Protecting the consumer - to what extent?

Clear limitations as to the extent to which an EU member state can go about protecting consumers have been recently imposed by the European Court of Justice. A member state cannot adopt measures which are more restrictive than those laid down by an EU law which fully harmonises certain rules across all member states, even if the objective of the particular member state is that of awarding more protection to consumers, the court has ruled.

This ruling concerned the proper interpretation and application of the EU directive on unfair commercial practices. This law provides for a general prohibition of unfair commercial practices and lays down rules on misleading or aggressive commercial practices. It also contains a list of commercial practices which must be considered as being unfair in all circumstances. In this way it provides both consumers and traders with a single European reference point, asserting their rights and making it clear which commercial practices are or are not permissible.

This ruling by the European Court of Justice was given within the context of the following facts. Two distinct scenarios had to be analysed by the court. A Belgian firm, Total Belgium, a subsidiary of the Total Group, the primary business of which is the sale of fuels at filling stations, had been offering free breakdown services for a period of three weeks to consumers who are Total Club cardholders with every purchase of at least 25 litres of fuel for a car or at least 10 litres for a motorcycle. The other case concerned the company Sanoma, which publishes a number of magazines. One issue of a magazine published by the company contained a voucher entitling the holder to a reduction on products sold in various lingerie shops.

Competing undertakings alleged before the national courts that such practices were in breach of a Belgian law which among other unfair commercial practices prohibits combined offers. These cases were eventually referred by the courts to the European Court of Justice for guidance as to whether the EU Unfair Commercial Practices Directive permits the inclusion by a member state of a general prohibition of combined offers made by a vendor to a consumer, with certain exceptions, and without taking account of the specific circumstances of each case.

The European Court of Justice maintained that combined offers are a type of commercial practice which falls within the ambit of the EU Unfair Commercial Practices Directive. The scope of the latter directive is to fully harmonise across all EU member states the rules on unfair commercial practices.

This, therefore, means that member states cannot go about introducing in their national laws stricter rules than those provided for in the EU law, even if the final objective is that of affording consumers a higher level of protection. The directive does not list combined offers as a type of commercial practice which ought to be prohibited. Indeed, the court noted that the directive exhaustively lists those commercial practices which are prohibited in all circumstances and which do not have to be assessed on a case-by-case-basis. This ruling clearly serves to stem a highly effective barrier to cross-border trade, that is, divergences in the national laws of the different EU member states. The European Court of Justice has made it clear that nothing ought to stand in the way of harmonisation. Traders and consumers alike must be able to trade and shop across a borderless Europe with the certainty that they are being afforded the same rights and protection in whichever member state they opt to do so.

Dr Vella Cardona is a practising lawyer and a freelance consultant in EU, intellectual property, consumer protection and competition law. She is also a visiting lecturer at the University of Malta.

mariosa@vellacardona.com