The Black List as a Source of Increased Certainty?
Article 5(5) of the Directive refers to Annex I as containing the list of those commercial practices which shall in all circumstances be regarded as unfair. The practices listed are grouped into misleading and aggressive practices, reflecting the two categories of commercial practices which the UCP Directive has identified as unfair in Articles 6 and 7 (misleading practices) and Articles 8 and 9 (aggressive practices). The same single list shall apply in all Member States and may only be modified by revision of this Directive. In other words, a practice falling within the scope of the 31 practices listed in Annex I are unfair without the need for national authorities to engage in any specific fact assessment. The list therefore reverses the burden of proof by laying down an irrefutable presumption of unfairness. If a practice is listed, there is no need to assess whether it is contrary to the rules of professional diligence and whether it has materially distorted or would have been likely to materially distort the economic behaviour of the average consumer. If this list is not exhaustive of all unfair commercial practices, it nonetheless lists exhaustively all the commercial practices presumed to be unfair. Thus, if a claim is made that the economic behaviour of the average consumer has been distorted as a result of a practice which is not listed, the claimant will need to establish that the practice is indeed unfair to succeed in its claim, and therefore that the criteria of either the general unfairness clause or the two sub-clauses have been fulfilled.
It is undeniable that by defining the practices deemed unfair across the European Union in all circumstances, the Annex circumscribes the uncertainty of the general clauses. This is all the more as the Annex has been interpreted by the European Court of Justice and by the Commission in its guidance documents.
In its Purely Creative judgment, the Court interpreted the scope of one of the practices listed for the first time, shedding light on the scope of Point 31 of Annex I which classifies as aggressive the fact of: creating the false impression that the consumer has already won, will win, or will on doing a particular act win, a prize or other equivalent benefit, when in fact either, there is no prize or other equivalent benefit, taking any action in relation to claiming the prize or other equivalent benefit is subject to the consumer paying money or incurring a cost.
In this case, the Court issued an unequivocal ruling that Point 31 must be interpreted as prohibiting aggressive practices by which traders give the false impression that the consumer has already won a prize, while the taking of any action in relation to claiming that prize, be it requesting information concerning the nature of that prize or taking possession of it, is subject to an obligation on the consumer to pay money or to incur any cost whatsoever. It is irrelevant that the cost imposed on the consumer, such as the cost of a stamp, is de minimis compared with the value of the prize or that it does not procure the trader any benefit, such as the cost of a stamp. It is also irrelevant that the trader offers the consumer a number of methods by which he may claim the prize, at least one of which is free of charge, if, according to one or more of the proposed methods, the consumer would incur a cost in order to obtain information on the prize or how to acquire it. As the Court stated: the practice referred to in [Point 31] is considered, pursuant to [the UCP Directive] to be aggressive because the reference to a prize seeks to exploit the psychological effect created in the mind of the consumer by the perspective of having won something and to cause him to take a decision which is not always rational and which he would not have taken otherwise. It is, therefore, in order to protect the consumer that the concept of a true 'prize' should be preserved, by interpreting [Point 31] as meaning that a prize in respect of which the consumer is obliged to make a payment of whatever kind cannot be regarded as a 'prize' .
In other words, traders should not exploit the excitement consumers justifiably feel when told that they have won a prize. In particular, it is not acceptable for businesses to hide behind providing one route to claim a prize that is free, if the other ways of claiming the prize incur a cost.
This ruling suggests that the Court will provide guidance, and even detailed guidance, on the scope of the 31 practices listed in Annex I, thus contributing to the harmonization agenda of the EU legislature in this area. However, a broad range of difficult questions remain, and the guidance which both the Commission and the Court have provided fails to answer several of them. Once again, in light of the largely decentralized application of EU law by national courts and other competent authorities, one may wonder how far the European Union's explicit promises of a level playing field can ever be fulfilled.
One cannot help but mention the 'isitfair.eu' website which the Commission has set up to provide 'practical information for consumers on how to check if they have fallen victim to an unfair commercial practice, and how to get help'. However, the examples it uses to illustrate the types of practices falling within the scope of Annex I are all extremely obvious. What it does not contain is more contentious examples. As it fails to help draw boundaries, the contribution of this website to the provision of legal certainty is therefore extremely limited. For example, Point 28 of Annex I prohibits 'the inclusion in an advertisement of a direct exhortation to children to buy advertised products or persuade their parents or other adults to buy advertised products for them'. The example the 'isitfair.eu' website provides of such an aggressive practice provides very limited help in delineating the scope of this provision: 'Hey kids! Get your parents to buy the Golden Horrorscope Trilogy DVD and we'll enter your name to win a trip for four people to the Golden Hills Theme Park'. As one would have expected, this statement is automatically unfair, as it clearly is a direct exhortation to get parents to buy on children's behalf and therefore falls within Point 28 of the Annex. But where should the line be drawn between direct and indirect exhortations? For example, what about the many company-owned websites promoting their goods and services through a page specifically intended to attract children with advergames or give aways, funny characters, bright attractive colours and graphics and whose purpose is to impact directly on their purchase requests and consumption patterns? The relevant question remains outstanding: how direct should an exhortation to buy be to fall within the scope of Annex I?
The question where the line should be drawn was recently put in sharp focus by the Office of Fair Trading (OFT) in the United Kingdom. In April 2013, it launched an investigation into whether children were being unfairly pressured or encouraged to pay for additional content in 'free' web and app-based games, including upgraded membership or virtual currency such as coins, gems or fruit. Typically, players can access only portions of these games for free, with new levels or features, such as faster game play, costing money. The OFT investigation is exploring whether these games are misleading, commercially aggressive or otherwise unfair. In particular, the OFT is looking into whether these games include 'direct exhortations' to children - a strong encouragement to make a purchase, or to do something that will necessitate making a purchase, or to persuade their parents or other adults to make a purchase for them, and would therefore fall as such within the scope of the UCP Directive and the UK implementing legislation. Following extensive consultation, the OFT has proposed a set of principles on online and app-based games. Comments are invited until 21 November 2013. Looking at the proposed principles, however, it is clear that tough questions remain. For example, Principle 7 requires, in line with Point 28 of Annex to the UCP Directive, that 'a game should not include direct exhortations to children to make a purchase or persuade others to make purchases for them.' The examples illustrating how this principle could be implemented in practice distinguish the statement 'You have run out of cherries. Cherries are available to buy in the shop for real money or you can earn them by completing challenges' (fair because it does not constitute a direct exhortation) and the statement 'You have run out of cherries. BUY MORE NOW from the shop!' with a link that takes the consumer directly to the shop (unfair as a direct exhortation). However, the extent to which this distinction makes sense from a child psychology point of view remains arguable.
The Commission must engage with such questions, rather than infantilize consumers and suggest that all is clear-cut and obvious. It is not. One is tempted to ask whether it is not somewhat paradoxical to expect a high level of consumer awareness through the rather demanding 'average consumer' benchmark, even if adapted to the average consumer of a particularly vulnerable group, whilst simultaneously oversimplifying inherently complex issues to the point of ridicule on the website which is intended to help these very consumers find their way around the scope of as complex a regulatory instrument as the UCP Directive.
Overall, the categorization of practices as automatically unfair across the European Union would suggest that more legal certainty has been injected into the EU legal order. This is all the more so as, if several terms leave scope for interpretation, the Court seems willing to provide clarification on the practices listed. However, the black list is limited to 31 practices only, some of them being a safeguard against the most unfair, rogue commercial practices. Beyond the 31 practices listed, it is difficult to argue that the UCPD has injected much certainty regarding the notion of 'unfairness', and it would seem to be a contradiction in terms to fully harmonize national laws on the basis of general clauses with such a broad scope as the general unfairness clause and the two sub-clauses contained in the UCP Directive. The analysis of the relationship existing between the UCPD and other provisions of EU law further reinforces the argument.
-  Art 5(5) read in conjunction with Recital 17.
-  See in particular: Joined Cases C-261 and 299/07 VTB-VAB  ECR I-2949; Case C-304/08 Plus Warenhandelsgesellschaft  ECR I-217; Case C-540/08 Mediaprint  ECR I-10909; Case C-206/11 Köck  ECR I-xxx, judgment of 17 January 2013. For a more detailed discussion of Annex I, see Namyslowska in this volume.
-  Case C-428/11 Purely Creative, judgment of 18 October 2012.
-  At paragraph 49.
-  The summary of the investigation, the proposed principles and all related documents are available at oft.gov.uk/OFTwork/consumer-enforcement/ consumer-enforcement-current/childrens-online-games/#.UlJ9MBhwbMw.
-  On the inadequacy of the EU regulatory framework in protecting children from unfair commercial practices, and marketing techniques in particular, see European Parliament, Resolution of 22 May 2012 on a Strategy for Strengthening the Rights of Vulnerable Consumers (2011/2272(INI)). See also A Garde, 'Advertising Regulation and the Protection of Children-Consumers in the European Union: In the Best Interests of ... Commercial Operators?' (2011) 19 International Journal of Children's Rights 149. The question of the protection of vulnerable consumers, including children, is discussed more thoroughly by Marine Friant-Perrot, in this volume.
-  This is not to suggest, however, that no interpretation questions remain. See also Namyslowska's contribution in this volume for further examples.