DIRECTIVE 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market

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European Parliament and Council, DIRECTIVE 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market, 2005/29/EC, 11.05.2005

Type EU Directive
Legal context EU
Abstract
Link http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:149:0022:0039:en:PDF
Topics Business Model, Competition, Consumer, Contract, Technology, Interoperability, Transparency

Notes

It amends:

  • Council Directive 84/450/EEC;
  • Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council;
  • Regulation (EC) No 2006/2004 of the European Parliament and of the Council.

Art. 1: purpose: proper functioning of the internal market; high level of consumer protection.

Art. 2: "product" means any goods or service.

Art. 2: ""business-to-consumer commercial practices" (or commercial practices) means any act, omission, course of conduct or representation, commercial communication including advertising and marketing, by a trader, directly connected with the promotion, sale or supply of a product to consumers".

Art. 2: ""professional diligence" means the standard of special skill and care which a trader may reasonably be expected to exercise towards consumers, commensurate with honest market practice and/or the general principle of good faith in the trader's field of activity".

Art. 2: '""invitation to purchase" means a commercial communication which indicates characteristics of the product and the price in a way appropriate to the means of the commercial communication used and thereby enables the consumer to make a purchase".

Art. 2: ""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".

Art. 3: scope: unfair business-to-consumer commercial practices, BEFORE, DURING and AFTER a commercial transaction in relation to a product ("AFTER": so, when you firm change terms and conditions, and in continuing accessing or using the product I accept new terms and conditions, you may realize an unfair practice, at least when article 5 or subsequent are satisfied).

Art. 5: Annex I contains a list of CP unfair in all circumstances; if the practice is not in that list, we have to see if it is misleading (active or omissive) or agressive; if it is not, we have to see if it satisfies the conditions stated by the general definition of UCP; if not, it is fair.

Art. 5: general definition of UCP (unfair commercial practices): 2 cumulative conditions: 1) practice contrary to the requirement of professional dilgence; 2) it distorts or it is likely to distort the economic behavior of the average consumer.

Art. 6(1): misleading actions: two alternative conditions (false information, or deceiving even if information are factually correct) + a necessary condition (it causes or it is likely to cause a transactional decision that the consumer wouldn't have taken otherwise); a list of elements follows, information about which can be subjected to art. 6, and that list seems to be peremptory, not exemplifying; among these elements, there is the "nature of the product" (which may mean the fact that the product is a good or a service); the nature of the sales process (???) and the consumers' rights (also the ownership right??). May I apply this article to the expression "Buy now" of Amazon, when its terms and conditions say that the consumer is buying a license and, then, that he isn't buying anything?.

Art. 6(2): misleading actions: CP are also misleading actions if, considering the factual context, they satisfy two alternative conditions (the practice creates confusion with products of a competitor, or the trader don't comply with firm codes of conduct which he has indicated in the practice to be bound by) and a necessary condition (they cause or are likely to cause a transactional decision of the consumer that he wouldn't have taken otherwise).

Art. 7(1): misleading omissions: two cumulative conditions: omission of material information needed by the average consumer in the particular context to take an informed transactional decision + omission that causes or it is likely to cause a transactional decision not taken otherwise.

Art. 7(2): misleading omissions: two alternative conditions (concealment of material information, or its provision in an unclear, unintelligible, ambiguous or untimely matter) and a necessary condition (it causes or it is likely to cause a transactional decision not taken otherwise).

Art. 7(4): list of material information (if not apparent from the context) to be given in an invitation to purchase (among them, there is also "the main characteristics of the product").

Artt. 8-9: agressive commercial practices: two cumulative conditions: it impairs ot it is likely to impair the average consumer's freedom of choice by harassment, coercion (including physical force) or undue influence + it causes or it is likely to cause a transactional decision not taken otherwise: we have to consider the context of the practice.


Annex I: "20. Describing a product as ‘gratis’, ‘free’, ‘without charge’ or similar if the consumer has to pay anything other than the unavoidable cost of responding to the commercial practice and collecting or paying for delivery of the item." We may question if the case in which the price paid for the IoT device is actually destined (also) to remunerate the accompanying service, but in which the provider says that the service is free, should be included in this UCP.


See HELBERGER N., Digital Consumers and The Law. Towards a Cohesive European Framework, The Netherlands, Kluwer Law International, 2013.

See VTB-VAB NV v. Total Belgium NV and Galatea BVBA v. Sanoma Magazines Belgium NV: from this decision by the CJEU we may infer that a practice like the SIM-lock can not be automatically prohibited by national laws of EU Member States, because - on the matter of UCP - the above-mentioned Directive establishes a maximum level of harmonisation - according to which the practice of combining offers can't be automatically considered as an UCP, but its possible unfairness must be analysed on a case-by-case basis.

See GUIBAULT L., Accommodating the Needs of iConsumers: Making Sure They Get Their Money's Worth of Digital Entertainment: it could be considered as a misleading action the fact of not informing the consumer of what they can and cannot do with their digital hardware and content.


Interpretation Speculations

Can we define as misleading action (art. 6, where it refers to the "overall presentation" of the information) or omission (art. 7, where it refers to information concealment and information provision in an unclear, unintelligible, ambiguous or untimely manner) when the information really relevant for the customer is included in one or more long documents, where it is badly signalled?