The Position of Consumers in Unfair Trade Practices Strengthened
Bill for Implementation of the Unfair Commercial Practices
Directive adopted
The Unfair Commercial Practices Directive (2005/29/EC) intends to
counteract unfair commercial practices by commercial parties
against consumers. The Section 6:193b to be newly included in the
Dutch Civil Code ("BW" makes clear that a commercial
practice is unfair if "the trader acts contrary to the
requirements of professional diligence and the average
consumer's ability to make an informed decision is appreciably
impaired or may be impaired, thereby causing the average consumer
to take a transactional decision that he would not have taken
otherwise".
Professional Diligence and Average
Consumer
The most striking parts of Section 6:193b of the BW are
"professional diligence" and "average
consumer". What is understood by these terms?
Although the criterion of "professional diligence"
will be further defined by case law, it appears from legal history
that this must be understood to mean "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". In brief, the trader has to
act like an expert and decent trader.
With regard to the part "average consumer" the case
law of the European Court of Justice is used. It follows from this
case law that the "average consumer" must be understood
to mean the "reasonably well-informed, reasonably observant
and circumspect consumer". However, an exception to this
definition is possible; the definition of the "average
consumer" criterion will be adapted when it concerns a
commercial practice that is directed at a specific target group. In
that case, the average of the reference group will be taken as a
starting point. An example of this is a marketing campaign directed
at children.
"Black List"
Apart from the requirements of Section 193b of the BW, the
legislator has also included a "black list" of misleading
(Sections 6:193c of the BW through 6:193g of the BW) and aggressive
(Section 6:193h of the BW and 6:193i of the BW) commercial
practices that are particularly unfair. Examples of this are:
inducing consumers to buy by advertising a product at a very low
price while there is no reasonable stock of it; Falsely stating
that a product will only be available for a very limited time;
recommending the product in such manner as deliberately to create
the wrong impression with the consumer that the product was indeed
produced by that manufacturer; pyramid sales; advertising with
quality marks although there is no affiliation with that quality
mark; advertising with "free of charge claims" although
(some) payment must be made.
Many of the commercial practices in this "black list"
are already inadmissible in the Netherlands. The "black
list" provided transparency with regard to these practices
since they are automatically unfair. It is therefore not required
to prove anymore that the average consumer is affected by such
practices. Besides, the "black list" can only be adapted
at EU level, so that its contents are the same for all Member
States.
If an unfair commercial practice occurs that touches the
collective interests of consumers, the Dutch Consumer Authority or
- if it concerns a financial product - the Netherlands Authority
for the Financial Markets has the power to take administrative
measures. These authorities may impose incremental penalty payments
or penalties. In addition, consumers may take their individual
cases to the Dutch Advertising Code Committee or to the
court.
Conclusion
The implementation of the Directive into Dutch law strengthens
the position of consumers towards traders. Especially the
introduction of the "black list" of commercial practices
that are in any case unfair is a contribution to this.
For traders, this means that they will have to check carefully
whether their commercial practice features on the "black
list" or is included in the category of Section 6:193b of the
BW. If that is the case, the trader may be confronted with
incremental penalty payments, penalties and/or damages.
Furthermore, having to cease a commercial practice will also
involve considerable costs. The departments of marketing
(communication), sales and legal affairs within enterprises will
therefore have to cooperate well in order to have a commercial
practice that is not only effective but also legally
admissible.
To consumers, the implementation of the Directive brings
clarity. Via the "black list" it is easy for consumers to
judge which commercial practices are in any case unfair in the
Netherlands and in all Member States of the EU. Furthermore,
consumers have various possibilities of complaining.
Practice will show how effective this new law is.