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Introduction |
 On
February 24th, 2005, the European Parliament approved in a
second reading the Commission’s Proposal for a Directive of the European
Parliament and of the Council concerning unfair business-to-consumer
commercial practices in the Internal Market, and amending directives
84/450/EEC, 97/7/EC and 98/27/EC (the Unfair Commercial Practices
Directive, hereinafter “the Directive”)1.
The Directive introduces a single EU-wide regime for consumer protection
with regard to unfair commercial practices, which is expected to be
implemented across the EU by 2007, thus preventing rogue retailers from
benefiting from the existing discrepancies in national legislation.
Also, the new harmonized European regime is meant to boost cross-border
transactions within the Internal Market by increasing consumers’
confidence in such transactions as well as by helping businesses to
develop their activities at European scale.
The existing Romanian legislation does not comprise a general legal
framework with regard to the unfair business-to-consumer commercial
practices. There are only specific rules regulating various forms of
such commercial practices, such as sales promotion, misleading
advertisements or aggressive sales. Romanian Government Ordinance
21/1996 regarding consumers’ protection states, in general terms, that
retailers have the obligation to avoid using abusive commercial
practices in their relations with consumers. However, the term “abusive”
is not defined and there are no general principles in use in the case of
commercial practices that do not fall under the existing special
regulations. Obviously, special regulations alone cannot assure
efficient protection for consumers. Under such circumstances, the
adoption of the Directive by Romania will substantially improve the
existing regime.
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[1] COM (2003) 356 final.
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Business-to-Consumer Practices Under
Romanian Law |
As noted above, Romanian legislation only provides for special rules to
be applied to specific commercial practices.
- Misleading advertising is forbidden by Law 148/2000
related to advertisements. According to this law, the misleading
character of a commercial advertisement is to be evaluated by taking
into consideration various aspects such as the characteristics of goods
and services, their price and distribution manner, the legal and
economic conditions of the acquisition of goods/services, the services
to be rendered following the sale of goods or services, and the nature,
attributions and rights of the person for whom the advertisement is
made, etc. Also, Decision 254/2004 of the National Audiovisual Council
states that commercials must not mislead consumers, either directly or
by omission, with regard to the characteristics, properties and effects
of the products, their price or manner of distribution.
- Sales promotions are currently regulated by Government
Ordinance 99/2000 related to the trading of market goods and services
(hereinafter the “G.O.”). The G.O. mainly refers to sales at lower
costs, multilevel marketing and lotteries organized for commercial
purposes. Sales below cost are forbidden in some cases, but this is more
of a measure against dumping prices so as to assure fair competition,
having only an indirect effect on consumer protection (thus, the
preservation of a healthy competition environment is meant to ensure the
existence of a wide offer of products at competitive prices). However,
sales below cost are allowed when they are close downs or clearance
sales (meant to accelerate the sale of a stock of products when
retailers cease, suspend, transform or relocate their activities),
seasonal discount sales (which take place twice a year during a precise
period of time), factory shop sales (sales by the producers of goods
within their own selling structures), sales of perishable goods, etc.
The G.O. also forbids premium sales. A commercial practice is a premium
sale when a retailer offers consumers a supplemental product or service
for free (the premium). Nevertheless, premiums are allowed, for example,
when they are identical with the goods/service to be sold, when their
value is a maximum of 10% of the sale or when the free goods/services
are indispensable to the normal use of the product/service to be sold.
With few exceptions, retailers are not allowed to condition a sale of a
certain good/service on the obligatory buying of another product/service
or of a certain quantity of the main good/service. One other form of
aggressive selling is also expressly forbidden -- retailers are not
allowed to perpetrate forced sales, defined as the delivery of a good or
the rendering of a service without a prior order from the consumer, by
forcing the consumer to either buy the good/service, or send it back in
case of a refusal to buy.
 In
2002, the European Commission drafted a proposal for a European
Parliament and Council Regulation concerning sales promotions in the
Internal Market2 (hereinafter “the
Proposed Regulation”). The aim of such law is to facilitate the free
movement of goods that benefit from the use of sales promotions, as “The
use and communication of sales promotions contribute to the growth and
development of all businesses . . . provided that steps are taken to
ensure a high level of consumer protection as well as protection of
small and medium-sized enterprises.” (Recitals 2 and 1) Consumer
protection is strengthened by a series of information requirements3
that “. . .ensure that commercial communications relating to sales
promotions are transparent and that an individual interested in a
communicated sales promotion will be able to easily obtain all the
relevant information announced in that communication.” (Recital 14) The
Proposed Regulation covers sales promotions which are all “temporary” in
nature, loyalty programs, air-miles schemes and promotional contests or
games where the purpose is to encourage the sale of goods or services,
other than gambling activities. However, the national rules providing
for conditions that apply to seasonal, clearance or close down sales are
not affected by the Proposed Regulation, except in so far as they
restrict the offer of discounts. If the Proposed Regulation is enforced,
the Member States will no longer be able to impose general prohibitions
on or any requirement to obtain prior authorization for the use or
commercial communications of sales promotions (unless required by
Community law), nor will they be allowed to impose limitations on the
value of the sales promotions or prohibitions on discounts preceding
seasonal sales.
- The right of the consumer to unilaterally and unconditionally
terminate the contract is a universal remedy against unfair
commercial practices and more particularly against aggressive selling,
as stipulated by every law dealing with special consumer contracts, such
as Government Ordinance 130/2000 related to distance contracts,
Government Ordinance 106/1999 related to the conclusion of contracts
outside commercial areas, Law 282/2004 related to the protection of the
consumer in respect of timeshare property, and Law 289/2004 regarding
consumer credit.
The fragmentized approach of Romanian legislation in dealing with unfair
business-to-consumer commercial practices is similar to the situation
which exists at the EU level. This approach was dictated by the general
trend of literally transposing European laws without taking into
consideration the possibility of improving them at the national level.
It is obvious that in absence of a general prohibition and of a
definition of unfair practices, retailers are free to imagine all sorts
of rogue commercial techniques in order to avoid falling under the scope
of the existing specific regulations. Moreover, as there are no general
principles regulating unfair practices, in those fields which do not
benefit from a special regulation, there is not even little protection
for consumers from retailers who are intent upon committing abuses. In
these circumstances, the new Directive will fill in the gaps by
implementing a general framework to be used where there are no specific
provisions.
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[2] COM (2002) 585 final. The initial proposal was amended to
incorporate the amendments by the European Parliament – 2001/0227 (COD).
The amended proposal is currently being examined by the Permanent
Representatives Committee in view of reaching a common position within
the Council of Ministers.
[3] See art. 4 and the Annex. |
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The European Directive: Identifying Unfair
Commercial Practices |
 When
drafting the general framework regarding business-to-consumer commercial
practices, the European Commission has defined “unfairness” instead of
providing a definition of what should be fair practices. Thus, any
commercial practice is presumed fair until the contrary is proved. “This
leaves room for businesses4 to
innovate in developing new fair commercial practices,” as a different
approach would create “uncertainty and extra costs for honest
businesses” . The Directive therefore introduces not only a general
prohibition of unfair commercial practices, but also a three-step
mechanism to be used in order to establish whether a certain commercial
practice is unfair or not:
(1) Black list: Annex 1 to the Directive contains a list
of commercial practices “which shall in all circumstances be regarded as
unfair.” Such practices are classified either as misleading (e.g.,
claiming to be a signatory to a code of conduct when the trader is not
or falsely stating that the product will only be available for a very
short time) or aggressive (e.g., creating the impression that the
consumer cannot leave the premises until the contract is signed or the
payment made).
(2) Defining misleading and aggressive practices: If a
commercial practice cannot be found on the black list, then it should be
determined whether it can be qualified as misleading or aggressive. The
Directive states that “. . . commercial practices shall be regarded as
unfair if they are misleading or aggressive.” A misleading action is
defined as a commercial practice which “in any way, including overall
presentation, causes or is likely to cause the average consumer to take
a transactional decision that he would not have taken otherwise because
it deceives or is likely to deceive him” in relation to the aspects
provided for by the Directive. Also, a commercial practice is a
misleading omission if, “in its factual context, taking account of all
its features and circumstances, it omits material information that the
average consumer needs, according to the context, to take an informed
transactional decision that he would not have taken otherwise.”
According to the Directive, “A commercial practice shall be regarded as
aggressive if, in its factual context, taking account of all its
features and circumstances, by harassment, coercion or under influence,
it significantly impairs or is likely to significantly impair the
average consumer’s freedom of choice or conduct with regard to the
product and thereby causes him or is likely to cause him to take a
transactional decision that he would not have taken otherwise.”
(3) General definition of the unfair practices: If
following step 2, a commercial practice cannot be qualified as being
misleading or aggressive, it must be determined whether it can be deemed
to be unfair based on the general definition provided in the Directive.
“A commercial practice shall be regarded as unfair if: - it is contrary
to the requirements of professional diligence, and – it materially
distorts or is likely to materially distort the economic behavior with
regard to the product of the average consumer whom it reaches or to whom
it is addressed, or of the average member of the group when a commercial
practice is specifically directed to a particular group of consumers.”
The Directive establishes a common level of consumer protection in those
fields which are not regulated by the European legislation as yet. Where
there are specific provisions and in case of conflict between these
provisions and those of the Directive, the former prevail and apply to
specific aspects of unfair commercial practices.
__________________________________________________________________________
[4] See “Questions and Answers on the Unfair Commercial Practices
Directive”, MEMO/05/64, Brussels and Strasbourg, 24 February 2005. |
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Conclusion |
According to EU Health and Consumer Protection Commissioner Markos
Kyprianou, the Directive “marks a big step forward for consumers and for
EU competitiveness. It boosts the protection consumers enjoy across the
EU, while simplifying the regulatory environment for businesses”5.
As for the Romanian law, the adoption of the general principles provided
for by the Directive will most certainly ameliorate the flaws in the
existing legal framework concerning business-to-consumer commercial
practices, by adding a touch of coherence and by transforming a
fragmentized legal approach into a fairly complete protection system.
This is another example of how the EU adhesion process helps in the
renewal and modernization of the legal system of candidate countries.
__________________________________________________________________________
[5] See “Questions and Answers on the Unfair Commercial Practices
Directive”, MEMO/05/64, Brussels and Strasbourg, 24 February 2005. |
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Editors Note: It is our policy not to mention our clients by name in
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are made.
Copyright 2005 Rubin Meyer Doru & Trandafir, societate civila de avocati.
All rights reserved. No part of The Romanian Digest™ may be reproduced,
reused or redistributed in any form without prior written permission
from the publisher.
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