Unfair Commercial Practices Directive

Refers to a to a Directive adopted by the EU on 11 May 2005 with respect to “unfair business-to-consumer commercial practices in the internal market,” 2005 O.J. L 149/22. The directive requires the prohibition of various practices, particularly in advertising and promotion that are considered deceptive. The directive divides such commercial practices into two categories, misleading and aggressive. Misleading practices include untruthful statements, or misleading failures to disclose information, including information relating to:

  • the existence or nature of the product (e.g., vaporware);
  • key sales characteristics such as “availability” (i.e., is it in stock, immediately available), “benefits” (e.g., will it make you popular or beautiful? Does it cure conditions such as halitosis), “risks, execution, composition, accessories, after-sale customer assistance and complaint handling, the method and date of manufacture or supply, delivery, fitness for purpose, usage, quantity, specification, geographical or commercial origin or the results to be expected from its use, or the results and material features of tests or checks carried out on the product;”
  • The extent of the vendor’s (described as the trader’s) commitments to the customer and statements by the trader endorsing the product (e.g., attesting to its quality, etc.);
  • Pricing including price and/or cost advantages;
  • The need for services (e.g., not disclosing the need to subscribe to additional services to use the product), or the need to buy additional items, or the need for periodic repairs and replacements;
  • The nature and attributes of vendors, traders and their agents (e.g., membership in customer assurance associations or professional bodies, expertise in the sector, etc.)
  • Comparative advertising that leads to confusion with the products, trademarks and/or trade dress of a competitor.

Aggressive practices are broadly defined, but generally can be seen as including practices that by harassment, pressure, coercion or undue influence limit consumers’ ability to freely make informed purchasing decisions. It also includes abusive termination of contracts and most significantly making baseless threats of litigation.