the average consumer under the Directive is not somebody who needs little protection because he/she is always in a position to acquire available information and act wisely on it.

On the contrary, as underlined in Recital 18, the test is based on the principle of proportionality. The Directive adopted this notion to strike the right balance between the need to protect consumers and the promotion of free trade in an openly competitive market.

It is, first of all, based on the idea that, for instance, a national measure prohibiting claims (e.g. "puffery"[37]) that might deceive only a very credulous, naïve or cursory consumer would be disproportionate to the objectives pursued and create an unjustified barrier to trade.[38]

Secondly, it is a concept which should be interpreted in line with Art 114 TFEU which provides for a high level of consumer protection. To achieve this, national authorities and courts should take into account various specific factors to complement the average consumer test.

The concept, which was not applied by certain Member States' courts, was also codified by the Directive to give national authorities and courts common criteria, to enhance legal certainty and to reduce the possibility of divergent assessments of similar practices across the EU.

Factors influencing the level of knowledge of the average consumer

The Court of Justice and the General Court (formerly known as the Court of First Instance), in assessing the likelihood of confusion of certain trade marks, have given some indications as to the behaviour of the average consumer and the fact that his/her behaviour may be influenced by other factors. This can apply by analogy to the concept of the average consumer in the Directive.

According to the General Court, "[t]he average consumer normally perceives a mark as a whole and does not proceed to analyse its various details...In addition, account should be taken of the fact that the average consumer only rarely has the chance to make a direct comparison between the different marks but has to place his trust in the imperfect image of them that he has retained in his mind. It should also be borne in mind that the average consumer's level of attention is likely to vary according to the category of goods and services in question."[39]

And, according to the Court of Justice, "among the factors to be taken into account in order to assess whether the labelling at issue in the main proceedings may be misleading, the length of time for which a name has been used is an objective factor which might affect the expectations of the reasonable [average] consumer"[40].

An example of this approach at a national level can be found in a recent judgment of an Italian administrative tribunal which, in relation to a decision of the Italian enforcement authority (ACGM), confirmed that:

"the level of knowledge of the average consumer cannot be assessed in merely statistical, cultural and economic factors, including the economic context and market conditions in which the consumer operates must be taken into account...the relevance of the characteristics of the goods and/or services together with the specifics of the relevant market sector cannot be disregarded. "[41]

The case concerned misleading and aggressive commercial practices in the promotion and supply of electricity in Italy, after the liberalisation of the market. The Italian administrative court found that in the electricity market, the transition from a monopoly to a liberalized market not only altered the relationship between offer and demand, but had also increased the knowledge gap between consumers and traders. The court considered that, in such a context, the average consumer (i.e. somebody who is, in principle, reasonably well informed on the market conditions) could not be expected to have or gain the necessary knowledge or information to fill such a gap.

Essentially, the court took into account the fact that, in the electricity retail market, the average consumer had not yet adapted to the new market situation and that the reasonable level of knowledge one could expect from the average consumer had to be fixed accordingly.

Social, linguistic and cultural factors

In certain cases, social, linguistic and cultural features that are peculiar to a Member State may justify a different interpretation of the message communicated in the commercial practice by the competent authority or court.

In case of misleading advertising in the field of cosmetics the Court of Justice held that: "In order to apply that test to the present case, several considerations must be borne in mind. In particular, it must be determined whether social, cultural or linguistic factors may justify the term 'lifting', used in connection with a firming cream, meaning something different to the German [average] consumer as opposed to consumers in other Member States, or whether the instructions for the use of the product are in themselves sufficient to make it quite clear that its effects are short-lived, thus neutralising any conclusion to the contrary that might be derived from the word 'lifting' "[42]

Therefore, on the basis of the average consumer test and despite the Directive's full harmonisation character, requiring the foreign trader to provide an additional piece of information could be justified on the basis of social, cultural or linguistic factors[43]. In other words, because of these factors, the consumers of the country of destination, unlike those in the country of origin, would be misled by the omission of such an item.

National courts are those competent to make an assessment of such cultural, linguistic and social factors which warrant a different assessment of the unfair character of a commercial practice. All relevant factors must be taken into account, such as the circumstances in which products are sold, the information given to consumers, the clarity of such information, the presentation and content of advertising material, and the risk of error in relation to the group of consumers concerned[44].

The fact that a commercial practice is ordinarily employed in other countries without causing consumer protection concerns can be an element in assessing whether such a practice is unfair or not[45].

An additional point which national authorities and court should consider when assessing actual cases is that the average consumer test does not follow a statistical approach. A national court should be able to determine whether a practice is liable to mislead the average consumer exercising its own judgment by taking into account the presumed expectations of an average consumer without, in principle, having to commission an expert's report or a consumer research poll.[46]

Paragraph 29 of the Opinion of Advocate-General in the "Estée Lauder" case, contains a basic but very useful description of how the average consumer test should be structured:

"...the test to be applied to any case of restriction on the sale or marketing of a product on the ground of protecting the consumer from misleading labelling or other accompanying information is whether its presence on the market would, in some material respect, be likely to mislead the hypothetical consumer so defined...The test should enable the national court to assess the facts of each case against this standard on the basis of its own judgment of how such a consumer would be affected. The standard involved, being based on a cumulation of four factors, is clearly a high one. Having regard to all the relevant surrounding circumstances of the case, and especially the selling arrangements employed by the vendor, the national court must be satisfied that the average consumer, who is reasonably well informed and observant about the product in question and who exercises reasonable circumspection when using his critical faculties to assess the claims made by or in respect of it, would be confused. The approach is thus not statistical. Market surveys may, in certain cases, be of assistance, although it must be remembered that they are subject to the frailties inherent in the formulation of survey questionnaires and often subject to diverging interpretation as to their significance. Accordingly, they do not absolve the national court from the need to exercise its own faculty of judgment based on the standard of the average consumer as defined in Community law. In conclusion, the important point is that a single Community-law test is now available and it would, therefore, be inappropriate for a national court to base its final decision as to confusion on statistical evidence regarding the probable effect on 10% to 15% of potential consumers."

National courts should take into account the fact that, the Directive not only codifies this case law but also further refines it by adapting the average consumer test when the interests of specific groups of consumers are at stake (Art 5(2)(b) of the Directive). This means that when the practice is addressed at a specific group of consumers, be they children or rocket scientists, national authorities and courts must assess its impact from the perspective of the average member of the relevant group.

For example, in the case of an advertisement for a ring tone for teenagers, one will have to take into account the expectations and the likely reaction of the average teenager of the group targeted and disregard those of an exceptionally immature or mature teenager belonging to the same group.

[34] Case C-210/96 Gut Springenheide and Tusky [1998] ECR I-4657, para 31.

[35] Case C-470/93 Verein gegen Unwesen in Handel und Gewerbe Koln e.V. v Mars GmbH [1995] ECR I-01923, para 24.

[36] Case C-99/01 Criminal proceedings against Gottfried Linhart and Hans Biffl [2002] ECR I-09375, para 35.

[37] "Puffery" is a subjective or exaggerated statement about the qualities of a particular product, which is not meant to be taken literally, such as "best coffee in the world", or "it gives you wings".

[38] For vulnerable consumers see 2.3 below.

[39] See e.g. Joined Cases T-183/02 and T184/02 El Corte Inglés v Office for Harmonisation in the Internal Market (Trade Marks and Designs) ("Mundicolor") [2004] ECR II-00965, para 68. See also case T-20/02 Interquell GmbH v Office for Harmonisation in the Internal Market (Trade Marks and Designs) ("Happydog") [2004] ECR II-1001, para 37.

[40] Case C-446/07 Alberto Severi v Regione Emilia-Romagna, judgement of the Court of Justice of 10 September 2009, para 62.

[41] Tribunale Amministrativo Regionale del Lazio, Sezione I, Sentenza del 25 Marzo 2009 caso Enel S.p.A. contro Autorità Garante della Concorrenza e del Mercato .

[42] Case C-220/98 Estée Lauder Cosmetics GmbH & Co. OHG v Lancaster Group GmbH. [2000] ECR I-00117, para 29.

[43] See Case C-313/94 F.lli Graffione SNC v Ditta Fransa [1996] ECR I-06039, para 22: "the possibility of allowing a prohibition of marketing on account of the misleading nature of the trade mark is not, in principle, precluded by the fact that the same trade mark is not considered to be misleading in other Member States. As the Advocate General has observed in paragraph 10 of his Opinion, it is possible that because of linguistic, cultural and social differences between the Member States a trade mark which is not liable to mislead a consumer in one Member State may be liable to do so in another."

[44] Case C-313/94 F.lli Graffione SNC v Ditta Fransa [1996] ECR I-06039, para 26.

[45] See Case C-315/92 Verband Sozialer Wettbewerb eV v Clinique Laboratories SNC et Estée Lauder Cosmetics GmbH. [1994] ECR I-00317, para 21.

[46]Case C-210/96 Gut Springenheide and Tusky v Oberkreisdirektor Steinfurt (hereinafter 'Gut Springenheide‘) [1998] ECR I-4657, para 31, 32, 36 and 37. See also Case C-220/98, Estée Lauder Cosmetics GmbH & Co. ORG, v Lancaster Group GmbH, opinion of Advocate General Fennelly, para 28.

2.3.1. Provisions of the Directive

The legislator decided not to adopt the concept of "weak and vulnerable" consumer as the generally applicable standard. Nevertheless, the Directive is based on the idea that it is appropriate to protect all types of consumers from unfair commercial practices and it, therefore, contains provisions to protect consumers whose characteristic make them particularly vulnerable to unfair commercial practices.

When commercial practices are likely to materially distort the economic behaviour of only a clearly identifiable group of consumers who, for various reasons, are particularly vulnerable to the practice or the underlying product in a way that the trader could reasonably expect to foresee, then the practices must be assessed from the perspective of the average member of that vulnerable group.

2.3.2. Vulnerable Consumers - criteria

As provided for in Article 5(3) of the Directive, vulnerable consumers are those more exposed to a commercial practice or a product because of their (a) mental or physical infirmity, (b) age or (c) credulity.

The reasons mentioned by Article 5 as the basis to establish the vulnerability of a specific category of consumers are listed indicatively and cover a wide range of situations.

(a) infirmity (mental or physical): this includes sensory impairment, limited mobility and other disabilities. For example, consumers who need to use wheelchairs might be a vulnerable group in relation to advertising claims about ease of access to a holiday destination or entertainment venue, or those with a hearing impairment may be a particularly vulnerable group in relation to advertising claims about 'hearing aid compatibility' in a telephone advertisement.

(b) age: it may be appropriate to consider a practice from the perspective of an older or younger consumer.

Consumers who may be more vulnerable to certain practices because of their age are elderly people. Aggressive door-to-door selling methods is an example of a practice which may not affect the average consumer but which is likely to intimidate a certain group of consumers, in particular the elderly, who may be vulnerable to pressure selling. The Dutch and German enforcement authorities have also reported the practice of "bus trips" organised by traders to market their products during the trip, which are particularly attractive to elderly people because of their entertaining nature. The elderly might also be particularly vulnerable to practices connected to certain products, such as burglar alarms.

Children might be particularly vulnerable to advertisements about videogames. Despite the fact that a substantial part of the target audience is constituted by adults, a trader could reasonably foresee that such advertisements may have an impact on a vulnerable category of consumers such as children. For example, the compatibility of a videogame with a specific device may be sufficiently clear to an adult consumer but, due to the way the information is provided, it may still confuse children[48].

Teenagers represent another category of consumers who are often targeted by rogue traders. An example of this is promoting products which are particularly appealing to teenagers in a way which exploits their lack of attention or reflection due to their immaturity. For example, an advertisement for mobile phone services conveying the message that by subscribing to a particular loyalty plan you can easily make and maintain friends is likely to be taken more literally by teenagers.

(c) credulity: this covers groups of consumers who may more readily believe specific claims. The term is neutral, so the effect is to protect members of a group who are for any reason open to be influenced by certain claims. An example might be members of a group who, because of particular circumstances, might believe certain claims more readily than others.

A dishonest trader may sell winning lottery number on his website which is open to the general public, although he knows that only the credulous consumers will be attracted to his site and lured into the scam.

[48] Please note that pursuant to Directive 89/552/EC as amended by Directive 2007/65/EC, audiovisual commercial communications shall not cause physical or moral detriment to minors and therefore shall not, inter alia, directly exhort minors to buy or hire a product or service by exploiting their inexperience or credulity, exploit the special trust minors place in parents, teachers or other persons, directly encourage minors to persuade parents or others to purchase the goods or services advertised.

2.3.3. The "foreseeability" requirement

The vulnerable consumer test applies if the practice affects the economic behaviour of a vulnerable group of consumers "in a way which the trader could reasonably be expected to foresee".

This criterion adds an element of proportionality in assessing the effects of a commercial practice on vulnerable consumers and the professional diligence which reasonably can be expected from a trader. It aims at holding traders responsible only if the negative impact of a commercial practice on a category of vulnerable consumers is foreseeable.

This means that traders are not required to do more than is reasonable, both in considering whether the practice would have an unfair impact on any clearly identifiable group of consumers and in taking steps to mitigate such impact.

Some consumers because of their extreme naivety or ignorance may be misled by, or otherwise act irrationally in response to even the most honest commercial practice. There may be, for example, a few consumers who may believe that "Spaghetti Bolognese" are actually made in Bologna or "Yorkshire Pudding" in Yorkshire. Traders, however, will not be held liable for every conceivable interpretation of or action taken in response to their commercial practice by certain consumers.

The aim of the provision is to capture cases of dishonest market practices (e.g. outright frauds or scams) which reach the majority of consumers, but in reality are devised to exploit the weaknesses of certain specific consumer groups.

2.4.2. General considerations

A misleading action occurs when a practice misleads through the information it contains, or through the deceptive presentation of that information, and causes or is likely to cause the average consumer to take a different transactional decision than he or she would have taken otherwise.

The definition of a misleading action used in the Directive has taken into account the current state of knowledge of how consumers take decisions in the market space. For example, new insights from behavioural economics show that not only the content of the information provided, but also the way the information is presented can have a serious impact on how consumers respond to it. The Directive has therefore explicit provisions to cover situations of practices which are capable of deceiving consumers "in any way, including overall presentation", even if the information provided is factually correct.

It is then for the national courts and administrative authorities to assess the misleading character of commercial practices by reference, among other considerations, to the current state of scientific knowledge, including the most recent findings of behavioural economics. Thus, for example, the use of defaults (choices consumers are presumed to make unless they expressly indicate otherwise) or the provision of unnecessarily complex information may, according to the circumstances of the case, prove misleading.

The Directive envisages three types of misleading actions:

  • providing general misleading information;
  • creating confusion with competitors' products;
  • failing to honour firm and verifiable commitments made in a code of conduct.

2.4.3. General misleading information

Misleading price information and the use of recommended retail prices

Article 6 prohibits misleading actions which are capable of deceiving the average consumer on a wide range of elements including "the price or the manner in which a price is calculated, or the existence of a specific price advantage" (para 1(d)).

Under Article 6(1)(d), price information should not contain false information and be therefore untruthful or should not deceive or be likely to deceive the consumer in any way, including in the overall presentation, even if the information is factually correct.

Recommended retail prices are prices that the manufacturer or another party in the supply chain recommends that the retailer sells a product for. Under competition law recommended retail prices are questionable and can be used as indirect means to achieve resale price maintenance, which is a prohibited practice[49].

Under the Directive, recommended retail prices may contravene Article 6(1)(d) given that they are often illusionary. This can happen when traders use unreasonably high recommended retail prices for the purpose of price comparisons and, as a result, give consumers the impression that they are offering them a significant discount. Experience shows that very often recommended retail prices are not implemented, especially in markets where there is a healthy competition between retailers, who remain free to depart from the manufacturer's recommendation and to implement a price that can be substantially lower (or higher) than the recommended one.

Drawing on national experience in this area, it is worth noting that certain national guidelines and codes suggest that the main criteria for assessing whether a price comparison is misleading or not lies in the possibility of showing that a recommended retail price is in line with the general market price for the product or has been applied in the market for a significant period of time, or both.

Some examples from the guidelines of the Finnish Consumer Ombudsman

Recommended retail price (RRP)

The recommended retail price means the price that the manufacturer or a previous level in the supply chain recommends and that the consumer is generally charged for the same product. (Market Court 1982:19, 1989:7)

Comparison with the general price level

When a retail shop compares its own prices with the recommended retail price, it is a question of comparing its own prices with the general price level. It is misleading for a retail shop to call its own selling prices the recommended retail prices.

When it is not a case of advertising a reduced price, a retail shop may only compare its own sales price with the product's recommended retail price if a consumer is actually charged the recommended retail price for a similar good in another retail shop (Market Court 1982:19, 1989:7).

If a retail shop uses a comparison of this kind, it must be able, if necessary, to demonstrate by means of a price survey, at local level at a minimum, that consumers are genuinely charged the recommended retail price, and that it corresponds to the general price level.

UK, DTI Pricing Practices Guide

Price comparisons generally

1.1.1. If you choose to make price comparisons, you should [ ] be able to justify them, and to show that any claims you make are accurate and valid - in particular, that any price advantage claimed is real.

1.1.6 Use of initials or abbreviations to describe the higher price in a comparison should be avoided except for:

(a) the initials "RRP" to describe the recommended retail price; or

(b) the abbreviation "man. rec. price" to describe a manufacturer's recommended price.

You should write all other descriptions out in full and show them clearly and prominently with the price indication.

1.1.7 Sections 1.2 to 1.6 of this Guide give advice on particular types of price comparison.

1.6 Comparisons with "Recommended Retail Price" or similar

1.6.1 You should not use a recommended retail price, or similar, as a basis of comparison which is not genuine, or if it differs significantly from the price at which the product is generally sold.

1.6.2 You should not use an "RRP" or similar for goods that only you supply.

1.7 Pre-printed prices

1.7.1 Reductions stated on the manufacturer's packaging (e.g. "flash packs" such as "10p off RRP") should be passed on to consumers.

1.7.2 You are making a price comparison if goods have a clearly visible price already printed on the packaging which is higher than the price you will charge for them. Such pre-printed prices are, in effect, recommended prices (except for retailers' own label goods) and you should have regard to section 1.6.

[49] See Commission Regulation (EC) 2790/1999 of 22 December 1999 on the application of Article 81(3) of the Treaty to categories of vertical agreements and concerted practices [1999] OJ L 336, 21-25 and Commission Notice Guidelines on Vertical Restraints [2000] OJ C 291, 1-44. In particular para 48, 223-225.

2.4.4. Confusing marketing

2.4.4. Confusing marketing

The Directive prevents traders from providing false information on, inter alia:

(a) the main characteristic of the product (including method and date of manufacture, geographical or commercial origin);

(b) the nature, attributes and rights of the trader or his agent, such as his identity and assets, his qualifications, status, approval, affiliation or connection and ownership of industrial, commercial property rights or his awards and distinctions.

Under the Directive, a commercial practice will also be regarded as misleading if it involves any marketing of a product, including comparative advertising, which creates confusion with any products, trade marks, trade names or other distinguishing marks of a competitor and, as a result, distorts the economic behaviour of the average consumer.

In this connection it should be noted that a commercial practice will be regarded as unfair in case of misleading presentation of factually correct information.

Article 6(2) and 6(2)(a) of the Directive prohibits "any marketing of a product, including comparative advertising, which creates confusion with any products, trade marks, trade names or other distinguishing marks of a competitor" if, in its factual context, taking into account all its features and circumstances, it causes or it is likely to cause the average consumer to take a transactional decision he would not have taken otherwise.

A practice which raises issues of compatibility with the above provisions of Article 6 of the Directive is "copycat packaging".

"Copycat packaging" refers to the practice of designing the packaging of a product (or its "trade dress" or "get up") to give it the general "look and feel" of a competing well-known brand (typically the market leader). Copycat packaging is distinct from counterfeiting as normally it does not involve copying trade marks.

The risk posed by copycat packaging is consumer confusion, and, consequently, the distortion of their commercial behaviour.

Consumer deception takes a number of forms and each is explained in more detail below:

  • outright confusion - the consumer buys the copycat product mistaking it for the brand;
  • deception over origin - the consumer recognises the copycat product is different but believes, due to the similar packaging, that it is made by the same manufacturer; and
  • deception over equivalence or quality - again, the consumer recognises the copycat is different but believes, due to the similar packaging, that the quality is the same or closer to what they would have assumed if the packaging were different.

Deception over quality or nature

The similar packaging suggests to consumers that the quality or nature of the copycat product is comparable to the quality or nature of the brand in question or at least that it is more comparable that they might otherwise assume. As such, similar packaging gives the impression to consumers that the price alone is the only term of comparison between the products (rather than the combination of price and quality).

For example, a trader names or brands his new sunglasses so as to very closely resemble the name or brand of a competitor's sunglasses. If the similarity is such as to confuse the average consumer making him or her more likely to opt for the new sunglasses when, without such confusion, he or she otherwise would not have done so, this practice would breach the Directive.

The Directive also contains a list of unfair commercial practices to be considered unfair in all circumstances.

Annex I of the Directive (Commercial Practices which are prohibited in all circumstances)

The Directive contains some specific prohibitions concerning trade marks, brands and related features:

n. 3 Diplaying a trust mark, quality mark or equivalent without having obtained the necessary authorization.

n.4 Claiming that traders (including their commercial practices) or products have been approved, endorsed or authorised by a public or private body when they have not been or making such a claim without complying with the terms of the approval, endorsement or authorisation.

n. 13 Promoting a product similar to another product made by a particular manufacturer in such a manner as to deliberately mislead the consumer into believing that the product is made by that same manufacturer when it is not.

2.5.1. Introduction / Definition

The expressions "environmental claims" or "green claims" refer to the practice of suggesting or otherwise creating the impression (in the context of a commercial communication, marketing or advertising) that a product or a service, is environmentally friendly (i.e. it has a positive impact on the environment) or is less damaging to the environment than competing goods or services. This may be due to, for example, its composition, the way it has been manufactured or produced, the way it can be disposed off and the reduction in energy or pollution which can be expected from its use. When such claims are not true or cannot be verified this practice can be described as "green washing".

Consumers may weigh environmental considerations when purchasing products. Increasingly, in planning their advertising and marketing campaigns traders are taking these factors into account and environmental claims have become a powerful marketing tool. However, in order for environmental claims to be informative for consumers and to be effective in promoting goods and services with lower environmental impacts, it is imperative that they are clear, truthful, accurate and not misleading. They must also not emphasise one environmental issue and hide any trade-offs or negative impacts on the environment. The use of truthful environmental claims is also important in order to protect traders who make genuine claims from unfair competition from those traders who make unfounded environmental claims[50].

There is no EU legislation specifically harmonising environmental marketing. Environmental claims are partly covered by specific community legislation regulating the environmental performance of a category of products and prohibiting the misleading use of the claim, logo or label used in reference to this specific legislation. These laws provide for specific rules which take precedence over the broader provisions of the Directive as explained in section 1.9 above. Examples of such legislation are given in Section 2.5.2 below.

Outside those aspects covered by specific EU legislation, the general provisions of the Directive are to be used when assessing environmental claims and establishing whether a claim is misleading either in its content or in the way it is presented to consumers.

This was highlighted when, on 4 December 2008, the Environment Council adopted conclusions on the Sustainable Consumption and Production and Sustainable Industrial Policy Action Plan. Under point 18 of the conclusions, the Council "INVITES the Member States to fully implement the Directive on unfair commercial practices with regard to environmental claims; INVITES the Commission to include environmental claims in any future guidelines on the Directive on unfair commercial practices".

[50] See for example the recent survey on Green expectations - Consumers' understanding of green claims in advertising, by Consumer Focus, where it appears that 58% of consumers they consulted think that a lot of companies pretend to be green just to charge higher prices. To be consulted under:

2.5.2. Overview of specific EU legislation on environmental claims

(a) Organic labels are defined and regulated under Regulation (EC) n°834/2007[51] which provides for a list of terms and abbreviations (such as "bio" or "eco") that can be used in the labelling, advertising material or commercial documents of products which satisfy the requirements set out under this Regulation.

The misleading use of such labels is prohibited under article 23 of the Regulation:

"2. The terms referred to in paragraph 1 shall not be used anywhere in the Community and in any Community language for the labelling, advertising and commercial documents of a product which does not satisfy the requirements set out under this Regulation, unless they are not applied to agricultural products in food or feed or clearly have no connection with organic production.

Furthermore, any terms, including terms used in trademarks, or practices used in labelling or advertising liable to mislead the consumer or user by suggesting that a product or its ingredients satisfy the requirements set out under this Regulation shall not be used.

3. The terms referred to in paragraph 1 shall not be used for a product for which it has to be indicated in the labelling or advertising that it contains GMOs, consists of GMOs or is produced from GMOs according to Community provisions."

The Regulation also provides for rules concerning processed food and for compulsory indications and logos.

(b) Energy labelling is regulated by Directive 92/75/EEC[52]. Household appliances offered for sale, hire or hire-purchase must be accompanied by a fiche and a label providing information relating to their consumption of energy (electrical or other) or of other essential resources.

Misleading use of such labels is prohibited under article 7(b) of the Directive:

"if this is likely to mislead or confuse, the display of other labels, marks, symbols or inscriptions relating to energy consumption which do not comply with the requirements of this Directive and of the relevant implementing directives is prohibited. This prohibition shall not apply to Community or national environmental labelling schemes".[53]

(c) The labelling of tyres will be regulated by the Regulation on the labelling of tyres with respect to fuel efficiency and other essential parameters[54] which provides that tyre manufacturers will have to declare the fuel efficiency, wet grip and external rolling noise performance of C1, C2 and C3 tyres (i.e. tyres mainly fitted on passenger cars, light and heavy duty vehicles). From 1 November 2012, these performances will be displayed at the point of sale by means of a label in printed format displayed in the immediate proximity of the tyres at the point of sale or a sticker attached to the tyre tread. According to Article 4 and 5 of the Regulation, the performance of tyres will also have to be stated on or with the bill delivered to end-users when they purchase tyres as well as on technical promotional literature such as catalogues, leaflets or web marketing.

(d) Fuel and CO2 labelling: under Directive 1999/94/EC[55] a fuel economy label must be displayed next to all new passenger cars at the point of sale. This label must be clearly visible and meet certain requirements set out in Annex I. In particular, it must contain the official data on fuel consumption, expressed in litres per 100 kilometres or in kilometres per litre (or in miles per gallon), and of CO2 emissions in g/km.

Article 7 provides that "The Member States shall ensure that the presence on labels, guides, posters or promotional literature and material referred to in Articles 3, 4, 5 and 6 of other marks, symbols or inscriptions relating to fuel consumption or CO2 emissions which do not comply with the requirements of this Directive is prohibited, if their display might cause confusion to potential consumers of new passenger cars."

Besides this, Annex IV provides for prescriptive rules regarding promotional literature for cars:

"The Member States must ensure that all promotional literature contains the official fuel consumption and official specific CO2 emissions data of the vehicles to which it refers. This information should, as a minimum, meet the following requirements:

1. be easy to read and no less prominent than the main part of the information provided in the promotional literature;

2. be easy to understand even on superficial contact;

3. official fuel consumption data should be provided for all different car models to which the promotional material covers. If more than one model is specified then either the official fuel consumption data for all the models specified is included or the range between the worst and best fuel consumption is stated. Fuel consumption is expressed in either liters per 100 kilometers (l/100 km), kilometers per liter (km/l) or an appropriate combination of these. All numerical data are quoted to one decimal place.

Such values may be expressed in different units (gallons and miles) to the extent compatible with the provisions of Directive 80/181/EEC.

If the promotional literature only contains reference to the make, and not to any particular model, then fuel consumption data need not be provided."

(e) Fuel mix disclosure is required by the Electricity Directive 2003/54/EC[56] which provides for an obligation on Member States to ensure that electricity suppliers specify in or with the bills and in promotional material made available to customers:

"(a) the contribution of each energy source to the overall fuel mix of the supplier over the preceding year;

(b) at least the reference to existing reference sources, such as web-pages, where information on the environmental impact, in terms of at least emissions of the CO2 and the radioactive waste resulting from the electricity produced by the overall fuel mix of the supplier over the preceding year is publicly available."

With respect to electricity obtained via an electricity exchange or imported from an undertaking located outside the EU, aggregate figures provided by the exchange or the undertaking in question over the preceding year may be used.

(f) Eco-labels may be awarded to products which meet certain environmental requirements during the life cycle of the product under Regulation 1980/2000[57] (currently being recast).

Article 10(1) of the recast new Regulation provides that "Any false or misleading advertising or use of any label or logo which leads to confusion with the Community Ecolabel shall be prohibited".

[51] Council Regulation (EC) No 834/2007 of 28 June 2007 on organic production and labelling of organic products and repealing Regulation (EEC) No 2092/91, OJ L 189, 20.7.2007, p. 1-23

[52] Council Directive 92/75/EEC of 22 September 1992 on the indication by labelling and standard product information of the consumption of energy and other resources by household appliances, OJ L 297, 13.10.1992, p. 16-19

[53] The proposal of a recast of Directive 1992/75/EEC is currently at the final stage of the legislative process. When it enters into force, it will give a mandate to the Commission to adopt labeling measures on specific products. The scope of the labeling Directive will be extended to all energy-related products which, when offered for sale, hire or hire-purchase, will have to be accompanied by a fiche and a label providing information relating to the product's energy consumption and, if relevant, other resources. The well-known A-G scale (and for fridges, A+ and A++ classes) will remain in use, with the possibility to open the scale up to classes A+/A++/A+++ and the consumers will, at all times, be aware of the best available class on the market as the Directive will require that the dark green color should always indicate the best class. Unauthorized use of the label will be prohibited and Member States will be able to put in various penalties in this case when implementing the Directive. The new Directive also reinforces market surveillance provisions in line with Regulation n° 765/2008/EC that aim to minimize non-compliance. A new element of the recast is the introduction of mandatory advertising: "any advertisement for a specific model of energy-related products covered by an implementing measure under this Directive includes, where energy-related or price information is disclosed, a reference to the energy efficiency class of the product" (Article 4(2)(a)).

[54] The Regulation was adopted on 25 November 2009. It should be published in the OJ beginning of January 2010 and will enter into force 20 days after its publication.

[55] Directive 1999/94/EC of the European Parliament and of the Council of 13 December 1999 relating to the availability of consumer information on fuel economy and CO2 emissions in respect of the marketing of new passenger cars, OJ L 12, 18.1.2000, p. 16-23

[56] Directive 2003/54/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity and repealing Directive 96/92/EC, OJ L 176, 15.7.2003, p. 37-56.

[57] Regulation (EC) No 1980/2000 of the European Parliament and of the Council of 17 July 2000 on a revised Community eco-label award scheme, OJ L 237, 21.9.2000, p. 1-12.

2.5.3. The Directive and misleading environmental claims

The Directive does not provide for specific rules in relation to environmental marketing and advertising. However, its provisions apply to all claims made in the context of business-to-consumer commercial practices, including those related to the environment.

As stated in Recital 10 of the Directive, it indeed "provides protection for consumers where there is no specific sectoral legislation at Community level and prohibits traders from creating a false impression of the nature of products".

The Directive does not discourage the use of green claims and provides a legal basis to make sure that traders use green claims in a credible and responsible manner. The application of the provisions of the Directive to environmental claims can be summarised in two main principles:

(a) Based on the Directive's general clause, traders must, above all, present their green claims in a specific, accurate and unambiguous manner;

(b) Traders must have scientific evidence to support their claims and be ready to provide it in an understandable way in the case that the claim is challenged.

2.5.4. Annex I prohibits certain misleading environmental claims

Under Annex I of the Directive ("black list"), the following practices are always considered unfair, and therefore prohibited, regardless of the impact they have on the consumer's behaviour:

  • n°2: displaying a trust mark, quality mark or equivalent without having obtained the necessary authorisation.

Example: using any community or national label (e.g.: Nordic Swan label, Blue angel, or NF environment) without authorisation.

  • n°4: claiming that a trader (including his commercial practices) or a product has been approved, endorsed or authorised by a public or private body when he/it has not or making such a claim without complying with the terms of the approval, endorsement or authorisation.

Example: claiming that a product has been approved by an environmental agency, an NGO or a standardisation body when this is not the case.

  • n°1: claiming to be a signatory of a code of conduct when the trader is not;

Example: a trader displaying on his website that he is a signatory of code of conduct relating to the product's environmental performance when this is not the case.

  • n°3: claiming that a code of conduct has an endorsement from a public or other body which it does not have.

Example: a trader claiming that the code of conduct of his car-manufacturing company is endorsed by the national environment agency, ministry or a consumers' organisation when this is not the case.

2.5.5. The application of the Directive's general provisions to misleading environmental claims

This provision applies to commercial communications including environmental claims (such as text, logos, pictures and use of symbols). It provides for a case-by-case assessment of the practice, the content of the environmental claim and its impact on the average consumer's purchasing decision.

Two different situations may occur:

(i) Objective misleading practice: the environmental claim is misleading because it contains false information and is therefore untruthful, in relation to one of the items of the list provided for by Article 6(1).

Example: use of the term "biodegradable" when that is not the case (e.g. on a product for which no tests have been carried out); use of the term "pesticides-free" when the product actually contains some pesticides.

In conjunction with Article 12 of the Directive, this means that any environmental claims must be made on the basis of evidence which can be verified by the competent authorities.

(ii) Subjective misleading practice: the environmental claim is misleading because it deceives or is likely to deceive the average consumer, even if the information contained therein is factually correct.

This situation relates more to the way environmental claims are presented and put in context and the impression the commercial communication produces on consumers, suggesting him an environmental benefit which may turn out to be misleading.

Example: advertisement showing a car in a green forest; use of natural objects (flowers, trees) as symbols; use of vague and general environmental benefits of a product ("environmentally friendly, green, nature's friend, ecological, sustainable"); greening of brand names or of a product's name.

Example: a manufacturer of a washing machine claims that his new model reduces water usage by 75%. This may have been true in certain laboratory conditions but within an average home environment it only reduces water by 25%.

Example: a food product is claimed to be produced in an environmentally friendly manner, based on a label or certification scheme which in fact only ensures that the farmer complies with the environmental baseline under EU law (cross-compliances).

  • Clarity and accuracy of the claims are important criteria for the assessment by national enforcers. In particular, it should be mentioned in a way to be clear for the average consumer:
  • whether the claim covers the whole product or only one of its components (e.g.: recyclable packaging where the content is not recyclable or a part of the packaging if the packaging is only partially recyclable);
  • whether the claim refers to a company (applying to all its products) or only to certain products;
  • if the claim does not cover the product's entire life cycle, which stage of the life cycle or the product characteristics the claim exactly covers;
  • The environmental claim, label or symbol used must not cause confusion with official marks.
  • The assessment should also take into account the product's nature. For certain products which are, in any case, harmful for the environment (cars, pesticides, products containing toxic substances), environmental claims related to one aspect of the product should not give the misleading impression that the product itself is environmentally friendly

Example: a French appeal court has confirmed recently that a pesticide labelled as "biodegradable" and "good for environment", where several of the substances contained in the pesticide are still harmful to soil, was misleading advertising[58].

  • Useful criteria and examples can be found in the Commission's non-binding guidelines published in 2000 for making and assessing environmental claims[59], based on the international standard ISO 14201-1999. These guidelines contain references to environmental claims which should be deemed misleading, for example:
  • claims based on the absence of a harmful product (e.g. chemical) when the product category does not generally include this harmful product;
  • inappropriate use of "...-free" claims, when they refer to substances that have never been associated with the product or, if the substance referred to used to be associated with the product but is no longer (e.g. deodorant spray claiming to be "CFC-free", where this requirement is legally mandatory for all similar products).

[58] France - Cour d'appel de Lyon, 29 October 2008, Case "Roundup" (Monsanto - Scotts France)

[59] Guidelines for making and assessing environmental claims, December 2000, European Commission - ECA SA, Dr Juan R Palerm.

2.5.6. Breaches of codes of conduct containing environmental commitments may also be considered misleading actions.

Breaches of codes of conduct containing commitments in relation to environment protection by an enterprise which has subscribed to such a code can be tackled under this provision.

Example: a trader has subscribed to a binding code of practice that promotes sustainable use of wood and displays the code's logo on its website. The code of practice contains a commitment that its members will not use hardwood from unsustainably managed forests. However, it is found that the products advertised on the website contain wood from a deforested area.[60]

The average consumer would expect code members to sell products which comply with their code. National enforcers will then assess whether he or she is likely to take his or her purchase decision on this basis.

[60] From the Guidance on the UK Regulation (May 2008) implementing the Unfair Commercial Practices Directive - Consumer Protection from Unfair Trading - Office of Fair Trading/Department for Business Enterprise and Regulatory Reform (2008)

2.5.7. Product comparisons involving environmental claims must be assessed under the criteria set out by the Directive on Misleading and Comparative Advertising

Directive 2006/114/EC on misleading and comparative advertising (e-link) notably lays down the conditions under which comparative advertising is permitted (Article 1). Article 4 of this Directive sets out the criteria under which comparative advertising is allowed. These criteria apply to advertisements which compare the environmental impact or benefit of different products.

Under this Directive, such a comparison should therefore, among other things:

  • not be misleading, within the meaning of the Directive on unfair commercial practices;
  • compare goods or services meeting the same needs or intended for the same purpose;

As regards environmental comparison, national enforcers and self-regulation bodies usually interpret this criterion to mean that the comparison should refer to the same product category.

  • objectively compare one or more material, relevant, verifiable and representative features of those goods and services.

It should also be clear from the trader's claim whether the comparison is made as against one or more of the following:

  • the organisation's own prior process;
  • the organisation's own prior product;
  • another organisation's process, or;
  • another organisation's product.

2.5.8. Enforcement action against misleading environmental claims and the burden of proof

Under the Directive:

  • Self-regulation is allowed as an enforcement method and the control exercised by code owners at national or community level to eliminate misleading environmental claims may supplement administrative or judicial action. In the vast number of Member States, codes of conducts and self-regulatory bodies play an important role in the regulation of advertising, including on the environmental aspects and claims made in advertisements.
  • National, local and sectoral codes of conduct may regulate the behaviour of traders who undertake to be bound by such codes in relation to environmental claims. Stricter requirements on green claims may then apply to those traders who have committed to such codes.
  • Advertising codes of conduct usually contain rules as regards environmental claims, in particular requiring traders to substantiate any factual claims.
  • However, under Article 10 of the Directive, recourse to self-regulation "shall never be deemed the equivalent of foregoing a means of judicial or administrative recourse as provided for in Article 11".

Self-regulation cannot therefore be used as a substitute for legal action. It is the Member States' responsibility, under Article 11 of the Directive, to ensure adequate and effective means to combat unfair commercial practices in general and misleading environmental claims in particular.

  • Finally, under Article 12 of the Directive, national enforcers and courts must be given the power to require traders to furnish evidence as to the accuracy of the factual claims they make where such a requirement is necessary:

"Member States shall confer upon the courts or administrative authorities powers enabling them in the civil or administrative proceedings provided for in article 11:

to require the trader to furnish evidence as to the accuracy of factual claims in relation to a commercial practice if, taking into account the legitimate interest of the trader and any other party to the proceedings, such a requirement appears appropriate on the basis of the circumstances of the particular case;

to consider factual claims as inaccurate if the evidence demanded in accordance with (a) is not furnished or is deemed insufficient by the court or administrative authority"

2.6.2. Definition

The Directive leaves traders the choice as to whether to include the price in their advertising. Under Article 2(i), a commercial communication or advertisement containing the characteristics of a product and a price should be qualified as an "invitation to purchase" in the sense of the Directive.

The notion of "invitation to purchase" implies that traders have to respect a number of specific information requirements listed in Article 7(4) (described in paragraphs 2.6.3. and 2.6.4. below).

The "characteristics of the product" requirement, mentioned in Article 2(i) of the Directive is invariably present as soon as there is verbal or visual reference to the product. A different interpretation could incentivise traders to provide vague product descriptions or omit information in their commercial offers in order to circumvent the information requirements provided for by Article 7(4).

The last part of the definition in Article 2(i) of the Directive ("thereby enables the consumer to make a purchase") does not require that the commercial communication provides the consumer with a mechanism to purchase (e.g. a phone number or a coupon). It means that the information given in the product marketing must be sufficient to enable the consumer to take a purchasing decision (i.e. to decide whether to purchase that product for that price or not).

The following will normally be considered invitations to purchase where the price and the characteristics of the product are given[61]:

  • an advertisement in a newspaper or on TV;
  • an airline website displaying offers for flights and their prices;
  • a menu in a restaurant;
  • a leaflet from a supermarket advertising for discounted prices on certain products;
  • a radio advertisement for a mobile phone ring tone;
  • a product with a price on the shelf in a shop.

Based on Article 2 (i), a commercial communication or advertisement which does not include the price shall not be considered as an "invitation to purchase" in the sense of the Directive.

A clear example of commercial communications which are not invitations to purchase would be advertisements promoting a trader's 'brand' rather than any particular product (i.e. brand advertising). Other examples include the promotion of a specific product or a service, through an exhaustive description of its nature, characteristics and benefits, without making reference to the price.

[61] See also Guidance on the UK Regulation (May 2008) implementing the Unfair Commercial Practices Directive, 2008 Consumer Protection from Unfair Trading, Office of Fair Trading, 2008 ( page 36.

2.6.3. Invitation to purchase in the context of misleading omissions

The Directive employs the notion of invitation to purchase in the context of Article 7[62], which concerns misleading practices by omission and which establishes, in very general terms, a positive obligation on traders to provide all the information which the average consumer needs to make an informed choice (i.e. the material information). Given that articles 7(1),(2) and (3) do not define in explicit terms the concept of material information, national authorities and courts will need to use their judgement in assessing whether key items of information have been omitted, taking into account all features and circumstances of a commercial practice and the limitations of the communication medium.

In contrast, when it comes to the invitation to purchase, Article 7(4) lists a number of information requirements which should be considered as essential (material), to ensure the maximum amount of legal certainty at this critical point. These include, inter alia, the product characteristics, the trader's geographical address and identity, and the total price.[63]

The invitation to purchase is a critical moment in the consumer's decision making. By its nature it is a direct and immediate form of product promotion, triggering a more impulsive reaction from consumers and thus exposing them to higher risks.

The aim of the provision in Article 7(4) is therefore to make sure that, whenever traders make commercial offers to consumers, they make available simultaneously, in an intelligible and unambiguous manner, enough information to enable the consumer to take an informed decision to purchase and do not mislead the consumer by the omission of important information.

[62] The Directive makes reference to the invitation to purchase also in Annex I, n. 5 and 6.

[63] See recital 14 which clarifies further that "In respect of omissions, this Directive sets out a limited number of key items of information which the consumer needs to make an informed transactional decision..."

2.6.4. Application of the information requirements in Article 7(4)

The information requirements provided in Article 7(4) concern the product's main characteristics, the trader's address, the full price inclusive of taxes, the payment arrangements, delivery, performance and complaint handling policy (if they depart from professional diligence) and the existence of a right of withdrawal or cancellation (for products involving such a right).

It is clear that under the Directive, whenever a communication includes the product and the price these information requirements become inevitably applicable.

However, the objective of these requirements is not to introduce unnecessary or disproportionate information burdens on traders but rather to ensure that consumers are not misled when they make a purchasing decision. Therefore, the wording of Article 7(4) also requires that national authorities and courts enforce this obligation in an adequate manner, taking into account the following elements.

First, traders do not need to provide information which is already obvious or apparent from the context (Article 7(4), first paragraph).

Second, establishing what constitutes the "main characteristics" of a product may vary depending on the product concerned (Article 7(4)(a)):

  • complex products may require the provision of more information than simple ones. It follows that a picture, for example, could be sufficiently clear for consumer as regards certain product's main and distinguishing characteristics;
  • certain restrictive conditions which limit the offer should also in principle be considered as part of the main characteristics of the product (for example: a very limited period during which a service is provided).

Third, the amount and the type of information concerning the main characteristics of the product may also vary depending on what can be considered "appropriate" in relation to the "medium" used by the trader to make that commercial communication (Article 7(4)(a)). In this connection, it is reasonable to expect that an offer on the radio may deliver to consumers less detailed information on the main characteristics of the product than an invitation to purchase on a web-site or in a specialized magazine. The main characteristics of a product or service (Article 7(4)(a)) may often be apparent from the context of the advertisement, and in this case they would not need to be listed separately.

The geographical address and the identity of the trader (Article 7(4)(b)) can sometimes be considered as "obvious or apparent from the context":

  • The address of a shop or restaurant which the consumer is already in constitutes an obvious example of such information being "apparent from the context".
  • The address of the local branch of a major retail or restaurant chain may be considered as "obvious or apparent from the context" since it is expected to be known to the average consumer. Therefore, a national-wide advertisement by such a trader would not normally require an explicit reference to the geographical address. This assumes however that the invitation applies to all of the traders' points of sale. However, the geographical address shall be provided when the invitation to purchase only concerns certain stores or restaurants of the chain in question in order to avoid consumers being mislead.
  • In case of online shops, it should be noted that under Directive 2000/31/EC of 8 June 2000 on electronic commerce, traders must in accordance with its Article 5 render easily, directly and permanently accessible their name, the geographic address where they are established and details including their electronic mail address - which allow them to be contacted rapidly and communicated with in a direct and effective manner. Some of this information does not need to be displayed in the invitation to purchase but should be available on the website of the trader. Furthermore, under Article 10 of the e-commerce Directive, certain information (e.g. on the various technical steps which are necessary before the formal conclusion of a contract) must also be provided prior to the order being placed. This information does not need to be displayed at the stage of the invitation to purchase but should be available prior to the order being placed by the recipient of the service and no later than it is clear, from the consumer behaviour, that he/she is ready to consider the offer (e.g. by clicking on the banner with the invitation to purchase).
  • Where an advertisement includes a widely known logo or a brand name, a trader's identity should be apparent from the advertisement's context, and so would not need to be listed separately.

In relation to the price, it is important to note that Article 7(4)(c) requires traders to provide the total (or final) price, which must include all applicable taxes (e.g. V.A.T.) and charges, and that, when such charges cannot be calculated in advance, consumers should be properly informed that these may be payable.

The arrangements for payment, delivery, performance and the complaint handling policy of most established products, services and traders (Article 7(4)(d)) would normally be expected to conform to the requirements of professional diligence, and so would not normally have to be stated explicitly. Such information must be displayed only where the terms of payment, delivery, performance and handling of complaints are to the consumer's disadvantage when compared to the good diligent market practice.

The existence of a right of withdrawal or cancellation (Article 7(4)(e)) must be mentioned in invitation to purchase where applicable, for example in case of distance selling (e-commerce, telephone, etc). At the invitation to purchase stage, traders are only required to inform consumers about the existence of such rights (without detailing the conditions and procedures needed to exercise them).

It is worth noting that in a recent EU-wide investigation into websites selling consumer electronic goods (a "sweep"), national authorities found that 66% of the websites investigated either did not provide information on the right to withdraw or provided misleading information about it[64].

[64] See FAQ on EU-wide investigation into websites selling consumer electronic goods, 9 September 2009, available under:

2.6.5. Invitation to purchase and material information - Other considerations

Where traders make invitations to purchase they will need to ensure that their commercial practices include the information required by the Directive, or that such information is apparent from the context. This does not mean that such information only needs to be provided where there can be said to be an invitation to purchase. Complying with the information requirements in Article 7(4) at the moment of the invitation to purchase does not exempt traders from providing any other additional information that the average consumer needs, in the context of a specific transaction, to make informed decisions, nor from providing any other information under other EU laws.

The Directive considers certain information to be 'material' where traders make invitations to purchase. Subject to the same considerations, which apply under Article 7(2) to misleading omissions generally, this information must be provided in a clear, unambiguous, intelligible and timely manner. Failure to do so in the context of an invitation to purchase will be tantamount to a misleading omission.

2.6.6. Examples of invitations to purchase

The following are examples of how the information might be provided in differing types of invitation to purchase:

Pencil (a simple product)

A shop has a number of pencils for sale and displays the price. This is an invitation to purchase because the information given in the context of a shop enables the consumer to make a purchase (by taking the pencil to the till and paying for it). The pencils themselves 'indicate' their characteristics (that they are pencils), and the pencils together with the price ticket or label form the commercial communication. In this instance, the material information required is provided on the pricing label or is already apparent from the context. The main characteristics of the product - such as the colour or thickness of the lead - are apparent from looking at it. The trader trades under his own name and is based in the shop (the address), the price is given, and there are no arrangements for payment, delivery, performance or complaint handling that differ from those that consumers would reasonably expect. There are no omissions of cancellation rights or information requirements under other Community law provisions.

Price list in a bar

A licensed premise offers various drinks for sale to consumers. The price list (which is the commercial communication) placed near the bar provides consumers with the information they need to enable them to purchase drinks, in that it tells consumers what drinks are available and their price. In this instance, the main characteristics are the names (and possibly the name of the brand) of the drinks available. The trader's identity and the name of the establishment are given on the price list, and the address is apparent from the context as the consumers are there. There are no delivery or other arrangements which are contrary to the requirements of professional diligence that need noting.

Mail order advertisement

An advertisement in a magazine features T-shirts for sale. The prices and sizes of the T-shirts available are given in the advertisement, and the bottom half of the advertisement is an order form which can be filled in, with payment enclosed, and sent direct to the retailers. This would be an invitation to purchase. Here, the main characteristics of the product are included in the advertisement (i.e. such as the size, material and colour). The trader's identity is stated in the advertisement, as is his geographical address. So, too, are payment and delivery arrangements. The advertisement also mentions the consumer's entitlement to cancel any order and the period for which the advertised price would be valid, given the fact that this is a contract concluded by mail order and the Distance Selling provisions apply.

[65] Taken from Guidance on the UK Regulation (May 2008) implementing the Unfair Commercial Practices Directive, 2008 Consumer Protection from Unfair Trading, Office of Fair Trading, 2008 ( page 37.