Private or Public Enforcement of the UCP Directive? Sanctions and Remedies to Prevent Unfair Commercial Practices
According to the principle of national procedural autonomy, in the absence of any relevant Union rules, enforcement of EU law is a matter for the Member States. But how does this comply with the full harmonization approach of Directive 2005/29/EC on unfair commercial practices in the Internal Market (hereinafter: UCP Directive)? The UCP Directive is intended to fully harmonize the rules for the fight against unfair commercial practices in order to contribute to the proper functioning of the internal market and to achieve a high level of consumer protection. To ensure full effectiveness of the UCP Directive it is essential to establish a level playing field of effective enforcement in the European Union by discouraging unfair commercial practices. Uneven or incomplete enforcement of the national provisions adopted in application of the UCP Directive would not only reduce the overall benefits of the harmonized substantive law and affect the interests of the citizens or enterprises concerned but also jeopardize the mutual confidence which underlies the whole internal market structure.
The debate over the most effective way to enforce the UCP Directive often reveals a division into private versus public enforcement. This concerns first and foremost the question who should be the actor initiating enforcement of the UCP Directive. Public enforcement in this context means enforcement by national authorities or the European Commission on their own motion or based on complaints of citizens or businesses. Public authorities can impose administrative or criminal sanctions. Private enforcement means application of the law based on the UCP Directive in civil disputes before national courts, for example in actions for injunctive relief or for damages to those who have suffered a loss caused by an infringement of the rules based on the UCP Directive. Private enforcement can be pursued by way of individual or collective redress: natural or legal persons initiate distinct legal proceedings to enforce their rights or a group of persons respectively a private entity may claim damages.
With regard to unfair commercial practices there is no centralized enforcement at the EU level as, for instance, in competition law under Regulation 1/2003. The different Member States have employed various strategies in their enforcement policies. Some Member States - including Germany and Austria - essentially rely on private enforcement or partially complement it - as is the case in Sweden and Denmark - with administrative enforcement. On the other hand, Great Britain relies mainly on enforcement through administrative authorities which are able to implement administrative sanctions. Administrative enforcement is complemented by self-regulation. There is no private right of action against traders by businesses or consumers. Lastly, France is operating a third model which is based on a combined system: rules regarding fair commercial practices are enforced mainly by public authorities using administrative and criminal sanctions. Moreover consumers may bring a case before a civil or criminal court to claim damages, including through collective redress. In EU law, due to limited resources of public authorities, the issue of strengthening private enforcement mechanisms has been increasingly brought on the agenda. Since the seminal decision of the ECJ in Courage there has been a comprehensive discussion on the merits and risks of private enforcement of European competition law. Moreover, private enforcement has traditionally been a mainstay in the US enforcement system.
This paper will discern which role private and public enforcement should play in regard to the UCP Directive. The first part deals with the requirements of EU law. In the second part, the implementations and open issues in the Member States are scrutinized.
-  I would like to thank Orkun Akseli, Willem van Boom, Antonina Engelbrekt, Marine Friant-Perrot, Amandine Garde, Geraint Howells, Bert Keirsbilck, Hans Micklitz, Charlotte Pavillon, Franziska Weber, Chris Willet and the other participants of the workshop 'Experiencing the Unfair Commercial Practices Directive' and Werner F. Ebke for valuable comments. The usual disclaimers apply.
-  Case 33/76 Rewe v Landwirtschaftskammer Saarland  ECR 1989, para 5; Case 45/76 Comet v Produktschap voor Siergewassen  ECR 2043, para 11; Case 158/80 Rewe v Hauptzollamt Kiel  ECR 1805, para 44.
-  See recitals 5 and 6 in the preamble and art 1 of the UCP Directive. Joined Cases C-261 & 299/07 VTB-VAB  ECR I-2949, para 52.
-  Commission (EC), 'Communication from the Commission to the Council and the European Parliament on the Role of Penalties in Implementing Community Internal Market Legislation' (Communication) COM (95) 162 final, 3 May 1995, 6.
-  From an economic point of view Franziska Weber, 'Law and Economics of Enforcing Misleading Advertising Laws - Incentives of Bona and Mala Fide Traders Assessed', in this volume.
-  For more details on this see Dörte Poelzig, Normdurchsetzung durch Privatrecht (Tübingena: Mohr Siebeck, 2012) 286 et seq.
-  Willem H van Boom and Marco Loos (eds), Collective Enforcement of Consumer Law (Groningen: Europa Law Publishing, 2007); Hans-W Micklitz, 'Legal Redress', in Geraint Howells, Hans-W Micklitz and Thomas Wilhelmsson (eds), European Fair Trading Law (Aldershot: Ashgate, 2006) 217 et seq.
-  The Consumer Protection from Unfair Trading Regulations 2008, part 4. On the implementation of the UCP Directive in the United Kingdom see Geraint Howells, 'The End of an Era - Implementing the Unfair Commercial Practices Directive in the United Kingdom: Punctual Criminal Law Gives Way to a General Criminal/Civil Law Standard' (2009) 2 JBL 183 et seq.
-  Willem H van Boom, Efficacious Enforcement in Contract and Tort (Den Haag: Boom Juridische uitgevers, 2006) 37 et seq.; Geraint Howells and Stephen Weatherill, Consumer Protection Law (2nd edn, Aldershot: Ashgate, 2005) 586 et seq.
-  As to the enforcement of the rules on unfair and deceptive acts and practices in US state law see Henry N Butler and Joshua D Wright, 'Are State Consumer Protection Acts Really Little-FTC Acts?' (2011) 62 Florida Law Review 163. As to rule 10b-5 in securities laws see Werner F Ebke, Wirtschaftsprüfer und Dritthaftung (Bielefeld: Verlag Ernst und Werner Gieseking, 1983) 187 et seq.