Delimiting the Harmonisation Scope of the Unfair Commercial Practices Directive: Towards a Specific Competitive Intent Requirement? Comment on Anzeige

Transcription

1 Delimiting the Harmonisation Scope of the Unfair Commercial Practices Directive: Towards a Specific Competitive Intent Requirement? Comment on Anzeige By Georgios Anagnostaras and Asteris Pliakos Reprinted from European Law Review Issue 5, 2014 Sweet & Maxwell 100 Avenue Road Swiss Cottage London NW3 3PF (Law Publishers)

2 Analysis and Reflections 701 Delimiting the Harmonisation Scope of the Unfair Commercial Practices Directive: Towards a Specific Competitive Intent Requirement? Comment on Anzeige Georgios Anagnostaras * Hellenic Radio and Television Council; Technological University of Athens Asteris Pliakos ** Athens University of Economics and Business; the Hellenic Parliament Advertisement control; EU law; Germany; Intention; Newspapers; Unfair commercial practices Abstract Nine years after its adoption, the Unfair Commercial Practices Directive continues to give rise to controversy as concerns its scope of application and the national laws that are covered by its provisions. The recent Anzeige ruling suggests that the existence of a specific competitive intent is required in order to bring a commercial representation within the personal scope of the Directive. However, this essentially allows the national legislature to impose more restrictive requirements on advertising in the written media than those allowed by the Unfair Commercial Practices Directive s provisions. The ruling also seems to provide some interesting clarification on the relationship between the Directive and EU legislation on audiovisual media services, authorising in principle the imposition of more restrictive advertising obligations on national broadcasters based on the minimum harmonisation clause of the Audiovisual Media Services Directive. Introduction The Unfair Commercial Practices Directive (UCPD) was adopted in order to improve the level of consumer protection and to contribute to the completion of the internal market, by removing regulatory obstacles to cross-border trade stemming from the existence of fragmented national legislation. 1 Horizontal in nature, this measure covers all business-to-consumer commercial practices involving products and services unless it stipulates otherwise in its provisions. 2 It contains a blacklist of commercial practices that are considered automatically unfair in all circumstances. 3 The legality of all other commercial communications must be ascertained concretely, in accordance with the requirements of the UCPD and the criteria of its general clauses. 4 * Legal Adviser and Teaching Associate respectively. ** Professor of European Union Law and Director of the Scientific Committee respectively. All views expressed are personal. The authors are grateful to Professor Niamh Nic Shuibhne and the anonymous reader of the European Law Review for their comments. 1 Directive 2005/29 concerning unfair business-to-consumer commercial practices in the internal market [2005] OJ L149/22. 2 UCPD art.3. 3 UCPD Annex I. 4 UCPD arts 5 9.

3 702 European Law Review In terms of its approximation objectives, the UCPD is based on a full harmonisation model. 5 This means that the national legislature is not allowed to introduce more restrictive rules within its scope of application and may not unilaterally extend the list of commercial practices that are considered unfair in all circumstances. Member States are not permitted to reverse the liberal orientation of the measure, which is based on the rationale that commercial practices that are not expressly blacklisted in its annex can be prohibited only following an individual assessment allowing their unfairness to be established. The national legislature may not, accordingly, introduce a presumption of unfairness as regards business-to-consumer commercial practices that are not included in the UCPD s blacklist, unless it is authorised by that measure s provisions to deviate from the objective of full harmonisation. 6 The question then is when national law falls within the approximation scope of the UCPD. 7 Some interesting clarifications in this respect were provided recently by the Anzeige ruling, which concerned the legality of a national prohibition on the publication of sponsored articles that are not clearly identified by the term advertisement. 8 The ruling seems to suggest that there is an additional criterion that needs to be satisfied in order to conclude that a given national provision is covered by the approximation scope of the UCPD. Even if a commercial communication is liable to be classified as a commercial practice, and even if it transpires that it is regulated by national law aimed at the protection of consumers, it will still fall within the competence of the national legislature if it is employed by a trader that is not envisaging it as a marketing tool specifically aimed at the promotion of its own products to the public. This conclusion also applies to the publication of financed editorial content in the written press, in relation to the obligations that national law may impose on publishers. 5 UCPD art.1 and Recitals 5 and 6. That this is indeed the case was emphatically confirmed in VTB-VAB NV v Total Belgium NV (C-261/07) and Galatea BVBA v Sanoma Magazines Belgium NV (C-299/07) [2009] E.C.R. I-2949; [2009] 3 C.M.L.R. 17 at [51] [52]. See also, in this respect, Zentrale zur Bekampfung unlauteren Wettbewerbs ev v Plus Warenhandelsgesellschaft mbh (C-304/08) [2010] E.C.R. I-217; [2010] 2 C.M.L.R. 24 at [42]; Mediaprint Zeitungs- und Zeitschriftenverlag GmbH & Co KG v Osterreich -Zeitungsverlag GmbH (C-540/08) [2010] E.C.R. I-10909; [2011] 1 C.M.L.R. 48 at [27 ]; Wamo BVA v JBC NV and Modemakers Fashion NV (C-288/10) [2011] E.C.R. I-5835 at [33]; BKK Mobil Oil Körperschaft des öffentlichen Rechts v Zentrale zur Bekämpfung unlauteren Wettbewerbs ev (C-59/12) [2014] 2 C.M.L.R. 1 at [34]. 6 See, for example, the preliminary ruling in Citroën Belux NV v Federatie voor Verzekerings- en Financiële Tussenpersonen (C-265/12) [2014] 1 C.M.L.R. 26. It was concluded there that national law may impose a general prohibition of combined offers made to consumers, where at least one of the components of those offers is a financial service. This is because the Unfair Commercial Practices Directive allows an exception to the objective of full harmonisation in the case of requirements which relate to financial services within the meaning of its provisions. 7 This question has attracted considerable academic interest. See indicatively, in this respect, B. Keirsbilck, The New European Law of Unfair Commercial Practices and European Law (Oxford: Hart Publishing, 2011), pp ; A. Garde, The Unfair Commercial Practices Directive: A Successful Example of Legislative Harmonization? in P. Syrpis (ed.), The Judiciary, the Legislature and the EU Internal Market (Cambridge: Cambridge University Press, 2012), pp ; U. Bernitz, The Unfair Commercial Practices Directive: Its Scope and Relation to the Law of Unfair Competition in S. Weatherill and U. Bernitz (eds), The Regulation of Unfair Commercial Practices (Oxford: Hart Publishing 2007), pp.33 46; T. Wilhelmsson, Scope of the Directive in G. Howels, H.-W. Micklitz and T. Wilhelmsson (eds), European Fair Trading Law: The Unfair Commercial Practices Directive (Aldershot: Ashgate, 2006), pp.49 82; J. Glöckner, The Scope of Application of the UCP Directive: I Know What You Did Last Summer (2010) 41 I.I.C. 570; J. Trzaskowski, Towards a Common European Marketing Law, EUI Working Paper Law 2010/21, p.35, available at [Accessed September 19, 2014]; G. Anagnostaras, The Unfair Commercial Practices Directive in Context: From Legal Disparity to Legal Complexity? (2010) 47 C.M.L. Rev. 147; J. Stuyck, E. Terryn and T. van Dyck, Confidence Through Fairness? The New Directive on Business to Consumer Commercial Practices in the Internal Market (2006) 43 C.M.L. Rev RLvS Verlagsgessellschaft mbh v Stuttgarter Wochenblatt GmbH (C-391/12) [2014] 2 C.M.L.R. 7 (also referred to as the Anzeige (advertisement) case).

4 Analysis and Reflections 703 This article examines the Anzeige ruling in the light of the previous unfair commercial practices case law. It argues that, ultimately, the ruling amounts to the introduction of a specific competitive intent requirement, which is not immediately apparent from the wording of the UCPD. It concludes that this requirement is warranted, in principle, given the regulatory structure of the measure. However, its application in the circumstances of the Anzeige proceedings essentially allows the national legislature to impose more restrictive requirements on the publication of financed editorial content in the written media than those allowed by the provisions of the UCPD. The ruling also seems to provide some important clarification as concerns the relationship between the UCPD and EU legislation on audiovisual media services, authorising in principle the imposition of more restrictive advertising obligations on national broadcasters based on the minimum harmonisation clause of the Audiovisual Media Services Directive (AVMSD). 9 Factual and legal background One of the blacklisted commercial practices that are considered unfair in all circumstances concerns the use of editorial content in the media to promote a product, without making it clear to consumers that this is actually financed by a trader. There are two ways consumers can be informed about the existence of an advertorial. This information may be incorporated in the actual editorial content. Alternatively, it may be communicated by images and sounds clearly identifiable by the public. 10 German law on unfair competition reproduces in essence the above provision on the use of advertorials. 11 At the same time, regional press law provides that any publisher and manager of a periodical who receives remuneration for a publication must identify that publication clearly with the word advertisement unless its nature is already apparent from its arrangement and layout. 12 This law pursues two objectives. First, it seeks to protect newspaper readers from being misled as to the promotional nature of the publication. Secondly, the requirement that advertising be separated from editorial content is also intended to maintain the objectivity and the neutrality of the press, by countering the risk of undue external influence being exerted on publishers and managers of periodicals. The issue that gave rise to the main proceedings was the publication in a newspaper of two sponsored articles. While both of these articles clearly mentioned their sponsors, they were not identified by the term advertisement as required by regional press law. When legal proceedings were instituted against it by a local competitor, the newspaper publisher argued that the relevant national legislation violated EU law by unilaterally extending the list of commercial practices that could be considered unfair in all circumstances. Uncertain as to the resolution of the case, the competent national court stayed the proceedings and referred a preliminary question on the matter. It asked in essence whether the UCPD precluded the application of the contested provision of the regional press law. The ruling of the Court of Justice The ruling starts by recalling that, given the complete harmonisation objective of the UCPD, it is only the specific commercial practices that are explicitly blacklisted in its annex that can be considered unfair in all circumstances. With reference to its earlier case law, the Court then reiterates that the possibility of maintaining at national level measures that automatically classify other commercial practices as unfair on 9 Directive 2010/13 on the co-ordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services [2010] OJ L95/1 art.10(1)(c). 10 UCPD Annex I point Annex to the Federal Law on Unfair Competition point Land Press Law of Baden-Württemberg para.10.

5 704 European Law Review grounds relating to the protection of press pluralism does not appear among the derogations from the scope of the UCPD set out in its Recitals and provisions. 13 It is immediately added, though, that these considerations are relevant in the circumstances of the main proceedings only if the publication of financed editorial content by a newspaper publisher comes within the scope of the UCPD. Even when a national provision pursues consumer protection objectives, it is also necessary that the conduct covered by it actually constitutes a commercial practice in order to ascertain whether it actually falls within the scope of the UCPD. 14 The Court stresses in this respect that even though the UCPD gives a particularly broad definition of the notion of commercial practices, the fact remains that these must originate from traders and they must be directly connected to the promotion and supply of their products to consumers. 15 There are certainly instances where the commercial practices of an operator are put to use by another undertaking acting on its behalf, in which case the UCPD may be relied on as against both that operator and the other undertaking. However, the publications at issue in the main proceedings were not such as to promote the newspapers in which they appeared, but rather the products and services of the third parties that financed them. Even though they were liable to be classified as commercial practices, the only direct connection that could possibly be established with respect to such a piece of commercial communication would be with the products of undertakings that were not parties to the main proceedings. In such a scenario, the UCPD was intended to protect consumers of products and services of those same undertakings and their legitimate competitors. On the contrary, it was not intended to protect the competitor of a newspaper publisher on the ground that the latter proceeded with publications that were liable to promote the products of their sponsors. Given that these publications could not alter significantly the economic behaviour of the consumer as concerns the purchase of the newspaper in question, they were not in themselves liable to be classified as commercial practices. 16 According to the Court, this conclusion is corroborated by the UCPD blacklist and its reference to the use of editorial content in the media. The ruling stresses that it cannot be ruled out that a newspaper publisher may itself employ a commercial practice which may be classified as unfair in relation to the reader, by offering, for example, the opportunity of winning a prize in competitions and thereby encouraging the consumer to purchase the newspaper. 17 However, the blacklist is not intended as such to require newspaper publishers to prevent possible unfair practices by advertisers connected with the promotion of their products and services to consumers. 18 The ruling also considers that if it were accepted that the UCPD could be relied on by an undertaking operating in the media sector against one of its competitors publishing financed editorial content intended to promote the products and services of its sponsors, such an application would conflict with the obligations imposed by the AVMSD as concerns the sponsorship of audiovisual programmes. 19 This is because the latter measure covers different practices from those covered by the UCPD. 20 The obligations imposed on 13 RLvS Verlagsgessellschaft (C-391/12) [2014] 2 C.M.L.R. 7 at [33]. The ruling refers in this respect to Mediaprint Zeitungs (C-540/08) [2010] E.C.R. I-10909; [2011] 1 C.M.L.R. 48 at [26] [27] and [34]. 14 RLvS Verlagsgessellschaft (C-391/12) [2014] 2 C.M.L.R. 7 at [34] [35]. 15 RLvS Verlagsgessellschaft (C-391/12) [2014] 2 C.M.L.R. 7 at [36] [37]. The ruling refers to VTB-VAB NV v Total Belgium (C-261/07) and Galatea BVBA v Sanoma Magazines Belgium NV (C-299/07) [2009] E.C.R. I-2949; [2009] 3 C.M.L.R. 17 at [50]; and to Plus Warenhandelsgesellschaft (C-304/08) [2010] E.C.R. I-217; [2010] 2 C.M.L.R. 24 at [37]. 16 RLvS Verlagsgessellschaft (C-391/12) [2014] 2 C.M.L.R. 7 at [38] [42]. 17 The ruling refers in this respect to Vereinigte Familiapress Zeitungsverlags- und vertriebs GmbH v Bauer Verlag (C-368/95) [1997] E.C.R. I-3689; [1997] 3 C.M.L.R at [28]. 18 RLvS Verlagsgessellschaft (C-391/12) [2014] 2 C.M.L.R. 7 at [43] [44]. 19 AVMSD art.10(1)(c). 20 The ruling refers in this respect to Recital 82 of the AVMSD.

6 Analysis and Reflections 705 newspaper publishers by the contested national rule correspond in essence to the obligations that the EU legislature imposes in the audiovisual sector on media service providers when their programmes are sponsored by third-party undertakings. Since no similar legislation currently exists at EU level as concerns the written press, Member States retain the power to impose obligations on newspaper publishers to indicate the existence of sponsored editorial content so long as they comply with the free movement requirements. 21 The ruling thus concludes that in a situation such as that at issue in the main proceedings, the fact that the contested national provision seems to pursue both the objective of guaranteeing the independence of the press and that of protecting consumers against misleading commercial conduct cannot extend the application of the UCPD to practices and to persons from whom these practices originate if they are not covered by its scope. How does the ruling compare with previous unfair commercial practices case law? Does it fit in well with the regulatory structure and the wording of the UCPD? What is actually required in order for national law to come within the scope of unfair commercial practices law? What are the obligations imposed on traders in the media sector? What is the current level of consumer protection in this area? All of these issues will now be examined in turn. Some reflections on the implications of the competitive intent requirement for the media sector will then be offered. The approximation scope of the Unfair Commercial Practices Directive An interesting feature of the Anzeige ruling is that the Court and its Advocate General reached completely opposite conclusions on the legality of the contested national provision, relying on exactly the same case law and following a similar legal methodology. Just like the Court, A.G. Wathelet examined whether the publication of editorial content in the media constituted a commercial practice and whether the national law at issue included consumer protection among its regulatory objectives. 22 Exactly like the ruling, it was stressed in the Opinion that the concern to maintain the objectivity and neutrality of the press could not modify the list of commercial practices that are considered unfair in all circumstances. 23 However, the Advocate General adopted a wider interpretation of the notion of commercial practices that covered both the financing of editorial content by advertisers and the circulation of this content to the public by publishers. The only exception that the Advocate General accepted in this respect concerned publications paid for by general interest associations and parties with no commercial objective, on the rationale that these were not actually likely materially to affect the economic conduct of the average consumer. 24 For advertorials with a commercial intent, the obligations that national law could impose on publishers were clearly outlined in the blacklist of unfair commercial practices. The regional press law involved in the main proceedings went beyond these obligations, insofar as it required the specific use of the term advertisement. 25 The previous unfair commercial practices case law a confusing attempt to reconcile scope of application with regulatory purpose Not surprisingly, the first preliminary rulings in the area concentrated on the definition of a commercial practice. 26 It was stressed that the EU legislature gives a particularly wide interpretation to the concept of commercial practices, which covers any commercial act that forms part of the marketing strategy of an 21 RLvS Verlagsgessellschaft (C-391/12) [2014] 2 C.M.L.R. 7 at [45] [49]. 22 Opinion of A.G. Wathelet in RLvS Verlagsgessellschaft (C-391/12) [2014] 2 C.M.L.R. 7 at [25] [33]. 23 Opinion in RLvS Verlagsgessellschaft (C-391/12) at [42] [43]. 24 Opinion in RLvS Verlagsgessellschaft (C-391/12) at [34] [37]. 25 Opinion in RLvS Verlagsgessellschaft (C-391/12) at [38] [40]. 26 UCPD art.2(d).

7 706 European Law Review operator and relates directly to the promotion thereof and its sales development. 27 Advertising statements constitute the most obvious examples of commercial practices. 28 Combined offers and sales with bonuses also belong to this category, since they are marketing tools aimed at the incitement of consumers and increasing the volume of sales. 29 The same is true of the organisation of promotional campaigns and prize competitions. 30 The offer of price reductions to consumers is also covered by the notion of commercial practices. 31 The announcement of clearance sales and the sale of goods at a loss are two more examples of commercial acts falling within the concept of commercial practices. 32 This broad interpretation of the notion of commercial practices brought within the scope of EU law certain marketing acts that used to escape its application completely, as relating exclusively to the selling arrangements of goods. 33 However, it was so wide that it could potentially cover any practice connected with the promotion of products to consumers regardless of its actual impact on their economic interests. There were two possible ways that the Court could address this issue. One would be to insist on the existence of a direct connection between a commercial conduct and the promotion of products to consumers. This would exclude the classification as commercial practices of business conduct that is only indirectly connected with increasing the volume of sales of the trader concerned. It would accordingly bring outside the scope of the UCPD any national provision that regulates such conduct, by restricting, for example, the opening hours of stores. However, it was not until Anzeige that the Court paid specific attention to this direct connection requirement, by considering that the publications at issue in the main proceedings were not such as to increase the overall volume of sales of the newspapers in which they appeared and were not, therefore, connected with the promotion of these products to consumers. 34 Instead, the Court interpreted the scope of the UCPD in the light of its regulatory purpose, excluding from its application national laws on commercial practices that are not aimed at the protection of consumers. 35 There is nevertheless an important observation that needs to be made in this respect. An approach based on the teleological interpretation of national law is not actually supported by the regulatory objectives of the UCPD. The latter clarifies that it aims only at the approximation of national laws on commercial practices that adversely affect the economic interests of consumers. 36 It is thus exclusively interested in the nature of the economic interests that a given commercial practice concerns. If these relate to consumers, they are covered by the provisions of the UCPD regardless of the presumed intention of the applicable national law. If, on the contrary, the 27 Total Belgium (C-261/07) and Galatea (C-299/07) [2009] E.C.R. I-2949 at [49] [50]. 28 CHS Tour Services GmbH v Team4 Travel GmbH (C-435/11) [2014] 1 C.M.L.R Total Belgium (C-261/07) and Galatea (C-299/07) [2009] E.C.R. I-2949; Telekomunikacja Polska SA w Warszawie v Prezes Urzedu Komunikacji Elektronicznej (C-522/08) [2010] E.C.R. I-2079; Citroën Belux NV (C-265/12) [2014] 1 C.M.L.R Plus Warenhandelsgesellschaft (C-304/08) [2010] E.C.R. I-217; [2010] 2 C.M.L.R. 24; Mediaprint Zeitungs (C-540/08) [2010] E.C.R. I-10909; Purely Creative Ltd v Office of Fair Trading (C-428/11) [2013] 1 C.M.L.R Wamo BVA v JBC NV and Modemakers Fashion NV (C-288/10) [2011] E.C.R. I-5835; INNO NV v Unie van Zelfstandige Ondernemers VZW (C-126/11) Order of December 15, Köck v Schutzverband gegen unlauteren Wettbewerb (C-206/11) [2013] 2 C.M.L.R. 21; Euronics Belgium CVBA v Kamera Express BV and Kamera Express Belgium BVBA (C-343/12) Order of March 7, Criminal Proceedings against Keck and Mithouard (C-267/91 and C-268/91) [1993] E.C.R. I-6097; [1995] 1 C.M.L.R See, in this respect, A. Pliakos and G. Anagnostaras, Harmonising National Laws on Commercial Practices: Sales Promotions and the Impact on Business to Business Arrangements (2010) 35 E.L. Rev It will nevertheless be seen that this amounts in practice to a more restrictive interpretation of the direct connection requirement than that suggested by the UCPD provisions. 35 UCPD art.1 and Recital 6. That the regulatory objective of national law is indeed relevant to the application of the Directive was initially accepted in Mediaprint Zeitungs (C-540/08) [2010] E.C.R. I Since then, it has been emphatically reaffirmed on several occasions. 36 UCPD art.1 and Recitals 6 7.

8 Analysis and Reflections 707 commercial practice impacts solely on the interests of competitors, it automatically escapes its application even if it is regulated by a consumer protection measure. Furthermore, this reliance on the assumed legislative intention gives rise to considerable legal uncertainty and undermines the approximation of national laws on commercial practices. This is because it introduces a subjective element of assessment that does not form part of the definition of commercial practices contained in the UCPD, which refers to all commercial representations connected with the promotion of products to consumers. The introduction of this element allows Member States to maintain national legislation that is inconsistent with the UCPD, simply by reference to the alleged nature of its regulatory objectives. Hence, the same commercial practice may be subject to legislative approximation in one Member State but not in another, negatively affecting, in practice, the legal uniformity and simplicity promised by the EU legislature. 37 Even in the same Member State, there may be varying judicial interpretations as to the actual objectives pursued by a given legislative measure. An interesting example in this respect is given by national rules prohibiting announcements of price reductions outside the sales periods. In two recent cases examined under the preliminary reference procedure, there was considerable controversy as to whether the contested national rule also aimed at the protection of consumers in addition to the regulation of competitive relations and the protection of small traders. On both occasions, the referring national courts were instructed to consider this legislation to be unlawful if they concluded that it also pursued consumer protection objectives. Otherwise, it would escape the application of the provisions of the UCPD completely. 38 Needless to say, of course, that similar interpretative problems arise in relation to most national rules on commercial practices. 39 Clearly then, national laws that are not aimed at all at consumer protection fall automatically outside the scope of the UCPD even if they regulate a commercial conduct liable to be classified as a commercial practice. 40 This was emphatically confirmed when the Court was called upon to ascertain the legality of a national provision prohibiting traders from opening their stores seven days a week. It concluded that the contested national law only aimed to protect the interests of workers and employees in the commercial sector. Because of that objective, the measure could not come within the scope of application of the UCPD. 41 What if consumer protection constitutes just one of several objectives pursued by national law? Based on the Recitals of the UCPD, one would probably be inclined to believe that its provisions come into play only in cases where the national legislature aims principally at consumer protection. This is because it is stressed in these Recitals that the approximation of national laws concerns national rules on commercial practices that impair directly the economic interests of consumers. 42 Given that this statement is interpreted by the Court as referring to the regulatory objective of national law, it is only natural to assume that it also implies the existence of a close connection between a given national rule and the interests of consumer 37 See particularly, in this respect, the Extended Impact Assessment on the Unfair Commercial Practices Directive SEC(2003) 724. See Commission, The Application of the Unfair Commercial Practices Directive COM(2013) Wamo BVA (C-288/10) [2011] E.C.R. I-5835 at [20] [28]; INNO NV (C-126/11) Order of December 15, 2011 at [22] [30]. See in this respect J. Vannerom, Case Wamo: And the Question Remains Who is (Actually) Protected? (2012) 1 R.E.D.C See also B. Akkermans, Belgian Prohibition on Sales Periods Outside the Legally Mentioned Periods (2011) 18 M.J Another interesting example is provided by national rules on sales below cost. See B. Keirsbilck, Does EU Economic Law Preclude National Prohibitions of Sales Below Cost? (2012) 5 E.L.R It is for the competent national courts and authorities to ascertain the regulatory objectives of national law, with regard to its wording and Recitals. It is nevertheless clear from the unfair commercial practices case law that this will often be challenging. Suffice it to compare in this respect Wamo BVA (C-288/10) [2011] E.C.R. I-5835 and INNO NV (C-126/11) Order of December 15, Pelckmans Turnhout NV v Walter Van Gastel Balen NV (C-559/11) Order of October 12, 2012 at [15] [24]. 42 UCPD Recital 6.

9 708 European Law Review protection. However, once again, the Court pays no particular attention to this requirement. 43 It is clearly attested by its case law that national law is covered by the scope of the provisions of the UCPD whenever it can be concluded that consumer protection constitutes one of its regulatory objectives. 44 At the time of the Anzeige ruling, it thus seemed that the provisions of the UCPD would apply any time it was ascertained that a given representation constituted a business to consumer commercial practice regulated by a national law aiming, even residually, at the protection of consumers. It is against this legal background that the importance and the implications of the ruling can now be assessed. Anzeige and the introduction of the specific competitive intent requirement The particularity of the Anzeige case was that the parties involved in the judicial proceedings were acting in essence as intermediates between advertisers and consumers, in the sense that their publications promoted the products of third-party undertakings and not the newspapers at issue. The situation was not, therefore, comparable to Galatea, where the offer of vouchers by a magazine entitling its readers to price reductions in a number of lingerie shops promoted both the products of the advertiser and the readership of the magazine. 45 For similar reasons, it was not analogous to Mediaprint, where the organisation of a prize competition by a newspaper clearly formed part of the commercial strategy of its publisher. 46 There were, of course, two preliminary references in the past in which the Court was asked to provide guidance on commercial communications published in newspapers. However, in both of those cases, legal action was instituted against the advertised companies and not the media that these companies used in order to communicate their promotional campaigns to the public. 47 Accordingly, this was the first time that the Court was called upon to ascertain the application of the UCPD in relation to traders that are not employing a commercial communication in order to promote their own products to the public. It concluded that, in such circumstances, it is not possible to classify the conduct of these undertakings as a commercial practice. It relied in this respect on the notion of commercial practices, as interpreted by its case law. Particularly as concerns the publication of financed editorial content in the media, the Court also referred to the wording of the blacklist and to the relationship between the UCPD and the provisions of the AVMSD. The notion of commercial practices commercial conduct lacking competitive intent According to the ruling in Anzeige, the existence of a commercial practice may be established in two basic scenarios. The first is relatively clear. A commercial representation will constitute a commercial practice if the trader is employing it in order to promote its own products to consumers. The second requires some more clarification. If the commercial practice of an economic operator is put to use by another undertaking acting on its behalf, it can be classified as a commercial practice also as concerns this latter undertaking. Regrettably, the Anzeige ruling provides very little explanation in this respect. It only notes that the publisher involved in the main proceedings was clearly not acting in the name of the commercial operators financing the publication of editorial content in its newspaper. 43 It is argued, therefore, that this requirement has become redundant. See, in this respect, Namyslowska, To B2C or Not to B2C. Some Reflections on the Regulation of Unfair Commercial Practices from a Polish Perspective (2013) 36 J.C.P. 329, Mediaprint Zeitungs (C-540/08) [2010] E.C.R. I at [20] [26]; Wamo BVA (C-288/10) [2011] E.C.R. I-5835 at [20] [28]; INNO NV (C-126/11) Order of December 15, 2011 at [22] [30]; Köck (C-206/11) [2013] 2 C.M.L.R. 2 at [28] [33]; Euronics Belgium CVBA (C-343/12) Order of March 7, 2013 at [17] [18]. 45 Galatea (C-299/07) [2009] E.C.R. I Mediaprint Zeitungs (C-540/08) [2010] E.C.R. I Konsumentombudsmannen v Ving Sverige AB (C-122/10) [2011] E.C.R. I-3903; Köck (C-206/11), [2013] 2 C.M.L.R. 2.

10 Analysis and Reflections 709 There are certainly many situations in which the provisions of the UCPD may be relied upon as against more than one trader. Galatea constitutes a very interesting example in this respect. 48 In that case, the offer of lingerie items at reduced prices clearly constituted a commercial practice for the traders of those products. However, this price reduction was made available to consumers by means of a voucher contained in a weekly magazine. Given that the offer of the voucher formed part of the marketing strategy of this magazine, it constituted a commercial practice for its publisher. Hence, the UCPD could be invoked in these circumstances against both the traders of the said lingerie products and the publisher of the magazine at issue. Combined offers thus constitute an area in which more than one economic operator may be concurrently involved in a given commercial practice. One can also think of promotional competitions organised by the media where the prize is offered by a sponsor. In this case, both parties involved in the organisation of the competition envisage it as a means of promoting their products to the public. However, it could be argued that none of the above constitute real examples of commercial practices put to use by an undertaking acting on behalf of another operator. Maybe, then, the Court wanted to refer to situations where there exists some type of business connection between two operators. Consider in this respect the case of travel and insurance agencies. These use various marketing techniques in order to promote the products of other commercial operators to consumers, by advertising, for example, their low prices and limited time offers. At the same time, it is apparent that their commercial representations also aim to increase their own volume of sales. The same is the case for trade of products by authorised retailers: by communicating the promotional campaigns of their providers to the public, these traders also purport to improve their own sales performance and to attract a larger number of consumers. On the contrary, the ruling excludes from the notion of commercial practices any commercial conduct that is not connected with the promotion of the products of the trader that employs it. This interpretation seems to be in line with earlier judicial pronouncements, which consider as a commercial practice any commercial act that forms part of the marketing strategy of an operator and relates immediately to its promotion and sales increase. 49 However, it is not completely supported by the legislative concept of commercial practices contained in the UCPD, which refers to any course of conduct and commercial communication by a trader connected with the promotion of a product to consumers. 50 The terminology used by the EU legislature seems therefore to suggest that there is no need to establish an association between the commercial conduct of an operator and the promotion of its own products. It only suffices that this conduct is liable to promote a product to consumers, even if this is marketed by a third undertaking. 51 It is interesting to note that the Anzeige ruling makes absolutely no reference in this respect to the purpose of the UCPD. This measure intends to establish uniform legislative rules in the area, in order to contribute to the proper functioning of the internal market and to attain a high level of consumer protection. 52 On several occasions in the past, the Court relied on these objectives in order to interpret the provisions of the UCPD and to ascertain their scope of application. It also invoked these objectives as an argument to conclude that the EU legislature intended completely to harmonise national laws on business to consumer commercial practices 53 ; to cover national legislation that is not aimed exclusively at consumer protection 54 ; 48 Galatea (C-299/07) [2009] E.C.R. I Most recently confirmed in Citroën Belux NV (C-265/12) [2014] 1 C.M.L.R. 26 at [18]. 50 UCPD art.2(d). 51 See also Glöckner, The Scope of Application of the UCP Directive (2010) 41 I.I.C. 570, who considers that publications by the media may be classified as commercial practices when they are likely to influence the market behaviour of consumers. 52 UCPD art.1 and Recitals Total Belgium (C-261/07) and Galatea (C-299/07) [2009] E.C.R. I-2949 at [51] [52]. 54 Mediaprint Zeitungs (C-540/08) [2010] E.C.R. I at [24] [28].

11 710 European Law Review to interpret the notion of misleading actions 55 ; to clarify that it is not necessary to examine whether a commercial practice is contrary to the requirements of professional diligence in order to consider it as misleading 56 ; to preclude the imposition on consumers of the obligation to incur any cost whatsoever, when they are informed by a trader that they have already won a prize 57 ; and to explain that a public law body charged with the task of public interest comes within the personal scope of the unfair commercial practices provisions. 58 The lack of reference to the objectives of the UCPD in Anzeige is therefore remarkable, especially since these objectives have been relied upon in the past to extend the material scope of the measure to a wide variety of commercial conduct and representations. Arguably, the Court considers that it was not the intention of the EU legislature to bring within the personal scope of the UCPD traders that engage in a business act without specific competitive intent. Seen in this perspective, there are actually three criteria that need to be met cumulatively in order for national law to come within the approximation scope of the measure. The first concerns the regulatory purpose of the law, which must also relate to the protection of consumers. Once this is ascertained, the next step is to examine whether the commercial conduct that this law regulates is connected with the promotion of a product to consumers. If this is the case, the final question that needs to be asked is whether this commercial conduct forms part of the marketing strategy of the trader concerned in relation to its own products. If one/any of these criteria is not met, the case comes within the competence of the national legislature unless, of course, there exists EU sectoral legislation in the area. The competitive intent requirement in the regulatory structure of the UCPD The question that arises in this respect is whether the Anzeige ruling is indeed warranted, insofar as it introduces a requirement that is not immediately apparent from the wording of the provisions of the UCPD. There are two closely related issues that must be examined in this connection: first, whether the EU legislature intended to exclude from the notion of commercial practices commercial conduct that is not specifically aimed at the promotion of the products of the trader concerned; and, secondly, in the case of an affirmative answer, whether this is also the case as concerns the publication of advertorials, given that the blacklist expressly prohibits the use of concealed advertising content in the media. As concerns the first question, there are important practical aspects that need to be taken into account. Consider, for example, an advertisement in a newspaper informing the public about the availability of a special offer on airfares. If it turns out that this information is misleading because only a very small number of seats are offered at the reduced rate, the air carrier violates the provisions of the UCPD. Its invitation to the public constitutes bait advertising, which is regarded as automatically unfair in all circumstances. 59 Obviously, the newspaper was completely unaware of this violation when it proceeded with the publication at issue. If this publication could be classified as a commercial practice, it would nevertheless be caught by the prohibition of bait advertising. Consequently, that would expose the newspaper publisher to the potential institution of legal proceedings against it. Similar issues would arise with regard to any publication of misleading advertising claims in the media, even if they are not explicitly blacklisted. This is because 55 Trento Sviluppo Srl and Centrale Adriatica v Autorità Garante della Concorrenza del Mercato (C-281/12) [2014] 1 W.L.R. 890 at [31] [33]. 56 CHS Tour Services (C-435/11) [2014] 1 C.M.L.R. 38 at [45] [47]. 57 Purely Creative Ltd (C-428/11) [2013] 1 C.M.L.R. 35 at [43] [50]. This case concerned the interpretation of point 31 of Annex. See, in this respect, H. Köhler, Congratulations, you have Won! New Standards Apply to Announcements of Wins (2013) 8 J.I.P.L.P BKK Mobil Oil Körperschaft des öffentlichen Rechts v Zentrale zur Bekämpfung unlauteren Wettbewerbs ev (C-59/12) [2014] 2 C.M.L.R. 1 at [34] [41]. 59 UCPD Annex I, point 5.

12 Analysis and Reflections 711 the existence of a misleading commercial practice can be ascertained even if the trader concerned cannot be criticised for any breach of the duty of diligence. 60 Turning then to the legislative concept of commercial practices, it needs to be recalled that this requires the existence of a direct connection between a commercial conduct and the promotion of products to consumers. 61 This cannot be established when an operator is merely communicating to consumers the marketing strategy of another undertaking without specifically aiming at the increase of its own volume of sales. In these circumstances, this commercial operator is acting as a simple intermediary and any market effects are produced primarily as a result of the promotional policy of the other undertaking. Hence, it is only the commercial conduct of the latter that can be considered as immediately connected to the promotion of products to the public. Needless to say, of course, under this interpretation the media are excluded from the application of the UCPD any time that they are simply advertising the products of third-party operators without envisaging this as part of a commercial strategy specifically intended to confer upon them a clearly identifiable competitive advantage in the relevant market. Their respective obligations towards consumers are ascertained consequently by the national legislature, subject to respect for the Treaty and EU sectoral legislation. This conclusion seems to be reinforced by the wording of the blacklist. Although many of its provisions are open to interpretation, none of them is explicitly addressed to traders acting without specific competitive intent. On the contrary, all of them can be interpreted as referring to commercial conduct serving the marketing strategy of traders in relation to their own products. Consider, for example, advertisements that expressly invite children to buy the advertised products and to persuade their parents to proceed to their purchase. In the audiovisual sector, these commercial communications are considered illegal and media service providers are obliged not to broadcast them. 62 These advertisements are also referred to in the blacklist. However, what is actually prohibited is the inclusion in the advertisement of the invitation to purchase and not its actual publication. 63 That implies that this particular prohibition is exclusively confined to advertisers and that it cannot be relied on as against the media, unless the latter acquire a specific competitive advantage by the said commercial practice in relation to their own products. 64 According to this interpretation, the national legislature retains its freedom to impose concrete regulatory restrictions on the media outside the audiovisual media services sector in relation to advertisements specifically addressed to children, subject to the general requirements of the Treaty. The competitive intent requirement and the publication of concealed editorial content That leads to the second question, concerning the publication of financed editorial content in the media. Even if the provisions of the UCPD generally intend to cover commercial conduct that originates from traders aiming at the promotion of their own products, the blacklist could possibly introduce exceptions from this rule. The publication of advertorials would be an ideal candidate for this purpose. Unlike other forms of unfair commercial communications, the publication of concealed advertising content is made consciously by the media and it certainly constitutes a breach of the duty of professional diligence on their part. That being so, the EU legislature might want to acknowledge this particularity by imposing specific obligations on publishers under the blacklist. 60 CHS Tour Services (C-435/11) [2014] 1 C.M.L.R. 38 at [33] [47]. For an interesting comment on this ruling, see P. Siciliani and H. Gamper, Should a Finding of Material Distortion under Art 6 Para 1 UCPD Raise an Unrebuttable Presumption of Breach of the Duty of Professional Diligence? (2013) 4 E.U.V.R UCPD art.2(d). 62 AVMSD art.9(1)(g). 63 UCPD Annex I, point For example, an advertisement in a magazine that invites children to buy a specific product in order to find a code that will allow them to participate in a promotional competition organised by the magazine.

13 712 European Law Review In Anzeige, the Court considered that to allow reliance on the UCPD against newspapers and magazines proceeding with the publication of financed editorial content would conflict with the specific obligations imposed by EU law as regards the sponsorship of audiovisual programmes. It relied in this respect on the Recitals of the AVMSD. These provide that, apart from the practices that are covered by this measure, the provisions of the UCPD apply to unfair commercial practices occurring in the audiovisual sector. 65 However, this argument is not very convincing. The provisions of the UCPD give precedence to the application of EU sectoral legislation, in the sense that, in the case of conflict, the latter prevails and applies to the specific aspects of the commercial practices that it covers. 66 In other words, the UCPD merely complements existing sectoral legislation and only comes into play when this is necessary in order to cover any potential gaps in its application. That is exactly the case in the audiovisual media services area, where specific EU rules regulate extensively both the sponsorship of audiovisual programmes and the obligations imposed in this regard on media service providers. However, this is not to say that the existence of these rules precludes automatically the application of the UCPD also as concerns commercial conduct by the media that occurs outside the audiovisual sector. On the contrary, much more interesting is the second argument put forward by the Court. This is based on the premise that the wording of the blacklist clearly attests that it is not intended to require newspaper publishers to prevent possible unfair commercial practices by advertisers. The ruling is not very explicit in this respect. However, it probably means that the blacklist covers only the use of concealed advertising content in the media and not the publication thereof. This seems to suggest that the EU legislature is specifically targeting commercial operators profiting competitively from the use of advertorials, and not the media that make this possible by communicating the financed editorial content to consumers. It is interesting at this point to compare the wording of the blacklist with the terminology used by the EU legislature as concerns sponsored audiovisual programmes. 67 Indeed, the provisions of the AMSD make it clear that their requirements are imposed on natural and legal persons bearing editorial responsibility for audiovisual content. They thus aim clearly at media service providers, making them legally responsible towards viewers. Arguably, this is not the case as concerns the blacklist. This is not clearly addressed to publishers but it seems instead to refer principally to the obligations of advertisers towards consumers in relation to the use of sponsored editorial content. However, this interpretation undermines the operation of the blacklist in practice as concerns advertisers and it indirectly affects the obligations that national law is allowed to impose on them as regards the use of advertorials in the written media. When confronted with more restrictive national standards on the publication of financed advertorial content than those imposed on advertisers by the provisions of the UCPD, the publisher is required to comply with them in order to protect itself from the potential institution of legal proceedings under national law. That means that, in practice, consumers will be informed about the existence of the advertorial in the specific manner prescribed by the national legislature, even though this goes beyond the obligations imposed on advertisers by the blacklist. One can only wonder whether this is not actually an implicit way of introducing more restrictive rules within the scope of application of the UCPD by unilaterally extending the list of commercial practices that are considered automatically unfair in all circumstances. Ultimately, then, the position of the Advocate General in Anzeige seems to be closer to the regulatory objectives of the blacklist even though it is certainly correct as a matter of principle that the provisions of the UCPD are not generally intended to require the media to prevent the unfair commercial practices of advertisers. Regrettably, the ruling fails to take account of this particularity as concerns the publication of advertorials in the press. 65 AVMSD Recital UCPD art.3(4) and Recital AVMSD art.10.