Two new sets of regulations come into force on 28May 2008 implementing the Unfair Commercial Practices Directive 2005/29/EC (UCPD)and the Consolidated Misleading and Comparative Advertising Directive 2006/114/EC(CMCAD).
The UCPD harmonises unfair trading laws across the EU and introduces a prohibition on the unfair treatment of consumers by traders. The CMCAD requires Member States to take measures against business-to-business misleading advertising and lays down conditions for permissible comparative advertising (both that aimed at consumers and that addressed to businesses). The Directives are implemented in the UK via the Consumer Protection from Unfair Trading Regulations 2008 (CPRS) and the Business Protection from Misleading Marketing Regulations 2008 (BPRs). The latter will replace the Control of Misleading Advertisements Regulations (as amended) which are repealed by the CPRs.
The CPRs prohibit “unfair commercial practice” and its promotion in relation to consumers. A commercial practice is unfair if:
- it contravenes the requirements of professional diligence and materially distorts or is likely to materially distort the economic behaviour of the average consumer with regard to the product.
- it is a misleading action or omission or is aggressive or is one listed in Schedule 1 to the Regulations. Penalties include fines and prison terms of up to 2 years.
Misleading actions can involve false product information or deceptive presentation or failure to comply with any applicable code. The BERR guidance on the CPRs gives product get-up copying as an example of a breach of the regulations.
Misleading omissions include omitting or hiding material information or unclear or ambiguous use of such or failure to identify commercial intent. The regulations are very specific and cover a wide range of situations and possible marketing angles.
Aggressive commercial practices are those that significantly impair (or are likely to) the average consumer’s freedom of choice or conduct in relation to the product concerned through use of harassment, coercion or undue influence and thereby cause him to fake a transactional decision he would otherwise not have taken.
The BPRs prohibit advertising which misleads traders and set out the conditions under which comparative advertising is permitted.
Engaging in misleading advertising will become a criminal offence, punishable with a fine or up to two years imprisonment (a neglectful, consenting or conniving officer of a company can be punished individually as well as the company being fined).
The CPRs and BPRs will be enforceable by the enforcing authorities only (the OFT and Trading Standards) and cannot be enforced directly by consumers or any other persons.
There had been a strong lobby from consumer groups and intellectual property right owners to allow direct enforcement by other interested parties but to no avail. However, this approach will be reviewed in three years time so there is still an opportunity for further lobbying in this regard.