The UCPD and Self-Regulation of Commercial Practices Directed to Consumers
The Commission's Initial Wish for European Codes of Conduct
In the Green Paper that lit up the path towards the UCPD, the Commission considered self-regulation to be a potentially effective complement to regulation and wondered whether it would be useful to include a basis for self-regulation in a framework directive. The Commission also observed that self-regulation remained severely constrained at the EU level because of the degree of national diversity. Before the UCPD came into being, the Commission clearly expressed the wish that EU-wide codes of conduct would develop. In its Follow-up Communication to the Green Paper, the Commission uttered such codes should provide an 'implicit "presumption of conformity"' with the fairness standard. It also announced it would consult further on whether there was a need to provide for endorsement of such codes. None of these wishes and intentions, however, have materialized in the UCPD. The potential role of self-regulation in tackling unfair commercial practices and overcoming national legal diversity has been strongly reduced during the negotiations on the UCPD. The next sections analyse what was left of the references to self-regulation and codes of practice in the directive.
The Honest and Responsible Use of Codes of Conduct
2.2.1 Voluntary codes bind signatories
Concerning self-regulation, article 6(2)(b) UCPD is perhaps the farthest-reaching provision in the directive. The non-compliance by a trader with a code of conduct to which he has openly agreed to adhere constitutes a misleading practice and is therefore prohibited:
A commercial practice shall also be regarded as misleading if, in its factual context, taking account of all its features and circumstances, it causes or is likely to cause the average consumer to take a transactional decision that he would not have taken otherwise, and it involves:
(b) non-compliance by the trader with commitments contained in codes of conduct by which the trader has undertaken to be bound, where:
(i) the commitment is not aspirational but is firm and is capable of being verified, and
(ii) the trader indicates in a commercial practice that he is bound by the code.
The misleading claim to abide by a code requires the trader to have undertaken to be bound by this code. The trader does not need to have actually signed up to the code. The commitment the trader fails to live up to must be firm and capable of being verified afterwards. The distinction between a firm and an aspirational commitment is, however, a blurred one. The infringement on an open-ended provision by a code member may assumingly be intercepted by the general clause.
In its Green Paper, the Commission stressed the benefits of article 6(2)(b). From the consumers' point of view, the advantage of more rigorously enforced voluntary commitments is the increased confidence that public enforcement bodies would act as the 'enforcer of last resort'. By reinforcing the control exercised by the code owners themselves, this article could provide a stronger case for less substantive regulation, which is beneficial for traders. Effectively enforced codes of conduct would also provide an additional point of reference for courts and supervisory bodies in confronting traders outside self-regulatory agreements (the so-called free-riders who benefit a competitive advantage to traders adopting higher standards).
Article 6(2)(b) is concerned with striking a balance between the voluntary character of a code and the confidence it raises amid consumers. Consumers should be protected without traders being discouraged from adhering to a code.
This article has, however, principally been regarded as a disincentive for voluntary adhering to a code of conduct. It has been maintained that the article puts a signatory trader at risk since a 'challenge to its marketing practices could be successful on a technical non-compliance with some detailed provision of a code'. This type of non-compliance may, however, not always bear a significant effect on the average consumer's economic behaviour, depending on the content of the obligation imposed by the provision in question. That being said, there is a risk that unintended non-compliance - a trader misjudging his obligations - would amount to a misleading practice, the article not being limited to situations where the trader deliberately breaches a code.
2.2.2 Forbidden false claims about codes and marks
The list of commercial practices that are under all circumstances deemed unfair provides further support for the honest use of codes of conduct and trust marks.
The following practices are forbidden because of their flagrantly misleading nature (Annex 1):
1. Claiming to be a signatory to a code of conduct when the trader is not.
2. Displaying a trust mark, quality mark or equivalent without having obtained the necessary authorization.
3. Claiming that a code of conduct has an endorsement from a public or other body which it does not have.
Those provisions ensure that traders make responsible use of codes of conduct in their marketing activities. The black list seems to have a deterrent effect. As follows from an analysis of online databases, there are yet hardly any administrative and no court decisions at all regarding the black list provisions relating to self-regulation.
-  European Commission, 'Green Paper on EU Consumer Protection' COM (2001) 531 final, 2, 5 and 15.
-  European Commission, 'Follow-up Communication to the Green Paper on EU Consumer Protection' (Communication) COM (2002) 289 final, 11.
-  The UCPD only implicitly favours the co-regulatory approach: F Cafaggi, 'Private Regulation in European Private Law', in AS Hartkamp et al. (eds), Towards a European Civil Code (Kluwer Law International, 2011) 119-120.
-  1G Howells, 'Codes of Conduct', in G Howells, H-W Micklitz and T Wilhelmsson, European Fair Trading Law: The Unfair Commercial Practices Directive (Aldershot: Ashgate, 2006) 208.
-  COM (2001) 531 final (n 7), 14.
-  H Collins, 'EC Regulation of Unfair Commercial Practices', in H Collins (ed.), The Forthcoming EC Directive on Unfair Commercial Practices (Kluwer Law International 2004) 31.
-  oft.gov.uk and bailii.org (United Kingdom), https:// acm.nl/nl and rechtspraak.nl (the Netherlands), economie. gouv.fr/dgccrf and, legifrance.gouv.fr (France).
-  I have, however, found an example of a breach of point 1 of Annex 1 - a trader making false claims about its credentials (Anna Tillman) - and an example of a breach of point 2 - Displaying an unauthorized trustmark or equivalent (Bradley's Fine Jewellery Ltd) - being tackled by the trading standards in the United Kingdom.