An individual who publishes a number of sales advertisements on a website cannot automatically be considered to be a trader, the Court of Justice of the European Union (CJEU) has recently asserted. It is only if such a person is acting for purposes related to their trade, business, craft or profession that their activity may be deemed to be a commercial practice and hence they can be considered to be trading.
Establishing whether an individual is a trader or not is a pre-requisite for ascertaining whether such person is obliged to comply with consumer laws in carrying out their activity.
Consumer laws give rise to a number of rights on behalf of consumers and obligations on the part of traders which, however, only subsist if the person selling the goods or services is actually a trader. In particular, in terms of the EU’s Unfair Commercial Practices Directive, traders must provide the consumer with enough accurate information to enable the latter to make an informed decision when purchasing a product. If they fail to do so, their actions may be considered as unfair and the consumer can file for redress.
The facts of this case which came before the CJEU were briefly as follows. A consumer bought a second-hand watch on an online sales platform. After realising that the watch did not correspond to the description given in the sales advertisement, the consumer informed the seller that he wished to withdraw from the contract. The seller refused to take back the item in exchange for a refund. Consequently, the consumer lodged a complaint with the Bulgarian Consumer Protection Commission (CPC).
Having checked the platform, the CPC established that, eight sales advertisements for various goods were still being published on the site by the same seller operating under the profile ‘eveto-ZZ’. The CPC observed that the seller had acted in breach of consumer laws on a number of counts such as a failure to indicate, in each of the advertisements, the trader’s name, postal address and e-mail address, the total price of the product put up for sale, the payment conditions, the conditions of delivery and performance and other defaults.
Hence, the CPC concluded that the seller had committed an offence and imposed several administrative fines in line with national consumer laws. The seller appealed from this decision, alleging that she could not be considered to be a ‘trader’ and that, therefore, the relevant consumer law provisions were not applicable. The national court seized of the case filed a preliminary reference before the CJEU requesting guidance as to whether a natural person who publishes online a relatively high number of sales advertisements for goods of significant value can be regarded as a ‘trader’ within the meaning of the EU’s Unfair Commercial Practices Directive.
The CJEU observed that, in order to be classified as a ‘trader’, it is necessary that the person concerned is acting for purposes relating to their trade, business, craft or profession or in the name of or on behalf of a trader. It went on to clarify that the meaning and scope of the concept of ‘trader’ ought to be determined in relation to the concept of ‘consumer’, which refers to any individual not engaged in commercial or trade activities.
The court asserted that it is for the national court to determine, on a case by case basis, taking cognisance of all the facts in its possession, whether an individual was acting for purposes relating to their trade, business, craft or profession. In doing so, the court could take into account a number of aspects, namely, whether the sale was carried out in an organised manner, whether it was a regular occurrence or was for profit and whether the offer was concentrated on a small number of goods. The national court must also take into consideration the legal status and technical experience of the seller. The CJEU made it clear 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 goods for sale, is not sufficient, by itself, to classify the person as a ‘trader’.
In view of the innumerable rights granted to consumers and as many obligations imposed on traders by virtue of the EU’s consumer acquis, it is of the utmost importance for an individual selling goods or services to determine whether they fall within the purview of consumer laws with all the legal implications ensuing therefrom. Judgments such as this serve to provide guidance in an area of law which at times could give rise to interpretation and uncertainty.
Mariosa Vella Cardona M’Jur, LL.D., is a freelance legal consultant specialising in European law, competition law, consumer law and intellectual property law. mariosa@vellacardona.com.