Transcript Bild 1

Positive information
obligations on advertisers
Antonina Bakardjieva Engelbrekt, LL.D.,
Associate Professor
Stockholm University
[email protected]
Introduction to
Question B
LIDC Congress
Hamburg 2008
Question B

Under which circumstances and to what
extent should the positive obligation of
providing information be imposed by
regulation on advertisers?
Background

Growing number of rules and regulations
imposing positive information obligations on
advertisers on national and European level, e.g.
– On health and safety aspects of products (e.g.
dangers of alcohol and tobacco, obesity, etc.)
– On environmental characteristics of products (e.g.
CO2 emissions)
– On withdrawal rights of consumers

Directive 2005/29/EC (UCPD)
– General ban on misleading omissions, Article 7 UCPD
– Specific information obligations for the case of
’invitation to purchase’
Concerns
Too costly for industry?
 Excessive constraint on freedom of
commercial communications?
 Effectiveness?
 Information overload for consumers?
 Shifting undue burden and risk
assessment to consumers?

Delimiting the question
Subjective scope: advertisers, not traders
in general
 Objective scope:
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– Obligations in advertising, i.e. in precontractual relations
– Positive obligations
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Geographical scope:
– In principle global, but confined to states
whose national groups submit reports
Difficulties of delimitation
Defining advertising – upon broad
definition encompasses nearly all
commercial communication
 Pre-contractual relations – but often with
contractual consequences
 Positive obligations in what sense:

– Positive (affirmative), contrary to negative?
– Positive (specific), contrary to general?

European bias due to UCPD
Short answer to Question B

It depends.
Structure of the study

Mapping the existing types of information obligations
– Positive or negative?
– General or specific?
– Horizontal or vertical?
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Identifying the typical circumstances under which
positive obligations are imposed and the policy
justifications for that
Analyzing the scope of the obligations
–
–
–
–
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Who is the addressee of the obligation?
What information is required?
How is the information to be provided?
Is the communication medium taken into account?
Providing a glimpse in enforcement
Review of the legal policy discussion: pros and cons
Information…

Individuell und sportlich - der
neue Passat R36
Liebhaber maximaler Dynamik und
exklusiven Designs können den
neuen Passat R36 ab jetzt
bestellen. Der stärkste Passat aller
Zeiten steht mit seinen sportlichen
220 kW (300 PS) als Limousine
und Variant zur Auswahl. Optisch
reizvoll sind unter anderem die
Lackierung „Biscay Blue
Perleffekt“, der für die R-Reihe
typische Stoßfänger und die
entsprechenden in Aluoptik
gestalteten Doppellamellen des
oberen Kühlergrills.
(Kraftstoffverbrauch: 10,5 l/100
km; CO2-Emission: 249
g/km)*****
… or product standard?
BBC news, 26 September 2008:
MEPs stand by car emission curbs

– European car makers face tough new
targets for cutting carbon emissions
after MEPs rejected industry pleas for
more time to produce greener cars.
Infromation and advice, or …




« Pour votre santé,
mangez au moins cinq
fruits et légumes par
jour»
« Pour votre santé,
pratiquez une activité
physique régulière »,
«Pour votre santé, évitez
de manger trop gras, trop
sucré, trop salé »
« Pour votre santé, évitez
de grignoter entre les
repas».
…advertising ban?

Obésité :
« Bachelot
envisage de
supprimer
certaines publicités
pour enfants »
…or product ban?
Smoking kills
Summary of the
international report
International report

Based on:
– National reports
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Austria
Belgium
Czech Republic
France
Germany
Hungary
Italy
Spain
Switzerland
UK
– Additional comparative information
 Scandinavian countries, but no national reports!
– Analysis of European law, Unfair Commercial Practices Directive
Regulative approaches

Unfair competition law
– Germany, Austria, Switzerland

Marketing practices law
– Sweden, Denmark, Finland

Consumer law
– France, Belgium, Italy, Spain, Czech Republic

Self-regulation
– UK
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Mixed approaches
– Hungary: competition law and consumer law
Types of information obligations

Positive or ‘negative’ obligation:
– Positive: requires in an affirmative manner disclosure
of material information in the marketing to consumers
– Negative: upon failure to provide material information
the advertisement may be considered misleading or
unfair
General or specific (certain aspects only)
 Horizontal or vertical (certain products or
industries only)

Information obligations prior to
UCPD

Positive information obligation
– Unfair competition model: no
– Marketing practices model: yes
 Sweden – most far reaching, applies to all marketing,
information important from consumers’ point of view
 Other Scandinavian countries – with qualifications
– Consumer law model: yes, but restricted to offers,
linked to contract law
– Self-regulation model: no
– Mixed model: yes, in consumer law

Negative information obligation: yes in all
countries
Directive 2005/29/EC (1)

Misleading omission
– Elements:
 Material information
 Needed by average consumer (general public or average for
the group)
 To make informed decision
 Capacity to influence transactional decision
– Flexibilities
 Context (twice)
 Account of practice features and circumstances
 Limitations of the communication medium
Directive 2005/29/EC (2)

Invitation to purchase:
– 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
List of material information
 Flexibilities

– If not apparent from the context
– to an extent appropriate to the medium and the
product
Directive 2005/29/EC (3)

Way in which information is provided can
equal omission
– a trader hides or provides in an unclear,
unintelligible, ambiguous or untimely manner
such material information;
– fails to identify the commercial intent of the
commercial practice
Swedish Market Court, MD 2003:33
KO v. Ryanair
MD 2004:24 Vodafone
Directive 2005/29/EC (4)

To be taken into account
– Limitations of space and time imposed by the
communication medium
– Any measures taken by the trader to make
the information available to consumers by
other means
Post-implementation stage

Problems with transposition into national
law
– Missing flexibilities
– No definition of average consumer
– Communication medium

Problems with interpretation of provisions
– Invitation to purchase?
– Limitations of communication medium?
Specific and vertical information
obligations

Information asymmetries
– Complex products (foodstuffs, medicines, cosmetics,
complex services)
– Price (artificially complicated price-setting)

General public interest
– Health and safety
– Environmental protection

Paternalistic motives: protecting consumers from
themselves
– Altering consumption patterns toward healthy food,
no smoking, no drinking etc.
Regulative transparency?
Annex II UCPD
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Articles 4 and 5 of Directive 97/7/EC
Article 3 of Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and
package tours
Article 3(3) of Directive 94/47/EC of the European Parliament and of the Council of 26 October 1994 on
the protection of purchasers in respect of certain aspects of contracts relating to the purchase of a right
to use immovable properties on a timeshare basis
Article 3(4) of Directive 98/6/EC of the European Parliament and of the Council of 16 February 1998 on
consumer protection in the indication of the prices of products offered to consumers
Articles 86 to 100 of Directive 2001/83/EC of the European Parliament and of the Council of 6 November
2001 on the Community code relating to medicinal products for human use
Articles 5 and 6 of Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000
on certain legal aspects of information society services, in particular electronic commerce, in the Internal
Market (Directive on electronic commerce)
Article 1(d) of Directive 98/7/EC of the European Parliament and of the Council of 16 February 1998
amending Council Directive 87/102/EEC for the approximation of the laws, regulations and administrative
provisions of the Member States concerning consumer credit
Articles 3 and 4 of Directive 2002/65/EC
Article 1(9) of Directive 2001/107/EC of the European Parliament and of the Council of 21 January 2002
amending Council Directive 85/611/EEC on the coordination of laws, regulations and administrative
provisions relating to undertakings for collective investment in transferable securities (UCITS) with a view
to regulating management companies and simplified prospectuses
Articles 12 and 13 of Directive 2002/92/EC of the European Parliament and of the Council of 9 December
2002 on insurance mediation
Article 36 of Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002
concerning life assurance
Arguments for and against
information obligations

The pros
– Enhancing market transparency
– Relatively cost-efficient (cheapest information
provider)
– Relatively simple and clear-cut enforcement
– More conducive to economic integration than product
bans and uniform standards
– Protection of non-economic interests (health and
safety, environment)
– Protecting consumers against themselves
(sometimes)
Arguments for and against
information obligations

The cons
– Costs of information obligations (often passed
on to consumers)
– Questionable effectiveness
– Commercial communication and free speech
– Regulative thickets
Suggested conclusions
1) Support for measures enhancing market
transparency and truthful commercial
communication, but
–
balance against the principle of free market
communication: the choice of form, content and
medium of commercial communication should
essentially rest with advertisers.
2) Positive information obligations on advertisers
should be imposed in
–
–
carefully selected instances of well-evidenced
information asymmetries,
where additional information can be effectively
apprehended and used by consumers.
Suggested conclusions
(UCPD in particular)
3) Argue for loyal implementation of the UCPD’s provision on
misleading omissions in the national laws of the EU Member
States, transposing the flexibilities envisaged.
4) Which information should be qualified as material? Use
economic theory, market analysis, assessment of the
circumstances of the individual case rather than universally
applicable specifications.
5) ‘Invitation to purchase’: shall the concept apply to any
commercial communication which contains price and product
characteristic or should the communication also enable the
consumer to make a purchase in other way?
6) The League could take a stand on the issue of whether
information obligations should be confined to B2C relations
or whether they should be extended to traders as well.
Suggested conclusions
7) The League should insist on a better regulative
environment where redundancy and overlap of
information duties and confusion over
applicable rules and regulatory competence
are avoided. The implementation of the UCPD
in national law should be used as an occasion
for streamlining and consolidating information
duties to match market transparency with
regulatory transparency.