EU rules on misleading ads enter into force

Christmas shopping may be safer for European consumers this year after a new directive against unfair commercial practices entered into force. The directive clearly defines and bans for the first time at European level a variety of misleading and aggressive behaviour, such as falsely creating the impression of free offers or pushing for a purchase.

The new set of rules clarifies unfair behaviour, which is often defined in different ways by EU states. With the directive in place, it will now be impossible to brand a product ‘free’ if it involves payments by the consumer. At the moment, in some EU countries it is possible to sell something as free while specifying in small print in the advertisement what the real economic conditions are – a practice which is now illegal.

The European Commission has outlined a ‘black list’  that includes over 30 banned actions. Fake offers through the media are particularly targeted by the directive as they have the ability to reach a bigger audience and cross-border relevance. 

New rules already in use in ‘old’ media are now extended to the Internet. Moreover, direct exhortations to children to persuade their parents to buy products (so-called ‘pestering power’) are now banned on the Web rather than just on television as had thus far been the case.

Aggressive behaviour is also tackled by the directive. Practices exemplified by suggestions such as “With the third phone call maybe a contract will be agreed” are now clearly banned across Europe.

According to the European Commission, e-commerce is set to get important advantages from the application of the directive because it creates a clear set of EU rules, thus encouraging new commercial activities.

One application of the directive has already come to light, with the order issued last November by the Commission to airline companies to remove misleading information from their websites (EURACTIV 15/11/07). 

The directive was agreed in May 2005 and came into force on 12 December, but thirteen member states have yet to implement it. Infringement proceedings have already been launched against these states. They are Finland, France, Germany, Hungary, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Romania, Spain, Sweden and the United Kingdom.

Enforcement of the new legislation is left to the member states. “We say to citizens: if you see these kinds of practices, you should complain to your national authorities”, explained Helen Kearns, spokesperson for Consumer Protection Commissioner Meglena Kuneva.

The Commission is targeting the delays of EU member states in transposing the directive, but it cannot do much to ensure its actual enforcement by the national authorities. “According to the national rules, a company that uses unfair practises could be fined or shut down. But if the authorities don’t respond to the complaints, we cannot intervene directly”, explained an EU official. 

This is due to the fact that the directive is aimed at protecting “collective and not individual rights”. “Every citizen has the right to file a complaint but it is not guaranteed that the national authority will act”, said another EU official. Indeed, this depends on several factors, such as the gravity of the case, the number of complaints and the priorities of the authority. The Commission may directly intervene only where a clear lack of application of the directive emerges, and even then only after a complaint has been issued to Brussels.

Another enforcement problem may arise due to unfair practices used in the media by companies based in countries outside the EU. A US or Chinese website may get around the new EU legislation by exploiting less restrictive national rules. However, “this is a marginal problem since the most important companies active in the EU have at least a branch in the European territory, and thus are subject to the directive”, explained the EU official. “The biggest part of e-commerce in EU activities will fall under the scope of the new legislation”, he added.

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