European Business Law, the fourth volume in our series, shows how the European authorities simultaneously abolish all restrictions on access to and exercise of economic activities and support the growth of domestic markets, through the harmonization the internal legislation or the enactment of genuinely unified regulations.

European Business Law

Directive No 2005/29  on unfair business-to-consumer commercial practices (full harmonization Directive) seeks to guarantee a high level of protection to consumers  by approximating the laws of the Member States, whereas Directive No 84/450, of minimum application, had led to a territorial division of consumer law and, correlatively, to a strong degree of legal uncertainty for consumers and compet …

Scope of application

Directive No 2005/29  on unfair business-to-consumer commercial practices (full harmonization Directive) seeks to guarantee a high level of protection to consumers  by approximating the laws of the Member States, whereas Directive No 84/450, of minimum application, had led to a territorial division of consumer law and, correlatively, to a strong degree of legal uncertainty for consumers and competitive distortions to the detriment of traders.

Under the directive , “consumer” means any natural person acting for purposes which are outside his trade, business, craft or profession; “trader” on the other hand means any natural or legal person acting for purposes relating to his trade, business, craft or profession and anyone acting in the name of or on behalf of a trader. The scope of application of the directive is particularly broad since it applies “to unfair business-to-consumer commercial practices […] before, during and after a commercial transaction in relation to a product” (Article 3) and therefore refers to all marketing stages of the product. Although the directive is aimed specifically at undertakings, the Court of Justice extended its scope to cover a body responsible for managing a statutory health insurance fund. The Court held that whether such a body was a public or private body or the fact that it was charged with a task of public interest is irrelevant and found that its members could be deceived by the misleading information circulated by that body and must therefore be regarded as consumers, the economic interest of whom are expressly protected by the directive . The Court has also stated that the mere fact that the sale is intended to generate profit or that a person publishes, simultaneously, on an online platform a number of advertisements offering new and second-hand goods for sale is not sufficient, by itself, to classify that person as a trader . Notably, the assessment of the classification as a “trader” is based on a set of criteria which requires a case-by-case verification of whether the sale on the online platform was carried out in an organized manner, whether it was intended to generate profit, whether the seller had technical information and expertise relating to the products offered for sale which the consumer did not necessarily have, whether the seller had a legal status which enabled her to engage in commercial activities and was subject to VAT, whether the seller, acting on behalf of a particular trader or on her own behalf or through another person acting in her name and on her behalf, received remuneration or an incentive, whether the seller purchased new or second-hand goods in order to resell them, whether the goods for sale were all of the same type or of the same value, and, in particular, whether the offer was concentrated on a small number of goods .

Article 2(d) defines “business-to-consumer commercial practices” as “any act, omission, course of conduct or representation, commercial communication including advertising and marketing, by a trader, directly connected with the promotion, sale or supply of a product to consumers” . The directive applies to commercial practices taking place before the commercial transaction and also defines, at Article 2(i), the concept of invitation to purchase as “a 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”. The Court of Justice has stated that to be capable of being categorized as an invitation to purchase, it is not necessary for it to include an actual opportunity to purchase or for it to appear in proximity to and at the same time as such an opportunity . A practice will fall within the scope of application of the directive where its purpose is to attract consumers to the business premises of a trader and to encourage them to make purchases . Thus information relating to exclusivity on which a travel agency relied constitutes a commercial practice . However, this is not the case of national legislation prohibiting the opening of an establishment seven days a week because its objective is the protection of the right of workers to a private life, not the protection of consumers , or of a provision under which publishers are required to identify specifically, through the use of the term “advertisement”, any publication in their periodicals for which they receive remuneration . 

A commercial practice is unfair, according to Article 5, where “it is contrary to the requirements of professional diligence” and “materially distorts or is likely to materially distort the economic behavior with regard to the product of the average consumer whom it reaches or to whom it is addressed, or of the average member of the group when a commercial practice is directed to a particular group of consumers”. To that general definition, Annex I of the directive adds a list of thirty-one unfair practices that the Member States are required to include in their provision of transposition and which are penalized per se without previous review of the practice . According to the Court, Annex 1 applies to a pyramid promotional scheme in which there is  an indirect link between the contributions paid by new members of the scheme and the compensation paid to existing members, in that its aim is to generate a profit for itself, that is, for the promoters of the scheme, and not only for the players . As the list is exhaustive, practices which do not fall within the Annex, such as bans on tied sales , commercial lotteries which make the participation of consumers dependent on the purchase of goods  or clearance sales without prior administrative authorization , resale at a loss  or announcements of price reductions  must be assessed in view of the criteria laid down by Articles 5 et seq.

Despite the European legislator's wish to give the directive a scope of application as wide as possible, the provision applies without prejudice to the rules of contract law, in particular those on the validity, formation or effects of a contract (Article 3(2)). The rules relating to the health and safety aspects of products, which are the subject-matter of sector-specific Directives, also do not fall within the scope of Directive No 2005/29 (Article 3(3)). The directive does not therefore preclude  a provision of national law which protects public health and the dignity and integrity of the professions of plastic surgeon and plastic doctor by prohibiting any natural or legal person from disseminating advertising for procedures relating to plastic surgery or non-surgical plastic medicine . Although financial services necessitate detailed requirements due to the complexity and inherent serious risks they present, Directive No 2005/29 applies to them and provides that Member States may impose requirements which are more restrictive or prescriptive (Art.3 (9)). Thus the Court finds that Article 3(9) does not preclude a Member State from laying down a general prohibition - save in the cases exhaustively listed by the national legislation - of combined offers to consumers where at least one of the components of those offers is a financial service .

In addition to the general ban on unfair commercial practices defined in Article 5, the directive refers to two specific types of unfair commercial practices: misleading commercial practices (Articles 6 and 7) and aggressive commercial practices (Articles 8 and 9) . The EU court has specified that a contractual term cannot be declared invalid on the basis of Directive No 2005/29, unlike Directive No 93/13, even if it was agreed on between the parties to the contract on the basis of an unfair commercial practice, insofar as the two directives pursue distinct aims, the prohibition of unfair commercial practices for the former and the restoration of contractual equality for the latter .

Directive No 2005/29/EC of 11 May 2005 concerning unfair business-to-consumer commercial practices, OJ L 149 of 11 June 2005, 22. 

The consumer is defined in Article 2 of the directive as any natural person who, in commercial practices covered by the directive, is acting for purposes which are outside his trade, business, craft or profession. Thus a Member State fails to fulfill its obligations under Article 2(b) and (d), 3 and 4  of Directive No 2005/29 by excluding members of a profession and dentists and physiotherapists from the scope of its national legislation transposing the directive: Case C-421/12 Commission v Belgium, Judgment of 10 July 2014, LawLex201400002220JBJ.

Case C559/11 Pelckmans Turnhout NV, Judgment of 4 October 2012, not available in English.

Case C-391/12 RKvS Verlagsgesellschaft mbH, Judgment of 17 October 2013, LawLex201300001496JBJ.

For an example of its application see Case C-515/12 "4finance" UAB, Judgment of 3 April 2014, LawLex201400000569JBJ, which classifies a practice as an unfair commercial practice per se only where such a scheme requires the consumer to give financial consideration, regardless of its amount, for the opportunity to receive compensation that is derived primarily from the introduction of other consumers into the scheme rather than from the sale or consumption of products.

Case C-667/15 Loterie Nationale - Nationale Loterij NV van publiek recht, Judgment of 15 December 2016, LawLex201600002083JBJ.

Case C-261/07 and C-299/07 VTB-VAB [2009] ECR I-2949, LawLex200900002352JBJ; C-522/08 Telekomunikacja Polska [2010] ECR I-2079, LawLex201000000290JBJ. Case C-310/15 Deroo-Blanquart, Judgment of 7 September 2016, LawLex201600001382JBJ: the sale of a computer equipped with pre-installed software does not in itself constitute an unfair commercial practice. 

Case C-304/08 Plus Warenhandelsgesellschaft, LawLex201100000479JBJ.

Case C-206/11 Köck [2013], LawLex201300000099JBJ.

Case C-343/12 Order of 7 March 2013, Euronics Belgium; Case C-295/16 Europamur Alimentación SA, Judgment of 19 October 2017, LawLex201700001687JBJ: Directive No 2005/29 precludes a national provision, which contains a general prohibition on offering for sale or selling goods at a loss and which lays down grounds of derogation from that prohibition that are based on criteria not appearing in that directive. 

Case C-13/15 Cdiscount SA, Judgment of 8 September 2015, LawLex201500001102JBJ.

Case C-356/16 Wamo BVBA, Judgment of 26 October 2017, LawLex201700001766JBJ.

Case C-265/12 Citroën Belux NV, Judgment of 18 July 2013, LawLex201300001169JBJ.

According to the Court, the basic rule according to which unfair commercial practices are prohibited is given effect and concrete expression by more specific provisions with a view to due account's being taken of the risk posed to consumers by the two cases that arise most frequently, namely, misleading commercial practices and aggressive commercial practices: Case C-435/11 CHS Tour Services GmbH, Judgment of 19 September 2013, LawLex201300001334JBJ. 

Case C-109/17 Bankia SA v Marí Merino, Judgment of 19 September 2018, LawLex201800001351JBJ

Case C-59/12 BKK Mobil Oil Köperschaft des öftenlichen Rechts, Judgment of 3 October 2013, LawLex201300001442JBJ.

Case C-105/17 Komisia za zashtita na potrebitelite, Judgment of 4 October 2018, LawLex201800001459JBJ.

According to the ECJ, the practices covered by it must be commercial in nature, i.e. they must originate from traders, and they must be directly connected with the promotion, sale or supply of their products to consumers: Case C-391/12 RKvS Verlagsgesellschaft mbH, Judgment of 17 October 2013, LawLex201300001496JBJ. 

Case C-122/10 Konsumentombudsmannen v Ving Sverige AB [2011] ECR I-3903, LawLex201100001092JBJ.

This is the case for resale at a loss: Case C -343/12 Order of 7 March 2013, Euronics Belgium.

C-435/11 CHS Tour Services GmbH, Judgment of 19 September 2013, LawLex201300001334JBJ.

European Business Law

215. Scope of application

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

215. Scope of application

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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