The Family Resemblance of Unfair Terms and Unfair Commercial Practices

On the Way to an Approximation of the Control Methodology (from Blacklists to General Clauses) in Both Fields of Law via the ECJ

EU secondary law is breath-taking with regard to the field we are interested in. Both fields of law are painted with a broad brush, so to speak. Whereas the regulatory technique of Directive 93/13/EEC might still be acceptable in view of its proximity to the then already-existing national laws on unfair contract terms control, Directive 2005/29/EC does not correspond to established legal conceptions of the law on unfair commercial practices. The Directive establishes a catalogue of prohibitions (the blacklist) and makes the blacklist the starting point of the examination. The system of control according to the inverted pyramid from the blacklist down to the blanket clause, which was celebrated as a success e.g., in the German law on unfair terms (but not in the Nordic countries),[1] meets much resistance in some Member States with regard to the law on unfair commercial practices. It seems to be a strange logic to applaud blacklists in contract terms but to criticize them in unfair commercial practices, in particular if the discourse takes place in the same country.

The ECJ now seems ready to take a common approach to both directives -from the blacklist to the general clause in unfair commercial practices and from the general clause to the 'blacklist' in the law on unfair terms. Contrary to Freiburger Kommunalbauten and much more in line with Océano, in Invitel the ECJ granted the indicative list a rather prominent position. Penziighyi[2] was the break-even point in the development of the case law. Since then the ECJ uses the indicative list as the starting point for evaluating the unfairness of contract clauses.

In a way Invitel could be understood as a variation of the VTB case law[3] on sales promotion. In this respect, it seems as if the ECJ merges the different control methods in the application of the two directives into one, although it remains to be seen in two pending cases, in MohamedAziz11 and in RWE28 whether and to what extent the ECJ is ready to confirm the merger or whether variations are possible. The rather different conclusions of the two advocate generals Kokott (Aziz, rather reluctant) and Trstenjak (RWE, rather forceful) demonstrate an element of uncertainty in the current case law. If the ECJ would follow the line commenced in Penzüghyi and confirmed in Invitel, in the pending cases, one might very well argue that the ECJ is ready to put the blacklist test in the most prominent position.

On the Way to a Coherent Interpretation

Both catalogues, the blacklist and the indicative list, exist side by side as if one had nothing to do with the other. Therefore, it is high time to compare the two lists. In all likelihood the result would be a complex melange of rules, which reflect the intertwining of commercial practices and contract. Neither decision gave the ECJ an opportunity to get involved. Invitel did not deal with the evaluation of the interaction between the advertising and contract clauses. Perenicova is exactly about this, but the incriminated marketing strategy does not appear in Directive 2009/29/EC's catalogue of prohibited clauses. Nor does the indicative list in Directive 93/13/EEC provide any assistance.

From this perspective, Article 3(2) of Directive 2005/29/EC, which formally confirms traditional thinking, would give way to a coherent interpretation. Such an integrated approach is favoured by AG Trstenjak, when she speaks in Perenicova of the need for a 'coherent interpretation' that should even extend to the blanket clauses of the two directives (recital 90). It is to be noted that this statement is preceded by the formal separation of the two fields of law, since an unfair commercial practice in terms of 'legal consequences' must be regarded as irrelevant for the evaluation of the validity of the contract (recital 85). It should be equally recalled that AG Trstenjak had only to decide on the impact of an unfair commercial practice on individual contract terms and not on standardized contract terms. We will have to come back later to the fundamental implications which result from the distinction between individual and collective contract terms.

The ECJ did not pick up the proposed terminology, but followed the AG on substance. Seen this way, it appears necessary to promote the concept of a coherent interpretation.

  • [1] See, therefore, Sweden, which was not ready to integrate the indicative list into the law and succeeded before the ECJ Case C-478/99, European Commission vs. Sweden,
  • [2] ECJ, Judgment of 9.11.2010, Case C-137/07, VGPenzügyi Lizing, nyr.
  • [3] ECJ, Judgment of 23.4.2009, Joined Cases C261/07 and C299/07 2009 ECR 2949.
 
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