European Case on Unfair Commercial Practices
Proceedings were brought in Denmark against Canal Digital for alleged breaches of the Danish Commercial Practices Act, which transposed the Unfair Commercial Practices Directive (Directive 2005/29) into Danish law.
In autumn 2009, Canal Digital had issued a number of advertisements on television and online which promoted the company’s TV subscription services. In all of the advertisements a low monthly price was displayed prominently but a six monthly charge and the total overall price was either absent or displayed in a less conspicuous fashion.
The Danish courts made a request to the European Court for a preliminary ruling on a number of questions regarding articles 6 and 7 of the Unfair Commercial Practices Directive (misleading actions and misleading omissions). On 26 October 2016, the Court (Fifth Chamber) issued a judgment which confirmed, inter alia:
Time constraints that may apply to certain communication media, such as television commercials, cannot be taken into account when assessing whether a commercial practice is a misleading action under Article 6 [this contrasts with the position in respect of misleading omissions, see Article 7(3)]. (paragraph 42)
Article 6(1) must be interpreted as meaning that a commercial practice which consists of dividing the price of a product into several components and highlighting one of them, must be regarded as misleading, since that practice would be likely, first, to give the average consumer the false impression that he has been offered a favourable price and, secondly, cause him to make a transactional decision that he would not have made otherwise, which it is for the referring court to ascertain, taking into account all the relevant circumstances of the main proceedings. (paragraph 49)
Article 7 must be interpreted as meaning that, where a trader has opted to state the price for a subscription so that the consumer must pay both a monthly charge and a six-monthly charge, that practice must be regarded as a misleading omission if the price of the monthly charge is particularly highlighted in the marketing, whilst the six-monthly charge is omitted entirely or presented only in a less conspicuous manner, if such failure causes the consumer to take a transactional decision that he would not have taken otherwise. (paragraph 64)
It is for the referring court to assess, taking into account the limitations of the communication medium used, the nature and characteristics of the product and the other measures that the trader has actually taken to make material information about the product available to the consumer. (Ibid)
Article 7(4) must be interpreted as meaning that it contains an exhaustive list of the material information that must be included in an invitation to purchase. (paragraph 72)
It is for the national court to determine whether the trader at issue has satisfied his duty to provide information, taking into account the nature and characteristics of the product but also the communication medium used for the invitation to purchase and additional information possibly provided by that trader. (Ibid)
The fact that a trader provides, in an invitation to purchase, all the information listed in Article 7(4) does not preclude that invitation from being regarded as a misleading commercial practice within the meaning of Article 6(1) or Article 7(2). (Ibid)
The full judgment can be found here.