Court of Justice of the European Communities rules on the general requirements for honest, truthful and not misleading advertising
A central provision of the Unfair Commercial Practices Directive (Directive 2005/29/EC) is Article 6. This Article provides that a commercial practice shall be regarded as misleading if it contains false information and is therefore untruthful. As the Court ruled on the 19th of October in that context, it is irrelevant if the advertiser is aware that his commercial practice contains false information.
The legal provisions related to an Austrian Company which had described certain accommodation establishments as 'exclusive', that expression meaning that the hotels in question had a fixed contractual relationship with advertiser and could not, on the specified dates, be offered by another tour operator. Therefore the advertiser had concluded exclusive contracts for bed quotas with several accommodation establishments. The contracts contained a clause pursuant to which the allocated room quotas remained at the advertiser´s entire disposal and those accommodation establishments might not derogate from the contract without obtaining the advertiser´s written consent. Nonetheless, the accommodation establishments sold bed quotas to another company, which the advertiser did not know when he distributed his sales brochures.
The competitor was of the opinion that the exclusivity statement contained in the sales brochures infringes the prohibition of unfair commercial practices. He consequently asked to prohibit the advertiser, by interim injunction, from stating, in the context of the operation of its travel agency, that, on specific dates, certain establishments can be booked only through the advertiser, that information being incorrect because those establishments can also be booked through the competitor.
The Austrian Courts observed that there was no unfair commercial practice since the advertiser had complied with the requirements of professional diligence when securing the exclusive pre-booking opportunity negotiated with the hotels concerned. The Court of Justice of the European Communities observed the information relating to exclusivity as objectively incorrect. Since it satisfied all of the criteria expressly laid down in that regard by the Unfair Commercial Practices Directive. The Court has stated that, if a commercial practice satisfies all the criteria expressly set out in the directive, which specifically governs misleading practices in relation to the consumer, it is not necessary to determine whether such a practice is also contrary to the requirements of professional diligence as referred to in that directive in order for it legitimately to be regarded as unfair and, therefore, prohibited. According to the relevant provision of the directive, the misleading nature of a commercial practice derives solely from the fact that it is untruthful inasmuch as it contains false information.
The Court order provides precise, accurate and consistent reasons for the judgment in this issue. The Unfair Commercial Practices Directive is designed to ensure a high level of consumer protection. Therefore subjective elements such as the requirements of professional diligence must be irrelevant, if a commercial practice contains false information. If a Company intends to use exclusivity for advertising or publishing purposes, the Decision should be taken into account and the the contractual exclusivity partner shall be liable for all costs and claims arising from a violation of the Unfair Commercial Practices Directive.
Dr. Robert Kazemi