European City Guide - a positive development

Further to the numerous articles we featured on this issue (most recently on June 16) there has been a very positive development. The UK Office of Fair Trading (OFT) issued a press release which can be accessed at its Website http://www.oft.gov.uk/ News/Press+releases/2002/index.htm under the heading "Spanish ruling protects UK businesses".

A Spanish court upheld a ruling against a company that misled UK businesses into paying for adverts in its directory, describing the mailshot as 'deceitful and misleading'.

European City Guide, based in Barcelona, was originally found by the Catalan authorities to have seriously infringed Spanish laws on misleading advertising in March 2001 following international co-operation with the OFT. Its appeal against this ruling has now been dismissed.

European City Guide had sent out mailshots, mostly to British and French firms, asking businesses to check the details about their company that it planned to place in its directory. The mailings asked recipients to verify their details, fill in the application and return it even if they didn't want to place an order, giving the impression that this would incur no charges. However businesses that signed and returned the form - even if only to correct or add to the details provided - were later invoiced for £1,455, being the cost of three entries, and a copy of the directory. More than 100 complaints were received by the OFT from British businesses who had been targeted by European City Guide claiming they had been incorrectly invoiced.

The ruling magistrate in Barcelona upheld the original ruling following an appeal from European City Guide. The judgment described European City Guide's mailshot as 'deceitful' and 'misleading' and 'led those reading it to believe that by signing it they would incur no economic liabilities of any kind'.

Welcoming the ruling, John Vickers, the Director-General of Fair Trading, said: "Cross-border co-operation is important and effective in tackling unfair business practices. This is a good result from the Spanish courts that protects UK companies from such misleading practices."

Notes

1. The Control of Misleading Advertisements Regulations 1988, which implemented an EC Directive, seeks to protect consumers and traders from the effects of misleading advertising. Under these Regulations, the OFT can seek a court injunction to put a stop to advertisements which are against the public interest. However, effectively using these powers against businesses that are based abroad but are advertising in the UK is difficult. Therefore, in this instance, the OFT sought the co-operation of the Catalan authorities.

2. The original ruling by the Catalan authorities was made on 28 March 2001. Press notice 13/01 gives more details. Since dismissal of their appeal against that ruling, European City Guide has lodged a further appeal.

3. In this press release the functions of the Director General of Fair Trading (DGFT) under the Regulations are for simplicity described as the functions of 'the OFT'. The Enterprise Bill proposes to replace the office of the DGFT with the OFT, to which would be transferred the DGFT's functions.

As far as "bitten" Maltese companies are concerned, this constitutes a precedent and it is very well worth setting up a meeting with a view to exploring possible joint legal action. Those companies who wrote to me and are interested in joining forces are invited to write to me or send me an e-mail.

We can consider the possibility of setting up a meeting with a view to exploring options such as taking legal action against European City Guide.