Information Obligations And Disinformation Of Consumers 3030180530, 9783030180539, 3030180549, 9783030180546

Table of contents :
Preface......Page 6
Contents......Page 11
Part I: General Report......Page 13
Information Obligations and Disinformation of Consumers......Page 14
1 Introduction......Page 15
2.1 Economic Orientation of Consumer Models......Page 17
Mainly Natural Persons Protected, Sometimes Also Legal Persons or Even Final Users......Page 19
Acting for Private, Mixed or Business Purposes......Page 21
Irrespective of the Consumer´s Level of Knowledge......Page 23
2.2.2 The `Average Consumer´ Is the Benchmark for Information Duties, Unfair Commercial Practices and Unfair Terms......Page 24
2.2.3 The Changing Nature of the European Average Consumer: From a Severe Obligation to Internalize Disclosed Information to A.........Page 30
2.2.4 Toward a Definition of Vulnerable Consumers: The Sick, the Elder and the Young?......Page 37
3.1 General Duty of Information Disclosure......Page 40
3.2 Specific Transparency Requirements: Food Labelling and Beyond......Page 44
3.3 Mandatory and Additional Voluntary Information......Page 47
3.4 Sanctions for Failure to Provide (Correct) Mandatory Information......Page 48
4.1 Overall Analysis......Page 49
4.2 Advertising Directed Towards Children......Page 55
5.1 Standard-Form Contracts and Individually Negotiated Terms......Page 56
5.2.1 Case Law of the CJEU......Page 62
5.2.2 Application of Transparency in the EU and beyond......Page 66
5.2.3 Core Terms Must Be Prominent......Page 70
5.3 Black or Grey List of Unfair Terms......Page 71
5.4 Specific Rules Concerning the Control of Unfair Terms in B2B Relationships......Page 72
6.1 Financial Consumer: Rationalisation, Yes; Simplification, Not Yet......Page 73
6.2 Digital Consumer: Consent for Use Personal Data......Page 79
7 Behavioural Sciences´ Impact on the Consumer Information Model......Page 84
8.1 Economic Orientation of Consumer Models: Concept of Average Consumer......Page 95
8.2 Pre-contractual Information: Transparent Contract Terms-Misleading Practices......Page 97
8.3 Financial Consumer......Page 99
8.5 Overload of Information: Behavioural Critiques-Which Way Forward?......Page 100
References......Page 103
Part II: National Reports: European Union......Page 108
1.1 The Consumer in Statute, Not in the Common Law......Page 109
1.2 Statutes Adopt Individual Definitions Rather Than a Unified Definition......Page 111
1.3 Characteristics of the ``Consumer´´......Page 114
2.1 General and Specific Information Duties: Statute and Common Law......Page 116
2.2 Information Required Under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013......Page 118
2.3 Form of Information Required Under the 2013 Regulations......Page 119
2.4 Sanctions for Failure to Provide the Required Information and in the Required Form......Page 120
2.5 Food Information Requirements......Page 121
3.1 Prohibition Against Unfair Commercial Practices in the Consumer Protection from Unfair Trading Regulations 2008......Page 123
3.2 Criminal and Civil Consequences of Misleading Commercial Practices......Page 125
4.1 The General Approach to Unfair Contract Terms in English Law......Page 127
4.2 Control of Unfair Terms by Part 2 of the Consumer Rights Act 2015......Page 130
4.2.1 Bargaining Power Under Part 2 of the Consumer Rights Act 2015......Page 131
4.2.2 Core Terms and Transparency of Terms Under Part 2 of the Consumer Rights Act 2015......Page 132
5.1 Consumer Credit and Consumer Hire......Page 133
5.2 Consumer Financial Services......Page 134
6.1 Extension of Consumer Protection to Cover Digital Contracts......Page 135
6.2 Consumers´ Consent to the Storage of Information or Access to Stored Information......Page 136
6.3 New Technologies and Information Asymmetries......Page 138
7 The Information Model Under Pressure and the Problem of Disinformation......Page 139
References......Page 140
1.1 National Consumer Model in a Europeanized Legal Order?......Page 141
1.2 Confident, Informed or Informable Consumer......Page 143
2.1 General Information Obligations......Page 145
2.2 Voluntarily Added Information Complementing Mandatory Information Given by Businesses......Page 146
2.3 Sanctions for Violation of Pre-Contractual Duties to Supply Information......Page 147
2.5 Forensic Experience Regarding Transparency......Page 148
3.1 General Aspects......Page 149
3.3 Rules About the Presentation of Food Information......Page 150
4 Misleading Commercial Practices......Page 151
5.1 Different Categories of Non-Negotiated Terms......Page 152
5.2 Control of Inclusion of Terms......Page 153
5.4 Assessment of Bargaining Power......Page 154
5.5 Burden of Proof for Non-Negotiated Terms......Page 155
5.7 Exclusion of Core Contract Terms from the Control of Fairness......Page 156
5.8 Transparency Requirements......Page 157
6.1 Deviations from Other Sectors of Consumer Law......Page 158
6.2 Discussion Regarding the Adequacy of Extensive Information Obligations......Page 159
7.1 Specific Regimes Addressing Online Consumer Sales/Distance Sales......Page 160
7.3 Data Protection: Requirements of Consent Regarding Storing and Processing Data......Page 161
8.1 Critique of Mandatory Information and Legislative Response......Page 162
9 Measures Relating to the Education of Consumers......Page 164
References......Page 165
L´information et la désinformation des consommateurs : Rapport français......Page 167
1.1 Origine, fondements et objectifs du droit de la consommation......Page 168
1.2 Définition du consommateur bénéficiaire de la protection légale......Page 170
2.1 L´obligation générale d´information......Page 175
2.2 L´information à l´initiative du professionnel......Page 182
2.3.1 L´obligation générale d´information......Page 184
2.3.2 Information sur les prix et conditions de vente......Page 185
2.4.1 Illustrations......Page 187
2.4.2 Mise en œuvre judiciaire......Page 189
2.4.3 Sanction des obligations de transparence......Page 191
2.5.1 Présentation des règles......Page 194
2.5.2 Lisibilité des informations en matière de produits alimentaires......Page 195
2.5.3 Sanctions......Page 196
3 Pratiques commerciales trompeuses......Page 197
4.1 Les clauses concernées......Page 199
4.2 Transparence des clauses essentielles du contrat......Page 200
5.1 Présentation des règles françaises......Page 202
5.2 Les règles relatives à l´information......Page 203
5.3 L´objectif de simplification de l´information......Page 205
6.1 Présentation des règles françaises......Page 206
6.2 La protection des attentes raisonnables du consommateur......Page 208
6.3 Information et données personnelles......Page 209
7 Information et ''désinformation'' des consommateurs......Page 211
Articles......Page 213
L´information et la désinformation des consommateurs : Rapport italien......Page 215
1 Introduction......Page 216
2 L´information comme instrument principal pour la protection du consommateur......Page 219
3 Le sujet destinataire des informations......Page 221
4 Le contenu des informations......Page 224
5 Les conséquences et les remèdes en cas de violation des obligations d´information......Page 226
6 Problèmes et défauts de modèle et de système......Page 228
6.1 Excès d´information, à savoir l´information devient désinformation......Page 229
6.2 Les informations comme minimum ou maximum?......Page 230
6.3 Une surproduction réglementaire......Page 231
6.4 L´insuffisante protection de l´individu contre les pratiques commerciales déloyales......Page 232
6.5 Clauses abusives, transparence et risques de la négotiation individuelle......Page 233
6.6 Produits financiers et précautions spécifiques dans un contexte peu équilibré......Page 235
7 Le consommateur numérique, l´utilisation des Big Data et la discrimination contractuelle......Page 237
8 Pour un modèle différent d'information et de transparence......Page 241
References......Page 243
1 Introduction......Page 247
2.1 Applicable Legislation......Page 248
2.1.2 Law 2251/1994......Page 249
2.2.1 The Notion of ``Consumer´´ in Greek Law......Page 250
2.2.2 The Notion of ``Supplier´´ in Greek Law......Page 251
2.2.3 The Consumer Benchmark: The ``Average Consumer´´......Page 252
Protection of Minors......Page 253
Other Cases of Vulnerable Consumers......Page 254
3.1.1 Pre-contractual Information in General......Page 255
3.1.3 Possible Sanctions Due to Lack of Pre-contractual Information......Page 257
3.2 Transparency Requirements......Page 258
3.3 Special Requirements for Foodstuff......Page 259
3.3.1 Information Requirements in the Acquis Communautaire......Page 260
Labeling Requirements......Page 261
Greek Labeling and Clarity Requirements......Page 262
4 Commercial Practices......Page 264
4.2 Misleading Actions......Page 265
4.3 Misleading Omissions......Page 266
5 General Transaction Terms......Page 267
5.1 The Prohibition of Unfair GTTs......Page 268
5.2 The Principle of Clarity and Terms of the Contract......Page 271
6 Consumers of Financial Goods and Services......Page 272
6.1.1 Law 2251/1994......Page 273
6.1.2 Specific Legislation......Page 274
7 Consumers in Digital and Distance Transactions......Page 275
7.1 Provisions of the CRD......Page 276
7.2 E-Commerce......Page 277
7.3 Storage and Access to Information......Page 278
7.4 Consumers in a Digital Age......Page 279
8 Concluding Remarks......Page 280
Annex: Main Greek Legislation......Page 281
References......Page 282
L´information et la désinformation des consommateurs : Rapport roumain......Page 284
1 Les caractéristiques générales du modèle d´information du consommateur......Page 285
2.1 L´obligation générale imposée aux professionnels de fournir aux consommateurs une information pré-contractuelle......Page 287
2.3 L´absence de l´information précontractuelle : sanctions, culpa in contrahendo, rapport avec l´autonomie des parties et le .........Page 289
2.4 L´existence des règles qui imposent la transparence et la manière dont l´information doit être présentée au consommateur......Page 290
2.6 Les sanctions prévues pour le cas où le professionnel omet de faire parvenir au consommateur une information obligatoire......Page 291
2.7.2 Le traitement des techniques manipulatoires de marketing qui exploitent le fait que les consommateurs sont plus faciles .........Page 292
3 Les pratiques commerciales trompeuses......Page 293
4.1 Le traitement des termes standards par rapport aux termes négociés individuellement......Page 297
4.2 Le pouvoir de négociation du consommateur par rapport au pouvoir du professionnel......Page 298
4.4 La contestation du caractère « individuellement négociée » d´une clause. L´appréciation des juridictions......Page 299
4.6 La transparence des clauses contractuelles (essentielles)......Page 300
5.1 La différence......Page 301
5.2 Les effets des éventuelles critiques formulées par la doctrine......Page 302
6.1 Les éventuelles dérogations des conditions imposées aux ventes s´adressant consommateurs off line......Page 304
6.3 L´information du consommateur sur ce à quoi il consent......Page 305
8 D´autres observations pertinentes......Page 307
Références bibliographiques......Page 308
1.1 Introductory Remarks......Page 309
1.2 Consumer Definition......Page 311
1.3 Consumer Model......Page 313
2.1.2 Scope and Modalities of the Information Duty......Page 316
2.1.3 Sanctions......Page 317
Private Enforcement......Page 318
Public Enforcement......Page 320
2.2.1 Applicable Law......Page 322
2.2.2 Manipulative Techniques......Page 323
2.2.3 Sanctions......Page 324
3.1 Introductory Remarks......Page 325
3.2 Misleading Actions......Page 326
3.3 Misleading Omissions......Page 327
3.4 Specific Rules on Advertising......Page 328
4.2 Individual Control......Page 329
4.3 Abstract Control......Page 330
5.1 Introductory Remarks......Page 332
5.2 Act on Consumer Credit......Page 333
5.3 Act on Mortgage Credit......Page 335
6.1 Scope and Modalities of the Information Duty......Page 336
6.2 Sanctions......Page 337
6.3 Personal Data, Cookies and Spam......Page 338
7 The Information Model Under Pressure and the Problem of Disinformation......Page 340
8 Other Relevant Topics......Page 341
References......Page 343
Information Obligations and Disinformation of Consumers: Czech Law Report......Page 346
1 General Characteristics of the Consumer Information Model......Page 347
2.1 General Information Obligation......Page 348
2.2 Presentation of Information Includes Transparency Requirements......Page 349
2.3 Specific Food Information Requirements for Consumers......Page 350
3 Misleading Commercial Practices......Page 351
4 Unfair Contract Terms: Bargaining Power......Page 353
4.1 Transparency of (Core) Contract Terms......Page 355
5.1 Special Sanction for Breaching Information Duty in Credit Agreement in Meaning of Directive 2008/48 and Directive 2014/17......Page 356
5.2 Withdrawal Right......Page 357
6 Sector Specific Rules: The Digital Consumer......Page 358
7 Reasonable Consumer Expectations......Page 364
9 The Information Model Under Pressure and the Problem of Disinformation......Page 366
10 Conclusion......Page 368
References......Page 369
1.1 Economic Orientation of Consumer Models......Page 372
2.1.1 Common Law Rules on Information Disclosure......Page 375
2.1.2 Statutory Rules on Information Disclosure......Page 376
2.1.4 Rules on Presentation of Information......Page 378
2.2.1 General Legal Framework......Page 380
2.2.2 Rules on Presentation of Food Information......Page 381
2.2.3 Sanctions for Failure to Comply with Food Information Requirements......Page 383
3.1 Statutory Protection from Misleading Commercial Practices......Page 384
3.2 Misleading Practices and the Average Consumer......Page 385
3.4 Remedies......Page 388
4 Unfair Contract Terms: Bargaining Power and Transparency......Page 389
4.1 Exclusion of Core Contract Terms and Transparency......Page 393
5.1.1 The European Communities (Distance Marketing of Consumer Financial Services) Regulations 2004......Page 395
5.1.2 The European Union (Payment Accounts) Regulations 2016......Page 396
5.2.1 The Consumer Protection Code 2012......Page 400
5.2.2 Enforcement and Use of the Codes......Page 404
5.2.3 The Information Provision Model and Financial Services......Page 405
6.1 Information Requirements for Distance Contracts......Page 406
6.2 Information Requirements for Accessing Information on a User´s Computer......Page 409
7 The Information Model Under Pressure......Page 410
8 Conclusion......Page 411
References......Page 413
Information Obligations and Disinformation of Consumers: Finnish Law Report......Page 414
1 General Characteristics of the Consumer Information Model......Page 415
1.1 Benchmarking and Specific Types of Consumers......Page 417
1.2 Pre-contractual Information Provided to Consumers......Page 419
1.3 Lack of Pre-contractual Information and Possible Sanctions......Page 420
1.4 Food Information Requirements......Page 422
1.5 Misleading Commercial Practices......Page 423
2 Unfair Contract Terms and Bargaining Power......Page 425
3 The Financial Consumer......Page 427
3.1 Insurance......Page 429
3.2 Investment Services......Page 430
4 The Digital Consumer......Page 432
Journal Articles......Page 434
Organisation Sites......Page 435
Part III: National Report: Euro-Asian Region......Page 436
L´information et la désinformation des consommateurs : Rapport turc......Page 437
1.1 Le droit de la consommation turc harmonisé avec le droit européen......Page 438
1.2 Le consommateur naïf ou le consommateur moyen: le grand dilemme du droit turc de la consommation......Page 439
2.1 L´obligation d´information précontractuelle et contractuelle en droit turc de la consommation......Page 441
2.2 L´obligation d´information pour les denrées alimentaires......Page 442
3.2 La publicité trompeuse et la publicité comparative......Page 445
4 Conditions contractuelles abusives......Page 446
5 Le consommateur financier......Page 447
6 Le consommateur digital......Page 448
7 Un consommateur trop éclairé : La surinformation est la non-information......Page 449
References......Page 450
Part IV: National Reports: Asia......Page 451
1 Introduction......Page 452
2.1 Obligations d´information générales......Page 453
2.2 Obligation d´informer les consommateurs sur les denrées alimentaires......Page 455
3 Pratiques commerciales trompeuses......Page 456
4.1 Pouvoir de négociation......Page 457
5.1 Le consommateur financier......Page 458
5.2 Le consommateur numérique......Page 459
6 Conclusion - Problème à envisager......Page 460
1 General Introduction of Consumer Protection......Page 462
1.1 Consumer Definition......Page 463
1.2 Benchmark of Average Consumer......Page 464
2.1 Scope of Information Disclosure......Page 465
2.3 Sanctions......Page 466
2.4.1 Legislations on Food Labelling......Page 467
2.4.2 Manipulative Techniques......Page 468
3.1 Legislations on Misleading Commercial Practices......Page 469
3.2 Assessment of Misleading Commercial Practices......Page 470
3.3.2 Civil Remedy......Page 471
3.3.3 Punitive Damages......Page 472
4.1 Legislations on Standard Contract Terms......Page 473
4.2 Consumer´s Bargaining Power......Page 475
4.4 Transparency of Standard Terms......Page 476
5.2 Financial Information Disclosure......Page 478
5.3 Sanctions......Page 479
6.1 Online Information Disclosure......Page 480
6.1.2 E-Commerce Platform´s Codes of Conducts......Page 481
6.1.3 Information on Products and Advertisements......Page 482
6.2 Consent for Personal Information Collecting......Page 483
7 New Trends in Information Disclosure......Page 485
References......Page 486
Part V: National Reports: North and South America......Page 488
1 Introduction......Page 489
2.1 Main Features of Quebec´s Consumer Law......Page 490
2.2 Who´s the Consumer? The New Canadian Way......Page 492
3 Pre-contractual and Contractual Information Requirements......Page 494
3.1 Information Surrounding Goods and Services......Page 495
3.2 Moving Towards the Contractual Dynamics......Page 497
3.4 Specific Food Information Requirements......Page 498
4 Extracontractuality......Page 501
5.1 Misleading Actions and Omissions......Page 504
5.2 Evaluation Benchmarks......Page 507
5.3 Ban on Publicity Destined to Children......Page 510
6 Contract of Adhesion......Page 511
6.1 Protection in Substantive Law......Page 512
7 Sector Specific Rules: The Financial Consumer......Page 514
8 Sector Specific Rules: The Digital Consumer......Page 518
9.1 Precontractual Information Defects......Page 520
9.2 Contractual Sanctions......Page 521
9.3 Coordinating Pre-contractual and Contractual?......Page 523
9.4 Penal Sanctions......Page 524
10 Conclusion......Page 525
References......Page 526
1 Introduction: The Consumer Under Brazilian Law......Page 527
2 The Importance of the Supplier´s Duty to Inform and the Need for Informed Consent by the Consumer: Binding Effects of the In.........Page 530
3 Protection Against Misleading and Abusive Advertisement......Page 536
4 Unfairness Test of Contractual Clauses. Possibility of Inversion of the Burden of Proof in Consumer´s Favor......Page 539
5 Application of the Consumer Protection Code to Banking and Insurance Activities......Page 541
6 Consumer Protection in the Context of the E-commerce......Page 545
7 Conclusion: The Concern with Healthy Consumption in Brazil......Page 549
References......Page 550
Introduction......Page 553
Questionnaire......Page 554
Introduction......Page 559
Questionnaire......Page 560

Citation preview

Ius Comparatum – Global Studies in Comparative Law

Gert Straetmans Editor

Information Obligations and Disinformation of Consumers

Ius Comparatum – Global Studies in Comparative Law Volume 33

Series Editors Katharina Boele-Woelki, Bucerius Law School, Hamburg, Germany Diego P. Fernández Arroyo, Institut d’Études Politiques de Paris (Sciences Po), Paris, France Founding Series Editors Jürgen Basedow, Max Planck Institute for Comparative and International Private Law, Hamburg, Germany George A. Bermann, Columbia University, New York, USA Editorial Board Joost Blom, University of British Columbia, Vancouver, Canada Vivian Curran, University of Pittsburgh, USA Giuseppe Franco Ferrari, Università Bocconi, Milan, Italy Makane Moïse Mbengue, Université de Genève, Switzerland Marilda Rosado de Sá Ribeiro, Universidade do Estado do Rio de Janeiro, Brazil Ulrich Sieber, Max Planck Institute for Foreign and International Criminal Law, Freiburg, Germany Dan Wei, University of Macau, China

As globalization proceeds, the significance of the comparative approach in legal scholarship increases. The IACL / AIDC with almost 800 members is the major universal organization promoting comparative research in law and organizing congresses with hundreds of participants in all parts of the world. The results of those congresses should be disseminated and be available for legal scholars in a single book series which would make both the Academy and its contribution to comparative law more visible. The series aims to publish the scholarship emerging from the congresses of IACL / AIDC, including: 1. of the General Congresses of Comparative Law, which take place every 4 years (Brisbane 2002; Utrecht 2006, Washington 2010, Vienna 2014, Fukuoka 2018 etc.) and which generate (a) one volume of General Reports edited by the local organizers of the Congress; (b) up to 30 volumes of selected thematic reports dealing with the topics of the single sections of the congress and containing the General Report as well as the National Reports of that section; these volumes would be edited by the General Reporters of the respective sections; 2. the volumes containing selected contributions to the smaller (2-3 days) thematic congresses which take place between the International Congresses (Mexico 2008; Taipei 2012; Montevideo 2016 etc.); these congresses have a general theme such as “Codification” or “The Enforcement of Law” and will be edited by the local organizers of the respective Congress All publications may contain contributions in English and French, the official languages of the Academy. More information about this series at http://www.springer.com/series/11943

Académie Internationale de Droit Comparé International Academy of Comparative Law

Gert Straetmans Editor

Information Obligations and Disinformation of Consumers

Editor Gert Straetmans Faculty of Law University of Antwerp Antwerp, Belgium

ISSN 2214-6881 ISSN 2214-689X (electronic) Ius Comparatum – Global Studies in Comparative Law ISBN 978-3-030-18053-9 ISBN 978-3-030-18054-6 (eBook) https://doi.org/10.1007/978-3-030-18054-6 © Springer Nature Switzerland AG 2019 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Preface

To combat market inefficiencies resulting from the information asymmetry that exists between businesses and consumers, an increasing number of mandated information disclosures are imposed on businesses to give consumers the means to protect their own interests by making autonomous, informed choices. Prohibiting misleading information and informing consumers with correct information lies at the core of the so-called information paradigm which resulted in consumer information models across the world. In those models, consumers are often perceived as benefit-maximising creatures. Information requirements allow consumers to make decisions themselves, decisions which are supposedly better than anyone else can make for them. According to the economic theories underlying those models, informed consumer decisions are efficient. It follows that if consumers are given full information, they will consistently make decisions that maximise their welfare. As a consequence, the disclosure of correct information and information in general cannot have a negative impact on the purchase decision of consumers. Being rational creatures consumers are supposed to ignore information that is ineffective or irrelevant. Pre-contractual information duties and labelling requirements for foodstuffs range among the earliest information obligations that have been adopted in view of protecting consumers. Together with the prohibition of misleading commercial practices and transparency requirements for contract terms, these measures seek respectively to prevent and to combat the deception of consumers. The last decade models based on mandatory disclosures increasingly became the subject of criticism not in the least by behavioural economists. More particularly, the continuous accumulation of information requirements begs the question whether the ‘inundation’ of information does not risk to disinform the consumer rather than inform. Furthermore, the benchmark of the rational consumer which serves as the basis for the design of protective measures is increasingly criticised. Also, new communication technologies pose new threats to consumers and might cause new forms of information asymmetries.

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Preface

This book focuses on these recent developments in consumer law and specifically addresses mandatory disclosures and the topical problem of information overload. It provides an in-depth comparative analysis based on national reports from countries with common law and civil law traditions in Asia, America and Europe. More in particular, it bundles contributions originating in founding countries of the European Union (France, Germany and Italy), in member states that at a later stage acceded to the European Union (Finland, Greece, Ireland, Poland, Romania and the Czech Republic), in the United Kingdom that initiated the process to leave the European Union, in countries of the Asian continent (China, Japan, Singapore and Taiwan) and furthermore in Brazil, Canada (Québec province) and Turkey which echo views from respectively the North- and South-American and the Euro-Asian region. The book further benefits from the Belgian experience with consumer information rules. The national reports follow the structure of the questionnaire which is annexed in English and in French to this book. It allows readers in a user-friendly manner to compare the subparts of the chapters of their preference. Also, the general report in this book applies the same order of treatment as the questionnaire. It offers comparative insights based on the national reports in the most relevant developments of consumer information law. The main themes dealt with in the book are the following. At first the main characteristics of the current consumer protection models and the basic assumptions underlying those models such as the information paradigm and the average consumer benchmark are examined. The analysed legal systems start traditionally from the assumption that contracting parties are more or less in an equal bargaining position and enjoy the freedom of contract. As is well known, new market circumstances (mass products, standardised contracts) made increasingly clear that market failures occurred and consumers could no longer be considered in an equal position with traders. Hence, consumer protection rules responded in the first place to failures in the market economy like increasing information asymmetries and provided for corrections to restore real equality between traders and consumers. Besides increased information requirements in line with the economic pace of the market, the conviction gradually grew that consumers must be considered weaker parties in some circumstances, deserving extended protection for instance in the context of distance selling, off-premises contracts and e-commerce. The characterisation as a weaker party justified more intrusive consumer protection measures like withdrawal rights, rules on delivery in conformity with the contract and consumer guarantees. More recently, consumers are increasingly approached as the weaker party by definition, especially when concluding standard or adhesion contracts. As a consequence, the fairness of contract terms is enforced by a multitude of measures among which are the nullity of unfair contract terms, the impact of pre-contractual information on the fairness of a contract term, the transparency of core contract terms and terms in general, the duty to explain contract terms, etc. It follows that consumer models in markets that become more global can no longer be reduced to pure corrections of the information asymmetry that occurs. Market fairness towards consumers is no longer necessarily linked to a demonstrated

Preface

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inferior information or even bargaining position of the consumer, but increasingly connected with the assumption that the consumer is a weaker party as such given the economic environment in which he makes transactional decisions. It is further examined in this book how consumer models adapt to the new market circumstances and whether consumer models tend anew towards consumerist approaches as experienced in the 1970s or retain, albeit maybe with varying degrees of intensity, their overall economic orientation. In the same vein, the analysis seeks to investigate whether the consumer seen as a rational, benefit-maximising creature still holds as the benchmark of consumer protection measures and whether the information paradigm is there to last as foundation of consumer protection models. In the second part of this book, the information obligations themselves are the subject of analysis, starting with the general pre-contractual information rules and the role of good faith in contracting. A grand variety of rules exist as regards pre-contractual information with countries imposing a general pre-contractual information duty and countries where such a duty is absent. The book highlights the existing differences in this regard and focuses more particularly on countries with a general pre-contractual information duty. Countries with such a duty almost always also impose transparency requirements. It follows that pre-contractual information must be clear, intelligible and comprehensible. These transparency requirements incorporate in general two obligations. The first relates to the form and the presentation of the information which must be easy to read. The second refers to the content of the information and its comprehensibility. Transparency measures often lack clarity due to the absence of further guidance by legislators. The book studies whether that is the case and if such a lack of clarity would occur, how courts cope with that shortcoming. It is further analysed whether common rules on transparency can be deduced from the existing national systems. In this regard also the heavy regulated field of food labelling is briefly analysed in view of extracting overall rules on the readability and intelligibility of information. With these analyses as background, the focus of the book in the third part shifts towards the relationship of the transparency requirement in general information obligations and the prohibition of misleading commercial practices on the one hand and the fairness of (standard) contract terms on the other hand. With regard to the misleading character and comprehensibility of the information, a remarkable evolution takes place in the European Union. Recent case law of the European Court of Justice seems to suggest that an average consumer who is provided with correct and comprehensive information in advertisements, nevertheless, may have a mistaken perception of the offer due to the presentation of that information taken as a whole. The Court’s approach first took place in a case relating to food labelling but was extended later to misleading commercial practices cases. Although the European Court of Justice does not as such renounce that the average consumer serves as a benchmark for the assessment of misleading practices in labelling and in advertising, it clearly mitigates the consumer’s obligation to internalise the information which is disclosed in the market for his benefit. It follows that even when the trader satisfies the information requirements imposed by the law, that does not automatically rule out that the information may be presented in such a

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manner that the average consumer remains misled, notwithstanding the correct and comprehensive information he received. Hence, the Court accepts that in some circumstances correct and comprehensive information may no longer be capable of correcting the consumer’s erroneous or misleading impressions based on other informational elements. This will be especially so in the case of price information provided to consumers in TV advertising for rather complex products and in the case of advertising for or information on the package of a daily product. In those circumstances, the European Court of Justice seems to accept that the level of attention of consumers may be lower and hence their capability to absorb the disclosed information due to either the reduced time to internalise the information (e.g. in the case of a TV ad) or the fact that the consumer (sometimes hastily) buys a daily product (e.g. products from the range of basic consumables in supermarkets). With regard to contract terms, the European Court of Justice has given some very strong guidance on what is required for terms to be plain and intelligible. In doing so, the Court strengthened the bond between pre-contractual information on the one hand and the unfairness of contract terms on the other hand, which it considers as closely intertwined. In its recent case law, the European Court of Justice held that the requirement of transparency should not be restricted to mere formal and grammatical intelligibility but should extend to the precise content of the terms. According to the Court, the consumer must be informed in such a manner that he is in a position to evaluate on the basis of clear, intelligible criteria the economic consequences for him which derive from a term. More specifically, the consumer must be provided with all the information likely to have a bearing on the extent of his commitment so that he is enabled to estimate in particular the total cost of his contract. Furthermore, consumers must be expressly informed of their rights that flow from mandatory national law of which they are beneficiaries, even though they are deemed to know their national legislation. Hereby the fundamental importance of pre-contractual information for consumers is emphasised since consumers decide on that basis to be bound by a contract. The book specifically analyses these new developments in food labelling, commercial practices and unfair contract terms law and examines whether similar traits of these developments can be found in non-European jurisdictions. The analysis in this book is further complemented with a fourth part wherein sector-specific information rules are analysed. Two sectors were selected to that aim: the financial services sector and the e-commerce sector, the first because legislatures increasingly impose specific information obligations on businesses in the financial services sector due to the often complex, sophisticated and highly technical nature of those services and the latter because new communication technologies pose new threats to consumers in terms of information and consequently force legislatures to enact specific rules to protect the digital consumer. Especially the fact that legislators are experimenting with different forms of summary disclosures in the financial services sector retained attention. Also, recent initiatives to make use of the new technological environment with the aim of presenting information in a more digestible way for consumers are highlighted in this part of the book. It is more particularly

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examined whether the tendency towards rationalisation of information in this domain also has led to simplification of the information. The analysis in the preceding parts gives the reader the necessary background to understand that consumer protection models based on mandatory disclosures are not free of criticism. As was pointed out above, they increasingly became the subject of criticism the last decade, not least by behavioural economists. Especially the excessively detailed rules on advertising and information are increasingly criticised as counterproductive if they lead to constantly extended lists of information catalogues. This part of the book particularly focuses on the topical problem of information overload that results from the continuous accumulation of information requirements. Here, the question is raised whether this evolution risks to disinform rather than inform the consumer? The book examines how countries with different legal backgrounds respond to this emerging problem. More in particular, the focus of the analysis is placed on the impact, if any, of those criticisms on the national consumer information policies in the reporting countries and whether legislatures react to the highlighted critiques and drawbacks of the information models. Also, the degree to which countries address more particular problems relating to overload of information is discussed in this part of the book. The concluding and final part of the book provides a critical appraisal of the recent developments in consumer protection models based on information obligations. More in particular, the question is addressed whether the multiple criticisms on the existing consumer information models necessitate the abandonment of those models in favour of new forms of more adequate and thus better consumer protection. In this context also the multiple initiatives to educate consumers will be taken into account. Finally, the book concludes with some suggestions on how consumer law could/ should evolve in the future, based on the comparative analysis of the national reports originating in different continents. Antwerp, Belgium 6 February 2019

Gert Straetmans

Contents

Part I

General Report

Information Obligations and Disinformation of Consumers . . . . . . . . . . Gert Straetmans Part II

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National Reports: European Union

Information Obligations and Disinformation of Consumers: English Law Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . John Cartwright

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Information Obligations and Disinformation of Consumers: German Law Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Boris Schinkels

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L’information et la désinformation des consommateurs : Rapport français . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thomas Piazzon

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L’information et la désinformation des consommateurs : Rapport italien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gian Antonio Benacchio

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Information Obligations and Disinformation of Consumers: Greek Law Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Antonios G. Karampatzos and Charalampos A. Kotios

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L’information et la désinformation des consommateurs : Rapport roumain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Raluca Bercea and Dan Adrian Cărămidariu

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Information Obligations and Disinformation of Consumers: Polish Law Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monika Namysłowska and Agnieszka Jabłonowska

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Information Obligations and Disinformation of Consumers: Czech Law Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Markéta Selucká, Iva Šťavíková Řezníčková, and Pavel Loutocký

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Information Obligations and Disinformation of Consumers: Irish Law Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cliona Kelly

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Information Obligations and Disinformation of Consumers: Finnish Law Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Salla Hyvönen

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Part III

National Report: Euro-Asian Region

L’information et la désinformation des consommateurs : Rapport turc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Başak Baysal Part IV

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National Reports: Asia

L’information et la désinformation des consommateurs : Rapport japonais . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Masamichi Nozawa

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Information Obligations and Disinformation of Consumers: Chinese Law Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shaolan Yang

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Part V

National Reports: North and South America

Information Obligations and Disinformation of Consumers: Quebec Law Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Marie-Eve Arbour

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Information Obligations and Disinformation of Consumers: Brazilian Law Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Milena Donato Oliva

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IACL Questionnaire: Information/Disinformation Consumers Including Negotiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Questionnaire AIDC: Information/désinformation des consommateurs, y compris le pouvoir de négociation des consommateurs . . . . . . . . . . . .

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Part I

General Report

Information Obligations and Disinformation of Consumers Gert Straetmans

Abstract To combat market inefficiencies resulting from the information asymmetry that exists between businesses and consumers, an increasing number of mandated information disclosures are imposed on businesses to give consumers the means to protect their own interests by making autonomous, informed choices. Prohibiting misleading information and informing consumers with correct information lies at the core of the so-called information paradigm which resulted in consumer information models across the world. Pre-contractual information duties and labelling requirements for foodstuffs range among the earliest information obligations that have been adopted in view of protecting consumers. Together with the prohibition of misleading commercial practices and transparency requirements for contract terms these measures seek to respectively prevent and to combat the deception of consumers. The different forms such measures may take are the subject of an in-depth comparative analysis in this general report. The last decade models based on mandatory disclosures increasingly became the subject of criticism not in the least by behavioural economists. More particularly the continuous accumulation of information requirements begs the question whether the ‘inundation’ of information does not risk to dis-inform the consumer rather than inform. Furthermore the benchmark of the rational consumer which serves as the basis for the design of protective measures is increasingly criticised. In this general report the impact, if any, of those criticisms on the national consumer information policies in the reporting countries is examined.

The text has been finalised in September 2018. G. Straetmans (*) Economic, Consumer and Commercial Practices Law, Research Group Business and Law, University of Antwerp, Antwerp, Belgium Consumer Law Institute, University of Antwerp, Antwerp, Belgium Consumer Law Institute, University of Ghent, Ghent, Belgium Court of Appeal, Antwerp, Belgium e-mail: [email protected] © Springer Nature Switzerland AG 2019 G. Straetmans (ed.), Information Obligations and Disinformation of Consumers, Ius Comparatum – Global Studies in Comparative Law 33, https://doi.org/10.1007/978-3-030-18054-6_1

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Finally new communication technologies pose new threats to consumers. The general report examines whether those developments cause new forms of information asymmetries.

1 Introduction Consumers deserve legal protection on account of their inferior position. This is the well-known rationale for adopting special rules for consumers. To combat market inefficiencies resulting from the information asymmetry that exists between businesses and consumers, an increasing number of mandated information disclosures are imposed on businesses to give consumers the means to protect their own interests by making autonomous, informed choices. Prohibiting misleading information and informing consumers with correct information lies at the core of the so-called information paradigm which resulted in consumer information models across the world. In those models consumers are often perceived as benefit maximizing creatures. Information requirements allow consumers to make decisions themselves, decisions which are supposedly better than anyone else can make for them. It follows that if consumers are given full information, they will consistently make decisions that maximise their welfare.1 Pre-contractual information duties and labelling requirements for foodstuffs are well-known illustrations of such mandatory information obligations. In a number of legal systems they range among the earliest information obligations that have been adopted in view of protecting consumers. Together with the prohibition of misleading commercial practices and transparency requirements for contract terms these measures seek to respectively prevent and to combat the deception of consumers. The different forms such measures may take will be the subject of further analysis in this general report. New communication technologies pose new threats to consumers and financial services are traditionally seen as complex with their inherent technicalities. Some specific rules enacted to protect respectively the digital and the financial consumer will therefore complement the analysis. The last decade models based on mandatory disclosures increasingly became the subject of criticism not in the least by behavioural economists. Without going into too much details behavioural economics scholars mark as major critiques on consumer information policies based on disclosures, the bounded rationality, planning fallacy, overconfidence and loss aversion of consumers,2 the fact that consumers

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According to economic theory informed consumer decisions are efficient. If the information is ineffective or irrelevant, it will simply be ignored by consumers and businesses. Economic theory thus presupposes that information in general cannot have a negative impact. See also on this point Better Regulation Executive and National Consumer Council (2007), p. 9. 2 See e.g. “The total capacity that is available in the human mental architecture for the processing of input information is limited” Mangold (2015), p. 142 and see A Lang on LC4MP ‘Limited Capacity

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often lack the time to read information,3 the absence of rules on the presentation of the information, the length of the information and the comprehensibility of information for consumers in general and for vulnerable consumers in particular.4 More particularly the continuous accumulation of information requirements begs the question whether the ‘inundation’ of information does not risk to dis-inform the consumer rather than inform. In this general report the impact, if any, of those criticisms on the national consumer information policies in the reporting countries will be examined. This general report builds on the valuable contributions and national experiences of national reporters. It bundles contributions originating in founding countries of the European Union (France, Germany and Italy), in member states that at a later stage accessed to the European Union (Finland, Greece, Ireland, Poland, Romania and The Czech Republic), in the United Kingdom that initiated the process to leave the European Union, in countries of the Asian continent (China, Japan, Singapore and Taiwan), and in Brazil, Canada (Québec province) and Turkey which echo views from respectively the North- and South-American and the Euro-Asian region. The general report further benefits from the Belgian experience with consumer information rules. Thanks to the expertise of the well-recognised national scholars contributing to this book, the general report provides significant insights on different aspects of consumer law in different continents. These insights will be highlighted hereafter in accordance with the structure of the questionnaire which is annexed to this book.

model of mediated motivated message processing’ Lang (2000), pp. 46–70 and Lang (2009), pp. 193–204. A central assumption in the LC4MP-model is that processing of information needs capacity and that the total amount of capacity is limited: if one process gets more capacity for operation, other processes being executed at the same time will get less. See also Mangold (2017), pp. 75–87: “the demands of different processes for a variable level of capacity are strongly related to the kind of processing (deep and rule-governed or superficial or heuristic). Processes not receiving the capacity they would require for thorough operation will only attain superficially computed results” (p. 79). Motivation (the information relates to the consumer’s interests, needs, goals or expected gratifications) turns out to be one of the dominant factors for the allocation of capacity (p. 80). However, customers tend not to be consciously aware of their own needs. Yet, to date, it has never been shown and according to Mangold could never be shown that unconscious priming “allows the creation of new and previously non-existing needs or motivates subjects to make decisions that are contrary to their general intentions” (p. 87). Compare with Kahneman (2011), p. 477, who refers to the “planning fallacy” as one of the manifestations of our pervasive optimistic bias. Planning fallacy is our tendency to overestimate benefits and underestimate costs, and hence foolishly to take on risky projects. 3 See e.g. Bakos et al. (2014), p. 1. See recently Wagner (2017), p. 1027. 4 The lack of transparency is an important factor that impedes consumers to read disclosed information and contract terms, but also a considerable number of cognitive and social factors as well as rational and economic factors play a crucial role in here; see to that extent respectively Stark and Choplin (2009), p. 659 and also Barnes (2007), pp. 228–272 and Becher and Unger-Aviram (2010), pp. 199–210.

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2 General Characteristics of the Consumer Information Model 2.1

Economic Orientation of Consumer Models

Consumer protection in all legal systems is a modern, twentieth century, phenomenon. In the analysed legal systems contract law starts from the assumption that contracting parties are more-or-less in an equal bargaining position and enjoy the freedom of contract.5 Freedom of contract pairs well with a free market economy based on liberal paradigms and fair competition. The thriving market economy based on fair competition also brought mass production. The standardisation of contracts resulting thereof and the introduction of new sales techniques gave rise to new market failures such as increasing information asymmetry (both quantitative and qualitative) between a trader and a consumer and marketing techniques that impact the consumer’s decision making process.6 These new market circumstances made increasingly clear that consumers could no longer be considered in an equal bargaining position with traders, especially in the presence of pre-formulated contracts. These findings triggered the development of consumer protection rules, as a response to failures that occurred in the market economy.7 These rules mainly consist of information requirements as they are the least intrusive to the economy and capable of restoring the balance between traders and consumers.8 But, subsequently, also more intrusive rules like the prohibition of unfair contract terms, cooling off periods and withdrawal rights were introduced. It follows that in the European countries consumers nowadays are almost automatically perceived as weaker parties in terms of legal and economic bargaining powers. Their need for protection is based on the perception that commercial actors

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Courts in common law systems are, more than in civil law systems, reluctant to intervene in the terms of the contract, nor even generally to define forms of “weakness” of one party, or “inequality” between the parties, that deserve their protection. For instance, in the United Kingdom Lord Denning’s plea in 1985 to devise a common law principle of ‘inequality of bargaining power’ was rejected. See more on this issue in the contribution of Cartwright to this book. 6 The emergence of industrial giants and correlative depersonalisation of relations between traders and consumers also contributed to these market failures. 7 Markets becoming more open almost automatically result in increased attention for the (weaker) position of consumers; see extensively on this subject, Straetmans (1998), p. 242 e.s. 8 See e.g. Baldwin et al. (2011), pp. 118–119 and Ramsay (2007), pp. 61–71 and 119 e.s. By impairing the consumer’s ability to make choices which are informed, unfair commercial practices generate a market failure.

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possess a greater negotiating power due to their economic and informational upper hand.9 However, the economic orientation of European consumer law makes it a balancing exercise between conflicting aims, namely providing the necessary protection of the weaker contract party and ensuring the proper functioning of the (internal) market.10 A similar economic orientation, albeit with different degrees of intensity, underpins consumer protection rules in the non-European countries analysed in this report. For example consumer law in Brazil aims at protecting the ‘homo economicus’ and in Singapore, which has to date less elaborated consumer protection rules than in the European Union, the consumer is also placed in the larger context of a free market economy where regulation is light-touched, and a belief in the invisible hand is prevalent.11 The economic orientation is also present in Turkish consumer law where the rules are gradually being adapted to bring them in line with European law as part of the accession process. Also Québec’s private law copied French contract law so that the consumer protection rules equally rely on the rationality paradigm in the free market with its inherent economic orientation to which it provides a correction to ensure real equality between traders and consumers.12

9 See also the contribution of Hyvönen and Schinkels in this book. Schinkels further submits that the informable consumer more easily fits as an explanation for market-complementing information than as an explanation for market correction. Also Rott expressly differentiates between informed and informable consumers, whereby the latter are seen as a benchmark for consumer contract law (see in that sense Rott 2015, p. 164). 10 In this regard, Piazzon distinguishes subjective consumer law (weaker party protection) and objective consumer law (proper functioning of the internal market); see his contribution to this book. 11 Based on the responses to the questionnaire from professor G. Low, Singapore Management University, [email protected]: “The emphasis in Singapore has been on encouraging competitive processes and raising consumer awareness . . . as active competition policy is seen as a more efficient way to deliver benefits . . . to end-user consumers . . . [and] business consumers”. With regard to Japan, Nakata (2016), pp. 481–482, points out that consumer law reforms in 2004 aimed at converting the existing law from a consumer that needs protection towards a consumer who is selfreliant, namely “an independent subject, acting so as to ensure its interests” (p. 482). The law reform entailed the creation of an environment tailored to a self-reliant consumer with ex post regulation based on market rules instead of ex ante controls and the promotion of information disclosure. Also these elements reflect an economic orientation of consumer law with the emphasis on deregulation and self-responsibility as marketplace principles. Also the Japanese Consumer Contract Act of 2001 reflects this idea: “The purpose of this Act is to ensure self-determination of consumers, and to provide an environment which will support it”, o.c., 487. 12 See the contribution of Arbour to this book.

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The Consumer Concept A Codified General Definition of Consumer, But No Unified Definition

In most of the reported countries the consumer is a creature of statute. Though normal in civil law systems, it is much more peculiar in case based, common law systems.13 In the European member states national legislative texts mainly literally transpose the definition of consumer stemming from European instruments. In those instruments the consumer is generally defined as “any natural person who is acting for purposes which are outside his trade, business, craft or profession”.14 This definition represents the common core which is equal to all reported countries. That way, it can be seen as a factor of convergence, but differences in interpretation remain to exist. For instance in all the member states of the European Union a variety of functional consumer definitions15 are used in function of the precise underlying aims of the legislation,16 not in the least because the European legislature itself within its legislative enactments did not advance a single definition of consumer.17 The national reports of the non-European countries in this book present a similar finding. It may thus be concluded that despite the existence of a generally accepted common core definition of consumer, there is no unified definition of consumer that is to be used within the consumer protection legislation generally. Hereafter we will point to some differences in scope.

Mainly Natural Persons Protected, Sometimes Also Legal Persons or Even Final Users The aforementioned common core definition limits the protection to natural persons acting for purposes which are outside their trade, business, craft or profession. Even 13

Furthermore, it must be stressed that in common law systems individualised definitions of consumers are approached differently than in civil law systems “as there is no general expectation that legislation will be dovetailed to form a coherent, systematic whole”, see the contribution of Cartwright to this book. 14 See e.g. Article 2 (b) Unfair Commercial Practices Directive 2005/29/EC, O.J. 2005, L 149/22. 15 In the UK for instance the parliament has defined the circumstances in which consumers should receive protection. Courts will read these statutes by reference to the normal, objective meaning of their words, and will not look behind the text to find the “intended” meaning from the travaux préparatoires to give an interpretation beyond the text itself or to provide a conceptual unity amongst discrete legislative provisions. See the contribution of Cartwright to this book. 16 The personal scope of legislation is often adapted to its particular purposes. 17 The European Commission recognizes that Member States’ approaches are different and fragmented, but also found that there is no consensus on the stakeholders on how to reduce legal uncertainty generated by the fragmentation (see Report of the Fitness Check of EU Consumer and Marketing Law 2017, p. 109).

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though in most of the reported countries consumer law is limited to natural persons, member states within the European Union as well as states outside the EU have experimented with broader definitions.18 Some states straightforwardly apply a broader definition. For instance Greek consumer law extends the protective scope to legal persons and a union of persons. A consumer may be “any natural or legal person or union of persons without legal personality, for whom the goods or services offered in the market are intended and who make use of those products or services, as long as they are the final receivers of such goods or services”.19 In the same vein the Brazilian Consumer Protection Code defines the consumer as any individual or legal entity that acquires or uses a product or service as a final user.20 To be characterized as a consumer, the individual or legal entity does not need to have a contractual bond with a supplier, since the provision expressly refers in general to acquirer or user. Furthermore, the Consumer Protection Code, despite the reference to final users, also applies specific consumer rights to ‘consumers by comparison’ in an attempt to ensure equal treatment to every person who is in a similar vulnerable position, irrespective of whether he is a final recipient.21 Some countries provide for an extension of the definition in certain subdomains of consumer law. For instance Finland provides smaller businesses in certain areas consumer-like protection.22 Thus the domain of unfair contract terms benefits from such extension if the business contracts involved are concluded by consumer-like small businesses and policy holders equal to consumers.23 Also French law has a longstanding tradition in protecting ‘non-professionals’. It follows that professionals could benefit as non-professionals from the protective 18 The UK for instance evolved from a broader to a narrower conception of consumer in the field of unfair contract terms where ‘consumer’ protection was initially extended to corporations as long as the transaction in question was neither an integral part of their business, nor conducted with a sufficient degree of regularity to make it part of the business. Also, Poland briefly experienced with an extension of the notion to ‘persons’ but it was quickly abandoned as it was believed that the inclusion of non-governmental organisations and micro-, small- and medium-sized undertakings would negatively affect the national traders in the internal market. See respectively the contribution of Cartwright and Namysloswka and Jablonowska to this book. 19 See the contribution of Karamptzos and Kotios to this book. 20 See Head of Article 2 of the Consumer Protection Code. 21 Read more on this scholarly debate in the contribution of Donato Oliva to this book, who submits that vis-à-vis a legal entity the liability of a supplier may be limited. 22 A concrete example is the protection provided by the Insurance Contracts Act which not only protects the consumer but also a legal person who in terms of the nature and scope of its business can be compared to a consumer vis-à-vis the insurer. See more in the contribution of Hyvönen to this book. 23 However, it must be pointed out that the unfairness of a term is evaluated differently in the case of a consumer or a small business. “Consumer protection is much broader and includes the protection provided for in the national Consumer Protection Act (Sections 1–2 of Chapter 4) or the EU directives on consumer protection. In the case of a small business, unfairness is evaluated on the basis of general contract law (Section 36 of the Contracts Act)”, see the contribution of Hyvönen to this book.

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rules in the domain of unfair contract terms when they find themselves in a position equal to consumers, for instance if they lack any competence in the subject matter of the contract.24 It comes as no surprise that this gave rise to divergent interpretations in case law.25 In 2016 the French legislator (tried to) cut the discussion short introducing a new definition whereby any legal person that acts for purposes that do not enter within the framework of his commercial, industrial, artisanal, liberal or agricultural activity must be regarded as a ‘non-professional’. Likewise with regard to unfair contract terms the French case law excludes natural or legal persons (non-professionals) who conclude contracts that present a direct link (interpreted broadly) with their professional activity from the protective scope.

Acting for Private, Mixed or Business Purposes The second part of the common core definition refers to non-professional purposes. Also this part has been the subject of debate in Europe and beyond where numerous variations exist on how ‘acting for non-business, non-professional purposes’ must be understood. In Japanese law the consumer is defined as a natural person who does not exercise a function within a business, whereas the professional is defined as an individual who contracts for business purposes.26 Also Chinese law makes the purpose of purchase, namely to meet consumption needs in daily life, the key factor to distinguish between a consumer and a business operator, but the definition is criticised because also legal persons may have consumption needs for their daily operations. Hence legal persons would qualify as consumers whereas it is believed that legal persons are not as weak as natural persons in market transactions. Chinese legal doctrine therefore advised to exclude legal persons from consumer protection and to amend the definition so as to focus on the non-professional, non-profit and dependent on business operators characteristics of consumers. In 2013 legal persons were excluded by law from consumer protection measures but so called professional fake commodities buyers were not.27 24

For instance, trade unions may benefit as non-professionals from protective rules provided that the subject matter of the contracts they conclude does not present a direct link with their professional activity. See the contribution of Piazzon to this book. 25 Thus, commercial companies were generally excluded from the protection whereas case law was divergent with regard to the classification as consumers of civil companies. 26 See the contribution of Nozawa to this book. Compare with Nakata (2016), p. 489, who adds that “there are situations in which consumers might appear as ‘business operators’ due to special characteristics of the transaction, or business operators are put in similar positions of those consumers” (p. 489). 27 Professional fake commodities buyers are persons who deliberately and repeatedly buy substandard commodities with the intention to obtain punitive damages since those commodities do not correspond to the national safety and quality standards. Chinese Courts tend to be receptive towards such claims initiated by fake commodities buyers. Yet recent statements in 2017 from the Supreme People’s Court will restrict the professional fake buyer’s exploitation so that more disqualifications

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The Québec Consumer Protection Act defines a consumer as a natural person “except a merchant who obtains goods or services for the purposes of his business”, without however defining the notion of merchant.28 Romanian law provides for another variation on the same theme. Here, the consumer is generally defined as any natural person or group of natural persons in an association who acts for purposes that exceed his commercial, industrial, producing, artisanal or liberal activity. Yet, with regard to unfair contract terms the definition is slightly different since it refers to a natural person or group of natural persons who act for purposes that do not enter within the framework of their professional activity. The latter definition can also be found in France29 and in slightly different wording in Italy.30 The broad wording does not exclude dual purpose (private and business) contracts from consumer protection. How far a dual purpose contract might be mixed so as not to forfeit the categorization of consumer contract, is debated in Europe. In the Consumer Rights Directive, recital 17 states broadly that “in the case of dual purpose contracts, where the contract is concluded for purposes partly within and partly outside the person’s trade and the trade purpose is so limited as not to be predominant in the overall context of the contract, that person should also be considered as a consumer”.31 Yet, in the Gruber- case32 the European Court of Justice gave a more restrictive reading of the consumer concept holding that the notion of consumer contract must be confined to contracts wherein the element of business use is negligible. As a result, the UK legislator defined the consumer as an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession. The UK legislator preferred ‘wholly or mainly’ to extend the definition beyond the interpretation of the Court of Justice of the European Union (hereafter: CJEU) in Gruber. Also the Polish Civil Code allows courts a certain margin of discretion. It defines the consumer as a natural person who performs a legal act33 with a trader for purposes not directly related to his or her business or professional activity. It follows that courts can bring dual purpose contracts into the protective scope in accordance with the broader interpretation in the Consumer

as consumers may be expected in case law. See more extensive on this point, the contribution of Yang to this book. 28 Court practice shows that a natural person who sells his services or products obtained from professional activities in an organised fashion, is no longer a consumer. See the contribution of Arbour to this book. 29 Consumer is a natural person who acts for purposes that do not enter the framework of his commercial, industrial, artisanal, liberal or agricultural activity. See already supra. 30 In Italy the consumer is defined as any person who buys products or services from a business to satisfy his proper needs, those of his family and partially also his professional needs, provided that he acts for purposes that do not enter the framework of his commercial, industrial, artisanal, liberal or professional activity. See the contribution of Benacchio to this book. 31 Directive 2011/83/EU of 25 October 2011 on consumer rights, OJ 2011, L 304/64. 32 CJEU 20 January2005, Johann Gruber v. Bay Wa, case C-464/01, ECLI:EU:C:2005:32. 33 The reference to legal act does not severely limit the scope of the definition, see more in the contribution of Namyslowska and Jablonowska to this book.

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Rights Directive. Also the Belgian wording of the definition allows for such stretched reading as applied by some courts with respect to consumer sales contracts.

Irrespective of the Consumer’s Level of Knowledge In most of the reported countries the actual level of (technical) knowledge of the consumer, his bargaining power, his concrete legal skills or observant or financial capacities are irrelevant for the application of abovementioned definition of consumer. A natural person who is acting for purposes outside his business or profession is considered automatically to be the weaker person vis-à-vis a trader, seller or merchant. This is however not the case in countries where a broad consumer definition is applied referring to persons acting as final users. Thus the Brazilian Superior Court of Justice extends the protective scope on the basis of a so-called ‘deepened finalism’. This interpretative method allows the application of the Consumer Protection Code in all cases were the vulnerability is established, even if from the finalist perspective the final destination is not known and the person concerned is no final user. According to the Brazilian Superior Court of Justice this vulnerability can have multiple origins: it can be of a “technical (lack of specific knowledge regarding the product or service being consumed), legal (lack of legal, accounting or economic knowledge and its reflections in the consumer relation) or even factual (situations in which the economic, physical or even psychological insufficiency of the consumer puts him in a disadvantageous position vis-à-vis the supplier) nature”.34 More recently, the vulnerability with regard to information (insufficient data about the product or service that is able to influence the buying decision-making process) has also been included.35 It has already been mentioned above that also the Greek definition of consumer refers to the broad notion of final user. The definition includes legal persons and does not limit the scope to persons acting for purposes outside their business, trade or professional activity. It follows that natural or legal persons are worthy of the law’s protection even when they obtain goods or services for professional use, as long as they can demonstrate that they acted as final recipients. The more narrow common core definition of consumer highlighted above, is in Greece only applied in cases where European law imposes to do so. A similar vulnerability-approach creeps in in Singapore’s consumer law, when the evaluation of relative bargaining positions regarding the reasonableness of otherwise onerous terms is at stake or with regard to the statutory requirement obliging businesses to take care not to take undue advantage of the peculiarities of

34 See Brazilian Superior Court of Justice, REsp 1195642/RJ, 3aT., Rel. Min. Nancy Andrighi, julg. 13.11.2012. 35 See the contribution of Donato Oliva to this book.

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their customers,36 and in Taiwan where the consumer is automatically approached as the weaker party, disadvantaged in terms of experience and knowledge vis-à-vis a trader.

2.2.2

The ‘Average Consumer’ Is the Benchmark for Information Duties, Unfair Commercial Practices and Unfair Terms

The common core definition of consumer referred to above serves as the general benchmark to identify the beneficiaries of protective measures. Within the European Union the maximum harmonisation of the Directive on unfair commercial practices37 together with the case law of the Court of Justice of the EU had the effect of advancing the so-called ‘average consumer’ as the more concrete general benchmark for the assessment of the adequacy of information disclosures and the unfairness of commercial practices. This European standard of an ‘average consumer’ is a person who is reasonably well informed, reasonably observant and circumspect, taking into account social, cultural and linguistic factors.38 It is an somewhat idealized image of how consumers behave or should behave.39 The idea of an average or typical consumer has been used by most of the European member states’ courts as a benchmark even in cases where it is not specifically referred to in legislation. It follows that the ‘average consumer’ is also used by national courts in the member states of the EU as the general benchmark to assess the unfair character of contract terms. In Ireland for instance the average consumer is referred to as a benchmark in relation to the transparency requirement for unfair terms or in cases of passing off. Also in Greece contracts must be drafted in such a manner that the average person reading the terms is able to fully understand their meaning.40 The same applies in Poland were the average consumer gains full weight, despite the fact that consumers prior to accession to the EU were perceived

36

Based on the responses to the questionnaire from professor G. Low, Singapore Management University, [email protected]., who submits: “Although these requirements are aimed at ameliorating the probability of pressure sales, they also and necessarily go towards what information is shared with the consumer and how it is shared. The same may also be said regarding disclosure in financial products or services contracts, where although there is a mandatory minimum disclosure, the manner and extent of disclosure of information beyond that hinges on the assessment of the savviness of the consumer. As with much in the common law, everything turns on its facts”. 37 Directive 2005/29/EC, cited above. 38 See the national reports of The Czech Republic, France, Germany, Greece, Ireland, Italy, Poland, Romania, The United Kingdom. This is also the case in Belgium. Also Finnish consumer law applies this average consumer benchmark, but concentrates on top of that also on individual measures after a conflict has arisen with a consumer; see the contribution of Hyvönen to this book. 39 It follows that the expected behaviour of the consumer is to be determined in abstracto. See more extensively on this point, Duivenvoorde (2014), pp. 63–75, more specifically on pp. 64 and 73. 40 In Greece courts tend to rely on a relatively well informed but inexperienced consumer who is not specifically careful, suspicious or observant, but who at the same time is not a gullible, completely indifferent or careless person. The average consumer is not expected to have legal expertise in

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as forgetful and not careful at all. The benchmark of an ‘average consumer’ applies in Poland in areas such as unfair competition, trademark law, unfair terms control, pre-contractual information and even general tort law.41 There is no reason to believe that the CJEU would deviate from the general standard of the average consumer when it comes to the assessment of contract terms.42 Yet, this increasing adherence to the European standard of an average consumer does not rule out the national traditions in which the consumer concept is embedded.43 These traditional consumer standards continue to play an important role in the assessment of law provisions. The most prominent example in that regard is Finland where psychologically inspired assessments by the Market Court remodel the average consumer, stating for instance that the value of the giveaway should not be used to distract a consumer from the price of the main product and that reporting prices to consumers in an inconsistent way may be considered to be inappropriate or otherwise unfair conduct in marketing consumer goods.44 It brings Finnish scholars to the conclusion that the general benchmark for the Finnish national consumer legislation remains the weaker, less rational consumer.45

contract drafting but is supposed to read the contract terms which should allow him to understand his rights and duties. See the contribution of Karampatzos and Kotios to this book. 41 See the contribution of Namyslowska and Jablonowska to this book. 42 This is all the more so since the Directive on Unfair Contract Terms states that “the unfairness of a contractual term shall be assessed, taking into account the nature of the goods or services for which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it is dependent”(own emphasis), see Article 4(1), Directive 93/13/EEC, O.J. 1993, L 95/29. The overall assessment implies that also pre-contractual information and advertisements must be taken into account and their possible impact on the contract terms. Also the misleading character of those commercial practices may play a role in this assessment. It would then be odd if the average consumer used for the assessment of the misleading character of those practices would be different from the benchmark used for the unfair character of the term. Also the fact that several European law instruments impose to inform the consumer prior to the conclusion of the contract about at least some of the general conditions and clauses of the contract, strengthens this analysis. The most extensive obligation is imposed on service providers by Article 22 (1f) and 1g)) of Directive 2006/123/EC on services in the internal market, O.J. 2006, L 376/36. 43 The European Commission concludes in its Fitness Check Report that Member States rather apply the average consumer implicitly than explicitly (see Report of the Fitness Check of EU Consumer and Marketing Law 2017, p. 109). 44 See the contribution of Hyvönen to this book. In Finland contractual liability is at stake when the content of a contract does not correspond to what the consumer expected. The consumer expectation test with regard to informational defects is based on the general level of expectations and not the consumer’s personal level of expectations, but the price of the contract is taken into account when evaluating the defect (see Finnish Supreme Court Decision 1992:86). 45 In this regard Hyvönen notes that “the Finnish (and the Nordic) average consumer is not similar to the EU consumer image. Nonetheless, when the UCPD is applicable, the EU benchmark is as well. Duty to disclose information has not played a similar role in Nordic consumer law as it has in EU consumer law. Consumer protection after the conclusion of a consumer contract, e.g. by adjusting an individual term, has been regarded as being equally as important as a company’s duty to disclose

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Also Irish courts struggle with the application of the average consumer, especially in advertising cases. “In the Aldi decision, the Court of Appeal avoided an overly paternalistic approach to the average consumer, stating that “[t]he notional consumer has common sense” and that “shoppers have to be given some credit for intelligence and appreciation of common marketing practice”.46 In this case “Aldi objected to a comparative advertising campaign by the Dunnes chain of supermarkets, in which shelf-edge labels compared the Dunnes prices and Aldi prices for 262 separate products. Aldi claimed this was misleading, particularly in relation to certain products since Dunnes compared the price of their own brand tomato ketchup with Aldi’s even though Aldi’s ketchup has more tomato content, and compared its own-brand products when the Aldi products carried quality assurance marks”.47 The Court of Appeal pointed out that “misleading should not be lightly found and that in this case the intention was comparison, not deceit”.48 It further concluded that the average consumer was well capable of understanding price comparisons of that type and would not be misled either by general slogans such as ‘lower price guarantee’ and ‘always better value’.49 However, in the McCambridge case50 the Supreme Court seems to depart from the stricter European standard in favour of perhaps a more realistic view of a consumer.51 Although Kelly reports that there was some evidence that if the consumer actually looked at the packaging and “get up” of the defendant’s soda bread they would not confuse it with that of the plaintiff, the Court held that one bakery passed off its soda bread as that of the rivalry bakery for there was potential for confusion if consumers put it into their shopping trolley without properly looking at it. The Supreme Court further emphasised “the phenomenon of fast moving consumer goods displayed on the supermarket shelf”,52 and stated that “even

information prior to the purchase. Concentrating solely on duty to disclose has been seen as protecting the more well-off, educated consumer, and less other weaker consumer groups”, see the contribution of Hyvönen to this book. 46 Aldi Stores (Ireland) Limited and Aldi GMBH & Co KG v Dunnes Stores [2017] IECA 116, at paras 104 and 105. 47 See the contribution of Kelly to this book. 48 At this point Kelly rightly points out that the UCPD prohibits misleading commercial practices irrespective of the trader’s intentions to or not to mislead. Misleading conduct is a strict liability offence. 49 Kelly highlights in her contribution the Court’s reasoning: “It seems to me that no sensible person could be misled by the use of general slogans that are the commonplace stuff of most advertising. . . . I think that shoppers have to be given some credit for intelligence and appreciation of common marketing practices. A lawyer’s exegesis of the words used is wholly inappropriate and it would correctly be brushed aside as unworldly and unrealistic by any average shopper. In my view, the proposition accepted and adopted by the trial judge in this regard is, with respect, unrealistic and inconsistent with the attitude to be ascribed to a reasonably well-informed and circumspect shopper”. 50 McCambridge Ltd v Joseph Brennan Bakeries [2013] 1 ILRM 369. 51 See the contribution of Kelly to this book. It must be submitted that the case concerned a common law action for passing off. 52 [2013] 1 ILRM 369, at para.43.

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ordinary reasonable prudent consumers do not, in fact, frequently carry out a detailed examination of the product at the time when they take the bread from the supermarket shelf and place it in the supermarket trolley”.53 Polish courts experienced similar difficulties in advertising cases and developed a formal two-step test. First, the targeted audience is determined on the basis of the characteristics of the advertised product or service and, second, the medium which is used for the advertisement is taken into account. Assessments by courts are made in that particular order and may sometimes, in contrast with the Irish evolution, lead to a lower level of protection. In a 2014 judgment concerning the on-line sales of tickets to UEFA EURO 2012 football games, the Polish Supreme Court held that a term included in the standard conditions of business, according to which, in case of a discrepancy between English and Polish language versions of the conditions, the English version should prevail, was not unlawful since they were addressed at a group of consumers who were more technology-savvy, active, well-informed, cautious, attentive and familiar with standard terms drafted in English.54 In Romania information is assessed in the light of the European average consumer but at the same time the personnel circumstances of the concerned consumer are taken into account. As a result, court practice in Romania demonstrates a vigorous application of the transparency standards in view of an increased level of consumer protection.55 In the same vein, information provided by the trader will not be taken into account in the Czech Republic when that information is communicated to consumers contrary to the requirements of comprehensibility or clarity.56 The Greek legislator adopts in function of the protective scope pursued in specific transactions a broader, ad hoc definition of consumer. The targeted audience, especially the non-professional character of the final recipient involved in the transaction triggers this ad hoc specification. As a result consumer protection rules may also apply when the person is not familiar with the specific transaction, irrespective of whether he acquired the products or services for professional or personal use.57 The lack of specific knowledge, experience and bargaining power vis-à-vis the supplier in transactions that persons do not frequently engage in, justifies the application of and the need for protective rules. Conversely, when a specialist group is targeted, for instance medical surgeons, the benchmark will be the average surgeon instead of the average medical doctor. The historical benchmark of the flüchtigen und unkritischen Durchschnittsverbraucher (the casually observing and uncritical average consumer) in Germany which under impulse of the CJEU has been replaced by the average consumer in the Orient Teppichmuster-case58 caused the Bundesgerichtshof to

53

Ibid. For more, see the contribution of Kelly to this book. See the contribution of Namyslowska and Jablonowska to his book. 55 See more extensively on this point, the contribution of Bercea and Caramidariu to this book. 56 See the contribution of Selucka, Staviková Reznicková and Loutocký to this book. 57 See already supra. 58 BGH 20 October 1999, I ZR 167/97, WRP 2000, 517 – Orient-Teppichmuster. 54

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conclude that the level of attention of the consumer primarily depends on the relevance or value of the products or services. If the advertising concerns low-value every-day products the consumer’s level of attention will be lower than his level of attention if the advertising concerns a specific offer of a product or service of considerable value.59 Despite the fact that the average consumer in some circumstances will be characterised as casually observing advertising, the BGH emphasised that, “although the consumer is not always assumed to be particularly attentive the interest of the consumer who is less attentive than the average consumer is not protected”.60 Within Europe, the UK takes a particular place. The average consumer has become the benchmark only for the law of unfair commercial practices, but traditionally courts took “a robust approach demanding consumers take a realistic interpretation to advertising even before the UCPD was adopted”.61 The UK Consumer Rights Act 2015 uses the average consumer for one additional particular point concerning unfair terms control, namely to determine whether a term specifying the main subject matter of the contract, or assessment of the price,62 is sufficiently prominent to be excluded from the Act’s assessment of fairness.63 Also Turkey has its characteristic features. In view of its accession to the European Union Turkish legislation has gradually evolved from protecting naïve consumers to the protection of average consumers who are increasingly aware of things. But, despite legislation with a stricter account of eligible persons for consumer protection Turkish courts continue to perceive the consumer as a naïve, irrational person who could be manipulated easily by marketing techniques. Although a certain legislative lip service towards the European standard of the average consumer can be detected, Turkish courts remain firmly rooted in the pre-existent image of the ‘very weak’ consumer. As for the analysed countries outside the EU, Brazil, Taiwan and Singapore seem to adhere to a more concrete analysis in function of the protective needs and expectations of the consumer concerned. For instance Brazilian law allows that information defects may simultaneously amount to product defects or non-conformity of the product in cases where legitimate consumer expectations

59

In this sense BGH 18 October 2001, I ZR 193/99, GRUR 2002, 550—Elternbriefe, BGH 26 September 2002, I ZR 89/00, WRP 2003, 275—Thermal Bad and BGH 2 October 2003, I ZR 252/01, GRUR 2004, 162—Mindestverzinsung. 60 See also on this point, Duivenvoorde (2014), pp. 88–94 who adds that according to the BGH the same holds true if the consumer glances through advertising leaflets or advertising in newspapers (p. 90). 61 See the contribution of Cartwright to this book. Compare with the analysis of cases prior to the transposition of the UCPD in the UK in Duivenvoorde (2014), pp. 103–128. 62 See also infra. 63 See UK Consumer Rights Act 2015: “A term is prominent if it is brought to the consumer’s attention in such a way that an average consumer would be aware of it”, S. 64(2) and see infra.

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are frustrated.64 The trader’s errors (information made public by mistake etc.) cannot release him from the enforced compliance with the information provided to the consumer, as it belongs to the normal commercial risks to which a trader is exposed.65 Yet, the binding effect of information provided to the consumer is not absolute; it must be interpreted in line with the objective good faith. It results that when the information provided is blatantly wrong, the trader cannot be forced to comply with it, as that type of information could not have created on behalf of the consumer the legitimate expectation that it was adequate information.66 In the same vein Japanese courts apply different typologies of consumers for the assessment of whether information duties are complied with, even despite the absence of a precise consumer definition in Japanese legislation.67 Despite initial conflicting approaches towards average consumers operated by Chinese courts the Supreme People’s Court of China gave in 2007 the following guidelines: judges must base their decisions on the general attention of the relevant public in daily life experiences taking into account the actual circumstances of each case and the facts causing the misunderstanding. It brought scholars to suggest that the average consumer standard consists of two elements: the scope of the average consumer test (the relevant public purchasing that product with a minimum of common sense) and the due attention that is paid by this average consumer (the higher the product price and thus economic risk for the consumer, the higher the average consumer’s attention will be).68 In the landmark Richard v. Time Inc case the Supreme Court of Canada in the case of a sweepstake departed from the rational and reactive consumer and held that “[. . .] the expression “average consumer” does not refer to a reasonably prudent and diligent person, let alone a well-informed person. [Under the CPA], the courts view the average consumer as someone who is not particularly experienced at detecting the falsehoods or subtleties found in commercial representations”69 (own emphasis). It further concluded that the credulous and inexperienced consumer be the prevailing 64 The legislation imposes sanctions such as enforced compliance on demand of the consumer in accordance with the pre-contractual information, replacement by another product if the consumer accepts so or even the consumer’s termination of the contract with the right to be refunded and to obtain compensation for damages. See more on this topic in the contribution of Donato Oliva to this book. 65 As a result, the lower price indicated on the product prevails on the price inserted in the computer. 66 For instance when a new car would be advertised at 50 (currency) instead of 50,000 (currency), the seller is not forced to sell the car at this ridiculous price, as the consumer cannot legitimately expect that a new car would be sold at that price. 67 See the contribution of Nozawa to this book. See also on this point, Nakata (2016), pp. 479–505, who submits: “The notion ‘consumer’, which forms the core of consumer law, was firstly used in the Consumer Protection Basic Act which was promulgated and put into force in 1968, but there is no provision defining this term” (p. 481). Compare with Kano (2016), pp. 467–468 and 471–472 and see also Nakata (2009), pp. 803–815. 68 See the contribution of Yang to this book. 69 Supreme Court of Canada, Richard v. Time Inc., 2012 SCC 8 [2012] 1 SCR 265 at par. 71 (emphasis added).

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model: “The words “credulous and inexperienced” [. . .] describe the average consumer for the purposes of the C.P.A.. This description of the average consumer is consistent with the legislature’s intention to protect vulnerable persons from the dangers of certain advertising techniques. The word “credulous” reflects the fact that the average consumer is prepared to trust merchants on the basis of the general impression conveyed to him or her by their advertisements. However, it does not suggest that the average consumer is incapable of understanding the literal meaning of the words used in an advertisement if the general layout of the advertisement does not render those words unintelligible”70 (own emphasis).71 This credulous and vulnerable paradigm evidently strengthens the pre-contractual and contractual information duties towards consumers,72 but despite the Canadian Supreme Court’s adherence to this decisive test of a credulous and inexperienced consumer, the Québec’s Court of Appeal would rather set aside the vulnerable paradigm in case a contract was passed and turn to basic interpretative tools that provide for instance that doubt is always resolved in favour of the consumer.73

2.2.3

The Changing Nature of the European Average Consumer: From a Severe Obligation to Internalize Disclosed Information to Acceptance of Different Levels of Attention

As was pointed out above, the average consumer benchmark is used to assess the transparency of information. Outside the European Union some countries seem to adhere to a consumer expectation test in that respect. In the European scholarly debate it has been sometimes objected that the current legislation lacks a real benchmark of reasonable consumer expectations. Especially with regard to digital content it has been submitted that the absence of such benchmark may have adverse effects on the level of protection of media users.74 According to those scholars “consumer information can shape the reasonable expectations of consumers, and thereby also the level of protection consumers can reasonably expect. In this respect, the level of protection consumers can expect (e.g. according to the rules of fairness of

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Supreme Court of Canada, Richard v. Time Inc., 2012 SCC 8 [2012] 1 SCR 265 at par. 72. This new turn has been criticized by legal scholars as being too paternalistic and shirking consumer’s responsibility. See in that regard the contribution of Arbour to this book. 72 See the contribution of Arbourto this book, who further state that according to the Québec Consumer Protection Act any statement or information provided by the merchant has a binding effect among parties and is used to the advantage of the consumer. Also the contractual fitness for purpose and conformity requirement opens doors to claims based on concealment, silence or otherwise misinformation connected with pre-contractual representations. 73 Contractual parties are expected to gain more than a general impression of the agreed contractual terms. See more on this in the contribution of Arbour to this book. 74 Helberger et al. (2013), pp. 50–51. These scholars argue that instead of leaving the matter entirely at the discretion of suppliers and relying on consumer information, a certain minimum standard of usability, safety and consumer friendliness of digital content must be imposed (p. 50). 71

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commercial practices or contract terms), depends to a considerable extent on the extent to which consumers have been informed. Hence, consumer information may indirectly also serve as an unfair exclusion clause”.75 On a broader account, Piazzon submits that the general pre-contractual information obligation in civil law countries distinguishes itself from the general duty to provide consumers with sufficient pre-contractual information, the former being subjective whereas the latter is standardised and abstract. The information duty originating in the French Code Civil for instance has an inherent subjective element in that its intensity may vary in accordance with the subject matter of the contract and even the capacities of the person concerned. In contrast, he argues, the European standardised general information duty has an objective and abstract character, with a detailed list of information particulars irrespective of the precise subject matter of the contract and regardless the level of knowledge of the consumer.76 Although there is a certain truth in this assessment, it seems that the divide is much less present in other EU countries since some national reporters point out that through the intermediary of good faith courts can decide on a case-by-case basis whether the information provided by the business corresponds to what an average, circumspect consumer may need to take an informed decision. Aforementioned analysis of the application of the average consumer benchmark in Sect. 2.2.2 also illustrates the existing flexibility. In that respect some Greek scholars warn that good faith may not be used in such a manner that it overburdens businesses by obliging for instance to teach or educate consumers. The Greek Supreme Court came to help and decided that the pre-contractual duty of suppliers to clarify the contractual content to the other contractual party must not extend to subject matters about which the consumer has information of its own or could have obtained information of its own.77 Although the national courts’ practices demonstrate the malleability of the European average consumer, the critique addressed to the CJEU and also voiced above by Piazzon, that this consumer standard is unrealistically high and assumes economic behaviour of persons that is far too rational did not fall on deaf ears. In that respect, some recent developments in the case law of the Court of Justice of the European Union deserve attention. In the beginning, the CJEU consistently held that the assessment whether an appellation, brand name or advertising statement may be misleading must take into account the presumed expectations of an average consumer who is reasonably well informed and reasonably observant and circumspect.78 This benchmark of the 75

Helberger et al. (2013), p. 51. See more extensively on this point, the contribution of Piazzon to this book. 77 See Greek Supreme Court Decision nr. 1435/2015, available on http://www.areiospagos.gr, and more in the contribution of Karampatzos and Kotios to this book. 78 See in particular, CJEU 28 January 1999, Case C-303/97, Sektkellerei Kessler, ECLI:EU: C:1999:35, para. 36. Thereby, the CJEU was not particularly inspired by human information processing models taken from other disciplines. See for example the Limited Capacity Model of Mediated Message Processing and the LC4MP developed by Lang already referred to above. 76

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European average consumer has its origin in the prime consideration taken from the non-binding preliminary programmes for a consumer protection and information policy that consumers should be enabled to make a choice in the market in full knowledge of the facts.79 The emergence of this European consumer image was implicitly present in misleading practices cases like GB-Inno-BM,80 Yves Rocher81 and Mars,82 and was subsequently consolidated in the Gut Springenheide and Tusky case.83 It has been confirmed since in case law, and also more recently in legislation.84 With regard to labelling requirements, the CJEU emphasized that the rational consumer whose purchasing decisions depend also on the composition of the products will first read the list of ingredients.85 As a result the average consumer who is “reasonably well informed and reasonably observant and circumspect” is not misled by the use of a term on the label if the seemingly misleading impression the term entails is contradicted by the list of ingredients that duly indicates the presence of all the ingredients in the product.86 Hence, a comprehensive and correct list of ingredients on the packaging of a product may prevent a consumer’s misleading impression derived from a term or depiction used on the packaging of the product.87

CJEU 7 March 1990, Case C-362/88, GB-Inno-BM, ECLI:EU:C:1990:102, para. 17: “a prohibition against importing certain products into a Member State is contrary to (the provisions relating to free movement of goods) where the aim of such a prohibition may be attained by appropriate labelling of the products concerned which would provide the consumer with the information he needs and enable him to make his choice in full knowledge of the facts”(own emphasis). 80 See CJEU 7 March 1990, Case C-362/88, GB-Inno-BM, ECLI:EU:C:1990:102. The ECJ agreed with the European Commission that any normally aware consumer knows that annual sales take place only twice a year so that the ‘European’ consumers would not be misled by information on temporary price reductions. 81 CJEU 18 May 1993, Case C-126/91, Yves Rocher, ECLI:EU:C:1993:191. The Court held that the prohibition on ‘eye-catching’ advertising was disproportionate: it also prohibits correct advertising that is eye catching. 82 CJEU 6 July 1995, Case C-470/93, Mars, ECLI:EU:C:1995:224, para 24. The CJEU held that “reasonably circumspect consumers may be deemed to know that there is not necessarily a link between the size of publicity markings relating to an increase in a product’s quantity and the size of that increase”. 83 CJEU 16 July 1998, Case C-210/96, Gut Springenheide and Tusky, ECLI:EU:C:1998:369, para. 31. 84 See Directive 2005/29/EC on unfair commercial practices (UCPD) and Directive 2011/83/EU on consumer rights (CRD). 85 This list contains all the ingredients of the foodstuff in descending order of weight, see Regulation 1169/2011/EU on the provision of food information to consumers, OJ 2011, L 304/18. 86 See to that effect, e.g. CJEU 9 February 1999, Case C-383/97, Van der Laan, ECLI:EU: C:1999:64, para 37. 87 See e.g. CJEU 10 September 2009, Case C-446/07, Severi, ECLI:EU:C:2009:530, para 61 on the question whether the designation of a foodstuff, ‘Salame tipo Felino’, which is evocative of a place and which is not registered as a PDO (protected denomination of origin) or PGI (protected geographical indication) may be legitimately used by producers who use it uninterruptedly for a 79

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And yet, despite the preference for an average consumer tailored to the objectives of the internal market, recent developments in the CJEU’s case law may reveal a changing approach towards the consumer’s duty to internalize disclosed information and perhaps also towards national courts’ leeway to include national preferences in the assessment. In the recent Teekanne case88 the Court had to interpret the alleged misleading character of the mentions on the packaging of a fruit tea. That packaging comprised a number of elements of various sizes, colour and font, in particular (i) depictions of raspberries and vanilla flowers, (ii) the indications ‘fruit tea with natural flavourings’ and ‘fruit tea with natural flavourings – raspberry-vanilla taste’ and (iii) a seal with the indication ‘only natural ingredients’ inside a golden circle. The questions referred to the Court were not so much about whether information requirements stemming from the foodstuff labelling directive89 were complied with,—the list of ingredients on the packaging correctly referred to ‘natural flavourings with a taste of vanilla’ and ‘natural flavourings with a taste of raspberry, blackberries, strawberry, blueberry, elderberry’—, but whether the depictions on the packaging of the fruit tea were of such a nature that they could mislead consumers with regard to the tea’s content. In other words, does the labelling of a foodstuff and methods used for the labelling give the consumer the impression, by means of the appearance, description or pictorial representation of a particular ingredient, that that ingredient is present, even though it is not in fact present and this is apparent solely from the list of ingredients on the foodstuff’s packaging? Having regard to the settled case-law set out above, one would have expected the CJEU to rule that the list of ingredients expresses, in a manner free from doubt, the fact that the flavourings used are not obtained from vanilla and raspberries but only taste like them, and that correct and complete information provided by the list of ingredients on packaging constitutes sufficient grounds on which to rule out the existence of any misleading of consumers. As was indicated above, consumers have the duty to internalize information which is disclosed to them in the market and on the products. At first, the Court in Teekanne confirmed that “it is apparent from the case-law that the Court has acknowledged that consumers whose purchasing decisions depend

considerable period and in good faith, is misleading. “It is clear from the Court’s case law that, in order to assess the capacity to mislead of a description to be found on a label, the national court must in essence take account of the presumed expectations, in light of that description, of an average consumer who is reasonably well informed, and reasonably observant and circumspect, as to the origin, provenance, and quality associated with the foodstuff, the critical point being that the consumer must not be misled and must not be induced to believe, incorrectly, that the product has an origin, provenance or quality which are other than genuine.” 88 CJEU 4 June 2015, Case C-195/14, Bundesverband der Verbraucherzentralen e. a. vs. Teekanne GmbH,ECLI:EU:C:2015:361. 89 See Directive 2000/13/EC on the labelling, presentation and advertising of foodstuffs, OJ 2000, L 109/29. This directive is repealed by Regulation 1169/2011/EU on the provision of food information to consumers, OJ 2011, L 304/18.

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on the composition of the products in question will first read the list of ingredients, the display of which is required”.90 But then the CJEU surprisingly continued that “the list of ingredients, even though correct and comprehensive, may in some situations not be capable of correcting sufficiently the (average reasonably well informed, and reasonably observant and circumspect) consumer’s erroneous or misleading impression concerning the characteristics of a foodstuff that stems from the other items comprising its labelling”(own emphasis).91 In doing so, the CJEU for the first time recognised in the Teekanne case that correct and complete information provided by the list of ingredients on packaging in accordance with the labelling of foodstuffs directive may constitute misleading advertising. It follows that the display of the correct and comprehensive list of ingredients no longer rules out the possibility that the labelling has the capacity to mislead consumers. These developments with respect to labelling requirements demonstrate that the CJEU is increasingly aware of national critiques on how the benchmark of the average consumer is applied in cases of deception. It reduces the consumer’s responsibility to process information as well as his duty to internalize mandated or voluntary disclosures when taking purchase decisions.92 This case law exerts an influence on how the prohibition of misleading commercial practices under the Unfair Commercial Practices Directive (hereafter: UCPD)93 is to be applied and allows national judges to mitigate to a certain extent the outcomes of the assessment in the light of the European average consumer benchmark. The recent Canal Digital94 case seems to confirm the approach taken in Teekanne. That case concerned Canal Digital’s price advertising campaign for TV subscriptions on television and on the internet. The CJEU held that when the price of a product is divided into several components, one of which is particularly emphasised in the marketing, while the other is completely omitted or is presented less

90 CJEU 4 June 2015, Case C-195/14, Bundesverband der Verbraucherzentralen e. a. vs. Teekanne GmbH,ECLI:EU:C:2015:361, para 37. 91 Ibid., para 40. 92 Also in the domain of unfair contract terms the CJEU showed itself prepared to reduce the impact on the (un)fair character of contract clauses of even extensive pre-contractual information, see CJEU 3 April 2014, Case C-342/13, Katalin Sebestyén v Zsolt Csaba Kővári, OTP Bank Nyrt., OTP Faktoring Követeléskezelő Zrt, Raiffeisen Bank Zrt, ECLI:EU:C:2014:1857. The CJEU first confirmed the fundamental importance of pre-contractual information for the consumer’s decision to be bound by the conditions drafted in advance by the seller or supplier. But instead of connecting immediate consequences for consumers to this voluntary disclosure by the trader, the CJEU was prepared to mitigate its impact on consumers, pointing out that “even assuming that the general information the consumer receives before concluding a contract satisfies the requirement under Article 5 that it be plain and intelligible, that fact alone cannot rule out the unfairness of a clause such as that at issue (red.: arbitration clause) in the main proceedings”(own emphasis). The high level of consumer protection set forth by the Unfair Contract terms Directive must also have played a role in the ECJ’s decision. See more extensively infra in Sect. 5.2. 93 Directive 2005/29/EC concerning unfair commercial practices, O.J. 2005, L 149/22. 94 CJEU 26 October 2016, Case C-611/14, Canal Digital Danmark, ECLI:EU:C:2016:800.

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conspicuously, “an assessment should be made, in particular, whether that presentation is likely to lead to a mistaken perception of the overall offer”.95 This will be the case “if the average consumer is likely to have the mistaken impression that he is offered a particularly advantageous price, due to the fact that he could believe, wrongly, that he only had to pay the emphasised component of the price”.96 An advertisement will be all the more misleading if the omitted or less visible component of the price represents a significant part of the total price that the consumer is required to pay. The fact that the total price was mentioned in the initial advertising or could be retrieved on the website of the advertiser does not shield the trader from the application of the prohibition of misleading actions. The CJEU stressed that offers for TV programme packages are likely to confuse consumers due to the significant asymmetry of information which results from the wide variety of proposals and combinations that are highly structured, both in terms of cost and content, and, furthermore, that the time available for the consumer to assess information provided to him in a television advertisement is limited. The objective of a high level of consumer protection set forth in the Unfair Commercial Practices Directive (UCPD) serves then as a correcting factor for literal interpretations of the Directive’s provisions with adverse effects on consumer protection.97 This objective played also a significant role in the Carrefour-judgment of the CJEU.98 In that case the Court had to assess whether the price comparison of the general price level of competitors was misleading when that extrapolation of prices is based on the prices of a range of basic consumables in the hypermarket of the advertiser (Carrefour) on the one hand with the prices of the basic consumables in the supermarket of the competitor (Intermarché) on the other hand.99 The Court seemed prepared to apply the stricter information standard and confirmed its approach in Canal Digital. It held that “with regard to advertising such as that at issue in the main proceedings, it follows from the foregoing considerations that the information on the basis of which the comparison was made between the prices charged in shops having larger sizes or formats in the advertiser’s retail chain and those displayed in shops having smaller sizes or formats in competitors’ retail chains is information in the absence of which it is highly likely that the advertising would fail to fulfil the objective comparison requirement and would be misleading. Therefore, that information must not only be provided clearly but, (. . .), be contained in the advertisement itself”(own emphasis).100 95

CJEU 26 October 2016, Case C-611/14, Canal Digital Danmark, ECLI:EU:C:2016:800, para 43. Ibid.; para 44. 97 See more on misleading practices, infra Sect. 3. 98 CJEU, 8 February 2017, Carrefour Hypermarchés, Case C-562/15, ECLI:EU:C:2017:95. 99 It must be noted that Intermarché also exploited hypermarkets and that the advertising only provided additional information about the basis of the price comparison on the website of the advertiser or through the less visible reference to ‘super’ in much smaller font, at the bottom of the advertising. 100 CJEU, 8 February2017, Carrefour Hypermarchés, Case C-562/15, ECLI:EU:C:2017:95, para 38. 96

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Thus, in a striking parallel with Teekanne the CJEU emphasizes in Canal Digital and Carrefour that an average consumer who is provided with correct and comprehensive information in advertisements, nevertheless may have a mistaken perception of the offer due to the presentation of that information taken as a whole. The Court does so without renouncing that the average consumer must serve as a benchmark for the assessment of misleading practices (in labelling, in advertising, etc.). That way, the Court seems to confirm its stance developed with regard to misleading packaging of products. Despite the absence of any reference to Teekanne it may in our view be deduced from the approach taken in Canal Digital Danmark and Carrefour that a similar correction101 to the general rule applies in both subdomains of misleading practices. Doing so, the CJEU has managed to bridge the case law in both domains of unfair marketing law. It follows that even when the trader satisfies the information requirements imposed by the law, it does not automatically rule out that the information may be presented in such a manner that the average consumer remains misled, notwithstanding the correct and comprehensive information he received. This characterization must be based by the national judge on an overall assessment of the case. As the CJEU pointed out in Teekanne, Canal Digital Danmark and Carrefour, in some circumstances correct and comprehensive information may no longer be capable of correcting the consumer’s erroneous or misleading impressions based on other informational elements. This will be especially so in the case of price information provided to consumers in TV-advertising for rather complex products and in the case of advertising for or information on the package of a daily product. In those circumstances the CJEU accepts that the level of attention of consumers may be lower and hence their capability to absorb the disclosed information due to either the reduced time to internalize the information (e.g. in the case of a TV ad) or the fact that the consumer (sometimes hastily) buys a daily product (e.g. fruit tea or other products from the range of basic consumables in supermarkets).102 Interestingly Chinese law tends to a certain extent in the direction of European law where it explicitly recognizes that businesses could manipulate consumers through the use of font sizes and colour differences. If for instance the variety of valuable ingredients or the presence of one ingredient is emphasized on the product packaging the exact volume of that/those ingredients must be indicated in a clear and prominent manner.103 It is also considered to be manipulative when the packaging of foodstuffs prominently displays pictures of ingredients which are not present in the product or refers to qualities that the product does not possess. 101

Namely that even in the presence of complete and correct information deception of an average consumer can take place. See already on this point prior to the Canal Digital Danmark case, Straetmans (2018), pp. 102–103. 102 It must be observed that those recent developments in the case law of the CJEU offer interesting parallels with the Irish Supreme Court’s analysis in the McCambridge-case and the Bundesgerichtshof’s case law highlighted above. See more extensively on this point Straetmans (2018). 103 See the contribution of Yang to this book.

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Toward a Definition of Vulnerable Consumers: The Sick, the Elder and the Young?

The foregoing analysis has demonstrated that courts in and outside the EU devise ways to protect more vulnerable consumers than the one that would normally equate with the average consumer. On a broader account the question arises whether specific categories of vulnerable consumers deserve specific attention when assessing the unfair character of commercial practices from their perspective? Despite the overwhelming attention to the so-called ‘average consumer’ the European legislator does not rule out the protection of specific categories of vulnerable consumers. Quite on the contrary, the Unfair Commercial Practices Directive (UCPD) dictates that in case commercial practices are likely to materially distort the economic behaviour only of a clearly identifiable group of consumers who are particularly vulnerable to the practice or the underlying product because of their mental or physical infirmity, age or credulity in a way which the trader could reasonably be expected to foresee, the unfairness of the commercial transaction shall be assessed from the perspective of the average member of that group.104 The total harmonisation character of this directive brought EU member states to a literal transposition of this requirement in their national legal order. When advertising is specifically targeted to those groups or the characteristics of a product imply that such group must be the target group, a more protective interpretation is in place. This could for instance be the case if video games or products promising cure, or eliminating the symptoms of a disease are advertised for.105 A similar requirement may be deduced from introductory recital 34 of the Consumer Rights Directive.106 However, the impact of the reference to the specific needs of particularly vulnerable

104 See Article 5 (3) UCPD, O.J. 2005, L 149/22. Article 5(2) UCPD already prescribes that if a commercial practice is specifically targeted to a particular group of consumers, the assessment of its unfair nature must be made in the light of the average member of that group. In this regard the European Commission recognizes that legal scholars increasingly criticise the appropriateness of the benchmark of the average consumer and voice concerns that the benchmark provides insufficient protection to consumers that are less capable and more careless than average. However, even though the Fitness Check Report provides arguments to basically doing away with the specific rule in Article 5(3) and integrating its content in Article 5(2)(b), the European Commission refrains from amending the UCPD in the absence of evidence of major problems in the application of the current rules (see Report of the Fitness Check of EU Consumer and Marketing Law 2017, p. 111). 105 The annex to the UCPD contains specific prohibitions in this regard: “Including in an advertisement a direct exhortation to children to buy advertised products or persuade their parents or other adults to buy advertised products for them” is an aggressive practice prohibited under all circumstances. “Falsely claiming that a product is able to cure illnesses, dysfunction or malformations” and “Claiming that products are able to facilitate winning in games of chance” are misleading commercial practices prohibited under all circumstances. 106 See introductory recital 34 of Directive 2011/83/EU: “In providing that information, the trader should take into account the specific needs of consumers who are particularly vulnerable because of their mental, physical or psychological infirmity, age or credulity in a way which the trader could reasonably be expected to foresee. However, taking into account such specific needs should not lead to different levels of consumer protection.”, O.J. 2011, L 304/64.

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consumers is immediately cut short as the introductory recital to that directive continues that this more targeted approach “may not lead to different levels of consumer protection”. To what precise extent the assessment of the pre-contractual information or the misleading character of commercial practices becomes more restrictive when assessed from the perspective of particular groups of vulnerable consumers remains unclear.107 Since the specific assessment is only required in case a commercial practice foreseeably targets a clearly identifiable group of particularly vulnerable consumers and is likely to materially distort their economic behaviour, jurisprudential applications are rare. Yet, legal scholars detected for instance an increasing tendency in Polish administrative proceedings to pay special attention to persons belonging to a specific age group, such as elderly people, or to the sick when commercial practices are targeted to them.108 Also the Finnish case law with its stronger roots in protecting less rational consumers considers underage consumers or persons suffering from an illness to be more vulnerable calling for more protective interpretations. In the same vein persons suffering from an illness were specifically taken account off in the case law of the Supreme Administrative Court in the Czech Republic. In its judgment of 17 January 2014, the Court concluded: “The average consumer who is adequately informed, attentive and reasonable, which is generally a benchmark when assessing advertising, is not so critical that he/she would be completely immune to advertising. If the target group is the sick, consideration should be given to their lower critical thinking and greater tendency to believe the advertising that promises cure for their illness. An average consumer suffering from a certain disease is undoubtedly more prone to believe a certain claim about curing his/her disease than an average healthy consumer.”109 Also the Greek legislator provided for a follow-up on the discretion left by the UCPD. In line with the UCPD elderly people, children and teenagers are considered to be vulnerable groups of consumers. Pursuant to Article 7A par. 1(a) of Law 2251/ 1994, suppliers in Greece are also required to place on the market “products110 that, by their purpose, use or conditions of supply do not pose risks to the mental,

107

For an analysis from a behavioural perspective, see Duivenvoorde (2014), pp. 183–192, who concludes that “it is difficult in practice to identify vulnerable groups. Qualifying groups as inherently vulnerable is problematic, as vulnerability is highly dependent on the individual consumer and the specific situation” (p. 192). 108 See the contribution of Namyslowska and Jablonowska to his book. 109 See the contribution of Selucká, Staviková Reznicková and Loutocký to this book. 110 The products referred to here are i.a. products that may cause fear or anxiety to minors, promote (directly or indirectly) violent behavior and use of force, insult human decency, promote behavioral models that are not in accordance with the moral or legal rules of modern society or endanger the environment, lead to distinctions based on sex, race, religion etc. or lead to hazardous addictions. In practice, the rule specifically targets suppliers of electronic entertainment products such as video games which must have affixed age labels.

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psychological or moral growth of minors.”111 In a similar attempt the French Consumer Code and the Penal Code sanction the abuse of the vulnerability or ignorance of persons who are not capable to understand the effects of the contracts they conclude and are not capable to discern artifices and ruses used to convince them to contract. Also the practice by which such person is given the impression of being under a constraint to contract, is sanctioned. The categories of persons envisaged by these rules are particularly vulnerable persons due to their age (such as minors) or due to sickness, pregnancy, a particular weakness, or a physical or psychological incapacity. Also persons that undergo severe physical and psychological pressure or that are the subject of, manipulative techniques’ to alter their transactional decisions are protected.112 Equally in non-European countries there is an increasing tendency to apply stricter standards for groups of particularly vulnerable consumers. For instance Japanese case law tends to protect elderly people more than others.113 Also Brazilian legislation counts among the consumers who have an aggravated vulnerability, the children,114 elderly people,115 persons with fragile health116 or disabled persons.117 These categories of so-called ‘hyper-vulnerable’ consumers are protected in accordance with their personal situation, allowing thus for a protection that is adequate and proportional to the real needs of the vulnerable person.118 In an even broader perspective119 the Consumer Protection Act in Québec recognizes subjective lesion. On this basis a contract was deemed null because the 111

See the contribution of Karampatzos and Kotios to this book. See the contribution of Piazzon to this book. See also for a more extensive analysis of the case law concerning particularly vulnerable groups such as children, teenagers and elderly in Germany and in Italy, Duivenvoorde (2014), pp. 97–100 and 144–152. 113 See the contribution of Nozawa to this book. Compare with Nakata (2016), pp. 490–491, who refers to specific solicitation acts of elderly people that are prohibited by the Consumer Contract Act as practices that run against the principle of good faith. 114 Article 2 of Law n. 8.069/1990 (The Child and Adolescent Statute): “For the purposes of this Law, the child is considered as the person who has not yet completed twelve years of age and the adolescent as the person between twelve and eighteen years of age”. 115 Article 1 of the Law n. 10.741/2003 (Elderly’s Statute): “The Elderly’s Statute is instituted with aiming at regulating the rights ensured to someone who is 60 (sixty) years old or older”. 116 “The probability of the irreparable or hard to repair damage is evident, since the appealed, hyper vulnerable as he is due to his health condition, needs urgent medical care, as per the medical report filed in the records; it is certain that Article 35-C, I of Law n. 9.656/98 establishes as mandatory the coverage of treatment in those cases” (Tribunal of Justice of Rio de Janeiro, AI 002504897.2016.8.19.0000, 27ª CC Consu., Rel. Des. Marcos Alcino de Azevedo Torres, julg. 14.9.2016). 117 Article 2 of Law n. 13.146/2015 (Statute of Disabled Persons): “A person is considered disabled when he/she has a long-term impediment of physical, mental, intellectual or sensory nature which, when faced with one or more obstacles, can hinder his/her full and effective participation in society in equal conditions with other people”. See also Pierri (2014), p. 27. 118 For more examples see the contribution of Donato Oliva to this book. 119 In the context of whether a consumer consented to a contract. Subjective lesion allows the consumer to demand the nullity of a contract or a reduction in his obligations thereunder where the disproportion between the respective obligations of the parties is so great as to amount to 112

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consumer did not have the means to acquire a leisure yacht. Subjective lesion stems out of the disproportion between the actual value and the financial capacity of the consumers. It seems to imply that sellers of luxurious goods must acquire information from their clients to assess their financial capacity and to find out whether the financial burden sustained by the consumer is not excessive. It may then be concluded from the foregoing that underage people like children and teenagers, elderly people and people suffering from a particular disease are in most of the reported countries expressly recognised as particularly vulnerable groups of consumers.

3 Pre-contractual Information Requirements 3.1

General Duty of Information Disclosure

EU law imposes a general duty of information disclosure for most on premises, distance and off premises contracts.120 The trader must provide information on a number of issues (details about the trader, main characteristics, total price, duration, cancellation rights if any, delivery, . . .)121 before the consumer is bound by the

exploitation of the consumer or where the obligation of the consumer is excessive, harsh or unconscionable. Where the court must determine whether a consumer consented to a contract, it shall consider the condition of the parties, the circumstances in which the contract was entered into and the benefits arising from the contract for the consumer. See in more detail, the contribution of Arbour to this book. 120 The general information duty in EU law stems from Directive 2011/83/EU on consumer rights, O.J. 2011, L 304/64; the directive harmonised the information duties for contracts other than distance and off premises contracts but allows the member states to adopt or maintain additional pre-contractual information requirements (see Art.5 (4); some member states made use of this option but only to a very limited extent: see e.g. Poland, Belgium and to a larger extent France). Specific pre-contractual information requirements for distance and off-premises contracts are imposed by Article 6 of the Directive. The Directive also excludes a number of contracts from its scope, e.g. an on premises contract which involves a day-to-day transaction and which is performed immediately at the time when the contract is entered into (on-the-spot on-premises contracts). 121 The option in the Directive to include language requirements regarding the contractual information is taken up by some member states; see e.g. Poland, Italy, France (e.g. on consumer demand businesses must provide a copy of the model contract they normally conclude in French). Romania and Greece further impose specific language requirements in accordance with the European food labelling regulation. These language requirements must be reconciled with the case law of the Court of Justice that allows member states to impose specific language requirements unless full information of consumers may be achieved by other means such as pictograms, symbols, labels, figures etc. The language used by the trader often has an impact on the national judges’ assessments of transparency of contract terms, especially when the contract terms are provided to the consumer in another language than the official language of the territory where the contract is offered. However, the Unfair Contract Terms Directive (O.J. 1993, L 95/29) does not contain any clarification in this respect. Hence legal scholars argue that transparency in a cross-border context implies

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contract. The information must be provided in a clear and comprehensible manner, if that information is not already apparent from the context.122 The Japanese Consumer Law Code is largely inspired by the French Consumer Code and hence contains a general pre-contractual information duty imposed on the trader with the aim of providing consumers with the necessary information in relation to the content of the contract prior to the conclusion.123 To that extent Japanese law also imposes transparency requirements: information about the content of the contract must be clear, without ambiguities, comprehensible and intelligible.124 The consumer’s right to information in Brazil is grounded in the objective good faith. The Brazilian Consumer Protection Code lists this right among the consumer’s basic rights which secure him the means to decide freely in an informed manner. The offer and the presentation of products must be done with correct, clear, precise and ostensive pre-contractual information125 relating to particulars such as the characteristics of the goods and services, the price, guarantee, duration, risks to health and security of consumers that goods or services may present etc.. The information must also be provided in Portuguese.126 The fact that the disclosed information must enable the consumer to take transactional informed decisions in freedom implies that businesses also must clarify the effects of the contracts and the risks they pose to consumers. Furthermore the qualified consumer consent seems to imply that sellers must avoid the excess of information (puffing/excess of marketing promotion: using exaggerations that cannot be objectively verified) and must adjust the information content in function of the targeted audience and the specificities of the product or service concerned, as the consumer is usually unaware of the technical language in contracts and the precise effects resulting from it.127 In that regard the Superior Court

that consumers are provided information on contract terms in the same language as the one in which they were approached by the seller, see in particular Loos (2017), pp. 54–59. 122 Additional European rules on the form into which this information is to be provided by the trader in case of specific types of contracts will be left out of the analysis here. 123 See the contribution of Nozawa to this book. 124 If a contract term is not or insufficiently intelligible the judge will interpret the term in favour of the consumer. See also infra. 125 Brazilian law also imposes information duties during the contractual phase and after the conclusion of the contract. 126 See the contribution of Donato Oliva to this book. 127 See more on this topic in the contribution of Donato Oliva to this book. The Civil Codes in the Member States of the European Union often contain specific rules about consumer’s consent to contract clauses. The German BGB for instance excludes so-called surprising clauses from becoming part of the contract. Surprising clauses are according to the Bundesgerichtshof terms that are unusual and which the other party to the contract cannot be expected to have been aware of (see BGH 26 February 2013 – XI ZR 417/11, NJW 2013, 1803). Thus a clause that assigned costs to a buyer of real estate although the contract was presented as an ‘all-inclusive price’-contract, was held to be surprising as well as charging for services that ordinarily were gratuitous (see respectively BGH 26 July 2012 – VII ZR 262/11, NJW RR 2012, 1261 and BGH 29 September 1983, NJW 1984, 171). However if an under normal circumstances surprising term is brought to the consumer’s

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of Justice has emphasized that information must be complete and useful, prohibiting the use of loose, redundant and useless information for consumers. Furthermore all information provided to the consumer which is sufficiently precise is binding upon the trader and prevails contractual clauses stating the opposite unless the contractual clauses are more advantageous for the consumers.128 Also Chinese law imposes a general pre-contractual information obligation the exact scope of which is inter alia determined by the uberrima fides doctrine. This general obligation is further complemented by different sets of detailed information requirements imposed by the Consumer Protection Law and the Advertisement Law.129 In absence of specific standards, information about the so called vital interests of consumers, as interpreted by courts, must be provided so that business operators are not required to provide consumers with general public information. No specific rules on how this information must be disclosed exist in China but the Consumer Protection Law requires standard terms on liability exemption and restriction to be conspicuous for consumers. A variety of sanctions including in certain circumstances punitive damages (of three or ten times (if defective information affects the safety of foodstuffs) the purchase price) further strengthens the pre-contractual information obligations.130 Turkish law had no express general obligation to provide pre-contractual information to consumers, but detailed information requirements are imposed by law with regard to specific types of contract such as for instance credit contracts, mortgage contracts, distance contracts (financial services and others), off-premises contracts and time-share contracts. Under the impulse of European law and with a view to the accession to the EU a new Law on Consumer Protection was adopted in 2014. Nowadays, a general pre-contractual information duty is implicitly deduced from this Law which imposes a number of information particulars.131 In common law systems there is no general obligation on businesses to provide consumers with pre-contractual information. For instance, the common law judges in the UK did not develop any general duty of disclosure nor a particular form into which the information must fit. However, significant inroads on this rule have been made in English contract law to implement EU law. Equally, in Singapore, the law is still very much influenced by the common law doctrinal rules so that one may conclude that there is no general articulation of transparency requirements regarding disclosure of information.132 Statutory

attention, it would forfeit its surprising character and could no longer be sanctioned (see BGH 18 February 1992 – XI ZR 126/91, NJW 1992, 1823). See more extensively on this issue, the contribution of Schinkels to this book. 128 See more on this topic in the contribution of Donato Oliva to this book. 129 See the contribution of Yang to this book. 130 See the contribution of Yang to this book. 131 See more extensively on this subject the contribution of Baysal to this book. 132 Based on the responses to the questionnaire from professor G. Low, Singapore Management University, [email protected].

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exceptions to the absence of a general duty for businesses to provide consumers with pre-contractual information are piecemeal, targeting specific types of contracts or sectors where consumers tend to contract without the requisite voluntary consent.133 Taiwanese law takes a much stricter stance as it is characterised by an ex ante control of the content of contract clauses by the consumer himself but also, and more importantly by the administrative authorities. Before the signing of the contract the Consumer Protection Act grants the consumer a preview period which allows him to read the contract clauses. Thereto businesses must in principle send a written form of the standard contract to the consumer. Clauses which are hard to notice or recognize due to the font, printing or other causes will not be included in the contract, unless the consumer otherwise specifies so. Any clause signed during the time when consumers are deprived of the preview period will not be part of the contract, unless again the consumer indicates that the clauses must be included. Furthermore, the administrative authorities have the competence to exercise pre-contractual controls of the standard clauses included in contracts in business sectors. As a result the central authorities have investigated the contract clauses in a significant number of business domains which they select. In those sectors the authorities have issued clauses that must be included in the contract as mandatory clauses and also have prohibited the use of certain clauses. The mandatory clauses thus announced are automatically included in the contracts of that specific business domain, even if the signed contract does not stipulate them. If a contract in a certain business area contains clauses that are prohibited by the central authorities for that sector, these clauses are invalid.134 This extensive prior control by the administrative authorities is increasingly criticized in Taiwan as overly restrictive for businesses and overprotective for consumers.135

133

In time share and colportage contracts information about the contract and the consumer’s right to withdraw and how to invoke that right must be contained in a ‘consumer information notice’. This notice must be given in writing in hard or soft copy, e.g. via email. “The statutory exceptions do not specify when businesses must disclose such information, but if businesses omit to provide the consumers information about his right to withdraw the contract, the consumer may withdraw from the contract at any point in time in the life of the contract, as failure to provide such information will in principle not be seen as a defect in consent leading to recission. Consequently businesses have an incentive to disclose this information as soon as practicable”. Based on the responses to the questionnaire from professor G. Low, Singapore Management University, [email protected]. 134 The administrative ex ante control resulted in more than 80 ‘model’ contracts. For reasons of consumer protection the freedom of contract and party autonomy have been replaced by mandatory and prohibited clauses imposed by the central authorities. 135 Based on the responses to the questionnaire from professor Jiin Yu Wu, National Chengchi University, Taiwan, [email protected].

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33

Specific Transparency Requirements: Food Labelling and Beyond

Most of the EU member states simply take over the wording of the Consumer Rights Directive without further specifying the legibility of print in consumer contracts or advertising and without specifying how clarity and comprehensibility136 is to be achieved nor the form137 into which this information is to be provided. European and national legislation often limits itself to vague concepts like ‘simple and clear information’, ‘visible, readable and comprehensible’, ‘clear and precise’ information etc.138 Piazzon criticizes the lack of clarity of European and national legislation.139 He questions whether there should be any difference between clarity, intelligibility and comprehensibility other than that they all incorporate two obligations. The first relates to the form, the presentation of the information which must be easy to read in terms of print size and contrast between font size and background.140 The second refers to the content of the information and its comprehensibility. In absence of further instructions from the European legislator, national courts themselves, as pointed out above, undertake efforts to increase transparency. At some occasions the legislator comes to their help.

Comprehensibility can be seen as a synonym to the wording ‘easy to understand’ which is used for information in food labelling, but it can also be regarded as a less strict demand. 137 Tangible medium or digitally. In Greece for instance the requirement of good faith imposes that consumers receive pre-contractual information which is easily accessible and which they can understand, whether this information is on the businesses’ website or provided in a hard copy. See the contribution of Karampatzos and Kotios to this book. It may indeed be assumed that pre-contractual consumer information must be provided in writing. 138 The Italian Consumer Code refers to parameters like exhaustiveness, clarity, comprehensibility, good faith and accessibility for the assessment of information. Romanian legislation seems to introduce a threefold standard of complete information (before, during and after the conclusion of the contract); transparency which refers to visibility of the information, readability and easiness to understand the information, and comprehensibility which encompasses understandability in the grammatical sense of the concept but also the obligation to inform the consumer about the real implications of the contract; and correct information. See more extensively on this standard, the contribution of Bercea and Caramidariu to this book. 139 He also submits that despite the absence of any guidance from the directive the French legislator has imposed the burden of proof on the trader to demonstrate whether he has fulfilled his information obligation. The assignment of the burden of proof has also been the subject of debate in Belgian doctrine. There is a tendency in scholarly views and case law that the burden of proof, contrary to the Civil Code rules, should rest on the trader. See in this regard Cambie and Straetmans (2016), pp. 57–58. Also Romania imposed the burden of proof on the trader, see the contribution of Bercea and Caramidariu to this book. 140 In that regard French law prescribes that if certain information provided on paper is subject to specific readability requirements, equivalent requirements apply to the digital counterpart of this information. 136

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Food for instance has been the subject of intensive regulation across the world. This regulatory context includes very detailed labelling requirements.141 This is not the place to extensively analyse these requirements,142 nor specific legislation143 that has been adopted concerning types of products that are considered harmful to the consumer’s health like for instance tobacco products. However, an innovative information technique that is specific to food labelling is worth mentioning, namely the Multiple Traffic Light System introduced on a voluntary basis in the United Kingdom. This system shows the levels of nutrients of the food as either high, medium or low. It helps consumers in assessing the nutritional qualities of foods in a

141

See e.g. Regulation 1169/2011 of 25 October 2011on the provision of food information to consumers, O.J. 22 November 2011, L 304/18. This regulation provides for instance for mandatory country of origin labelling (COOL) but also includes a provision that allows Member States to adopt national COOL measures. It has been argued that national COOL measures lead to a decrease in purchase of products coming from outside the concerned Member State. An American pilot study seems to confirm that American consumers are more likely to purchase meat when it is identified as a U.S. product since The COOL requirement impacts inferred attributes, such that meat products from the U.S are perceived to be safer, tastier, and fresher than meat products from Mexico. However, the study also reveals that the direct and indirect effects of the country-of-origin disclosure are attenuated by the presentation of objective information about the meat processing systems of competing countries. See Berry et al. (2015), pp. 533–542. Schmeiser also points out that the regulator’s decision to mandate a disclosure signals to consumers that an attribute is important and the intensity of the disclosure determines the strength of the signal, see Schmeiser (2014), pp. 192–200. On the basis of his model, Schmeiser concludes that “if regulators over-warn consumers about the side effect, consumers receive conflicting messages about the severity. If consumers react in accordance with the level of risk implied by the regulatory effort rather than the statistical data, it may seem as if they are over-estimating the risk from a small probability event. (. . .) Consumers might also draw inferences from information voluntarily disclosed by private firms. If consumer preferences are not malleable, then firms only devote advertising resources to attributes that consumers care about. But if a firm knows that its advertisements affect consumer preferences, then they will use this to their advantage” (p. 198). 142 Japanese law for instance introduced detailed rules relating to the print size of the mentions on the label of foodstuffs. The size of all mentions on the package of a product must be larger than 8 points, save in cases where the surface of the packaging is less than 150 cm2, in which case the print size may be reduced to 5.5 points. See the contribution of Nozawa to this book. 143 For instance Poland has a certain expertise with traders in food supplements that used manipulative techniques to assign medicinal properties to products with misleading statements like ‘cures the cough’ or ‘supports immunity’. Also the umbrella branding that some traders used for medicinal products and food supplements caused considerable consumer confusion since consumers automatically assigned medicinal properties to all products sold under the same umbrella branding. See the contribution of Namyslowka and Jablonowska to this book. Manipulative techniques of this kind used by businesses have not been the subject of specific legislation in other reporting countries. Schinkels points out that as long as the reasonably well-informed and reasonably observant and circumspect consumer is used as a benchmark, “it is questionable whether the use of a colour for a package as such may suffice to establish a misleading product-information with regard to purely emotional connotations while there is formal correct information about ingredients and nutrition. By contrast, packaging colours may be misleading if, according to established usages, they induce the expectation that the package contains a different product”, see the contribution of Schinkels to this book.

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more comprehensible manner than the guideline daily amount (GDA) labelling. Although the introduction of this system was also debated in Ireland it was found to be ‘over-simplistic’ as compared to the GDA labelling.144 According to a survey by the Society for Consumption Research (Gesellschaft für Konsumforschung, GfK) executed in June 2009, 69% of all interviewed German consumers were in favour of such a system and 77% rejected a European prohibition of the mandatory implementation of such a system by national legislators.145 In Germany, the academic board of advisors of the former Federal Ministry of Nutrition, Agriculture and Consumer Protection advocated more in general that there should be more differentiation of groups of consumers,146 whereby the distinction between trusting,147 vulnerable148 and responsible consumers149 could be helpful.150 Even beyond the context of food regulation initiatives are taken to help national courts in their decision taking. In the UK a recent study of the Competition and Markets Authority provides for guidance on information presented to consumers in digital comparison tools.151 Digital comparison tools (DCTs) are defined as “digital intermediary services used by consumers to compare and potentially to switch or purchase products or services from a range of businesses”. The report concludes that realising the benefits for consumers, such as time and effort saving and lower prices and better choices as a result of suppliers competing harder, depends on a number of things being in place: (a) consumers need sufficient trust and confidence to use DCTs in the first place, and enough understanding to choose and use them effectively; (b) DCTs need to be able to offer a relevant and accurate service and a smooth

144

See the contribution of Kelly to this book. According to Purnhagen, Van Herpen and Van Kleef, who examined the EU health claims regime, visuals may mislead consumers to a larger extent than textual claims in that they overpromise health benefits of consuming the product. Therefore, they claim that in order to effectively regulate health claims in the EU, regulation has to devote much more attention to the regulation of pictorial claims. See Purnhagen et al. (2016), pp. 197–216. 145 See the contribution of Schinkels to this book who refers to Spiegel online, 24. July 2009, Verbraucher wollen Lebensmittel-Ampel; see also https://www.foodwatch.org/de/informieren/ ampelkennzeichnung/mehr-zum-thema/studie-vergleich-ampel-gda/. 146 Der vertrauende, der verletzliche oder der verantwortungsvolle Verbraucher? Plädoyer für eine differenzierte Strategie in der Verbraucherpolitik Stellungnahme des Wissenschaftlichen Beirats Verbraucher- und Ernährungspolitik beim BMELV, as of December 2010, accessible via: https:// www.vzbv.de/sites/default/files/downloads/Strategie_verbraucherpolitik_Wiss_BeiratBMELV_ 2010.pdf. 147 Trusting consumers do not want to and cannot take the time necessary to inform themselves and to achieve the expertise to take well-grounded decisions especially in the fields of healthcare and finance. 148 Vulnerable consumers are persons excluded from social and economic interactions because of excessive indebtedness, sickness or lacking means of access to the internet. 149 Responsible consumers are persons who actively inform themselves and others in order to optimize sustainability of consumption regarding ecological and social aspects of production and disposal of consumables. 150 See the contribution of Schinkels to this book. 151 Competition and Markets Authority United Kingdom (2017).

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consumer journey, including information both about consumers and their requirements, and about the products being compared; (c) competition between DCTs needs to be effective, so that people can benefit from the competitive pressure DCTs bring to bear on the suppliers whose services they compare, and suppliers pay competitive prices for the services DCTs offer; and (d) regulation should support all these factors in a proportionate way, if the market does not deliver them on its own. Although consumer’s surveys give a mostly positive picture of DCTs, concerns have been raised about the transparency, accessibility for vulnerable consumers of DCTs and their use of consumers’ personal information.152 The study issued strong concerns about some types of contract between suppliers and DCTs, which prevent suppliers from offering better prices on one DCT than on another (so-called wide price parity/ Most Favoured Nation clauses) and can reduce competition between DCTs.153 It also provides recommendations for improvement of DCTs in order to support consumer trust and informed choice between DCTs and between suppliers. To that aim DCTs should treat people fairly, by being Clear, Accurate, Responsible and Easy to use (CARE). This CARE-principle is further specified in specific recommendations with regard to each of the aforementioned high-level principles.154

3.3

Mandatory and Additional Voluntary Information

In reality businesses do not limit themselves in providing consumers with mandatory information. They often insert additional voluntary information which not always contributes to a better understanding. Yet, we see that none of the reported countries has a ban on further voluntary information provided by traders. On the contrary, especially the European legislator and the national legislators in the EU member states seem rather to encourage traders to do so from the perspective to inform consumers better.155 This evolution has even brought Italian scholars to suggest that

152

Competition and Markets Authority United Kingdom (2017), pp. 76–79. Competition and Markets Authority United Kingdom (2017), pp. 79–81. 154 Competition and Markets Authority United Kingdom (2017), p. 9, 72. Being clear implies that DCTs explain their services and how they make money; it includes for instance that they prominently provide a general explanation of how they make money and clearly explain how much of the market they cover and how they have ranked the results. Being accurate necessitate to provide information that is complete, correct, relevant, up to date and not misleading and that for instance in each result all the information consumers need, including price and main characteristics, is included. Being responsible requires to protect people’s details and be easy to deal with, e.g. when showing reviews, it requires DCTs to have processes in place to ensure users see the full picture and be clear about how reviews are collected and checked. Being easy to use implies that DCTs make information easy to find and understand, and e.g. that all key information is present in a clear, prominent and timely way. 155 In that regard it must be noted also that the model forms annexed to some European legal instruments incite businesses to make use of them as they create the assumption that the provided information meets the required standard. 153

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the minimum information requirements imposed by the European legislature must also be considered the maximum of information particulars to be disclosed to consumers.156 In any case, both mandatory and voluntary information will normally be taken into account to assess the misleading character of information.

3.4

Sanctions for Failure to Provide (Correct) Mandatory Information

The enforcement of information requirements in the reporting countries represents a considerable variety of possible sanctions. Also within countries themselves the applicable sanctions in case information is absent, imprecise, incomplete or incorrect vary considerably. This is mainly due to the fact that the legislator concerned seeks to impose a sanction in function of the level of protection pursued for consumers.157 In that respect the divergence of sanctions cannot be criticised. In some of the analysed countries the infringement of the pre-contractual information duty is as such not specifically sanctioned. This is for instance the case in Japan where the contractual remedy of culpa in contrahendo does not exist either.158 Claims based on error or deceit give rise to the relative nullity of the contract. 156

See the contribution of Benacchio to this book. In other countries like Greece the principle of good faith in the pre-contractual stage could be used to combat information that would confuse or perturb consumers; see for instance the contribution of Karampatzos and Kotios to this book, who refer to the Greek Supreme Civil Court Decision nr. 1028/2015, available on http://www. areiospagos.gr. 157 French law takes a peculiar position as it seeks to distinguish between infringements in the pre-contractual phase, which may give rise to tort liability, and in the contractual phase which may then give rise to contractual liability. However, in practice, the focus on consumer protection of the information obligations seems to blur this civil law distinction to great extent. Find more on this topic in the contribution of Piazzon to this book. With regard to the failure to provide the consumer with mandatory information, the French Court of Cassation applies a formalist approach sanctioning the absence of any mandatory information even when that particular information did not have an influence on the consumer’s consent. This overprotective approach, often leading to the nullity of contracts, is criticised by French legal scholars. In the same vein Benacchio criticizes the European legislator’s neo-formalism, in his contribution to this book. In contrast, failure to provide mandatory information requirements in Turkey does not affect the validity of the contract, but the Law on Consumer Protection requires the trader to immediately fill in the lacunae and thus to promptly comply with his information obligation (see the contribution of Baysal to this book). In Canada, and more in particular in Québec, sanctions attached to a lack of information vary in light of three factors: (a) the chronological position within the pre-contractual timeline; (b) the general or specific nature of the violation; and (c) the provincial-federal structure of the legal system. See extensively on this subject the contribution of Arbour to this book, who refer to common sanctions like the nullity of the contract, price reduction or claims for damages, and exceptionally in Québec punitive damages. The simultaneous pursuit of preventive and deterrence goals justifies also the imposition of penal sanctions. 158 See the contribution of Nozawa to this book.

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Also when a trader omits to provide essential information to the consumer, the latter may claim the relative nullity of the contract before a judge. Essential elements to the contract are information about the quality of the product or the service, information about the price and information concerning the terms of the contract. Furthermore, in case a trader fails to provide mandatory food information the Japanese prime minister may order the business to recall the products from the market or to suspend all or part of the activities of the business for a certain duration so as to forestall further harm to consumers.

4 Misleading Commercial Practices In the EU member states the regulation of unfair commercial practices, including misleading (actions and omissions) and aggressive practices, is totally harmonised by Directive 2005/29/EC.159 The unfair commercial practices directive provides (hereafter: UCPD) a general prohibition of misleading commercial practices (actions and omissions of material information160).161 The laws of the other reported countries have similar traits to this European legislation.

4.1

Overall Analysis

The assessment of the misleading character of a commercial practice requires in all reported countries a synthetic approach. It presupposes an overall analysis taking into account the relevant features and circumstances of a commercial practice. Decisive is the general impression of the practice made on the average consumer and whether the practice affects or is likely to affect in a negative manner the transaction decision of this consumer.162 159

Directive of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market, OJ 2005, L 149/22. 160 Material information means the information which the average consumer needs, according to the context, to take an informed transactional decision, and any information requirement which applies in relation to a commercial communication as a result of an EU obligation. 161 With regard to misleading price comparisons websites, some of the reported countries have specific regulatory mechanisms. See for instance the UK Regulators Network (2016). Also the French Consumer Code developed a specific rule in that regard, but incorporated it into the general pre-contractual information duty. It requires persons whose activity consist in the exploitation of comparison websites to inform in a loyal, clear and transparent manner. In France, also specific rules exist concerning online platform and website operators; see in more detail, the contribution of Piazzon to this book. 162 In the words of the European directive (UCPD): a practice that materially distorts or is likely to materially distort the decision making process of the consumer and causes him to take a transactional decision that he in absence of the unfair commercial practice would not have taken.

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It follows that also the manner in which the information is provided to the consumer may have an influence on the misleading character of the commercial practice. Thus the Finnish Supreme Court held that advertisements for events without informing the consumer in the marketing material in a manner which is clear and easy to understand of the price of the tickets constitute misleading commercial practices. In this case the price of the tickets was only given in unclear small print in the advertisements and even not verbally expressed in the corresponding television commercials, so that the Supreme Court had no difficulty in finding that the manner of marketing had not been clear or easy to understand for consumers.163 Quite in contrast Piazzon states that the readability as such of information is rarely condemned in absence of the imprecision or the ambiguity of the information.164 Nevertheless the French Court of Cassation decided in an interesting case that the use for restrictive clauses to the offer of a print size that was 12 to 25 times smaller than the other mentions in the advertising amounts to a misleading commercial practice.165 In this case the French Court of Cassation introduced a link between the medium used and the readability of the advertising, a jurisprudential direction that seems to be in line with the aforementioned Canal Digital case decided by the Court of Justice.166 Interpreting the UCPD in that case the CJEU seemed to point out that the use of small print will be more harmful for example in TV adds than in an advertisement in a journal. In the latter case the average consumer (reader) will have sufficient time to read the integral advertising whilst the time available to the consumer to assess information provided to him in a television advertisement is limited. Turkish law is largely inspired by the UCPD, which it literally transposes,167 and also the Brazilian Consumer Protection Code comes close to the European

163

See the contribution of Hyvönen to this book. The ticket sales agent and organiser were both equally responsible for the misleading commercial practice. 164 See more in the contribution of Piazzon to this book. Also Schinkels indicates that transparency does not play an important role and can hardly be seen as a dominant factor to reject information that is correct. In his contribution to this book Schinkels points to case law of the Bundesgerichtshof wherein the court accepted the concretion in footnotes of mandatory instructions about the applicable withdrawal period ( see BGH 14 March 2017 – XI ZR 442/16, NJW RR 2017, 815). In an insurance contract case the Bundesgerichtshof even accepted that a formally correct and typographically emphasized instruction about the right of withdrawal sufficed despite the fact that it was accompanied by non-emphasized information that included a wrong (and divergent) indication of the time limit for the withdrawal (see BGH 16 December 2015 – IV ZR 71/14, BeckRS 2015, 21001. The latter approach has been confirmed by the BGH in a case of distance marketing (see BGH 10 October 2017 – XI ZR 443/16, WM 2017, 2248). 165 Cass. Crim. 13 May 2003, n
02-84.100. 166 See supra. 167 However, it is to be noted that there exist in Turkish law a certain reluctance towards comparative advertising. Although theoretically comparative advertising is permitted as long as it is not misleading, does not constitute an unfair commercial practice and compares goods or services of the same quality meeting the same needs or intended for the same purpose, explicit comparative

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standard.168 The latter prohibits misleading actions and omissions, even when committed in good faith.169 In line with aforementioned court judgments in Finland and France a beverage marketed under the name ‘Alpino Fast’ in a similar packaging as Alpino chocolate but with the mention in only small print that the product did not contain Alpino chocolate was proven to be misleading.170 Equally to European law the potentiality of deceiving consumers is sufficient to trigger the prohibition in Brazil. In the same vein also Chinese law considers the use of similar names or packages for different food products to be manipulative.171 A statutory requirement of fault or intention is also absent in Singaporean law. It deems unfair any action or omission that results in a consumer reasonably deceived or misled, but it will be up to the consumer to demonstrate that a commercial practice is reasonably deceiving or misleading him.172 The Taiwanese fair transaction law requires businesses not to present any false or misleading information on products, in advertising or via other means conveyed to the public that influences the transactional decisions of consumers. Information which is capable of influencing the public is information related to for example the price, quantity, quality, content, production, production date, term of validity,

advertising is still categorised as an unfair commercial practice in court practice. See the contribution of Baysal to this book. 168 But it also goes beyond where it considers advertisements abusive if they disrespect values worth of being protected. Among the prohibited advertisements on that ground are discriminatory advertising, advertising that incites to violence, exploits fear or superstition, profits from the immaturity of judgment and inexperience of children, disregards environmental values, or is capable of leading consumers to behave harmfully or hazardously with respect to their health and safety. Thus, the slogan “The true black woman is recognized by her body” accompanying the beer ‘Devassa Dark’ was considered discriminatory on that basis. See for more examples, the contribution of Donata Oliva to this book. In the EU, Directive 2005/29/EC on unfair commercial practices (UCPD) does not address legal requirements related to taste and decency which vary widely among the Member States (see introductory recital 7). That type of advertising falls outside the harmonised scope of the UCPD and remains within the ambit of the member states which consequently enjoy a broad discretion in that domain. 169 Brazilian advertisements that contain sufficient precise information can have a contractually binding effect. Ads must also be immediately recognizable as such by the consumer and must be transparent about the data used therein. Furthermore, Brazilian Law permits comparative advertising provided that the comparison has as its main objective to inform the consumer on the basis of true, objective information and that it does not mislead consumers, is not abusive, does not depreciate the product or brand of the competitor and does not lead to confusion between products or brands. 170 See the contribution of Donato Oliva to this book. 171 See the contribution of Yang to this book. 172 Furthermore, the Law in Singapore contains a number of practices that are considered to be unfair under all circumstances (black list). Among those black listed practices, we find false claims about products, bait-and-switch tactics, charging prices for goods or services higher than initially agreed, exerting undue influence or duress on consumers to enter into a transaction. The foregoing is based on the responses to the questionnaire from professor Gary Low, Singapore Management University, [email protected]. Also the UCPD lists misleading and aggressive practices that are under all circumstances prohibited in Annex I to the directive.

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instruction, usage, place of origin, manufacturer, place of manufacturing, processor, place of processing and other appealing information.173 Advertisements with a celebrity as spokesman or professionals (not exclusively public figures) or with references to renowned institutions in which consumers have trust, were given special attention in Taiwan. This so-called recommendation or demonstrationoriented advertising must comply with the principles (e.g. no false or misleading statements, reliability) developed by the Fair Trade Commission.174 The Japanese Law prohibiting unjustified offers and misleading presentations prohibits two types of commercial practices. First, advertisements that induce consumers into believing that the sold product has much better effects and qualities than in reality, e.g. if a trader states that his product is the best in the world without any proof to that extent.175 Second, advertisements that give consumers the impression that the sold product is much more advantageous than products from other businesses, e.g. when the advertiser mentions ‘sale’ in the advertisements whereas the products are sold at a price which is no less than the ordinary price (unjustifiable premiums—reference price does not reflect market price).176 Chinese Law also generally prohibits misleading and confusing commercial practices. Superiority claims (e.g. using words like ‘highest level’ or ‘best’) and health claims (except for medicinal products) are not allowed, nor is comparative

173

Based on the responses to the questionnaire from professor Jiin Yu Wu, National Chengchi University, Taiwan, [email protected]. 174 The following principles developed by the Fair Trade Commission must be observed: The advertising (1) truthfully reflects the opinion, trust, discovery or experience of the recommender and demonstrator and shall not include any false or misleading information; (2) If a public figure or a professional figure (institution) serves as the recommender and demonstrator and the advertised products or services change in content or quality, the main advertiser must assure that the recommender and demonstrator do not change the information to be conveyed in the advertising during the broadcasting; (3) If a professional figure (institution) serves as the recommender and demonstrator or the recommended-demonstrative advertising clearly shows or implies that the recommender or demonstrator is an expert in the advertised product or service, the recommender or demonstrator must indeed have the expertise or technology and its opinion must be consistent with the result of the demonstration by others who share similar professionalism or technology; (4) if the recommender and demonstrator share experience as a consumer, the consumer must be an actual user of the recommended and demonstrated product or service; in case that the consumer is not an actual user, the audience must be informed of that fact in the advertising. What is recommended and demonstrated must be based on science or experimental evidence. The results which consumers may obtain or under what circumstances the demonstrated effects may be obtained by consumers must be set out in the advertisement; and (5) in the case that there is an unpredictable interest-based relationship between the recommender and demonstrator and the main advertiser, the relationship shall be fully disclosed in the advertising. The foregoing is based on the responses to the questionnaire from professor Jiin Yu Wu, National Chengchi University, Taiwan, [email protected]. 175 Although Japanese law permits comparative advertising it is very rarely used as a marketing practice since it does not correspond to the Japanese business culture and mentality. 176 See the contribution of Nozawa to this book. Compare with Nakata (2017), p. 288, who points out that ‘much better’-advertisements give rise to “cases where the level of exaggeration has exceeded that which is generally admitted in society” (p. 288).

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advertising for drugs, home-used medical machinery or health foods.177 Misleading commercial practices further include incorrect or one-sided information, the use in advertising of inconclusive views of scientists and the use of ambiguous language. The omission of vital information for consumers in advertising can also be prohibited as a misleading commercial practice. According to the Supreme People’s Court judgment of 2007, already cited above, judges must take into account the relevant factors of the case to assess the misleading character of a commercial practice thereby using the average consumer as the benchmark. In general, courts often refer to the ‘overall consumer group’ of the said product as the average consumer and only take specific sensibilities of for instance children and patients into account if a particular product is specifically targeted to those groups of consumers.178 In the case of false information courts will have no difficulty to prohibit the commercial practice as misleading. However, if the information is true but incomplete or inaccurate, the assessment must normally be based on an additional test, namely whether the commercial practice substantially impacts the consumer’s purchase behaviour. This substantial effect on the consumer’s transactional decision is presumed to be present in the case of false advertising.179 The Québec Consumer Protection Act and the Canadian federal Competition Act provide for the prohibition of representations that are false or misleading.180 Although the latter Act does not define the term “representation” many parameters are set to its evaluation. The public dimension of the representation is presumed in certain circumstances.181 Thus plaintiffs are relieved from proving “that (a) any person was deceived or misled; (b) any member of the public to whom the representation was made was within Canada; or (c) the representation was made in a place to which the public had access”.182 Furthermore, “[i]n a prosecution for a contravention(. . .), the general impression conveyed by a representation as well as its literal meaning shall be taken into account in determining whether or not the

177

See the contribution of Yang to this book. See the contribution of Yang to this book. 179 See the contribution of Yang to this book. 180 “Persuant to art. 52 (1): “[n]o person shall, for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirectly, any business interest, by any means whatever, knowingly or recklessly make a representation to the public that is false or misleading in a material respect”. 181 “For the purposes of this section (see previous footnote), a representation that is (a) expressed on an article offered or displayed for sale or its wrapper or container, (b) expressed on anything attached to, inserted in or accompanying an article offered or displayed for sale, its wrapper or container, or anything on which the article is mounted for display or sale, (c) expressed on an in-store or other point-of-purchase display, (d) made in the course of in-store or door-to-door selling to a person as ultimate user, or by communicating orally by any means of telecommunication to a person as ultimate user, or (e) contained in or on anything that is sold, sent, delivered, transmitted or made available in any other manner to a member of the public, is deemed to be made to the public by and only by the person who causes the representation to be so expressed, made or contained. 182 Art. 52 (1.1), Competition Act. 178

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representation is false or misleading in a material respect”.183 Also false or misleading representations of prices such as false discounts and sales are prohibited, for instance when a trader increases prices a few weeks before the sales period to lower them afterwards. In the same vein year-round discounts for products that were never offered at their alleged regular price, are covered by the prohibition. The Consumer Protection Act which is mostly used in Québec seeks further to eliminate unfair and misleading practices that may distort the information available to consumers and prevent them from making informed choices. Like the European directive commercial practices are defined very broadly,184 which allows constant adequation to new marketing tools. The Consumer Protection Act thus provides that “[n]o merchant, manufacturer or advertiser may, by any means whatever, make false or misleading representations to a consumer”. In application of that rule the Court of Appeal considered that a defective locking door system of a car affected the purchase decision of a consumer. The fact that this known weakness of the car was not revealed to the consumer by the manufacturer was considered a violation of the prohibition. Apart from the general catch all prohibition a bundle of more specific misleading practices are prohibited with regard to specific forms of price indication and advertising, as well as warranty.185 The assessment of a misleading commercial practice in Québec must be exercised in accordance with the two following parameters: the general impression the practice gives and the literal meaning of the terms used therein. The latter criterion means that every word used in a representation must be interpreted in its ordinary sense, referring to its meaning in everyday life. The first criterion refers to an abstract test. Representation “must be analysed in the abstract, that is, without considering the personal attributes of the consumer who has instituted proceedings against the merchant”. In the Richard v. Time case, referred to above,186 about a sweepstake in Time Magazine with a leaflet congratulating the reader, whereby the consumer truly thought he had won a price, the Canadian Supreme Court developed a compromising, midway test between ‘first’ and ‘general’ impression. It first rejected the “instant impression” test anchored in the mere perception of the advertisement’s lay out, since that test would, in the end, discharge consumers from reading the actual message. According to the Court “the legislature adopted the general impression test to take account of the techniques and methods that are used in commercial advertising to exert a significant influence on consumer behaviour. This means that considerable importance must be attached not only to the text but also to the entire context, including the way the text is displayed to the consumer”.187 The Court then

183

Art. 52 (4), Competition Act. See the contribution of Arbour to this book. The definition corresponds to the European definition in the UCPD. It encompasses all forms of means that may affect consumer judgment. 185 See the contribution of Arbour to this book. 186 See Sect. 2.2.2. 187 See the contribution of Arbour to this book. 184

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somewhat alleviated the consumer’s obligation to absorb information. According to the Supreme Court, courts “must not approach a written advertisement as if it were a commercial contract by reading it several times, going over every detail to make sure they understand all its subtleties. Reading over the entire text once should be sufficient to assess the general impression conveyed by a written advertisement, [. . .][. . .] In the case of false or misleading advertising, the general impression is the one a person has after an initial contact with the entire advertisement, and it relates to both the layout of the advertisement and the meaning of the words used”. It follows that the general impression test does not involve the minute dissection of the text of an advertisement to determine whether the general impression it conveys is false or misleading.188

4.2

Advertising Directed Towards Children

The fact that the average consumer serves as the general benchmark for the assessment of misleading practices does not rule out that in most of the reported countries special attention goes to advertisements directed at children. According to the UCPD for instance the inclusion in an advertisement of a direct exhortation to children to buy advertised products or persuade their parents or other adults to buy advertised products for them, constitutes an aggressive commercial practice which is prohibited under all circumstances.189 In the same vein Finnish law emphasizes the particular vulnerable character of children. According to a decision by the Council of Ethics in Advertising businesses should be particularly careful when marketing food products to children. An advertisement promoting a multivitamin nutritional supplement was advertised on a website known for its popularity amongst young consumers. As the advertising gave the impression that the supplement could be seen as a substitute for food, the Council found the advertisement misleading and issued a warning to the company. Also the Brazilian Consumer Protection Code counts children among the hyper vulnerable consumers who can easily be persuaded by commercial practices. Hence any business conduct that exploits the immaturity, weakness or ignorance of consumers in view of their age or knowledge is considered abusive.190 The Québec Consumer Protection Act prohibits advertisements destined to children of 13 years old and under. To find out whether an advertising is targeted to Rather the Court “exposes the steps that shall guide judges in finding misleading practices: (1) the manufacturer violates provisions; (2) consumers actually saw the deceptive representation and (3) such prohibited practice impacted upon their decision to enter into a contract, and; (4) a sufficient nexus existed between the content of the representation and the products”. In those circumstances there exist an irrebuttable presumption of prejudice, as the consumer does not have to prove that the merchant intended to mislead. 189 See probation nr.28 in Annex I to the UCPD. 190 See more in the contribution of Donato Oliva to this book. 188

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children, account must be taken of the nature and intended purpose of the goods advertised, the overall presentation of the advertisement and the time and place it is shown.191 In Singapore, taking unfair advantage of a consumer who is unable to protect his own interest or who is unable to understand the transaction at hand, is deemed an unfair practice. The prohibition requires that the consumer concerned is vulnerable and that the business knew or out to have known of the vulnerable characteristics of the consumer it is dealing with.192 Thereto an objective standard is applied to assess the business’s conduct, assessing the reasonableness of the business’s actions vis-à-vis the vulnerability of the consumer and whether steps were taken to forestall or remove the unfair character. As was pointed out above Chinese courts will take the sensibilities of children into account to assess the misleading character of a practice if the advertisement specifically targets this group of consumers.193

5 Unfair Contract Terms: Bargaining Power and Transparency 5.1

Standard-Form Contracts and Individually Negotiated Terms

The European Unfair Contract terms Directive (hereafter: UCTD)194 applies to terms in consumer contracts which have not been individually negotiated. Some member states of the European Union, for example Austria, Belgium, Denmark, Finland, France, Luxembourg and Malta extended the protective rules to individually negotiated contract terms.195 Also in the UK were unfair contract terms control was initially limited to non-negotiated terms,196 an extension to all terms, whether negotiated or not, has been realised in 2015 since, according to the legislator, that extension would only affect very few cases.197 Along the lines of the UK reform in 2015 a similar extension was proposed in Ireland, but to date not adopted. The Brazilian Consumer Protection Code applies an unfairness test to standard terms in consumer contracts and to individually negotiated unfair or

191

See more in the contribution of Arbour in this book. Based on the responses to the questionnaire from professor Gary Low, Singapore Management University, [email protected]. 193 See the contribution of Yang to this book. 194 O.J. 1993, L 95/29. 195 See Report of the Fitness Check of EU Consumer and Marketing Law (2017), p. 147. 196 The Unfair Contract Terms Act of 1977 introduced control over the clauses of the contract which restricted or excluded liability and applied to both consumer contracts and non-consumer contracts. 197 See the contribution of Cartwright to this book. 192

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unconscionable198 terms which are listed in a grey list. The unfairness test applied to standard contracts199 is stricter. In order to be binding the Consumer Protection Code requires that standard contracts are drafted in legible and ostensible characters, with a font size of no less than 12 points, contributing to an easier understanding of the consumer. Furthermore, terms that imply a limitation of consumer rights must be highlighted, allowing their prompt and easy comprehension.200 If a business infringes abovementioned requirements the clauses concerned are not binding upon the consumer. A similar sanction results from the fact that the consumer is unaware of the contract purport201 or if its wording lacks clarity.202 It follows that in Brazil all terms in consumer contracts are subject to a double test, namely an (i) objective unfairness test of the contract terms and (ii) an assessment whether the business complied with the mandatory information disclosures set by law.203 German law differentiates between standard terms and non-negotiated individual terms in consumer contracts. “Standard contract terms are such terms that have been drafted in advance with the intention of multiple use and that are unilaterally implemented by one party. With regard to such terms, it is not relevant, whether the stipulating party is entrepreneur”.204 Contract terms that have been drafted in advance for single use are characterised non-negotiated individual terms. In contracts concluded with consumers that contain those terms businesses are deemed to have inserted previously drafted terms into the contract, unless they have been inserted by the consumer. Additionally, individually negotiated terms have priority over conflicting standard terms and surprising stipulations do not become part of the contract.205 Greek unfair contract terms control does not apply either to individually negotiated terms. It focuses on standard terms but also applies to pre-drafted terms that have not been used in multiple contracts and to all terms that were not subject to individual negotiation. Individual negotiation refers to the extent to which the

198

When a contract term is deemed unconscionable it must be considered null and non-binding to the consumer. 199 The fact that one or more of the terms were subject to individual negotiation does not alter the qualification of the contract as a standard contract. 200 See the contribution of Donato Oliva to this book. 201 The consumer was not given the chance of previously getting acquainted with the terms of the contract. 202 The terms are drafted in such a manner that their precise meaning and content is difficult to grasp for consumers. Thus, the Brazilian Superior Court of Justice held in the domain of insurance that the use of vague contract terms or terms which demand technical and/or legal knowledge of a level inconsistent with the reality of the insured person, is abusive. See the contribution of Donato Oliva to this book. 203 Contract terms that do not comply with the requirements imposed by law or which were not sufficiently disclosed to the consumer are deemed unfair, even when they are drafted in clear wording. 204 See the contribution of Schinkels to this book. 205 See the contribution of Schinkels to this book.

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consumer was capable of influencing the content of the contract. It can be the result of discussions between parties206 about the wording of terms whereby the seller/ supplier accepted changes as a result from the discussion.207 In case individually negotiated terms in the contract contradict the pre-drafted terms, the individually negotiated terms will govern the contract. The Romanian Civil Code, the Polish Civil Code and The Czech Civil Code as well as the Turkish and Taiwanese rules apply to standard terms only. Although the Czech Civil Code uses broader wording, seemingly including also individually negotiated terms in the unfairness test, the intention of the Czech legislator, as expressed in the preparatory works, was clearly to limit the unfairness control to standard terms. It thus remains unclear whether Czech courts will extend the unfairness control inspired by the broader wording of the legislation contrary to the preparatory works.208 The unfairness control in Japan applies to contract terms in adhesion contracts with consumers. The Japanese Civil Code recently provided that terms in adhesion contracts which are contrary to good faith must be considered as non-written. The sanction can be avoided only if the business provides proof that the term was individually negotiated, for instance by submitting evidence that the contracts which the business concluded with other consumers do not contain the same terms.209 Furthermore, a term that restricts the rights granted by law to consumers is considered to be null of its own, irrespective of whether it was included in an adhesion contract with a consumer or individually negotiated with him. Also the Canadian Civil Code targets unfair terms in adhesion contracts.210 The legislation includes protection relating to illegible, incomprehensible, external and abusive clauses and extends protection to parties that have lost bargaining power, including parties in B2B contracts.211 A clause which is illegible or incomprehensible212 to a reasonable person is null if the consumer or the adhering party suffers injury therefrom, unless the other party proves that an adequate explanation of the nature and scope of the term was given. The illegibility of a term is to be assessed in abstracto taking an ordinary adherent who can read and is able to understand as a

206

The consumer’s ability to negotiate is assessed both objectively and subjectively. The objective capacity refers to the location, duration of negotiations, complexity of the transaction etc.., whilst the consumer’s subjective capacity refers to his experience, age, literacy,... See more in the contribution of Karampatzos and Kotios to this book. 207 Karampatzos and Kotios note that this also could lead to situations where the consumer is denied protection in case the negotiations turned out unfruitful for him. 208 See the contribution of Selucká, Staviková Reznicková and Loutocký to this book. 209 See the contribution of Nozawa to this book. 210 These are contracts whereby the essential stipulations are drawn up by one of the parties and are not negotiable. 211 See the contribution of Arbour to this book. 212 The incomprehensibility refers in the first place to the grammatical accuracy but also goes beyond the meaning of the words and the grammatical formulation.

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benchmark.213 In the case of a consumer contract the illegibility must be tested in the light of an average, lay, untrained and inexperienced consumer. A similar nullity applies to the external clauses referred to above. A term is external if at the time of formation of the contract it was not expressly214 brought to the attention of the consumer or the adhering party, unless the other party proves that the consumer or adhering party knew of it.215 Finally, also abusive terms in consumer or adhesion contracts are sanctioned with nullity or the reduction of the obligation. Unfair is a term which is excessively and unreasonably detrimental to the consumer or the adhering party, and is therefore contrary to the requirements of good faith. This is particularly the case if a term so departs from the fundamental obligations arising from the rules normally governing the contract that it changes the nature of it into an abusive clause.216 In case of doubt or ambiguity the consumer or adhesion contract must be interpreted in favour of the consumer/adhering party.217 The Singaporean Unfair Contract Terms Act applies to written standard terms,218 but does not provide guidance on how to distinguish individually negotiated terms

213

A clause was held illegible because it was written on a document’s back in very pale grey on a white background. See the contribution of Arbour to this book. 214 This implies an explicit reference to another document, the back of a document or another regulation. In case of distance contracts the fact of having to click for further information does not necessarily point to an external term. 215 See the contribution of Arbour to this book. The Czech Civil Code also renders standard commercial terms which the other party could not have reasonably expected ineffective, unless they were expressly accepted by that party. The aim is to reduce the surprise factor. However, the Czech Supreme Court is rather reluctant to categorize commercial terms as ‘surprising terms’. Such classification necessitates a clear discrepancy between the content of the term and the expectation of the other party (it could not have been reasonably expected—subjective criterion) on the one hand and on the other hand the peculiar nature of the content of the commercial term (is the term unusual when assessed in the light of the contract as a whole—objective criterion). See the contribution of Selucká, Staviková Reznicková and Loutocký to this book. 216 In a striking parallel the CJEU defined good faith in the Aziz-case were it held that “the national court must assess for those purposes whether the seller or supplier, dealing fairly and equitably with the consumer, could reasonably assume that the consumer would have agreed to such a term in individual contract negotiations” and that ‘a significant imbalance’ is to be assessed in the light of the rules of national law that would apply in the absence of an agreement by the parties in that regard. “Such a comparative analysis will enable the national court to evaluate whether and, as the case may be, to what extent, the contract places the consumer in a legal situation less favourable than that provided for by the national law in force” (see CJEU 14 March 2013, C-415/11, Aziz, ECLI:EU:C:2013:164). In Constructora Principado the CJEU added that such imbalance “can result solely from a sufficiently serious impairment of the legal situation in which the consumer, as a party to the contract in question, is placed by reason of the relevant national provisions, whether this be in the form of a restriction of the rights which, in accordance with those provisions, he enjoys under the contract, or a constraint on the exercise of those rights, or the imposition on him of an additional obligation not envisaged by the national rules” (CJEU 16 January 2014, C-226/12, Constructora Principado, ECLI:EU:C:2014:10). 217 A similar interpretation rule can be found in the European UCTD. 218 The Act applies to standard terms in consumer contracts or where a party deals on the basis of the other’s standard terms.

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from standard terms. Whether a term is individually negotiated turns on the facts of each case and the fact that a contract has been negotiated does not necessarily exclude the presence of standard terms and thus the application of the Unfair Contract Terms Act. However, case law provides for some guidance and points to the following determinative criteria: “(i) the degree to which the ‘standard terms’ are considered by the other party as part of the process of agreeing the terms of the contract (ii) the degree to which the ‘standard terms’ are imposed on the other party by the party putting them forward (iii) the relative bargaining position of the parties (iv) the degree to which the party putting the ‘standard terms’ is prepared to entertain negotiations with regard to the terms of the contract generally and the ‘standard terms’ in particular”.219 Although it may be expected that the overwhelming majority of terms in consumer contracts will be considered standard terms, there exists no express presumption to that extent.220 Also Chinese Law imposes protective rules for standard terms only defined as clauses that are prepared in advance for general and repeated use by one party, and which are not negotiated with the other party when the contract is concluded.221 When standard terms are inconsistent with non-standard terms, the latter will prevail. Beside the application of the general principle of fairness also a specific obligation is imposed on the party that imposes the standard terms. This party has to explain the terms and inform the other party of the liability restrictions or exemptions in favour of the party providing the standard terms.222 A standard term will in general be invalid if the party providing the standard terms exempts itself from its liability, increases the other party’s liability or deprives the other party of its material rights guaranteed by law.223 It must be noted that Chinese law does not distinguish in this respect between B2C and B2B relationships, but Chinese Consumer Protection Law additionally imposes on businesses to remind the consumer in a conspicuous manner of the content of the terms that are vital to his interests, including terms relating to the product’s quality, quantity, price or additional costs, the contract’s duration and manner of performance, the safety precautions and risk warnings, the after sales service and the civil liability etc.224 In most jurisdictions the seller has to prove that a term had been individually negotiated.225 In Greece and Poland the burden of proof is incumbent on the party 219

Based on the responses to the questionnaire from professor Gary Low, Singapore Management University, [email protected]. 220 Based on the responses to the questionnaire from professor Gary Low, Singapore Management University, [email protected]. 221 See the contribution of Yang to this book. 222 See the contribution of Yang to this book. 223 See the contribution of Yang to this book. 224 See the contribution of Yang to this book. 225 Proof will often not be that easy. The Romanian High Court of Cassation for instance held that a clause in the contract wherein the consumer recognizes that the whole contract had been individually negotiated cannot reverse the burden of proof. That will neither be the case if the seller accords a reflexion period to the consumer. It must be demonstrated that the consumer effectively exercised

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claiming that a contract term had been individually negotiated, in most cases the seller.226 It must be submitted that European courts will indirectly take into account whether there was in fact negotiation between the parties over a term when assessing ‘good faith’ and ‘significant imbalance’ as parts of the unfairness test.227 According to the Irish High Court the requirement of good faith “mandates fair and open dealing, with the result that contractual terms must be expressed fully, clearly, and legibly by a seller/supplier, with suitable prominence being given to any disadvantageous terms, and all concealed pitfalls and traps avoided, in effect adherence to what might be described as good standards of commercial practice. (. . .) As for fair and equitable dealing, what this requires in effect is that a seller/supplier should not take advantage of, inter alia, a consumer’s necessity, indigence, inexperience, unfamiliarity with the subject-matter of a contract, or like characteristics or traits, and must take a consumer’s legitimate interests into account”.228

an influence on the content of the contract, e.g. on the basis of written documents or an exchange of e-mails that shows that clauses have been reviewed. In the same vein, the Italian Court of Cassation held that only in case of specific, individual, serious and effective negotiation the unfairness control of consumer contracts may be avoided. The Brazilian Consumer Protection Code is less demanding; it reverses the burden of proof in favour of the consumer when his allegation is credible or when he is in a position of hyper dependency. Hyper dependency refers to the difficulty of the consumer to provide evidence of a certain fact. Whether a consumer’s allegation is credible is assessed on the basis of a probability criterion based on the arguments advanced during the proceeding. In Germany the burden of proof regarding the characterization of contractual stipulations as standard contract terms lies in principle with the party relying on special control of such terms. With regard to consumer contracts the business is deemed to have implemented previously drafted terms into the contract, unless they have been inserted by the consumer. It follows that the burden of proof lies with the business. However, the German BGB indicates that it is up to the consumer to proof the drafting in advance and its causation for the consumer’s inability to influence the substance of the term. See the contribution of Schinkels to this book. 226 If consumers claim that no negotiation took place, the burden of proof shifts to the seller. An exchange of e-mails with draft terms that were reviewed by the parties or meetings of the parties in person to that extent may constitute such proof. See the contribution of Karampatzos and Kotios to this book. German courts evaluate the factual indications already given by the parties. In case of contradiction between parties’ statements, a copy of the written contract can be of help: “if it is contained in a specially printed or designed form, this prima facie indicates pre-formulation and unilateral implementation. If one clause of a form has been individually altered, this may be taken as a sign that other terms of the form were also subject to negotiation”, see the contribution of Schinkels to this book. 227 For example, according to the Polish Civil Code terms in B2C-contracts which have not been negotiated individually are not binding on the consumers if rights and obligations are set in a way that is contrary to ‘good practice’, thereby grossly violating the consumer’s interests. See the contribution of Namyslowska and Jablonowska to this book. 228 See the contribution of Kelly to this book.

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Exclusion of Core Contract Terms: Transparency Requirement

The European UCTD excludes terms on the main subject matter and price/quality ratio from unfairness review only if they are in plain intelligible language.229 The UCTD also requires that all written terms230 of a consumer contract be transparent, which means that terms must be legible and expressed in plain and intelligible language.231 If a term has different meanings, the meaning that is most favourable to the consumer is to prevail.232

5.2.1

Case Law of the CJEU

The CJEU has given some very strong guidance on what is required for terms to be plain and intelligible.233 This requirement was interpreted by the CJEU in the Árpád Kásler case.234 It held that the requirement of transparency should not be restricted to mere formal and grammatical intelligibility; the consumer must be informed in such a manner that he is in a position to evaluate on the basis of clear, intelligible criteria the economic consequences for him which derive from a term.

229

See Article 4(2) UCTD. This exclusion from unfairness has not been incorporated in Austrian, Danish, Greek, Latvian, Luxemburg, Slovenian, Spanish and Swedish legislation, see EC Consumer Law Compendium, 2007, 379, ec.europa.eu/consumers/archive/cons_int/safe_shop/acquis/ comp_analysis_en.pdf. 230 In Belgium the Unfair Contract terms Commission extended the transparency principle to oral terms, see C.O.B. 25, 19 November 2008, economie.fgov.be/nl/binaries/COB25_tcm325-74403. pdf, 6. In the Netherlands the limitation to written terms has not been inserted in the transposing legislation, see Article 6:238, section 2 C.C. 231 See Article 5 UCTD. 232 In a rare Belgian case the judge concluded that the contract terms about the price for renting a house were not transparent now that the offer for rent on the website of the seller indicated a lower price; he concluded that the lower price on the website had to be applied and discarded the contract terms. See Vred. Grâce-Hollogne 25 mei 2012, JLMB 2012/40, 1917–1925. Schinkels indicates that German courts have already ruled that it is possible to assess a standard contract term simply repeating the wording of a statute as unfair for want of transparency, see BGH, Judgment of 9. 5. 2001—IV ZR 138/99, Neue Juristische Wochenschrift (NJW) 2001, 2012. See the contribution of Schinkels to this book. 233 See more extensively on that issue Howells and Straetmans (2017), E-180-E-215. Both transparency requirements in Article 4 and 5 UCTD must be interpreted equally according to the CJEU, see to this extent Case C-26/13, Árpád Kásler, ECLI:EU:C:2014:282. 234 See Case C-26/13, ECLI:EU:C:2014:282.

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In RWE Vertrieb235 and in Naranjo236 the fundamental importance of pre-contractual information for consumers was emphasized since consumers decide on that basis to be bound by a contract. For that reason the consumer must actually be given an opportunity to examine all the terms of the contract. Furthermore, consumers must be informed of their rights that flow from mandatory national law of which they are beneficiaries. This follows from the Invitel237 and VKI/Amazon238 judgments. In Invitel the CJEU held that “where certain aspects of the method of amendment of the fees connected with the service to be provided are specified by mandatory statutory or regulatory provisions within the meaning of Article 1(2) of the Directive, or where those provisions provide, for the consumer, the right to terminate the contract, it is essential that the consumer be informed of those provisions by the seller or supplier”. In VKI/Amazon the CJEU confirmed that the transparency requirement must be interpreted broadly, having regard to the consumer’s weak position vis-à-vis the seller or supplier with respect in particular to his level of knowledge. This implies that where the effects of a term are specified by mandatory statutory provisions, it is essential that the seller or supplier informs the consumer of those provisions. “That is the case of Article 6(2) of the Rome I Regulation, which provides that the choice of applicable law must not have the result of depriving the consumer of the protection afforded to him by provisions that cannot be derogated from by agreement by virtue of the law which would have been applicable in the absence of choice”.239 It follows that if a term leads the consumer into error by giving him the impression that only the law of the Member

CJEU 21 March 2013, Case C-92/11, RWE Vertrieb, ECLI:EU:C:2013:180, para 44: “Information, before concluding a contract, on the terms of the contract and the consequences of concluding it is of fundamental importance for a consumer. It is on the basis of that information in particular that he decides whether he wishes to be bound by the terms previously drawn up by the seller or supplier“. Compare para 50: “With respect, in the first place, to the information to be given to the consumer, it is clear that that obligation to make the consumer aware of the reason for and method of the variation of those charges and his right to terminate the contract is not satisfied by the mere reference, in the general terms and conditions, to a legislative or regulatory act determining the rights and obligations of the parties. It is essential that the consumer is informed by the seller or supplier of the content of the provisions concerned”. Furthermore “the lack of information on the point before the contract is concluded cannot, in principle, be compensated for by the mere fact that consumers will, during the performance of the contract, be informed in good time of a variation of the charges and of their right to terminate the contract if they do not wish to accept the variation” (para 51). 236 CJEU 21 December 2016, Joined Cases C-154/15and C-307/15, Gutiérrez Naranjo e.a., ECLI: EU:C:2016:980, paras. 48–51. The CJEU did not contradict the Spanish court’s interpretation of the requirement of transparency, referred to in Article 4(2) of the directive, as not being limited to the requirement for formal transparency of contractual clauses in relation to the plain and intelligible nature of their drafting, but as extending to their substantive transparency linked to the adequacy of the information supplied to the consumer concerning the extent, both legal and economic, of the consumer’s contractual commitment. 237 CJEU 26 April 2012, Case C-472/10, Invitel, EU:C:2012:242, para 29. 238 CJEU 28 July 2016, Case C-191/15, VKI v Amazon, ECLI:EU:C:2016:612, para 68. 239 CJEU 28 July 2016, Case C-191/15, VKI v Amazon, ECLI:EU:C:2016:612, para 69 partim. 235

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State in which the seller or supplier is established applies to the contract, without informing him that under Article 6(2) of the Rome I Regulation he also enjoys the protection of the mandatory provisions of the law that would be applicable in the absence of that term, this term must be considered as unfair.240 The need for more than mere formal and grammatical ability to understand contract terms has been subsequently applied in Matei v SC Volksbank Romania SA,241 Bucura242 and Van Hove v CNP Assurances SA.243 Van Hove v CNP Assurances SA244 concerned a combined loan contract with an insurance contract intended to ensure that mortgage loan repayments are covered. The CJEU emphasized the relevance of the fact that the contract at issue forms part of a broader contractual framework. As a result the contractual framework may also have an impact on the average consumer’s level of attention. The Court said that “the consumer cannot be required, when concluding related contracts, to have the same vigilance regarding the extent of the risks covered by that insurance contract as he would if he had concluded that contract and the loan contracts separately”.245 Also in Ruxandra Paula Andriciuc246 the CJEU confirmed its broad interpretation of the transparency requirement, this time in respect of a term that placed all the exchange risk connected to a loan in foreign currency on the consumer. It held that “the requirement that a contractual term must be drafted in plain intelligible language is to be understood as requiring also that the contract should set out transparently the specific functioning of the mechanism to which the relevant term relates and the relationship between that mechanism and that provided for by other contractual terms, so that that consumer is in a position to evaluate, on the basis of clear,

240

It is interesting to note that the CJEU automatically connected the sanction of unfairness to a term that misleads a consumer whereby the misleading impression of the consumer is caused by the lack of information provided by the supplier or the seller. 241 CJEU 26 February 2015, Case C-143/13, Matei, ECLI:EU:C:2015:127, paras 73–77. The reference in para 77 to “the lack of transparency, in the agreements at issue in the main proceedings, of the statement of the grounds justifying those terms” seems to suggest that apart from informing the consumer about the economic consequences of a term, also information about the economic motives of the business using those terms could be part of the transparency requirement. 242 CJEU 9 July 2015, C-348/14, Bucura, EU:C:2015:447. See also infra. 243 CJEU 23 April 2015, Case C-96/14, Jean-Claude Van Hove v. CNP Assurances SA, ECLI:EU: C:2015:262. 244 CJEU 23 April 2015, Case C-96/14, Jean-Claude Van Hove v. CNP Assurances SA, ECLI:EU: C:2015:262. 245 See para 48. A similar mitigating approach can be seen in CJEU 3 April 2014, Case C-342/13, Katalin Sebestyén, ECLI:EU:C:2014:1857, para 34, where the Court held: “even assuming that the general information the consumer receives before concluding a contract satisfies the requirement under Article 5 that it be plain and intelligible, that fact alone cannot rule out the unfairness of a clause providing for the exclusive competence of a single arbitration tribunal”. 246 CJEU 20 September 2017, Case C-186/16, Ruxandra Paula Andriciuc e.a., ECLI:EU: C:2017:703.

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intelligible criteria, the economic consequences for him which derive from it”.247 More specifically, the consumer must be provided with all the information likely to have a bearing on the extent of his commitment so that he is enabled to estimate in particular the total cost of his contract. “First, whether the terms are drafted in plain intelligible language enabling an average consumer, that is to say a reasonably wellinformed and reasonably observant and circumspect consumer to estimate such a cost and, second, the fact related to the failure to mention in the loan agreement the information regarded as being essential with regard to the nature of the goods or services which are the subject matter of that contract play a decisive role in that assessment”.248 In the same vein, the CJEU stressed the importance of the APR in consumer credit contracts in Pohotovost249 and Maria Bucura.250 Informing the consumer of the total cost of credit, in the form of an interest rate calculated according to a single mathematical formula, is of critical importance as it contributes to the transparency of the market, enables the consumer to compare offers of credit and enables him to assess the extent of his liability. Hence, “the failure to mention the APR in the credit agreement at issue, the mention of the APR being essential information in the context of Directive 87/102 (consumer credit), may be a decisive factor in the assessment by a national court of whether a term of a credit agreement concerning the cost of that credit in which no such mention is made is written in plain, intelligible language within the meaning of Article 4 of Directive 93/13”.251 Finally, providing consumers with information on contract terms in plain and intelligible language cannot be used as a defence against the non-binding character of a contract term that eventually turns out to be unfair.252

247

CJEU 20 September 2017, Case C-186/16, Ruxandra Paula Andriciuc e.a., ECLI:EU: C:2017:703, para 45. 248 Idem, para 48. It follows that financial institutions must provide borrowers with adequate information to enable them to take well-informed and prudent decisions. It follows that the borrower must be clearly informed of the fact that, in entering into a loan agreement denominated in a foreign currency, he is exposing himself to a certain foreign exchange risk which will, potentially, be difficult to bear in the event of a fall in the value of the currency in which he receives his income. Furthermore the seller or supplier, in this case the bank, must be required to set out the possible variations in the exchange rate and the risks inherent in taking out a loan in a foreign currency, particularly where the consumer borrower does not receive his income in that currency (see also paras 49–50). 249 CJEU 16 November 2010, Case C-76/10, Pohotovost, ECLI:EU:C:2010:685. 250 CJEU 9 July 2015, Case C-348/14, Maria Bucura, ECLI:EU:C:2015:447. 251 CJEU 16 November 2010, Case C-76/10, Pohotovost, ECLI:EU:C:2010:685, para 71. 252 See to this extent, CJEU 3 April 2014, Case C-342/13, Katalin Sebestyén, ECLI:EU: C:2014:1857, para 34; see also supra.

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Application of Transparency in the EU and beyond

In line with the UCTD the exemption for core contract terms in most of the EU countries is subject to a transparency requirement.253 Similar rules apply in Turkey.254 The standard to be used is that of the average consumer but in practice the CJEU applied this test in a way which promoted consumer protection. To what extent the EU member states will follow suit, remains to be seen.255 In the UK for instance there are now many lower court decisions applying the Directive, sometimes in a manner that is very loyal to European law.256 However, attention has focussed on Supreme Court decisions that appear to be less consumer friendly. In fact the Supreme Court has recently considered the test to be opaque.257 It has been mentioned before that there is no or very little legislative guidance on how the transparency requirement must be applied.258 Consequently national courts when assessing the transparency of contract terms enjoy a broad discretion. The absence of sufficient legislative guidance has led to divergent interpretations of the transparency requirement, despite the gap filling case law of the CJEU referred to above. In Poland for instance the clarity requirement of core terms259 refers to the 253

Denmark, Finland, Portugal, Slovenia and Spain extend the unfairness control to core contract terms (see Report of the Fitness Check of EU consumer and marketing law, European Commission Staff Working Document, Brussels, 23 May 2017, SWD(2017)209final, 147). 254 Turkish law is also in other aspects aligned to the UCTD and requires for instance that consumers should be given the possibility to effective take notice of the terms. In the presence of ambiguous terms, an interpretation in favour of consumers applies. See the contribution of Baysal to this book. 255 This is the result of the minimum harmonisation set forth in the UCTD which nonetheless allows member states to adopt stricter standards. It must be submitted also that the (settled) case law of the CJEU when interpreting European legislation must be applied by national courts. 256 These courts require not only that the term be comprehensible for that consumer but also that the typical consumer can understand how the term affects the rights and obligations that he and the seller have under the contract. 257 See Lords Neuberger and Sumption in Cavendish Square Holding BV v Makdessi; ParkingEye Ltd v Beavis [2015] UKSC 67, 2015] 3 WLR 1373, at para 105. Lord Carnwath agreed. Yet, it must be noted that the vagueness of the requirement combined with the discretion accorded to national courts in applying the EU law as interpreted by the CJEU makes it hard to say the Supreme Court has wrongly applied the law. See more extensively on this subject, Howells and Straetmans (2017), pp. E-180–E-215. The Report of the Fitness Check of EU consumer and marketing law stated that the lack of clarity of some of the provisions of the UCTD could be addressed through specific Commission guidance (see Report of the Fitness Check of EU Consumer and Marketing Law 2017, p. 77). 258 In its report on the fitness check of EU marketing and consumer law The European Commission recognizes that the length of standard terms and conditions is found to be a considerable obstacle for consumers in identifying unfair terms. It also indicates that it is working with all stakeholders on voluntary principles for better presentation of both standard contract terms and pre-contractual information (see Report of the Fitness Check of EU Consumer and Marketing Law 2017, pp. 78 and 86). 259 According to the Polish Supreme Court the lack of transparency of a standard term can in itself constitute an unfair term, irrespective of whether it contributes to a significant imbalance of the parties’ rights and obligations to the detriment of the consumer. See Judgment of the Supreme Court

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substance of the standard term concerned and is satisfied if the term allows for only one possible meaning viewed from the perspective of the average consumer. Greek case law developed three principles for the assessment of the transparency of a contract term. First, the principle that contract terms must be clear (grammatically correct and succinct, no use of obscure terms) and comprehensible (referring to the subjective ability of the consumer to realize the term’s true meaning); second, the principle of the determinable content of terms (no use of vague terms); and third, the principle of foreseeability of terms (prohibiting unexpected, unusual, surprising or misleading terms).260 Italian courts seem to apply an ex post case-by-case approach by exclusion. Clauses that obviously do not correspond to the transparency requirement are excluded, such as contradictory terms in the consumer contract, e.g. terms that are drafted in highly technical (financial) language and terms in an ambiguous, vague language.261 This a posteriori application of the transparency principle is considered quite ineffective, especially for the more vulnerable consumers for whom no specific rules are enacted.262 French case law remains quite hesitant to apply the transparency principle on core terms for historical reasons.263 Czech case law also shows that the exclusion from the unfairness test of core contract terms is not subject to an elaborated transparency requirement.264 In contrast, Romanian courts tend to take into account all the relevant circumstances of the conclusion of the contract when assessing transparency and do so to an extent that the test becomes to a certain degree concrete and subjective, especially when the consumer concerned appears to be particularly vulnerable.265 The most protective approach is to be found in Finland where core contract terms are not excluded from the unfairness test.266 A similar protection seems available in

in case I CSK 72/15 (n 27) and more in the contribution of Namyslowska and Jablonowska to this book. 260 Businesses must secure that contract terms correspond to those three principles assessed from the point of view of an average consumer, who is assumed to be a self-aware and responsible person. Dellios (2015), pp. 118–119. 261 See more extensively, Giorgianni (2009), p. 209 e.s. Also French case law condems the use of very complex and technical terms without any further explanation in insurance contracts; see Piazzon in this book. Also the High Court in Prague stated that a contract due to its legal constructions was completely incomprehensible: “Obviously, the text of the contract is deliberately designed so that by its complex constructions it prevents a person who does not have legal education and a certain economic overview from understanding the true meaning of the contract covenant”. See the ruling of the High Court in Prague, file No. 76 Cm 876/2010, referred to in the contribution of Selucká, Staviková Reznicková and Loutocký to this book. 262 See the contribution of Benacchio to this book. 263 See Rochfeld (2004), p. 981. 264 See Rita Illdiko Sik-Simon (2017). 265 See the contribution of Bercea and Caramidariu to this book. 266 Furthermore, the Finnish Consumer Protection Act introduces specific provisions regarding the adjustment of unfair contract terms which have been drafted without the consumer having been able to influence the contents thereof. The provisions regarding the adjustment of an individual

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Greece, albeit that this appears not to have been a deliberate legislative choice, but rather the result of the omission to exclude contract terms from the unfairness test in the legislation.267 Also Chinese law does not differentiate between core contract terms and other terms when applying the unfairness test, although the precise scope of the unfairness test has recently been the subject of debate among scholars.268 It was already pointed out above269 that the Brazilian Consumer Protection Code requires that consumer contracts in order to be binding must be drafted in legible and ostensible characters, with a font size of no less than 12 points, and that terms that imply a limitation of consumer rights must be highlighted, allowing their prompt and easy comprehension.270 It is interesting to note in this respect that the Irish Sales Review Group recommended the introduction of regulations relating to print size. It recommended the use of a minimum ten-point font size in plain typeface against a contrasting background and also that a font size requirement should depend on the target group at which the contract is aimed. Thus a contract aimed at older age groups may need to be in a larger font size to be legible. To date no particular requirements relating to print size are adopted in Ireland.271 We can see a similar development in the Czech Republic were the Constitutional Court said that “the content of the contract is to be legible to the average consumer, clearly and logically arranged. For example, contractual arrangements must be of sufficient font size, they may not be in a significantly smaller size than the surrounding text, and they may not be placed in sections that give the impression of an insignificant character.”272 In the same vein, the practice of the Polish UOKiK273 provides multiple examples of marketing of financial and telecommunications

consumer contract term applies to all terms used in a consumer contract—individually negotiated or standardised, and promotes solutions in which the contract remains in force despite the unfair term. The preference for adjustment of unfair contract terms contrasts with the nullity set forth in de UCTD and the deterrence sought by the CJEU. According to the Finnish legislator increased cancellation of contracts would not ensure the established level of consumer protection in Finland. See the contribution of Hyvönen to this book. 267 See on this point the contribution of Karampatzos and Kotios tot his book. 268 See the contribution of Yang to this book and the discussion that is taken place in China about the inclusion or exclusion of core contract terms. 269 See section 4 (a). 270 See the contribution of Donato Oliva to this book. 271 See the contribution of Kelly to this book. 272 The decision of the Constitutional Court of the Czech Republic of 11 November 2013, file no. I. ÚS 3512/11, was based on Section 1811 (1) of the Czech Civil Code: “all communications to the consumer must be made clearly and comprehensibly by the entrepreneur in the language in which the contract is concluded.” 273 Consumer authority with the competence to carry out proceedings against practices that infringe collective consumer interests and to impose fines or even the remedy of public compensation. A breach of the obligation to provide consumers with reliable, true and complete information is considered to be an infringement of collective consumer interests.

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services that appear to be insufficiently transparent because of the size of the font used and the broadcasting time.274 Singaporean law has no transparency requirement imposing that terms in consumer contracts must be clear and comprehensible nor that the meaning and consequences of the terms must be explained to the consumer.275 Courts will exercise a control ex post applying the reasonableness test for onerous terms (restricting or excluding business’ liability) under the Unfair Contract Terms Act and the prohibition under the Consumer Protection Act of unconscionable imposing onerous terms to consumers. To assess the reasonableness of contract terms courts developed a number of interrelated criteria such as the relative bargaining position, whether the requirements could have been met by alternative means, whether the consumer received an inducement to agree to the term, and whether he could have entered into a similar contract without agreeing to that similar term. It follows that the greater the degree of imbalance the greater the probability that the term was imposed by the stronger on the weaker party.276 The Taiwanese Consumer Protection Act prohibits the insertion in consumer contracts of standard terms that are difficult to notice or to recognize due to the font size, the printing format or other factors. It follows that concealing standard terms in consumer contracts is prohibited in general.277 When standard terms are ambiguous or inconsistent with the information that the business provides the consumer prior to the conclusion of the contract, courts may interpret the standard terms in the light of the pre-contractual information stemming from advertisements. Yet, as Taiwanese law prioritizes individually negotiated terms, there is no specific rule in case advertisements contradict individually negotiated terms. The approach in Japan is somewhat different as the black list of unfair contract terms in adhesion contracts does not include core contract terms. Nevertheless, those core contract terms remain subject to the general requirement that terms must be in conformity with the good faith principle.278 Japanese consumer contract law further requires the contract to be clear and comprehensible for consumers. If a contract term is unclear the judge will interpret the term in the light of the pre-contractual information which was provided by the business to the consumer. If he finds out at that stage that the disclosed information is insufficient for the consumer’s comprehension of the contract, he may interpret the contract term in favour of the consumer, and will automatically do so in the presence of ambiguous standard

274

See the contribution of Namyslowska and Jablonowska to this book. Based on the responses to the questionnaire from professor Gary Low, Singapore Management University, [email protected]. 276 Based on the responses to the questionnaire from professor Gary Low, Singapore Management University, [email protected]. 277 Based on the responses to the questionnaire from professor Jiin Yu Wu, National Chengchi University, Taiwan, [email protected]. 278 See the contribution of Nozawa to this book. 275

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terms.279 The Japanese legislation does not provide in this respect for specific rules applicable to particularly vulnerable consumers.

5.2.3

Core Terms Must Be Prominent

The UK Consumer Rights Act 2015 provides that the exemption of Article 4 (2) UCTD applies only if the core term is also prominent. A term is prominent if it is brought to the consumer’s attention in such a way that an average consumer would be aware of it.280 In most of the other member states of the EU there is no equivalent requirement to bring the core contract terms to the consumer’s attention in such a manner that an average consumer would be aware of them.281 Similarly to the UK, the Taiwanese Consumer Protection Act requires businesses to explicitly highlight the content of their standard terms to consumers. In case this is difficult in practice businesses must noticeably announce the standard terms. On a second level the Consumer Protection Act requires businesses to disclose important information about the precise legal content of a limited number of issues dealt with in the standard terms, irrespective of whether the term is a core contract term. This mandatory disclosure is however confined to the legal consequences and rights and obligations. The economic or other consequences (other than legal) fall outside the scope of the information obligation.282 In the same vein Chinese law requires businesses to inform consumers in a conspicuous and reasonable manner of the content of standard terms that are vital to their interests. According to the Supreme People’s Court’s judgment of 2009 the conspicuous character of the information aims to attract the consumer’s attention. It may take different forms including special fonts, size of characters, the use of symbols, notices, declarations etc. As was indicated above, terms relating to the quality, quantity, price of products, the duration and manner of performance, the safety precautions and risk warnings and the after sales services and the civil liability are considered to be vital terms for consumers.283

279

See the contribution of Nozawa to this book. S. 64(4). The common law requirement that any particularly onerous terms are brought to a contracting party’s attention before the contract is concluded, applies only to onerous terms and requires that those terms have a prominent position in the contract and are not hidden away amongst a long list of terms and conditions. This is the so-called red hand rule which requires that in order to give consumers sufficient notice, these clauses need to be printed in red ink with a red hand pointing to it. 281 Finnish Law requires onerous and unusual terms to be specifically highlighted to the other contracting party. See the contribution of Hyvönen to this book. 282 The average consumer is the bench mark. There are no specific disclosure rules for particularly vulnerable consumers. The foregoing is based on the responses to the questionnaire from professor Jiin Yu Wu, National Chengchi University, Taiwan, [email protected]. 283 See the contribution of Yang to this book. 280

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In general, Chinese Courts assess whether the information is provided in a reasonable manner on the basis of the following elements. They take into account (1) whether the document with the standard terms takes the form of a contract instead of a receipt, (2) whether the provider informs the consumer individually or rather sends brochures or announcements to the public in general, (3) whether the standard terms themselves are clear and understandable for ordinary readers, (4) whether the information is provided to the consumer prior to the formation of the contract or during the formation and finally (5) whether the consumer’s (or the contracting party’s) attention was effectively attracted.284 In the Supreme People’s Court interpretation of 2013 the court ruled that unexpected terms or liability exemption terms require a higher duty to inform on the part of the seller and also that vulnerable consumers deserve a higher degree of explanation. Specifically with regard to liability exemption terms there exist an additional duty in Chinese law to explain their meaning to the contracting party.285 This duty to explain the meaning of standard terms is in consumer contracts extended to all vital terms.286 It is unclear to date how this specific duty must be interpreted in practice. The Supreme People’s Court gave a strict interpretation of this duty in insurance contracts, stipulating that the insurer must explain in writing or orally the concept, the content and the legal consequences of the liability exemption terms in such a manner that ordinary people could understand. However, to avoid arbitrary applications the Supreme People’s Court accepted the policy holder’s signature on a pre-formulated document drafted by the insurer stating that the insurer gave explanations of the terms in such a manner that the policy holder fully understands their meaning, as sufficient proof that the duty to explain was sufficiently performed.287 But, despite this leniency, the Supreme People’s Court also stated that the signature proof is not determinative and thus rebuttable. In practice the latter evidence rule is often used by Chinese Courts to deny the validity of contract terms, especially in the case of insurance contracts.288

5.3

Black or Grey List of Unfair Terms

In the UK the Consumer Rights Act contains a grey, indicative and non-exhaustive list of terms of consumer contracts that may be regarded as unfair.

284

See the contribution of Yang to this book. See more extensively on this point, the contribution of Yang to this book. 286 See the contribution of Yang to this book. 287 See the contribution of Yang to this book. 288 The sanction for breach of the duty to bring standard terms to the attention of the other party and to explain them is the exclusion from the contract, irrespective of whether they are core terms or not. See more on this point in the contribution of Yang to this book. 285

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Unlike Belgian and Greek Law that provides for a black list, Polish law has a grey list of terms, which in case of doubt, must be considered unfair.289 Equally Brazil lists unconscionable and thus unfair terms in a grey list. German, Italian and French law combines a black list of unfair terms with a grey list.290 Japanese law blacklists a number of terms as unfair in consumer adhesion contracts.291 Also the Canadian Consumer Protection Act provides for a bundle of deemed sector-specific terms which if present in a consumer contract will be null and deemed unwritten. The black listed terms comprise liability limitation clauses, damages clauses, unilateral amendment clauses etc.292

5.4

Specific Rules Concerning the Control of Unfair Terms in B2B Relationships

An extended control over the clauses which restrict or exclude liability exists in the UK.293 As indicated above a comparable approach applies in China where no preliminary distinction is made between B2C and B2B relationships.294 In Finland the legislation contains an unfairness test which is applicable to both consumer and business contracts.295 General contract law also subjects the use of standard terms in B2B-contracts to limitations. Legal doctrine advocates further that unusual or onerous standard terms only become part of the contract if the drafter of the terms specifically highlights the terms to the other contracting party.296 Germany applies unfairness control to standard terms297 irrespective of whether these terms are concluded in consumer contracts or B2B contracts. The unfairness 289

The European Commission points out that the use of black and grey lists of unfair terms tends to be more effective than the use of an indicative, non-exhaustive list, but that there does not appear any clear candidate for possible inclusion in a UCTD blacklist (see Report of the Fitness Check of EU Consumer and Marketing Law 2017, p. 77). 290 In the latter case also the proof that the term was the subject of individual negotiation may forestall the unfair character of the term in Italy. See the contribution of Benacchio to this book, who points out that the so-called free negotiation between consumers and businesses offers no guarantee whatsoever that balanced contract terms will be the result. 291 See the contribution of Nozawa to this book. See also Nakata (2016), p. 491. 292 See more extensively the contribution of Arbour to this book. 293 In the same vein, the Singaporean Unfair Contract Terms Act focuses on terms which serve to restrict or exclude liability on the part of the business, and also those which make liability or the enforcement thereof subject to restrictive or onerous conditions. Clauses which purport to do so are subject to a reasonableness test. The foregoing is based on the responses to the questionnaire from professor Gary Low, Singapore Management University, [email protected]. 294 See the contribution of Yang to this book. 295 The Consumer Protection Act introduces an unfairness test for consumers whereas the Contracts Act holds an unfairness test for contracts in general. 296 See the contribution of Hyvönen to this book. 297 See above in point 4.1.

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control even applies when a consumer sells something via eBay and uses a pre-formulated exclusion of liability. In that specific regard German scholars submit that “if one accepts the traditional German view that the power to unilaterally implement non-negotiated terms into a contract is the core aspect of superior bargaining power,298 one has to come to the conclusion that even a consumer can have superior bargaining power as opposed to an entrepreneur”.299 The divergent approaches within the EU resulted also in divided views across the EU on expanding the UCTD to cover B2B relationships, with more specifically business associations and public authorities opposing the idea.300

6 Sector Specific Rules 6.1

Financial Consumer: Rationalisation, Yes; Simplification, Not Yet

The European legislator has devoted considerable attention to information disclosures relating to financial services. Due to the often complex, sophisticated, highlytechnical nature of those services and the inherent difficulty for consumers to fully understand financial products, the provision of information to consumers in this field is a key component of consumer protection. It thus comes as no surprise that particularly with regard to credit, investment services and insurance services the European legislator developed key information documents that streamline a reduced quantity of information to consumers with the aim of making that information more accessible for consumers.301 Also in the field of payment accounts there exist

298

Cf. Pfeiffer in Wolf/Lindacher/Pfeiffer AGB-Recht, 6th. ed. 2013, introduction mn. 23. See the contribution of Schinkels to this book. 300 Report of the Fitness Check of EU Consumer and Marketing Law (2017), p. 84. 301 See for instance the SECCI (Standard European Consumer Credit Information—Consumer Credit Directive 2008/48/EC, O.J. 2008, L 133/86), the ESIS (European Standardised Information Sheet—Mortgage Credit Directive 2014/17/EU, O.J. 2014, L 60/34) and the KID (Key Information Document—Regulation 1286/2014 on PRIIPs, O.J. 2014, L 352/1). This evolution is generally welcomed for it also prevents that mandatory information is mixed with commercial information for marketing purposes. But despite the advantages the lists of information particulars that have to be disclosed to consumers remains long. Furthermore it remains unclear whether consumers are effectively able to absorb and understand the prescribed information. Compare with a national survey in South-Africa executed by Ramchander (2016), pp. 67–73. The findings of the survey were that consumers have a low to very low level of understanding of the features of basic insurance products (see p. 73). For a recent study on risk disclosure in corporate annual reports (capital markets) in a number of EU Member States, see Cordazzo et al. (2017), pp. 682–714. Disclosure effectiveness remains understudied. For a research with focus on identifying how the dimensions of a disclosure influence its efficacy, examining how different methodologies should best be deployed for disclosure testing and studying the market effects of mandatory disclosures, see Johnson and Leary (2017), pp. 184–191. See also Perry and Blumenthal (2012), pp. 305–312, who point out that 299

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standardised formats like the fee information document and the statement of fees that must be not misleading and provided to consumers in clear, unambiguous and non-technical language, using characters of a readable size.302 This illustrates a real tendency towards a rationalisation of information given to consumers.303 However, as the provided information remains technical, the shift towards simplification of information disclosed to consumers has not yet gained much ground.304 the literature to date lacks conclusive evidence of the effects of disclosures on decisions and outcomes, such as loan choice or performance, and also that research examining the role of disclosures in light of other social, contextual, or informational influences is scarce. They conclude that a much more thorough analysis of the effects of disclosures on decision quality must be undertaken. 302 See more extensively, De Muynck (2010), pp. 1222–1230, who points to the omission to enlighten, on a clear and concise way a vast category of borrowers (those who are not capable of being careful readers) about some of the most essential characteristics of the pursued credit (at p. 1223). See also on this subject the contribution of Kelly to this book. 303 A recent study executed by Edwards favours even an extension of the prospectus obligation to professionals in professional services markets. The prospectus has already proven effective in the securities markets. See Edwards (2017), pp. 1457–1515. According to Edwards a professional prospectus would reduce information asymmetries and improve the market for professional services through disclosure and consumer choice. It would also make professional reputation a more potent force. “Self-regulating professions and occupational licensing bodies often fail to protect consumers because they tend to act like cartels - behaving more in the interests of their members than of the public” (p. 1462 and 1489–1492). Further, “consumers often struggle to recognize low-quality professional services because professionals sell credence goods” (p. 1485). A Professional Prospectus would then complement the existing occupational licensing systems. “Tailored disclosures delivered through a Professional Prospectus would put existing public information into consumer hands, allowing the market to more efficiently price professional services. This would discipline and deter professional misconduct and reward higher-quality service providers” (p. 1515), see Edwards (2017), pp. 1457–1515, who further indicates that “the most benefits seem likely to emerge from presenting the information in a short, standardized, and clear format” (p. 1496). Also Baisch argues that despite the information overload the provision of information must not be condemned; this would mean throwing the baby out with the bath water. Disclosure can be used and function’s also as a nudge; thus the way information is framed matters a lot. See Baisch (2016), pp. 217–243, who also argues that education could, at least partially, compensate negative outcomes of human flaws (at p. 242). 304 See specifically on this subject, the contributions of Piazzon and Baysal to this book. Addressing the new EU mortgage credit directive 2014/17/EU, cited above, also De Muynck and Bruloot indicate that the information credit intermediaries are required to provide consumers, for instance on remuneration, are unsatisfactory, because they assume “that consumers will (1) be both able and prepared (. . .) to disentangle the knot between different financial incentives and intermediary behaviour and (2) to act upon the disclosed information”, see De Muynck and Bruloot (2017), p. 35. Thus, the real impact of such information will be doubtful, ineffective and does not constitute a sufficient protection of consumers. As a result the authors believe that they should be complemented with targeted remuneration regulation specifically addressing the most hazardous remuneration practices. Compare with Jonker et al. (2017), pp. 136–138, who point out with regard to consumer credit that “a large percentage of consumers do not understand what the information provided” (136) and conclude that “the increasing complexity hollowed out the mandatory information duties to the point of becoming useless, resulting in an information paradox: consumers can only be considered responsible if they could be brought to stomach a mass of indigestible information” (p. 138). Also V. Colaert recently came to similar conclusions, see Colaert (2017),

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In the aftermath of the financial crisis the European legislator required the financial institutions to conduct a suitability assessment to ensure that the financial product in question is suitable for the concerned consumer. It follows that a credit institution may not offer a credit to a (vulnerable) consumer unless the consumer has the capability to pay off the debt. Appropriate provision of information is thus complemented with careful product design and suitability assessments of consumers. In a number of the reported countries consumers are further protected by codes of practice with more specific information requirements.305 In Finland providers of intangible expert services, such as financial services, have an increased information duty and are required not only to provide correct and sufficient information but also comprehensible information, in accordance with the so-called ‘pedagogical duty’ of an expert service provider.306 p. 10. She furthermore points out that “even improved information obligations indeed cannot deal with certain biases, such as for instance overconfidence or herd behaviour” and that “if the PRIIPs regulation wants to achieve its goals of easily accessible information and comparability of substitute products, its scope of application is still too limited” (11). She concludes: “Legislators in the EU have come to understand that for investors to absorb and compare information, there should not be too much of it (information overload), it should be well-structured in conformity with a standardized format, and it should be attractive and accompanied by visual aids where possible. A clear trend with respect to information as a tool of investor protection is indeed a focus on presentation and a tendency towards short, standardized key information documents. At the same time the legislator has understood that the “caveat emptor” principle, underpinned and reinforced by the information paradigm, has reached its limits in the financial services sector. Behavioural biases and flawed investor decisions cannot or only partially be solved by simpler, shorter and more standardized information. Information requirements are therefore increasingly complemented with two other building blocks of investor protection: service quality rules (conduct of business) and product regulation.” (p. 28). In the same vein D. Busch concludes: “Under MiFID II, the amount of information that must be provided to investors is set to increase rather than decrease and the information will also have to be more detailed. This is despite the fact that many people doubt whether the huge volume of information provided really helps investors to make informed and wellconsidered decisions”, in Busch (2017), p. 380. On a broader account Sah and Loewenstein (2014), pp. 575–584, argued that mandatory and voluntary disclosure can deter advisors from accepting conflicts of interest so that they have nothing to disclose except the absence of conflicts. 305 In Ireland for instance the Consumer Protection Code 2012 requires “that all information of regulated entities provided to a consumer is clear, accurate, up to date, and written in plain English. Key information must be brought to the attention of the consumer. The method of presentation must not disguise, diminish or obscure important information”. Furthermore, the information must be given in a timely manner, having regard for inter alia the time necessary for the consumer to absorb and react to the information provided. Also in Poland a code of conduct for consumer credit advertisements has been drafted by the key stakeholders in 2016. Find more information in the contribution of respectively Kelly and Namyslowska and Jablonowska in this book. 306 See the contribution of Hyvönen to this book. This results for instance in the obligation as regards insurance contracts to bring the major exclusions of coverage to the attention of the consumer or in investment services to take into consideration the previous investment experience of the consumer, his age or his possible medical condition which might lead to a lowered level of comprehension of significant features of the investment-type insurance policy. With regard to investment services the Financial Supervisory Authority developed guidelines which, although non-binding as such, function as good practices. Deviating from good practices could constitute a breach of the Market Securities Act in Finland. See e.g. the Supreme Court judgment in KKO

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Also Japanese law imposes an obligation on the professional to advise consumers on the risks of certain investment transactions.307 As a result, a financial service provider in Japan is not allowed to contract with a consumer if the financial transaction is not appropriate having regard to the knowledge, the experience and the financial capacity of the consumer.308 However, it must be stressed that this protective legislation is limited to consumers who are layman in the financial sector and thus effectively lack specific knowledge in that domain. A similar suitability rule is included in the Taiwanese Financial Consumer Protection Act. According to this rule financial service suppliers, before signing a contract relating to financial products, must be fully informed about the financial capacities of their consumers to ensure that the products or services offered are suitable for them.309 The same Act also imposes fare-reaching information obligations and the duty to fully disclose the risks of a financial transaction before the contract is signed (obligation to explain the financial product).310 Equally to the Japanese rules, the protection is not available to consumers who cannot demonstrate that the financial loss of subscribing financial products is not due to their inability to fully understand the financial product or service, or due to false, misleading or incomplete risk disclosure by the financial service supplier. In Singapore information requirements vary depending on the type of financial product at hand, going from product summaries and benefit illustration tables to

2015:93 where the Court found a marketing brochure misleading since it did not mention that the investment product in question included a so-called issuer risk related to the possible insolvency of the issuer even though the 217 pages prospectus included information on the issuer risk and had been approved by the authorities. In its judgment the Supreme Court emphasized the legislative history of the Market Securities Act and underlined that the correctness, coverage and method of presentation of disclosed information should be evaluated from the point of view of the investor. 307 See the contribution of Nozawa to this book. Compare with the council obligation imposed on financial professionals in Québec; see more on this subject in the contribution of Arbour to this book. 308 See the contribution of Nozawa to this book. See also on this point, Nakata (2016), p. 492, who questions whether the general suitability rule in the broad sense, “according to which the business operator must conduct his solicitation and sales in a manner that suits the consumer’s knowledge, experience and fortune etc., must be laid down as a general obligation”. 309 Based on the responses to the questionnaire from professor Jiin Yu Wu, National Chengchi University, Taiwan, [email protected]. 310 Also certain form requirements and requirements as to the content of the information are imposed. The foregoing is based on the responses to the questionnaire from professor Jiin Yu Wu, National Chengchi University, Taiwan, [email protected], who further indicates that courts tend to formally assess the explanation obligation and the suitability test, often contenting themselves in verifying whether the consumer has personally signed the explanatory note and the risk attribution scale. Compare with the study of Yan et al. (2017), p. 53, who conclude with regard to recent health law reforms in Taiwan that “it may not be possible for outsiders to properly interpret the information provided by hospitals. Thus, when a hospital discloses information, it is necessary for the government to consider the information’s applicability. Toward improving medical expertise and information asymmetry, the government has to reduce the burden among health service consumers in dealing with this information, and it has to use the information effectively”.

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product highlight sheets. The aim of the latter is to summarise key information in simple and clear language. These product highlight forms may not exceed four pages, must use terms that investors can understand and must be of a font size of at least 10 Times new roman.311 “Requiring an increased amount of information duties in the domain of financial services fits in with the regulatory ethos of shifting the risk assessment to the consumer whilst educating him on how to do so. However, mandated disclosures with regard to financial contracts remain the exception to the rule”312 in Singapore. In Brazil any streamlining of information about financial products seems to be lacking despite practices are reported by which consumers are misled.313 In China it has been debated until recently whether financial consumers could benefit from the protective rules of the Consumer Protection Act. In 2015 a State Council’s regulation eventually issued guidelines that protect the consumer’s right to information and imposes transparency requirements.314 Also the China Banking Regulatory Commission, the China Insurance Regulatory Commission and the People’s Bank of China have issued guidelines in 2016 imposing financial institutions to disclose information to consumers timely and in a manner that is easy to understand.315 The idea of standardization of financial information and disclosure of information about the key features of financial products recently has gained ground in China. Also the courts’ attitude towards financial institutions’ obligation to inform consumers has changed in consequence of a Supreme People’s Court judgment of 2015 that interpreted the information duty of financial institutions. According to the Supreme People’s Court the key feature for the evaluation of this duty to inform is the financial consumer’s understanding of the risks and interests of financial products. In order to assess whether a financial institution has complied to its obligation both the objective average consumer standard must be taken into account complemented with a subjective standard which considers the risk level of the financial product concerned and the consumer’s personal situation. Thereby the burden of proof is placed on the financial institutions.316 Some national reporters indicate that the level of information disclosed to consumers in this field remains highly technical and is often no easy-read.317 In that 311

Based on the responses to the questionnaire from professor Gary Low, Singapore Management University, [email protected]. 312 Based on the responses to the questionnaire from professor Gary Low, Singapore Management University, [email protected]. 313 See the contribution of Donato Oliva to this book. 314 A survey published in 2015 indicated that only 18.4% of the Chinese financial consumers was capable to fully understand their rights and duties after reading the terms and conditions of the financial services contracts. A survey issued by the people’s Bank of China in 2017 indicated that only 35.27% of the consumers believed that they had a good command of financial literacy. 315 See the contribution of Yang to this book. 316 See the contribution of Yang to this book. 317 See for instance the contributions of Piazzon, Benacchio and Arbour to this book who point out that information requirements have been spread over different laws and must be read together in

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regard, the Irish authorities pay increasing attention to the layering of information through the use of pop-ups and hyperlinked texts. This digitised information provision technique ensures that “the most important information for the consumer is “provided upfront, in a form of summary disclosure . . . (then) there is a nesting of information, depending on how important it is to the consumer’s decision.”318 It allows consumers to have more easily and more conveniently access to information and to retrieve a range of information.319 Also the multiple warnings which result from the codes of conduct referred to above could be seen, at least to some extent, as a reaction to the risk of information overload as they focus much more on the manner in which key information elements are communicated. “With regard to investment consulting, the dilemma of the need to give sufficient details for an informed decision about an extremely complex financial product and the limited capacities to process such information has led several German scholars to the idea of completely replacing the information model by one of legal regulation of financial products (e. g. via licensing)”.320 Other German scholars also voiced the view of more “customer tailored” information that differentiates according to different target groups.321 Although consumer education is often seen as key, not in the least by the European Commission,322 legal scholars remain sceptical. Financial education order to find out whether the requirements are complementary or not. Arbour refers to the Canadian Supreme Court trilogy hinting at the existing limited intelligibility of information disclosures, despite the legislative efforts that have been made to that extent. Piazzon more specifically criticises the Annual Percentage Rate (APR) for credits as overly complex and incomprehensible for an average consumer. Also doubtful about the usefulness of APR, Ramsay (2005), p. 50 and Garcia Porras and Van Boom (2012), p. 28. Benacchio points to the fact that the risks of some financial transactions are insufficiently clarified to consumers and that information cannot make good for inappropriate conduct of financial professionals in the pre-contractual stage, which is difficult to document and thus to proof. As regards the APR, Benacchio seems to point out that this represents a good practice towards specific and simplified information indicators to the advantage of the consumer. In the same vein O. Bar-Gill sees a well-designed APR as part of a ‘smart disclosure’-policy, see Bar-Gill (2015), pp. 75–82. Also De Muynck (2010), pp. 1225–1226, pleads referring to Bar-Gill for a single APR disclosure in advertising. Schinkels, in his contribution to this book, sees the APR as an unidimensional yet meaningful criterion for the comparison of credit offers and thus a successful example of reducing complexity. 318 See the contribution of Kelly to this book. 319 In the context of e-commerce Québec law is reluctant towards the use of hyperlinks or multiple windows as they are likely to confuse consumers. The use of hyperlinks must therefore be avoided since a consumer too informed is also an uninformed consumer; see more on this point in the contribution of Arbour to this book. 320 See the contribution of Schinkels to this book, who refers to Koch (2012), p. 485, Köndgen (2011), p. 285; Klöhn (2006), p. 80 e.s. 321 See the contribution of Schinkels to this book, who refers to Institut für Verbraucherjournalismus (ifv) GmbH an der SRH Hochschule Calw, Fasel (2018), p. 48. 322 See Article 6 of the Mortgage Credit Directive 2014/17/EU and see the Commission Communication of 12 May 2012: “A European consumer agenda – Boosting confidence and growth”, Brussels, COM(2012)225final, 9, “improving consumer knowledge is particularly important in financial services and an overall improvement of financial literacy must be achieved”, and compare

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implies that consumers must be forced to absorb information that barely interests them and “retains a certain degree of paternalism which partly defeats the purpose of campaigns to improve consumer protection”.323 Furthermore it remains doubtful whether consumers will effectively act more responsible and base their decisions on the improved knowledge.324

6.2

Digital Consumer: Consent for Use Personal Data

According to the European ePrivacy Directive325 the user326 must be provided clear and comprehensive information about the purposes of the storage of personal data, or access to that information. More in particular, the use of electronic

with Regulation 254/2014/EU of 26 February 2014 on an multi-annual consumer programme for the years 2014–2020, O.J. 2014, L 84/42. 323 See Jonker et al. (2017), p. 137. Also Schinkels criticizes the voluntary character of laudable educational initiatives like the German Verbraucherzentrale Bundesverband e. V.’s web presentation for consumer education (www.verbraucherbildung.de) which provides specially developed educational material for use in schools in order to improve consumer skills. The materials cover topics like finance, media, nutrition, sustainable consumption and consumer law. See the contribution of Schinkels to this book. In Belgium the Flemish government decided on 17 January 2018 to make a certain level of financial literacy part of the compulsory key competences that students of secondary schools must have attained before commencing higher education; see the proposal for a Flemish Decree, to be consulted at https://www.vlaamsparlement.be/dossiers/vernieuwingeindtermen. 324 See Domurath (2015), p. 163. Compare with Pearson (2008), p. 20; Garcia Porras and Van Boom (2012), p. 50; Ramsay (2016), p. 174. See also Trigg (2011), p. 876 and about the huge costs of financial education: Willis (2008), p. 197 and Osovsky (2013), pp. 925–931. Also P. Bongini, L. Colombo, M. Iwanicz-Drozdowska doubt the effectiveness of financial education but nevertheless conclude: “However, the ineffectiveness of financial literacy programs for those specific individuals does not imply that all financial education initiatives are useless and that policy makers should instead concentrate their actions on consumer protection regulation and, in particular, on the design of mandatory choices, as behavioral financial economists tend to propose”, in Bongini et al. (2015), p. 7. 325 Directive 2002/58/EC of July 2002 concerning the protection of personal data and the protection of privacy in the electronic communications sector, OJ 2002, L 201/37, as amended by Directive 2009/136/EC of 25 November 2009, OJ 2009, L 337/11. This Directive builds on Directive 95/46/ EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (O.J. 1995, L 281/31) and Directive 97/66/EC of the European Parliament and of the Council of 15 December 1997 concerning the processing of personal data and the protection of privacy in the telecommunications sector (O.J. 1998, L 24/1) which translated the principles set out in Directive 95/46/EC into specific rules for the telecommunications sector. See also Directive 2016/680/EU of 27 April 2016 on the protection of natural persons with regard to the processing of personal data by competent authorities for the purposes of the prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties, and on the free movement of such data, O.J. 2016, L 119/89. 326 This is an individual using public electronic communication services, including also consumers.

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communications networks to store personal data information or to gain access to that information stored in the terminal equipment of a subscriber or user is only allowed on condition that the subscriber or user concerned is provided with clear and comprehensive information, inter alia about the purposes of the processing, and is offered the right to refuse such processing by the data controller. “This shall not prevent any technical storage or access for the sole purpose of carrying out or facilitating the transmission of a communication over an electronic communications network, or as strictly necessary in order to provide an information society service explicitly requested by the subscriber or user”.327 This information obligation serves as the basis for the user’s consent in the context of electronic communications and the use of cookies. How the cookies used by the electronic communication networks work and what they are used for must be explained to the consumer in a clear and easily available way.328 The consent of the consumer (user) is to date subject to a rather low-level control. Subscribers can give their consent by amending or setting controls on the internet browser which they use or by using another application or programme to signify consent, but also by simply clicking an answer on the web page. No specific requirements exist for the form in which the information about the purposes of the storage or access must be given nor exactly what information must be given.329 However, to be valid consent must be freely given, specific and informed.330 It follows that there must be some form of positive action of the consumer, even though this positive action may be confined to ticking a box or clicking a link. Yet, consent must not be an explicit ‘opt-in’ consent.331 Also an implied consent is valid such as consent by implication preceded by the following words: “By continuing to

327

Article 5(3) ePrivacy Directive, cited above. Not all cookies are subject to consumer’s consent. User-input cookies, authentication cookies etc. are exempted from consent. See EU advisory body on data protection—WP29. 329 However, default options have been expressly prohibited by Directive 2011/83/EU of 25 October 2011 on consumer rights, OJ 2011, L 304/64. “Before the consumer is bound by the contract or offer, the trader shall seek the express consent of the consumer to any extra payment in addition to the remuneration agreed upon for the trader’s main contractual obligation”(Article 22). Also Japanese law prohibits the use of default options, see the contribution of Nozawa to this book. In the same vein the law of Québec requires traders to bring costs to the attention of consumers. If they fail to do so, the additional costs cannot be claimed. See on this subject the contribution of Arbour to this book. 330 See Van Eecke and Schellekens (2015), pp. 279–301. The user/consumer must give his consent to the use of most types of cookies. 331 In Greece and the Czech Republic, the existing European legislation is interpreted as an opt-in system whereby users must actively accept the use of cookies on their terminal devices. In absence of such consent, users should be enabled to freely browse the webpage they are visiting. See the contribution of respectively Karampatzos and Kotios, and Selucká, Staviková Reznicková and Loutocký to this book. 328

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use this site you consent to the use of cookies in accordance with our cookie policy”, with a link to the “Cookie Statement”, and a positive action on the part of the user, such as pressing a “hide” button on the notification.332 How cookies work and what they are used for is a complex phenomenon which further exacerbates the information asymmetry with the consumer. It is questionable whether the average internet user fully understands what is meant by aforementioned notices or statements concerning cookies or is fully aware of the potential consequences of the use of cookies. In theory consumers who wish to use a website will often simply agree with the proposed use of cookies, in absence of which they are prevented from having access to the website. The new European General Data Protection Regulation333 which applies in the member states from 25 May 2018 onwards requires businesses to ask users their consent for data not necessary for the performance of a contract, for compliance with a legal obligation or certain other privileged aims.334 Consent is defined in Article 4 (11) as a freely given,335 specific, informed and unambiguous indication of the data subject’s wishes by which he or she, by a statement or a clear affirmative action, signifies agreement to the processing of personal data relating to him or her.336 It

332

See the contribution of Kelly to this book. Compare with consent pop-ups: a clear banner notifying the consumer about the use of cookies and a ‘learn more’-link to further information. 333 Regulation 2016/679/EU of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such date, OJ 2016, L 119/1 (General Data Protection Regulation). 334 According to Article 6 (1) GDPR processing shall be lawful only if and to the extent that at least one of the following applies: (1) the data subject has given consent to the processing of his or her personal data for one or more specific purposes; (2) processing is necessary for the performance of a contract to which the data subject is party or in order to take steps at the request of the data subject prior to entering into a contract; (3) processing is necessary for compliance with a legal obligation to which the controller is subject; (4) processing is necessary in order to protect the vital interests of the data subject or of another natural person; (5) processing is necessary for the performance of a task carried out in the public interest or in the exercise of official authority vested in the controller; (6) processing is necessary for the purposes of the legitimate interests pursued by the controller or by a third party, except where such interests are overridden by the interests or fundamental rights and freedoms of the data subject which require protection of personal data, in particular where the data subject is a child. Point (6) shall not apply to processing carried out by public authorities in the performance of their tasks. 335 According to introductory recital 43 of the GDPR, the assessment whether consent was freely given has to take into account a clear imbalance between subject and controller. 336 Article 7 of the Regulation further specifies the conditions for consent. Article 7 (2) for instance states: “If the data subject’s consent is given in the context of a written declaration which also concerns other matters, the request for consent shall be presented in a manner which is clearly distinguishable from the other matters, in an intelligible and easily accessible form, using clear and plain language. Any part of such a declaration which constitutes an infringement of this Regulation shall not be binding”. It follows that a banner on a website indicating the use of cookies with the only option to accept or acceptance as default option does not comply with these requirements (see also introductory recital 32 GDPR, which indicates that pre-ticked boxes are not sufficient to constitute consent). In absence of an option to refuse the processing of data not necessary for the service offered, the consent will not be given freely.

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follows that the Regulation imposes a stricter standard337 and requires an opt-in consent by the data subject (user/consumer) to the processing of his or her personal data for one or more specific purposes.338 As a consequence the European ePrivacy legislation needs to be adapted to align with these new rules. Hence the proposal for a regulation concerning the respect for private life and the protection of personal data in electronic communications.339 This proposal, when adopted, will repeal the ePrivacy-Directive cited above and contains revised cookie rules.340 The GDP Regulation also deals more explicitly with the transfer to other parties of personal data. According to some reporters this could hardly be seen as an adequate solution given the speed, the frequency and the number of implied issues.341 In that regard a consumer should at least be granted the right not only to be forgotten, but also to have access to his virtual self which results from the application of diverse algorithms and to adjust or correct the characteristics or profile of his virtual self.342 In The UK the manner in which this information must be given is further specified. Businesses are advised to make sure that the language and level of detail are appropriate for their intended audience and that the information about cookies/ the privacy policy cannot show consent if it is hard to find, difficult to understand or rarely read.343 If very sensitive personal data are collected, such as e.g. health details, businesses were advised to ask already before the GDPR entered into force an explicit opt-in consent from users. Yet, extensive legislation on the use of personal data does not exist in all the reported countries. In Brazil for instance a draft Bill aims at regulating the issue. More specifically with regard to cookies the unlimited use of them by businesses may constitute an abusive commercial practice within the meaning of the Consumer Protection Code. However, it is reported that although consumers have technically the means to disable cookies on their personal computers, they are generally unaware 337

This standard is based on the following principles, further clarified in Article 5 of the Regulation: lawfulness, fairness and transparency; purpose limitation; data minimisation; accuracy; storage limitation; integrity and confidentiality; accountability. 338 See Article 6 (1) (a) GDPR. See also the five other lawful ways of processing personal data, for which no prior consent of the data subject is required, mentioned in Article 6 of the Regulation. According to introductory recital 30 of the GDPR, cookies which allow to identify an individual directly or indirectly are considered as covering personal data. 339 Proposal for a Regulation concerning the respect for private life and the protection of personal data in electronic communications and repealing Directive 2002/58/EC (Regulation on Privacy and Electronic Communications), Brussels, 10 January 2017, COM(2017) 10 final. 340 The rules are said to be more user-friendly as browser settings will provide for an easy way to accept or refuse tracking cookies and other identifiers. Furthermore the proposal clarifies that no consent is needed for non-privacy intrusive cookies improving internet experience (e.g. to remember shopping cart history) or cookies used by a website to count the number of visitors. See Articles 8, 9 and 10 of the proposal. 341 See the contribution of Benacchio to this book. 342 See again the contribution of Benacchio to this book. 343 See the contribution of Cartwright to this book.

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of that in practice. Furthermore, if they would deactivate the cookies, they would no longer have access to most of the websites.344 In the same vein Japanese law on this subject is also in its infancy. Personal data may be used by businesses provided that the consumers are informed for which purposes they are used and provided that the use which is made from the personal data is in line with the communicated purposes pursued. There is no obligation to obtain any consent from the consumer. Furthermore, it turns out that in practice consumers would not have any choice but to accept the proposed uses by the businesses.345 Singapore has no legislation on e-commerce or distance selling. In contrast, the Personal Data Protection Act 2012 requires the consumer’s express consent for the collection, use or disclosure by businesses of the consumer’s personal information. “A consumer is deemed to have given his consent if he voluntarily provides personal data to the businesses and if it is reasonable that he would volunteer that data under the circumstances”.346 The reason for the data collection, use or disclosure must be made known to the consumer, absence of which he cannot consent.347 Although it is disputed whether opting out could constitute a means of imputing consent, the regime seems to favour an express opt-in. With regard to cookies consent can be derived from the consumer’s consent to internet activities which require cookies to be accessed. Default settings will not necessarily suffice to impute consent for cookies.348 Also Taiwan makes the collection, use and disclosure of personal data subject to the consumer’s consent.349 Consent will be inferred from the consumer’s absence of raising objections after being given substantial information about the use, processing and collection of personal data in accordance with the legislation. In case a business by accident uses personal data contrary to the purposes indicated to the consumer, that business will not be held liable.

344

See the contribution of Donato Oliva to this book. See the contribution of Nozawa to this book. 346 Based on the responses to the questionnaire from professor Gary Low, Singapore Management University, [email protected]. 347 The development of a data protection or privacy policy by which the consumers may be notified of the fact of and reasons for collection, use and disclosure of their personal data is categorised as a good practice, provided that the policy is drafted in sufficient detail. The notification of such policy drafted in too vague or general terms runs the risk that the notification and consent obligations are not met in specific cases. The foregoing is based on the responses to the questionnaire from professor Gary Low, Singapore Management University, [email protected]. 348 Based on the responses to the questionnaire from professor Gary Low, Singapore Management University, [email protected]. 349 Based on the responses to the questionnaire from professor Jiin Yu Wu, National Chengchi University, Taiwan, [email protected], who also seems to indicate that since information about the collection, processing, storage and use of personal data is mandatorily disclosed in standard contracts, the use of personal data in accordance with the purposes indicated therein is automatically allowed. 345

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Chinese law operates the distinction between personal information and personal sensitive information. Whereas in the latter case the explicit consent is required, authorized consent suffices in the former case. Explicit consent requires an affirmative action of the person concerned (e.g. by clicking the button ‘agree and register’ which gives access to the relevant information directly followed by another ‘agree’-button) which demonstrates his unambiguous consent for core business functions and his separate consent for all other affiliate functions.350 In contrast, an authorized consent may be given implicitly, but only when explicit consent turns out to be impossible in the given context. Overall it must be submitted that the extensive use of new technologies by businesses as a marketing tool creates the risk of new forms of information asymmetries to the detriment of consumers, namely businesses knowing more about an individual consumer’s behaviour and preferences than the latter is aware of, and to which legislatures have not yet found the right answer.

7 Behavioural Sciences’ Impact on the Consumer Information Model The multiple critiques sketched out above351 brought some legal scholars to the conclusion that information models based on mandatory disclosures have completely failed. The most prominent scholars who voice this view are Omri Ben-Shahar and Carl E. Schneider.352 In their view the disclosure’s failure is due to a misunderstanding of psychology: it rests on the false assumption that people actually want to make all of the significant decisions in their lives and to make them with care. They conclude that “as a regulatory technique, mandatory disclosure is a fundamental failure that cannot be fundamentally fixed”. Thus, “what fails should be abandoned”.353 Like Ben-Shahar and Schneider, Thaler and Sunstein attacked the economic benchmark of the information paradigm, but, instead of abandoning the information model Thaler and Sunstein argued in their best seller Nudge,354 for a new

350

See the contribution of Yang to this book. See the introduction to this contribution. See additionally on the subject of bounded rationality Hacker (2016), pp. 300–301. 352 See e.g. Ben-Shahar and Schneider (2011), pp. 647–749; Ben-Shahar and Schneider (2014), p. 240; Ben-Shahar and Schneider (2015), pp. 83–93. They claim that “although mandated disclosure addresses a real problem and rests on a plausible assumption, it chronically fails to accomplish its purpose. Even where it seems to succeed, its costs in money, effort, and time generally swamp its benefits. And mandated disclosure has intended and undesirable consequences, like driving out better regulation and hurting the people it purports to help”, see Ben-Shahar and Schneider (2011), p. 651. 353 Ben-Shahar and Schneider (2014), p. 12. 354 Thaler and Sunstein (2009). 351

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paternalism, the so-called libertarian paternalism that steers the paternalized person but preserves always his freedom of choice. In their view ‘nudgers’ could help consumers without the coerciveness inherent in traditional paternalism.355 In short, “nudge defends three main claims: one, the architecture of choice greatly influences how people make choices; two, choice architecture is unavoidable (so why not design in ways that improve wellbeing), and three, libertarian paternalism is not an oxymoron: paternalists can nudge while preserving freedom of choice”.356 In conclusion, they strongly believe that consumers can and must be manipulated by so-called savvy architects of choice. The compelling analyses of both Ben Shahar and Schneider, and Thaler and Sunstein beg the question how to move forward with an information model that is characterised by multiple drawbacks and shortcomings? The abandonment of the information paradigm, as proposed by Ben Shahar and Schneider would place us in a vacuum since they refrain from proposing a genuine alternative. They submit that there is rarely a good solution in principle: “incomplete disclosure leaves people ignorant, but complete disclosure creates crushing overload problems. Thus, a sophisticated lawmaker could recognize that ‘less is more’ but still fear that ‘less is not enough’. Furthermore, and crucially, the lawmaker’s incentives generally push it toward ever more disclosure”.357 Also the approach taken by Thaler and Sunstein can be criticised, even though it would leave the basic assumptions of the information model intact. Leonard for instance is very critical about nudging, and provides a strong counterpoint to the potential success of ‘nudging’ and ‘choice architecture’. He concludes: “The irony is that behavioural economics, having attacked Homo Economicus as an empirically false description of human choice, now proposes, in the name of paternalism, to enshrine the very same fellow as the image of what people should want to be. Or, more precisely, what paternalists want people to be.358 For the consequence of

355

Also Sibony and Helleringer (2015), pp. 221–226 take a more paternalist approach with the focus of information disclosure shifted from content to context and directed to what matters for consumers. In line with choice architecture theories which emphasize the importance of opt-in, opt-out or required choice systems, they suggest the use of for instance opt-out systems and the use of grey lists instead of black lists (pp. 229–233). 356 See the book review of R.H. Thaler & C.R. Sunstein, Nudge: improving decisions about health, wealth, and happiness by Leonard (2008), pp. 356–360. It must be submitted that an important number of nudges echoes behaviourally informed regulation. The so-called information nudge for instance rests upon disclosure requirements, default rules and simplification. See more extensive on this point, on market failure nudges and on information-providing nudges as a natural corrective, Sunstein (2015), p. 427 and 435–438. 357 Ben-Shahar and Schneider (2011), p. 688. See also the critique of Marotta-Wurgler (2015), p. 66 and 70–73, who states that doing nothing about the failure of disclosure might not be desirable. 358 In the same vein Ben Shahar and Schneider argued that the autonomy rationales for mandated disclosure “assume that discloses and their circumstances, preferences, and choices are various. Given all this variety, how is a lawmaker to find language to guide each discloser to the disclosure most helpful to discloses?”, see Ben-Shahar and Schneider (2011), pp. 691 and 743. Also Schinkels, in his contribution to this book, points to German legal scholars that submitted that “where the state

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dividing the self359 has been to undermine the very idea of true preferences. If true preferences don’t exist, the libertarian paternalist cannot help people get what they truly want. He can only make like an old fashioned paternalist, and give people what they should want”.360 Similarly Bubb points out that for disclosure systems that move consumer behaviour in a specific direction to be sensible, “one needs a model of ‘normative preferences’ independent of the preferences revealed through individual choice. This is because the approach’s entire premise is that individual choice in the absence of the disclosure is not a reliable indicator of what is truly in the relevant individual’s (or, in some cases, the social) interest”.361 Yet, Bubb also argues that Ben-Shahar and Schneider risk making a mistake symmetric to that of the nudge advocates with their strong believe in choice design that improves wellbeing.362 In his view disclosures characterized as operating just through providing information and correcting factual misperceptions work. This type of disclosure “gives the impression that mandating disclosure is basically innocuous, and it seems to preclude any need for paternalistic judgments about what is in others’ true interests”.363 Therefore, Ben-Shahar and Schneider’s conclusion that “the quantity problem is generally unsolvable without making disclosures fatally simple-minded, incomplete, and

of being reasonably informed is not identified as status quo but as a future goal to be achieved via information obligations, there may be an opposing tendency to consumer education and the danger of paternalism” Möstel (2015), p. 908 e.s. 359 Thaler and Sunstein point out that inconsistent preferences explain why people smoke, eat and drink too much, or exercise and save too little. They illustrate inconsistent preferences via a selfmodel of intrapersonal conflict. This model is dichotomous with an impulsive, myopic Doer versus a farsighted, resolute Planner. 360 See the book review of R.H. Thaler & C.R. Sunstein, Nudge: improving decisions about health, wealth, and happiness by Leonard (2008), pp. 356–360. 361 See Bubb (2015), p. 1036. Also critical Hale Russell (2015), pp. 56–84 and Avishalom (2016), pp. 3–10. Also M.D. White disputes claims that paternalism of means can be meaningfully separated from paternalism of ends, and argues that modern paternalism does not respect people’s true interests but instead adopts a perfectionist or objective conception of well-being, see White (2016), pp. 36–37. In the same vein A. D. Steffen argues that a nudge requires an ex-ante value judgment, but facts and values are almost always inextricably entangled. He argues that the inherent normative choices must be made more transparent. See Steffen (2016), pp. 85–86. According to Alli et al. (2014), pp. 342–343, ‘nudging’ must be approached as a complementary tool of consumer protection. 362 Bubb (2015), p. 1023: “The right response to the important critiques of mandatory disclosure that Ben-Shahar and Schneider raise is not a presumption against disclosure but rather rigorous empirical assessment of which disclosures work and which do not, with an eye toward the pitfalls the authors document. About disclosure, there is still a great deal more to know”. 363 Bubb (2015), p. 1039. See also the very critical analysis of Hansen and Jespersen (2013), pp. 9–23. Also critical pointing at the three degrees of Nudge and their compatibility with other control devices, Baldwin (2014), pp. 835–844. Even C.R. Sunstein acknowledges that the central objective of nudging to influence choices in a way that will make choosers better off, as judged by themselves, raises normative, conceptual and empirical challenges, see Sunstein (2015), pp. 430–433.

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misleading” and that “the accumulation problem would defeat mandated disclosure even if individual overload issues could be managed”,364 should not be endorsed. Taking these critiques into account, it seems that both Ben-Shahar and Schneider and Thaler and Sunstein went too far in their respective denial of and believe in the advantages of information policies and mandated disclosures. The abandonment of mandated information disclosures without replacing them comes close to the point where every legislation or policy tailored to consumers and their protection would become redundant. It is therefore submitted in line with Thaler and Sunstein that rather than abandoning information models it remains worthwhile to investigate time and research in finding ways to provide consumers simpler and better information.365 Shahar and Schneider did not substantiate that each approach to mandatory disclosure would automatically be ineffective.366 However, unlike the paternalism proposed by Thaler and Sunstein this must be done without denying the limits inherent in any information policy and without ignoring the drawbacks of mandated disclosures. In this respect Oren Bar-Gill convincingly pointed out that ‘smart disclosure’ might be endorsed. He submits that even Ben-Shahar and Schneider themselves do not as such reject to strive for simple information as a better tool to protect consumers. They simply don’t find it reassuring.367 Oren Bar-Gill therefore proposes to inform consumers through scores, a specific form of ‘smart disclosure’. Scores are in his view one-dimensional summaries of one or more product features.368

Ben-Shahar and Schneider (2011), p. 746. “In any event, we need to abandon the idea that people’s autonomy is bolstered by supposedly empowering them to make choices through mandated disclosures” (p. 749). 365 See also on this point, Sibony and Helleringer (2015), pp. 209–233, who favour reform instead of revolution. 366 See also on this point Bubb (2015), p. 1041: Shahar and Schneider’s “analysis strongly suggests that presumptionless cost-benefit analysis of disclosure and its alternatives would lead to substantial repeal of existing disclosure mandates. But it may also lead to useful new approaches to mandatory disclosure, including through forms of summary disclosure (. . .) that (is. . .) based on realistic models of disclose psychology”. 367 “Several things impede simplification, and the cure for the ills of mandated disclosure is not merely ‘keep it simple’”, see Ben-Shahar and Schneider (2011), p. 744. They rather advocate peer ratings and expert advice (see pp. 746–747) and even for the most vulnerable consumers, to channel people’s choices by law, without mandating them. See however on this point Marotta-Wurgler (2015), pp. 71–72, who points out that individuals must also seek out ratings, rankings, scores, reviews etc., read them, understand them and act on them. They in other words suffer from the same problems and conflicts associated with disclosure. 368 The APR or annual percentage rate is for example a one-dimensional aggregator of the cost of credit. In the case of a cost score like the APR a consumer need to only understand that a lower score is better than a higher score. It also facilitates comparison-shopping among firms and products. See Bar-Gill (2015), pp. 75–82. In the same vein the results of an experiment conducted by Helleringer suggest that, from the perspective of the recipients of advice, problems of conflict of interest may not be as impossible to treat by means of mandatory disclosure as has been commonly suggested, see Helleringer (2016), pp. 153–163. 364

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Of course, also Oren Bar-Gill’s approach implies “that regulators designing these score-type disclosures must ensure that the score in fact provides a useful summary of the underlying information”.369 In doing so research outcomes of psychological or interdisciplinary research must be taken into account. Scholars on a regularly basis370 emphasize the psychological aspects of disclosure pointing at new findings from research in cognitive psychology.371 Such psychological or interdisciplinary research helps to find out what information consumers effectively need for making better decisions.372 Some reporters submit with regard to the health sector (tobacco products, medicinal products and foodstuffs) that the particular knot between labelling and advertising calls a better synergy between lawyers and social sciences experts, as their interplay have often been used by businesses to misinform consumers.373 Many of the proposals to overcome some of the preceding drawbacks of information requirements and to secure that information disclosures effectively empower consumers374 point in the same direction. The key words are here: keep it short and simple,375 pay more attention to the presentation of information and standardise

369

See Bar-Gill (2015), p. 76. Furthermore, Bar-Gill is also in favour of full disclosures, but full disclosures that are designed for consumption by sophisticated intermediaries, rather than directly by consumers. These intermediaries would then digest the disclosure and use it to provide beneficial advice for consumers (pp. 81–82). This requires another type of mandated disclosure so as to allow intermediaries to give consumers adequate advice. 370 See a.o. Trzaskowski (2016), p. 27; Purnhagen and van Herpen (2014); Duivenvoorde (2014). Also Schinkels for instance indicates that insofar as the abilities of average consumers are crucial, it is not a priori impossible to take into account empirical findings of behavioural psychology as regards systematic errors and biases in choices made by average “humans”, see the contribution of Schinkels to this book. 371 See Sibony and Helleringer (2015), p. 219: “Throwing out the ‘disclosure baby’ with the bathwater would not be a good idea”. For a plea to insert insights from neuroscience and behavioural knowledge in unfair commercial practices law, see Sibony (2013), pp. 496–501. According to the author those insights can help to produce acceptable generalisations that will allow courts to take better account of the context in which consumer decisions occur (p. 502). 372 More particularly with regard to warnings and information requirements in the field of product liability, reference is often made to the popular so-called C-HIP (Communication, Human Information Processing) model. This model distinguishes the four major phases of information processing, namely from (1) attention capture and maintenance, via (2) comprehension and memory, and (3) attitudes and beliefs, to (4) persuasiveness, see Wogalter et al. (1999), p. 864 and Wogalter (2006), p. 365. See extensively on this subject, Pape (2012), p. 473. See also on the LC4MP-model, Mangold (2017), pp. 75–87. 373 See on this particular point and the recent tobacco case which is pending before the Canadian Superior Court, the contribution of Arbour to this book. 374 See e.g. Better Regulation Executive and National Consumer Council (2007), p. 8, on maximising the positive impact of regulated information for consumers and markets. “Information can help consumers make decisions which work for them and enable them to take responsibility for making these choices. Regulated information can be a powerful tool in facilitating choice, especially when given to consumers at the point at which they make a transaction or decision”. 375 See on this point, Johnston et al. (2015), p. 26. The complexity and technicality of the language (official or legal-speak), the layout, the small print, dense text format and the length of the

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information so as to make information more comparable.376 Reduce the length and content of disclosures to avoid information overload. Present information in a way that consumers want to read the information377 and in a way that is meaningful for consumers and aids their decision making.378 The latter means that information is best presented in a form that people can relate to, e.g. put information in the context of everyday live so as to enhance the understandability of the information.379 In other words, consumer information should be framed and contextualised in a way that points consumers towards real-life implications.380 Further, information should be correctly timed.381 Consumers must have the information at hand for the decisions they are actually making. Consumers must be presented with the information and only the information that they need at the moment when it is relevant since welltimed information is easier to understand and more inviting to read. It may then be concluded from the foregoing that reforming the information policy and its inherent mandatory disclosure, taking the multiple critiques seriously is to be preferred and a better way forward than straightforward abandonment of the information paradigm which is inextricably linked with the underlying economic order. Building further upon these research outcomes, consumers arguably may well want to make more responsibility themselves with the help of information about core elements, such as price, characteristics of goods and services, and core consumer rights.382 Although further research should be done,383 it could be envisaged to information provided impact on the comprehensibility of the information. Techniques to make information more accessible and comprehensible are the use of headings, highlighted key words, summaries, tables of contents etc. 376 See on this point, Johnston et al. (2015), p. 27. Comparative information contributes to transparency; it enables consumers to compare the legal situations and places him in a position to decide whether or not to purchase or to enter into a contract. Comparative information also has a competitive function in that it stimulates competition. Also Helberger et al. (2013), pp. 36–50, refer to the ultimate goal of consumer information which is to enable consumers to make informed choices: “To do so, consumer information regarding the different goods and services must be comparable. This again requires a certain level of standardization not only of the content but also of the form in which consumer information is supplied”. 377 If well designed, graphs and other visual representations can be beneficial in assisting comprehension. How information is formatted, its order, use of numbers, use of visual illustrations all contribute to the readability and understanding. See also Ayres and Schwartz (2014), p. 549. 378 The way the information is presented can have a significant impact on how consumers perceive and react to it. 379 Context can convey meaning and enables information to be more easily processed. 380 See on this point, Johnston et al. (2015), p. 22. Mandated disclosures are most easily remembered if a consumer can place them in some kind of context or a meaningful story. See also on the problem of remembering information, Ben-Shahar and Schneider (2011), pp. 719–729. 381 See also on this point, Helberger et al. (2013), p. 36:50. 382 See more extensively on this point, Straetmans (2016), pp. 199–210. This approach has also been endorsed recently by other Belgian scholars, see Terryn (2017), pp. 68–69. 383 For instance on communication in the digital sphere where consumers even being in possession of adequate literacy skills would still not have the resources to consciously process each and every

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require traders to provide consumers with standardized short and simple information about the core issues, separately from the mandated extended disclosure.384 Consumers might rationally leave the detail of standard form contracting be regulated by the law. That way, presumably more consumers would be informed of the core issues relating to the contract they are willing to engage in.385 Yet, the full disclosure of information must remain available for consumers in want of that additional information. Although most of the consumers are not going to read the long, detailed disclosure statements, the full disclosure remains important for those consumers who read the disclosures in a later stage but also, more importantly, for third parties or the judge who, for example when a conflict has arisen, must assess the rights of the contracting parties. So, even when full disclosure is basically useless for a large number of consumers, it remains important in the legal process, especially with regard to enforcement of e.g. consumer contracts.386 A recent behavioural study on behalf of the European Commission’s DirectorateGeneral Justice and Consumers, produced under the Consumer programme 2014–2020, demonstrates that shorter and simpler information could have a positive impact on the consumer’s readership of contract terms and conditions.387

piece of communication they are confronted with. See on this issue, Siegert et al. (2017), pp. 1–10. And for more about unconscious processing of commercial information, see R. Mangold, “Human processing of commercial information in digital environments”, in Siegert et al. (2017), pp. 75–87. 384 The twist of paternalism behind this proposal seems unavoidable. If we accept that the regulator is capable of imposing mandated disclosures, we inherently accept that he knows to a certain extent better than consumers what the core information should be to make decisions and what average consumers exactly need to make decisions well. Note also that Radlin (2015), p. 61, does not view this as ‘paternalism’. “Instead it is a recognition of the value of civil society to everyone, and to everyone’s liberty”. 385 The focus in a number of national reports on prominence of certain (core) standard clauses and avoidance of surprising clauses or clauses which limit the rights of consumers further point in that direction. 386 See more extensively on this issue, Straetmans (2016), pp. 199–210. 387 See Elshout et al. (2016). The Key findings of the study are that shortening and simplifying the terms and conditions results in improved readership of the T&Cs, a slightly better understanding of the T&Cs, and a more positive attitude towards the T&Cs. See already on the impact of simpler wordings and sentence structure on the intelligibility of a text, Masson and Waldron (1994), pp. 67–85. Also Schaub explores the question whether and how EU-information requirements can add value to consumer protection. He first recalls that information exchange is the basis of any contract, and that the general contract law imposes several information requirements (p. 32). However, these are mostly implicit, indirect and open-ended which makes it difficult for consumers to proof that the duty to inform of the offeror was violated. He consequently concludes that explicit and mandatory information requirements are capable of adding value where they are considered in relation to the general rules of contract law, which they strengthen, especially when the burden of proof with regard to the information provision is shifted to the trader. That way specific mandatory information requirements assist consumers in enforcing remedies under the general rules of contract law (p. 43). See Schaub (2017), pp. 25–44.

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However, any proposal made in this context must be accompanied by a thorough cost/benefit analysis.388 The precise cost a reform entails for market participants is a convincing argument, especially since costs imposed on businesses are likely passed on to consumers in commercial relationships. Also proposals to adjust the benchmark of information rules towards more specific groups of vulnerable consumers must be assessed in this light. Despite all critiques based on the illiteracy, innumeracy and lack of salience of groups of consumers, one should be very careful in lowering the benchmark. When set too low, the very existence of consumer information legislation might be called into question.389 In the same vein, it seems hardly possible to avoid legal speak or legal concepts in disclosure mandates or contract terms as it would render the task of judges more difficult, forcing them to take decisions in a ‘vacuum’. This however should not refrain scholars to avoid legal speak whenever possible, especially in the core information that would be made available separately to consumers in a more standardized form. Despite the many critiques on the information model in its current form and as much suggested remedies, recent legislative developments demonstrate that the European legislator is not yet fully affected by them.390 The same can be said from the national legislators. In most of the reported countries there is no or little evidence of in depth moves to deal with the problem of information overload or risks of disinformation as a result of the manner in which the information is provided or its quantity.391 For instance, the UK Government agencies acted generally in favour of information requirements without significant critical review of the risks of

T.B. Gillis criticizes the way disclosures are tested in the financial sector. She concludes that the evaluation of the methodology of regulatory testing requires in the first place a clear understanding of how regulators view the goal of consumer financial regulation and the problem to which regulation needs to respond, see Gillis (2015), p. 40. See already on the costs of information disclosures, Hadfield et al. (1998), pp. 141–146. 389 Shahar and Schneider’s adherence to peer review and expert advice seems to indicate that they too start from the idea that consumers to a certain extent are capable of processing information. European countries experimented in the seventies with consumer law that protected the consumers outside the market place. It turned to be the wrong cure for the disease; see for a critique on those consumerist models, Straetmans (1998). Recent developments in e.g. Japanese consumer law confirm that consumer policy “should not be limited to the mere protection of consumer interests but should rather aim at operating a sound market system in the context of state regulation too”, see Nakata (2016), p. 505. 390 In contrast with the Obama Administration in the US and the Behavioural Insights Team in the UK, the EU only timidly embraces behaviourally informed regulation so that as of yet behavioural insights are not formally integrated into EU policy-making. Nevertheless the Staff Working Paper on Consumer Empowerment in the EU, SEC(2011)0469 of 22 May 2012 encourages national courts and authorities to take account of the actual state of scientific knowledge and points out that this includes the most recent findings of behavioural economics (see p. 32). 391 See e.g. the contributions of Namyslowska and Jablonowska; Selucká, Staviková Reznicková and Loutocký; Bercea and Caramidariu; Schinkels, Piazzon (with regard to financial services), Nozawa (who nevertheless refers to recent critical studies on the functioning of information models) to this book, and Yu Wu and Low based on their responses to the questionnaire (pockets of policy discussion on incorporating behavioural insights, but no impact on legislation). 388

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information overload. Hence, there is no specific legislation in the UK that deals with the problem of disinformation as a result of an overload of information.392 In contrast, we can see an increasing awareness in Ireland of the problems associated with the European information model and with how consumers digest amounts of information. In this regard, the Economic and Social Research Institute published an interesting study,393 emphasizing the potential benefits of independent price comparison sites and advocating that product ranges and descriptions should be kept simple. Some hesitance to address the issues relating to information overload may be due to the risk of introducing inflexible standards luring. It is reported for instance that some Polish courts are reluctant to accept empirical evidence as regards consumers’ behaviour. In their view the average consumer benchmark remains a normative model which is construed in abstracto on the basis of the judges’ own experiences.394 Especially in Singapore the risk to impose too strict information obligations on businesses with the result of overburdening them is a genuine concern. Also the enduring belief in the competitive hand of the market seems to play a very important role which hampers new regulatory solutions in this domain.395 Therefore, in Singapore the emphasis is placed on consumer education with the relevant authorities developing a variety of initiatives such as web-portals, publications of informational pamphlets informing consumers of their rights or other important factors they ought to take into consideration, and roadshows across the country.396 In the same vein the Polish public authorities and non-governmental organisations have taken a variety of initiatives (targeted campaigns addressed to specific groups of consumers, online tools, professional hotlines,397 etc.) to increase the consumers’ awareness of their rights. Also in other reported countries several initiatives are taken

392

See the contribution of Cartwright to this book. PRICE Lab: An Investigation of Consumers’ Capabilities with Complex Products, study published in May 2016. Available at https://www.esri.ie/pubs/BKMNEXT306.pdf. 394 See the contribution of Namyslowska and Jablonowska to this book. Some legal scholars in France evaluate the current focus on information disclosures as too consumerist, turning average rational consumers into non-emancipated minors. Although they recognize that a certain formalism protects consumers, whereas too much formalism oppresses and spoils them. See more on this point in the contribution of Piazzon to this book. 395 Based on the responses to the questionnaire from professor Gary Low, Singapore Management University, [email protected]. 396 Idem. 397 See also in the financial services sector, the introduction of a toll-free telephone number for consumer information and increased information on ADR to solve problems in Romania, and on this subject the contribution of Bercea and Caramidariu to this book. 393

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to improve the education and literacy of consumers,398 although their effectiveness is openly questioned.399 Despite the multiple initiatives to address problems relating to information overload and to educate consumers, it must be concluded that there is in all of the reported countries still a long way to go.400 As for some of the member states401 of the European Union there seems to exist a tendency to await further initiatives on this subject from the European legislator, especially since regulation would be required in a context which is increasingly characterised by (targeted) full harmonisation. Yet, this tendency did not withhold some of the reporters of EU member states to suggest that information overload potentially could qualify as an unfair commercial practice, under the general clause in the UCPD, or by application of the prohibition of aggressive practices (analogous to spam).402 However, most of the European reporters conclude that it will be difficult under current European legislation to consider disinformation as a result of a trader’s compliance with mandatory disclosure rules, an unlawful practice as such.403 In a number of reported countries the excessively detailed rules on advertising and information are increasingly criticised as counterproductive if they lead to constantly extended lists of information catalogues404 or to the total opposite, “Rather than focussing on law, it seems that consumer confidence is more likely to be enhanced by educating consumers about being a consumer — that is to make them much more aware of how different sectors operate, what to expect, and what to look out for. Consumer education is one of the Treaty-based objectives of EU consumer policy (Article 169 TFEU) and there are important initiatives in place, but it seems that the EU focusses too much on rights and not sufficiently on practical action”, see Twigg-Flesner (2016), p. 201, who further refers to the ‘Consumer Classroom’-website: http://www.consumerclassroom.eu. 399 See e.g. the contribution of Kelly to this book. Also Bercea and Caramidariu refer to complementary educational measures in Romania, but there is no evidence about the effectiveness of those measures. In the same vein, Benacchio points to a number of initiatives in the financial services sector in Italy, but casts some doubt about the neutrality of those educational measures (as the financial sector seems too involved itself). He also seems in favour of shifting the debate towards the education of professionals in their relationship with consumers. Nozawa on his turn emphasizes the importance of consumer education in Japan and refers to legislative initiatives to that aim, but meanwhile also recognizes that it will be very difficult to educate young consumers via specific courses in schools. 400 In Brazil consumer protection policy is still very much focused on promoting healthy consumption among Brazilians so that information disclosure initiatives are mainly found with regard to tobacco products, alcoholic beverages, certain foodstuffs and medicinal products. See the contribution of Donato Oliva to this book. 401 See e.g. France, Poland, Italy etc. 402 See for instance the contribution of Namyslowska and Jablonowska, Bercea and Caramidariu, and Schinkels to this book. 403 See e.g. the contributions of Namyslowska and Jablonowska; Schinkels and Piazzon to this book. Also the Belgian practice points in that direction, see Straetmans (2016), pp. 199–210. The analysis may take a completely different turn if businesses mix voluntarily disclosed information with mandated disclosures and thereby deliberately confuse consumers. 404 Specifically with regard to complex contracts it is questioned whether an ever increasing amount of information would achieve a more balanced B2C-relationship. See particularly on this point, the 398

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general image campaigns.405 However, this line of thinking is also contradicted as it would provide liberalists an too easy argument to reduce constraints imposed on businesses.406 In that regard the value of a limited set of important information particulars disclosed in the appropriate time and form deserves further investigation.407 In that respect Schinkels point to another important development in average consumer skills. He rightly states that “any consumer-targeted education approach will not help where the most fundamental skill for processing written information is missing. According to a survey performed in 2016,408 around 19 percent of the tested German fourth graders (aged around 10) did not have the reading skill to understand the general context and the storyline of a text as a whole (Kompetenzstufe III)”.409 Also in other member states of the European Union, for instance in Belgium, this competence is in decline according to the most recent surveys.410

contribution of Hyvönen to this book who refers to investment services and submits that the critique stems from a Finnish (or a Nordic) consumer law perspective where the model forms set by the EU seem quite formalistic with low influence on the consumer’s actual knowledge on the sold product or service. She further observes that in Finland, the duty to disclose is already quite vast in consumer contracts and the seller has a far-reaching responsibility regarding the comprehensibility of the information (e.g. his pedagogical duty; see already above). Karampatzos and Kotios point also to the marginal utility of excessive information (see his contribution to this book): the added value of a new information particular diminishes when compared with the invested time and energy-cost to accumulate and assess the additional information. Furthermore, an intricate torrent of technical information may overwhelm the consumer who often lacks time, experience and knowledge to understand and properly evaluate the information, especially in the case of financial services. Piazzon stresses that the accumulation of the general pre-contractual information duty and the mandatory disclosures, absence of contradiction, lead to an overload of information; see his contribution to this book. 405 See e.g. the contributions of Hyvönen and Namyslowska and Jablonowska to this book. 406 See especially on this point, the contribution of Piazzon to this book. 407 See Straetmans (2016), pp. 199–210. See also the contribution of Karampatzos and Kotios to this book: maximum information is not equal to optimal information. See also the contribution of Benacchio who is in favour of highlighting essential information per domain. Baysal on her turn advances that the consumer is to a large extent unable to understand the multiplicity of information which is disclosed to him. Hence, he is in favour of simplified information that is made easily accessible for consumers. Piazzon argues that limited information to consumers in a pre-contractual stage and detailed information to consumers in a later stage, notably after the conclusion of a contract, may be efficient only in those circumstances were the consumer has been given a right to withdraw from the contract, see the contribution of Piazzon in this book. 408 IGLU (2016), p. 15. 409 See the contribution of Schinkels to this book. 410 The OECD PISA-study of 2015 (worldwide assessment of 15-year-old students in reading, mathematics and science) indicates that 17% of Belgian secondary school students fail to attain the basic competences, see https://www.oecd.org/pisa/pisa-2015-results-in-focus.pdf.

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8 Conclusion 8.1

Economic Orientation of Consumer Models: Concept of Average Consumer

The analysed legal systems start from the assumption that contracting parties are more-or-less in an equal bargaining position and enjoy the freedom of contract. New market circumstances (mass products, standardised contracts) made increasingly clear that consumers could no longer be considered in an equal position with traders. Consumer protection rules respond in the first place to failures that occurred in the market economy (information asymmetry) and provide a correction to restore real equality between trader and consumer. Hence, consumer protection measures follow the economic orientation of the legal system which they seek to correct for the benefit of the consumer seen as a rational, benefit-maximising creature. A fully informed consumer takes purchase decisions that are efficient. This so-called information paradigm based on that assumption has made its way into consumer protection models and is there to last. Beside increased information requirements in line with the economic pace of the market the conviction grew that consumers must be considered weaker parties in some circumstances, deserving extended protection (e.g. off-premises contracts, distance selling, e-commerce). More recently consumers are increasingly approached as the weaker party by definition which justifies more intrusive measures (withdrawal rights, nullity of unfair contract terms, consumer guarantees) enhancing consumer’s confidence. Confident consumers411 consume across borders and contribute to economic growth. It follows that consumer models in markets that become more global can no longer be reduced to pure corrections of the information asymmetry that occurs. Market fairness towards consumers is not necessarily linked to a demonstrated inferior information or even bargaining position of the consumer, but increasingly connected with the assumption that the consumer is a weaker party as such given the economic environment in which he makes transactional decisions. Consumer models adapt to the new market circumstances but, unlike consumerist movements

411

For a critical view on this concept and the greater uniformity of legal rules it would entail, see Twigg-Flesner (2016), pp. 183–202. According to his analysis the ‘European confident consumer’ has the following characteristics: “First, a confident consumer is one who wishes to take advantage of the single market and is therefore, at least in principle, a consumer interested in cross-border shopping. Moreover, a confident consumer is aware of consumer protection law, in particular of the law in their jurisdiction, and also aware of the fact that there are differences in the laws of the various Member States. Further still, the confident consumer seemingly puts a great deal of weight on the law — for (. . .), ensuring that there are no (significant) variations in the consumer laws between the various Member States will boost consumer confidence. Finally, it seems that a confident consumer is also a consumer who will benefit from information to help him make the right decision about which goods and services to purchase, where, and on what terms” (pp. 185–186).

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in the seventies that sought to protect consumers ‘outside the economic market’,412 modern consumer models retain with varying degrees of intensity their economic orientation. The consumer defined as “any natural person who is acting for purposes which are outside his trade, business, craft or profession” remains the generally accepted common core that underpins the analysed consumer models. In most of the analysed countries a normative, not empirically tested ‘average consumer’ serves as the more concrete general benchmark for the assessment of the adequacy of information disclosures and the unfairness of commercial practices. This benchmark serves the underlying economic orientation of the consumer models but seems flexible enough to accommodate protective needs.413 Courts in and outside the EU quite often devise ways to protect more vulnerable consumers than the normative rational standard that would normally equate with the average consumer. Hence, the consumer benchmark evolves from a harsh, purely rational person that is deemed to internalise all the information that is disclosed in the market to a person that in some circumstances is allowed to act less rational than the normative standard. In a way courts are forced to tailor the abstract benchmark of the rational, informed average consumer to new legislative and economic circumstances, and increasingly take empirical circumstances into account to assess the unfair character of information, marketing practices and contract clauses.414 It explains the degree of variation found in courts in and outside the EU notwithstanding the common normative benchmark. Yet, there are also common traits. In most of the reported countries underage people like children and teenagers, elderly people and people suffering from a particular disease are expressly recognised as particularly vulnerable groups of consumers that deserve specific protection. However, none of these variations so far undermines the overall economic orientation of the consumer models, nor do they lead to the rejection of the average consumer as the general benchmark.

412

They often did so in advancing an opposite normative benchmark, namely that of the gullible consumer (in all circumstances). 413 Some scholars advocate more fundamental reforms of the EU’s consumer policy; see for instance Twigg-Flesner (2017), p. 185, who criticizes the coupling of consumer protection to the internal market objectives and concludes: “The “average consumer” concept bears little resemblance to reality, and it is becoming increasingly difficult to justify it as a useful benchmark for consumer legislation. Research on consumer behaviour and psychology tells us a lot more about the factors which influence consumers, which have weakened the credibility of the average consumer benchmark” (p. 189). 414 Open legal norms like general prohibitions of misleading advertising, unfair market practices and unfair contract terms further contribute to this tailoring.

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Pre-contractual Information: Transparent Contract Terms—Misleading Practices

A grand variety of rules exists as regards pre-contractual information. In the European Union and in Japan a well-developed general pre-contractual information duty with an important number of information particulars exists. In other countries like for instance Brazil pre-contractual information is connected with objective good faith, whereas Turkish and Singaporean law have no general information duty but a number of information requirements in specific legislation. Taiwan opted for a consumer preview period which allows him to read the contract and an ex ante control of standard contract terms which may result in mandatory clauses automatically included in the contract. Countries with a pre-contractual information duty also impose transparency requirements. Pre-contractual information must be clear, intelligible and comprehensible. Again the average consumer, referred to above, serves as the benchmark. Transparency requirements incorporate in general two obligations. The first relates to the form and the presentation of the information which must be easy to read.415 The second refers to the content of the information and its comprehensibility. The lack of clarity of the requirements and the absence of further guidance of legislators have been criticized in the national reports. It has led national courts to undertake efforts themselves to increase transparency. At some occasions the legislator comes to their help, but the analysis shows that no overall conclusion as to readability or intelligibility of information can be deduced.416 In general it may be concluded that further guidance is needed from the legislator absence of which courts feel obliged to develop their own transparency standards based on the particular circumstances of the case. With regard to the form obligation national courts sometimes refer to sufficient font size of contractual arrangements that may not be significant smaller than the surrounding texts and not be placed in sections that give the impression of an insignificant character. In Ireland the Irish Sales Review Group recommended the 415

This can be specified in terms of print size and contrast between font size and background of the information. For instance the French Court of cassation held that the use for restrictive clauses to the offer of a print size that was 12 to 25 times smaller than the other mentions in the advertising amounts to a misleading commercial practice. Also the medium used affects the readability of the information. Thus the Finnish Supreme Court pointed out that manner of marketing had not been clear or easy to understand when the price of the tickets was only given in unclear small print in the advertisements and even not verbally expressed in the television commercials. Recently also the CJEU seemed to conclude that the use of small print will be more harmful in TV adds than in for example an advertisement in a journal. It held that the time available to the consumer to assess information provided to him in a television advertisement is limited whilst the average consumer (reader) will have sufficient time to read the integral advertising (See Canal Digital Danemark case, cited above). See more extensively on this point Straetmans (2018). 416 The following parameters are used: exhaustiveness, accessibility, correctness and clarity of the information; the easiness to understand, the logical arrangement, the legibility (absence of technical, complex constructions) and the visibility of the information.

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use of a minimum ten-point font size in plain typeface against a contrasting background and a larger font size if the target group of the information is for instance elderly people. With regard to the comprehensibility of the content of the information a remarkable evolution takes place in the European Union. The CJEU has given some very strong guidance on what is required for terms to be plain and intelligible. In doing so the CJEU strengthened the bond between pre-contractual information on the one hand and the unfairness of contract terms on the other hand, which it considers as intertwined. In its recent case law the CJEU held that the requirement of transparency should not be restricted to mere formal and grammatical intelligibility but should extend to the precise content of the terms. According to the Court, the consumer must be informed in such a manner that he is in a position to evaluate on the basis of clear, intelligible criteria the economic consequences for him which derive from a term. More specifically, the consumer must be provided with all the information likely to have a bearing on the extent of his commitment so that he is enabled to estimate in particular the total cost of his contract. Furthermore, consumers must be expressly informed of their rights that flow from mandatory national law of which they are beneficiaries, even though they are deemed to know their national legislation. Hereby the fundamental importance of pre-contractual information for consumers is emphasized once again since consumers decide on that basis to be bound by a contract. This evolution demonstrates that the CJEU seeks to provide national courts guidance for the assessment of pre-contractual information via the interpretation of the legislative transparency principle to which contract terms are subject. That way the vague concepts used by the legislator are filled in although it could be argued that legislative guidance,417 albeit in the form of an interpretative communication, would be better to streamline the broad discretion that still exists for national courts in this domain. In that regard it is worthwhile mentioning that some national legislators, irrespective of the civil law rules relating to consumer’s consent to contract terms, require businesses to make core contract terms prominent to consumers. In the UK for instance a term is prominent if it is brought to the consumer’s attention in such a way that an average consumer would be aware of it. Also Finnish Law requires onerous and unusual terms to be specifically highlighted to the other contracting party. In Taiwan the Consumer Protection Act requires businesses to explicitly highlight the content of their standard terms to consumers and to disclose important information about the precise legal content (legal consequences and rights and obligations) of a limited number of issues dealt with in the standard terms, irrespective of whether In its report on the fitness check of EU marketing and consumer law The European Commission recognizes that the length of standard terms and conditions is found to be a considerable obstacle for consumers in identifying unfair terms. It also indicates that it is working with all stakeholders on voluntary principles for better presentation of both standard contract terms and pre-contractual information (see Report of the Fitness Check of EU Consumer and Marketing Law 2017, pp. 78 and 86).

417

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the term is a core contract term. Also Chinese law imposes a duty on businesses to explain standard terms vital to the consumer interests. Also the misleading character of pre-contractual information may have an impact on the assessment of the unfairness of contract terms. The assessment of the misleading character of a commercial practice requires in all reported countries a synthetic, comprehensive approach. It presupposes an overall analysis taking into account the relevant features and circumstances of a commercial practice. Decisive is the general impression of the practice made on the average consumer and whether the practice affects or is likely to affect in a negative manner the transaction decision of this consumer. It follows that also the manner in which the pre-contractual information is provided to the consumer may have an influence on the misleading character of the commercial practice and consequently the unfair character of contract terms. Food (and medicinal products) has been the subject of more intensive regulation across the world. This regulatory context includes very detailed labelling requirements so that national divergence is merely reduced to the appreciation of the misleading character of information on the product label. An interesting technique to make certain information more easily digestible for consumers is the Multi Traffic Light System introduced on a voluntary basis in the UK. We further can see that in most of the reported countries case law on transparency is centred to the assessment of form elements like print size and not so much focused on the prominent character of information about core or onerous terms or their precise content, save in straightforward cases where important contract terms are hidden away or consumers deliberately deceived by complex, technical or legal constructions or contradictory information.

8.3

Financial Consumer

There exists a certain tendency within the European Union towards rationalisation of information about financial services that is to be given to consumers. However, as the provided information remains highly technical, the shift towards simplification of information has not yet gained much ground. Despite the efforts to reduce the number of information particulars, e.g. at EU-level through key information documents, legal scholars continue to criticize the amount and technicality of the information. Meanwhile, in most of the reported countries the appropriate provision of information concerning financial products is complemented with careful product design (ex ante-controls) and suitability assessments of consumers. It follows for instance that a credit institution may not offer a credit to a (vulnerable) consumer unless the consumer has the capability to pay off the debt. Furthermore consumer education is often seen as key to overcome the current informational problems, but legal scholars remain sceptical.

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Digital Consumer

The new European General Data Protection Regulation imposes stricter standards to protect consumers. It requires an opt-in consent by the data subject (user/consumer) to the processing of his or her personal data for one or more specific purposes. It remains to be seen whether the regulation can live up to all the consumer’s expectations. Quite in contrast, the other reporting (non-European) countries seem to have no extensive legislation concerning personal data protection. While most of the countries dictate some rules about how consumers must be informed of the collection, use and disclosure of personal data, they most of the time do so without imposing any obligation to obtain consent from the consumer. The existing legislation in Singapore and Taiwan is the exception to that rule. In those countries the collection, use and disclosure of personal data is subject to the consumer’s consent, be it that “a consumer is deemed to have given his consent if he voluntarily provides personal data to the businesses and if it is reasonable that he would volunteer that data under the circumstances”(Singapore) or that consent is “inferred from the consumer’s absence of raising objections after being given substantial information about the use, processing and collection of personal data”(Taiwan).

8.5

Overload of Information: Behavioural Critiques—Which Way Forward?

In a number of the reported countries the excessively detailed rules on advertising and information are increasingly criticised as counterproductive if they lead to constantly extended lists of information catalogues. However, this line of thinking is also contradicted as it would provide liberalists an too easy argument to reduce constraints imposed on businesses. The multiple critiques and compelling analyses of behavioural scientists make it difficult to leave the existing consumer information models as they are. All the more since most of the national reporters, especially those from the EU countries, conclude that it will be difficult to consider disinformation as a result of a trader’s compliance with mandatory disclosure rules, an unlawful practice. The national legislators and the European legislator alike still seem not to be fully affected by those critiques. In most of the reported countries there is no or little evidence of in depth moves to deal with the problem of information overload or risks of disinformation as a result of the manner in which the information is provided or its quantity. Far from stating that no initiatives are taken in this respect at both national or EU-level an overall approach to address the shortcomings of the consumer information models is lacking. For instance initiatives at EU-level to rationalise information are rather piece meal and mainly focused on financial services. Despite the ‘fitness check’-evaluation of consumer protection directives at EU-level demonstrated

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significant problems with consumers’ understanding of standard terms and conditions, the European Commission, in response to these problems, confines itself to investigate ways to improve the presentation of mandatory information requirements and the standard terms and conditions. This could eventually lead to a set of uniform key principles if the self-regulatory approach proves unsatisfactory.418 Furthermore, as regards the simplification of rules, the European Commission’s ‘fitness check’-evaluation has established that there is limited potential for reducing some of the information requirements (sic). Further legislative guidance in and beyond the EU is often lacking and by necessity filled in by courts. As a result, the CJEU strengthened the transparency standards of information. However, legislative guidance on how to apply the rather vague principles in the existing legislation, consolidating the approach of the CJEU, could help make it easier to understand and apply the transparency requirement.419 It has been argued above that there is no reason to abandon the consumer information model as such nor is there any reason to straightforwardly abandon the normative average consumer benchmark used in those models. Conversely, proposals to adjust the normativity of the overall benchmark are generally welcomed.420 One cannot deny the economic orientation of legislation tailored to consumers and the fact that legislation is often limping behind economic developments. But rather than abondoning the model, the new economic and legislative environment in which consumers operate necessitates refinement of the information model and its benchmark. To that aim research outcomes of psychological or interdisciplinary research421 must be taken into account since they can help to find out what information consumers effectively need for making better decisions. Building further upon these research outcomes, consumers arguably may well want to make more responsibility themselves with the help of information about core elements, such as price, characteristics of goods and services, and core consumer rights. Although further research should be done, it could be envisaged to require traders to provide consumers with standardized short and simple pre-contractual information about the core issues and only the core issues,422 separately from the mandated extended 418

Report of the Fitness Check of EU Consumer and Marketing Law (2017), p. 86. See on this topic, Report of the Fitness Check of EU Consumer and Marketing Law (2017), p. 86. 420 Proposals to adjust the benchmark of information rules towards more specific groups of vulnerable consumers must be addressed in this light. Despite all critiques based on the illiteracy, innumeracy and lack of salience of groups of consumers, one should be very careful in lowering the average benchmark (see however for a plea in that direction, Duivenvoorde (2014), pp. 213–224, who at the same time indicates that the German approach, well-known within the EU for adhering to a lower consumer benchmark, is over-protective. When set too low, the very existence of consumer information legislation might be called into question and consumerist paternalism luring. Also the precise cost a reform of this size entails for market participants is a convincing argument, especially since costs imposed on businesses are likely passed on to consumers in commercial relationships. 421 For instance linguistic studies on simplification and readability and psychological studies on human processing of commercial information in digital environments etc. 422 It must be noted that core issues and core terms of contracts are not (necessarily) the same. 419

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disclosure where additional voluntary information could be provided. Also the merits of a limited set of information particulars disclosed in the appropriate time and form (differentiation between pre-contractual information and information after the conclusion of the contract) must be further investigated. In that regard, interesting initiatives taken at national level deserve further attention. In some of the reporting countries there exists already an obligation on businesses to make some information prominent, that is to bring certain key information to the attention of the consumer. This requirement to inform consumers about important contract (core and others) terms prominently is worthwhile pursuing. In this regard, also reasonable consumer expectations could gain weight, as emphasized in some of the national reports. With respect to food characteristics the Multi Traffic Light System is interesting. Also the multiple warnings which result from the codes of conduct in some of the reported countries and which focus on the manner in which key information elements are communicated might be endorsed. Technological developments place this debate in a new context. Within the digital market contexts recent initiatives concerning layering of information with the use of pop-ups and hyperlinked texts and specific prohibitions of excessive use of hyperlinks in an effort to increase the reader-friendliness of information could be helpful. The use of pop-ups and hyperlinked texts ensures that the most important information for the consumer is provided upfront in a form of summary disclosure. It allows consumers to have more easily and more conveniently access to information and to retrieve in function of their specific needs a broader range of information. Also the application of the CARE-principle to and the development of digital comparison tools could contribute to a better insight in market developments. Enhanced comparability on the basis of essential key elements could further contribute to the effectiveness of information requirements. Furthermore, the multiple initiatives in the reported countries to educate consumers may be welcomed, but instantly urge to realism. They are often quite costly, mainly function on a purely voluntary basis and are sometimes used to stifle other initiatives to improve the effectiveness of consumer rules. Furthermore, it cannot be denied that any consumer-targeted education approach will not help where the most fundamental skill for processing written information is missing. In some of the EU countries these skills of average teenage consumers is according to recent surveys in strong decline. The foregoing analysis demonstrates that new initiatives to improve the consumers’ understanding of information disclosed in the market is complex and must take full account of the legal and economic context wherein transactions between businesses and consumers take place. Therefore the search for improved consumer information will constitute an ongoing balancing exercise between rationalisation, simplification and timing of information. An increased openness from legal scholars towards revealing insights from behavioural sciences may shed new light on the debate, especially on how consumer law and policy could be re-shaped to reflect more accurately the way consumers really behave, rather than how they ought to behave on the basis of a purely rational consumer model or conversely according to third parties who know better.

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However, zest for action may not detract from the important cost factor. All modifications made to the existing model must therefore be subject to a careful impact assessment, including an assessment of the costs of introducing new information obligations on top or in place of the existing ones.

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Part II

National Reports: European Union

Information Obligations and Disinformation of Consumers: English Law Report John Cartwright

Abstract Protection of the consumer in English law is generally by legislation, not through the common law (judge-made law) which has developed no general protection for consumers, and no general duties to provide information, although some common law rules can be applied for the benefit of consumers or (in general) weaker parties. Legislation on consumer protection is a patchwork of individual provisions, targeting particular concerns, some of purely domestic origin, others designed to implement EU Directives. The definition, including the characteristics, of the “consumer” to be protected varies according to the particular legislative protection. Information duties are imposed on traders most generally in the contexts of off-premises and distance contracts for the supply of goods, services or digital content, but there are also provisions relating to on-premises contracts, and specific regulation of particular types of transaction, such as consumer credit, the distance marketing of consumer financial services, timeshares and package travel contracts, as well as control (through both private law remedies and regulatory sanctions) by food labelling requirements, and by control of unfair contract terms and of unfair commercial practices.

1 General Characteristics of the Consumer Information Model 1.1

The Consumer in Statute, Not in the Common Law

The “consumer” in English law is a creature of statute.1 This may sound quite normal to the lawyer from a codified system where it is natural to start from a legislative text

1

Beale (2015), Ch 38 (S Whittaker) is the most useful detailed discussion of consumer contracts.

J. Cartwright (*) University of Oxford, Faculty of Law, Oxford, UK e-mail: [email protected] © Springer Nature Switzerland AG 2019 G. Straetmans (ed.), Information Obligations and Disinformation of Consumers, Ius Comparatum – Global Studies in Comparative Law 33, https://doi.org/10.1007/978-3-030-18054-6_2

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in order to find the law—and therefore to look for a definition of “consumer” within the Code. For a common law system such as English law, however, the normal starting point (at least for the core areas of private law, such as contract and tort) is not legislation but the common law—the cases, which have been built up by the courts over the years into a set of rules, and where the judges themselves have developed definitions of key concepts, principles and doctrines of the law.2 But within the common law the courts have not defined the “consumer”. The modern law of contract was developed by the English courts during the second half of the nineteenth century, and the paradigm transaction around which their theories were based was the arm’s length agreement between parties of moreor-less equal bargaining power: commercial transactions, or transactions which have a predominantly commercial function.3 Although lawyers in most systems will use the contract of sale as a classic illustration of a contract—and this is equally true in the common law—the English lawyer will traditionally think first of a sale between equals (a commercial sale) rather than between a trader and a consumer. That, at least, is the model sale contract in the common law of contract. In English law a contract is in principle a bilateral onerous transaction: the doctrine of consideration has the effect of limiting contract to transactions of exchange—but also in principle the courts give the parties the freedom to determine the value of the exchange (they will not assess the “adequacy” of the consideration),4 and will not generally intervene in the absence of misbehaviour such as a party’s misrepresentation, duress or undue influence: mistake is rarely a sufficient ground for challenging the validity of the contract, and parties should generally take responsibility for informing themselves, rather than expecting the other party to inform them.5 Acting within their role as creators and developers of the common law of contract, the courts do not feel that it is appropriate to intervene in the terms of the contract, nor even generally6 to define forms of “weakness” of one party, or “inequality” between the parties, that deserve their protection. This is the point at which the courts draw the line between their role and the role of the legislature. In 1985, for example, the House of Lords rejected an attempt by Lord Denning, sitting in the Court of Appeal in an earlier case,7 to devise a common law principle of “inequality of bargaining power”. Lord Scarman said: I question whether there is any need in the modern law to erect a general principle of relief against inequality of bargaining power. Parliament has undertaken the task—and it is essentially a legislative task—of enacting such restrictions upon freedom of contract as are in its judgment necessary to relieve against the mischief: for example, the hire-purchase and

2

Cartwright (2016), Ch 2. Cartwright (2016), p. 70. 4 Cartwright (2016), pp. 131–138. 5 Cartwright (2016), Ch 7. 6 There are exceptions, e.g. “unconscionable bargains” entered into by “poor and ignorant” persons: Cartwright (2016), pp. 197–198; relationships of “trust and confidence” in which one party is in a position to exercise undue influence over the other: Cartwright (2016), pp. 194–195; agreements in restraint of trade: Beatson et al. (2016), pp. 428–435. 7 Lloyds Bank Ltd v Bundy [1975] QB 326. 3

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consumer protection legislation, of which the Supply of Goods (Implied Terms) Act 1973, Consumer Credit Act 1974, Consumer Safety Act 1978, Supply of Goods and Services Act 1982 and Insurance Companies Act 1982 are examples. I doubt whether the courts should assume the burden of formulating further restrictions.8

Consumer protection in all legal systems is a modern (later twentieth century) phenomenon, so it is no more surprising that the English courts of the nineteenth century did not devise their law of contract around a consumer sale, than that the “consumer” did not appear in the French Code Civil of 1804 or the German Bürgeliches Gesetzbuch of 1900. But the introduction of consumer protection rules in codified systems—whether by amendment of an existing Code, by the introduction of a new “Consumer Code”, or by piecemeal legislative texts alongside the Codes—involves the creation of new rules of the same legal order. In English law, however, legislative intervention is of a different order from the common law; and the techniques of drafting by the legislator, and of interpretation of legislation by the courts, are significantly different from the techniques of judicial interpretation of case-law in the case of common law rules.9 The general approach is to read a statute by reference to the normal, objective meaning of its words, not to look behind the text to find the “intended” meaning from the travaux préparatoires, and not to give an interpretation beyond the text itself, nor to provide a conceptual unity amongst discrete legislative provisions.10 However—and of particular relevance for our topic, given the extensive implementation of EU consumer information rules—where an English legislative text is enacted in order to give effect to EU law, the courts will seek to interpret the text so as to give effect to the relevant EU law.11

1.2

Statutes Adopt Individual Definitions Rather Than a Unified Definition

Parliament has defined the circumstances in which consumers should receive protection, and has done so in a range of discrete legislative enactments, but even within the legislative enactments there has been no single definition of “consumer” which is to be used within the consumer-protection legislation generally.12 Each legislative intervention within domestic English law has been a response to a perceived need for protection of a particular kind, which has therefore involved different definitions of the protected party, devised for the policies underlying and justifying the particular intervention—and sometimes “consumer” has even

8

National Westminster Bank plc v Morgan [1985] AC 686, 708. Cartwright (2016), Ch 2. 10 Cartwright (2016), pp. 28–34. 11 Cross et al. (1995), pp. 105–112; Beale (2015), [38–013], [38–017]. 12 Beale (2015), [38–027]-[38–046]. 9

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included persons acting within the context of a business.13 In any legal system this may be the appropriate response: “consumers” are a broad category, the limit of which may need to be nuanced when deciding upon particular interventions based on a policy of protection. But this individualised definition of “consumer” is even more natural in English law, where there is no general expectation that legislation will be dove-tailed to form a coherent, systematic whole. Statutes are particular interventions to address particular problems, and even though it may seem odd and rather confusing for different statutes to use the same term without it having exactly the same meaning, this is not really unusual in English law, given the natural instinct of the English lawyer, whether in statutes or in contracts, to give a formal, precise and individual definition of the terms used. There may well, of course, be a general common core to the different definitions, but as long as each statute defines “consumer” for its own purposes, there is no general difficulty in the fact that they may differ. There is a further point to consider. Some legislative intervention in the consumer field has been on the purely domestic level, to fulfil domestically-defined policies. But much of the more recent intervention has been in response to EU Directives. The traditional approach in the UK is for the Government to take measures—sometimes by statute, but often by delegated legislation14—which implement EU Directives more-or-less according to the letter of the Directive, including therefore taking definitions (such as “consumer”) directly from the Directive in question. This has led to each implementing Act or set of Regulations containing an individual definition of “consumer”, taking the definition used in the Directive which it implements, which accordingly varies in its detail as the definitions in the different Directives also vary, although there is often some tailoring of the definition from the Directive, either to conform to the more usual terminology of domestic law,15 or to fit with other domestic policies.16

13 E.g. Unfair Contract Terms Act 1977 s 12 as interpreted in R & B Customs Brokers Co Ltd v United Dominions Trust Ltd [1988] 1 WLR 321; Consumer Credit Act 1974 below, Sect. 5.1. 14 European Communities Act 1972 s 2(2) permits the Government to implement EU obligations by delegated legislation, such as Regulations. The discussion in this paper refers only to English law as it is currently enacted, and cannot take into account any changes that may be made in due course to provisions now based on EU Directives, when the UK leaves the EU in 2019. 15 E.g. Directives commonly refer to the consumer as a “natural person”; some implementations have followed this (see e.g. Unfair Terms in Consumer Contracts Regulations 1994 reg 2(1)), but more recently it has become normal to use the term “individual” (see e.g. Consumer Rights Act 2015 s 2(3)). 16 E.g. Directives commonly refer to the consumer acting for purposes which are “outside” his business, but since 2012 the UK implementing legislation has referred to those acting for purposes that are “wholly or mainly outside” the business—a conscious decision to widen the scope of protection beyond the interpretation of the European Court of Justice in Gruber v Bay Wa AG [2005] Case C-464/01, [2006] QB 204 (which held that an individual does not act as a consumer if the element of business use was non-negligible): see Law Commission, “Consumer Redress for Misleading and Aggressive Practices” (Law Com No 332, 2012) paras 6.11 to 6.13.

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Although the result of this piecemeal legislation on consumer law is a patchwork of provisions without a uniform definition of “consumer”, on occasion the UK legislator has sought to remove some of the divergences where they cause particular difficulty or confusion, and there has been a general trend in recent years to follow a common pattern for the legislative definition of “consumer”. The best illustration is found in the context of unfair contract terms. The first general domestic legislation in England aimed at controlling unfair contractual exclusion and limitation clauses (and unfair non-contractual notices, in so far as they can exclude or limit non-contractual liability) was the Unfair Contract Terms Act 1977, which regulated both consumer and non-consumer contracts and notices, but its definition of “dealing as a consumer”17 did not limit the “consumer” to being a natural person. The section was interpreted by the courts as extending even to corporations as long as the transaction in question was neither an integral part of their business, nor conducted with a sufficient degree of regularity to make it part of the business.18 But when the UK first implemented the Directive on Unfair Terms in Consumer Contracts in 1994,19 it did so without seeking to assimilate the new law with the existing provisions, and without amending the definition of “dealing as a consumer” in the 1977 Act, even though there was a clear difference between the definitions and even though the two provisions could apply to the same facts, with different results. The existence of two separate but overlapping regimes of protection was criticised in 2005 by the Law Commission,20 which proposed that they be replaced by a new single piece of legislation, with a new definition of “consumer contract” but which excluded non-natural persons. This proposal was not implemented, but eventually the Consumer Rights Act 2015 had a similar effect, replacing both the consumer provisions in the 1977 Act, and the 1999 Regulations, by a new unified regime for unfair terms in consumer contracts. The definition in the 2015 Act, although it applies only for the purposes of that Act, is also a formulation which has now been used as model in

17 Unfair Contract Terms Act 1977 s 12(1), as originally enacted in 1977. Certain aspects of this definition were amended by Sale and Supply of Goods to Consumers Regulations 2002 (SI 2002/ 3045) to implement Directive 1999/44/EC of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees, [1999] OJ L171/12. 18 R & B Customs Brokers Co Ltd v United Dominions Trust Ltd [1988] 1 WLR 321. 19 Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, [1993] OJ L95/29, implemented first by Unfair Terms in Consumer Contracts Regulations 1994 (SI 1994/3159), and later re-implemented by Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999/2083). The definition in the Directive (art 2(a): “‘consumer’ means any natural person who, in contracts covered by this Directive, is acting for purposes which are outside his trade, business or profession”) was not reproduced precisely in the 1994 Regulations (reg 2(1): “‘consumer’ means a natural person who, in making a contract to which these Regulations apply, is acting for purposes which are outside his business”), but the 1999 Regulations followed the Directive almost exactly (reg 3(1): ‘“consumer’ means any natural person who, in contracts covered by these Regulations, is acting for purposes which are outside his trade, business or profession”). 20 Law Commission and Scottish Law Commission, “Unfair Terms in Contracts” (Law Com No 292, 2005).

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relation to most of the recent consumer protection legislation, whether domestic or EU in origin21: ‘Consumer’ means an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession.22

1.3

Characteristics of the “Consumer”

The practice of using individual definitions of “consumer” within English law allows for specific tailoring of the benchmark characteristics of the kind of consumer used within each context, although such a tailoring is the exception, rather than the rule, and where the English law definition has an EU origin, the tailoring of the consumer (his “image”) generally reflects the EU source.23 There is no further definition of the type of consumer protected by the regulations on pre-contractual information duties in relation to the distance marketing of consumer financial services24 or more generally on-premises, distance and off-premises contracts,25 or the regulations on food labelling26 (although the specific information requirements which are imposed on traders in favour of consumers—either what must be disclosed, or the way in which it must be given or displayed—may be designed with a kind of consumer in mind). However, within the law of unfair commercial practices contained in the Consumer Protection from Unfair Trading Regulations 2008, the “average consumer” is the benchmark, both in the general definition of when a commercial practice is unfair,27 and in the more particular definitions of “misleading action”,28 21 See similarly, implementing EU Directives: Consumer Protection from Unfair Trading Regulations 2008 reg 2(1) as substituted in 2014 by SI 2014/870; Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 reg 4; and (in purely domestic legislation) similar but not identical wording in Consumer Insurance (Disclosure and Representations) Act 2012 s 1. 22 Consumer Rights Act 2015 s 2(3). 23 cf Mak (2016), p. 381, contrasting the images of the consumer in European regulatory private law with the (autonomous) consumer in national private laws, including (at 396) English law. 24 Financial Services (Distance Marketing) Regulations 2004 (SI 2004/2095) implementing Directive 2002/65/EC of 23 September 2002 concerning the distance marketing of consumer financial services [2002] OJ L271/16. 25 Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 below, Sect. 2.1. 26 Below, Sect. 2.5. 27 Consumer Protection from Unfair Trading Regulations 2008 reg 3(1): “A commercial practice is unfair if—(a) it contravenes the requirements of professional diligence; and (b) it materially distorts or is likely to materially distort the economic behaviour of the average consumer with regard to the product.” 28 Ibid reg 5(2), (3) (false or misleading information or marketing which “causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise”).

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“misleading omission”29 and “aggressive commercial practice”,30 and in the definition of the general criminal offence committed by a trader in relation to unfair commercial practices.31 In determining the effect on the “average consumer” where the practice is addressed to consumers, account is to be taken of the “material characteristics of such an average consumer, including his being reasonably well informed, reasonably observant and circumspect”32; and where it is directed to a particular group, or where the practice is likely to materially distort the economic behaviour only of a clearly identifiable group which is particularly vulnerable to the practice or the underlying product because of their mental or physical infirmity, age or credulity, the “average consumer” is the average member of the group.33 These definitions adopt language from the Directive which they implement,34 which will therefore be subject to interpretation of the Court of Justice of the EU. The 2008 Regulations did not originally provide remedies in private law, but were amended in 2014 to provide rights of redress for consumers in relation to (only) misleading actions and aggressive commercial practices.35 Moreover, in dealing with unfair terms, the Consumer Rights Act 2015 uses the “average consumer” for one particular point: to determine whether a term specifying the main subject matter of the contract, or assessment of the price, is sufficiently prominent to be excluded from the Act’s assessment of fairness: a term is prominent if it is brought to the consumer’s attention in such a way that an average consumer would be aware of it; and for this purposes “average consumer” means “a consumer who is reasonably well-informed, observant and circumspect.”36

29 Ibid reg 6(1) (omission/hiding of material information or providing unclear, unintelligible ambiguous or untimely material information which “causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise”). 30 Ibid reg 7(1) (“(a) it significantly impairs or is likely significantly to impair the average consumer’s freedom of choice or conduct in relation to the product concerned through the use of harassment, coercion or undue influence; and (b) it thereby causes or is likely to cause him to take a transactional decision he would not have taken otherwise”). 31 Ibid reg 8(1) (“(a) he knowingly or recklessly engages in a commercial practice which contravenes the requirements of professional diligence under regulation 3(3)(a); and (b) the practice materially distorts or is likely to materially distort the economic behaviour of the average consumer with regard to the product under regulation 3(3)(b)”). 32 Ibid reg 2(2). 33 Ibid reg 2(4)-(5). 34 Directive 2005/29/EC of 11 May 2005 (“Unfair Commercial Practices Directive”) [2005] OJ L149/22 Recital 18 and art 5.3. 35 See below, Sect. 3. 36 Consumer Rights Act 2015 s 64.

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2 Pre-contractual Information Requirements37 2.1

General and Specific Information Duties: Statute and Common Law

Under English law, there is no general obligation on businesses to provide consumers with pre-contractual information. In developing the common law of contract, the judges did not develop any general duty of disclosure, even by parties who have a stronger bargaining position by reason of their having, or having access to, information not available to the other party. Indeed, the starting point is that there is no such general duty, and specific duties of disclosure are the exception rather than the rule.38 However, significant inroads on this principle have been made in recent years in the context of consumer contracts, effected—as is natural in English law39—by statutory intervention (primary or secondary legislation, designed to pursue domestic policies or to implement EU law). The most comprehensive duties on traders to provide information to consumers are contained in the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 201340 which apply to most “on-premises”, “off-premises”, and “distance” contracts between a trader and a consumer for the supply of goods, services or digital content.41 Taken together, “onpremises”, “off-premises”, and “distance” contracts cover all contracts entered into between traders and consumers, since an “on-premises” contract is “a contract between a trader and a consumer which is neither a distance contract nor an off-premises contract”,42 although in fact there are significant exclusions of certain

37

See Whittaker (2017), pp. 50–54; Beale (2015) [38–055]-[38–129]. Cartwright (2017), Ch 16. 39 Above, Sect. 1.1. 40 SI 2013/3134, implementing Directive 2011/83/EU of 25 October 2011 on consumer rights, [2011] OJ L304/64, and replacing (in relation to contracts entered into on or after 13 June 2014) Consumer Protection (Distance Selling) Regulations 2000 (SI 2000/2334) as amended [implementing Council Directive 97/7/EC on distance contracts] and Cancellation of Contracts made in a Consumer’s Home or Place of Work etc Regulations (SI 2008/1816) (“doorstep selling”), as amended [which replaced earlier Regulations and re-implemented Council Directive 85/577/EEC on contracts negotiated away from business premises]: see reg 2 of the 2013 Regulations. 41 The extended reference to include digital content was made (throughout the 2013 Regulations) by amendments made by SI 2014/870: below, Sect. 6. For similar special regulation of distance contracts for financial services, see below, Sect. 5.2. 42 SI 2013/3134 reg 5, which defines an “off-premises contract” as “a contract between a trader and a consumer which is any of these—(a) a contract concluded in the simultaneous physical presence of the trader and the consumer, in a place which is not the business premises of the trader; (b) a contract for which an offer was made by the consumer in the simultaneous physical presence of the trader and the consumer, in a place which is not the business premises of the trader; (c) a contract concluded on the business premises of the trader or through any means of distance communication immediately after the consumer was personally and individually addressed in a place which is not the business premises of the trader in the simultaneous physical presence of the trader and the consumer; (d) a contract concluded during an excursion organised by the trader with the aim or 38

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types of contract from the scope of these Regulations.43 Some of these, and other special types of transaction, have their own special regulation, such as consumer credit,44 the distance marketing of consumer financial services,45 timeshare and other long-term holiday contracts,46 and package travel contracts.47 Moreover, there is no duty under the 2013 Regulations to provide information to a consumer before making an on-premises contract which involves a day-to-day transaction and is performed immediately at the time when the contract is entered into48—in effect removing from the scope of the information duty many on-the-spot contracts entered into at the trader’s premises.

effect of promoting and selling goods or services to the consumer”. It defines a “distance contract” as “a contract concluded between a trader and a consumer under an organised distance sales or service-provision scheme without the simultaneous physical presence of the trader and the consumer, with the exclusive use of one or more means of distance communication up to and including the time at which the contract is concluded”. 43 SI 2013/3134 reg 6(1): contracts for gambling or a lottery, for certain financial services, for the creation of immovable property rights, for rental of accommodation for residential purposes, for the construction and conversion of buildings, for the supply of household food and drink by a trader on frequent and regular rounds to the consumer’s home, residence or workplace, and contracts within the scope of other regulations on package travel, and timeshare and other long-term holiday contracts. In addition, the Regulations do not apply to contracts concluded by means of automatic vending machines or automated commercial premises, or for the use of a public telephone, or for single connection telephone, internet or fax use, or where goods are sold by way of execution or otherwise by authority of law: reg 6(2); nor contracts for the supply of prescription medical products (reg 7(2)), passenger transport services, except for those entered into by distance contracts concluded by electronic means (reg 7(3)), and off-premises contracts under which the payment to be made by the consumer is not more than £42 (reg 7(4)). 44 Below, Sect. 5.1. 45 Below, Sect. 5.2. 46 Timeshare, Holiday Products, Resale and Exchange Contracts Regulations 2010 (SI 2010/2960), replacing the Timeshare Act 1992 and related regulations, and implementing Directive 2008/122/ EC of 14 January 2009 on the protection of consumers in respect of certain aspects of timeshare, long-term holiday product, resale and exchange contracts [2009] OJ L33/10, requiring “key information” to be provided before and in a contract between a trader and a consumer for certain holiday contracts. 47 Package Travel and Linked Travel Arrangements Regulations 2018 (SI 2018/634), implementing Directive (EU) 2015/2302 of 25 November 2015 on package travel and linked travel arrangements [2015] OJ L326/1 (replacing with effect from 1 July 2018 Package Travel, Package Holidays and Package Tours Regulations 1992 (SI 1992/3288), implementing Council Directive 90/314/EEC of 13 June 1990 on package travel, packaged holidays and package tours [1990] OJ L158/59) requiring the organiser or retailer of a package travel contract to provide specified information to the consumer before and in the contract, and before the start of the package. 48 SI 2013/3134 reg 9(2).

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Information Required Under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013

The information that a trader must provide to the consumer under the 2013 Regulations varies according to whether the contract is an on-premises contract, on the one hand, or an off-premises contract or a distance contract, on the other hand; and the information to be provided is rather more extensive for off-premises contracts and distance contracts49 than for on-premises contracts.50 We have already seen that many on-the-spot on-premises contracts will be excluded from the information duty altogether.51 Moreover, there is no duty to provide information to a consumer before making an on-premises contract where the information is already apparent from the context.52 The principal object of the information duties is therefore off-premises and distance contracts. In all three categories—on-premises, off-premises and distance contracts—where the duty arises, the trader is required to give information, before the consumer is bound by the contract, and in a clear and comprehensible manner, about the main characteristics of the goods, services or digital content; the total price (inclusive of taxes) or the manner in which the price is to be calculated, and any delivery charges; the arrangements for payment, delivery and performance (including the time of delivery/performance by the trader); the duration of the contract (including conditions for extension and termination); details about the trader (including his identity and contact details, and his complaints handling policy); and certain matters specific to different types of contract (the trader’s duty to supply conforming goods under a sale contract; any conditions of after-sales service and commercial guarantees; functionality of digital content and its compatibility with hardware or software that the trader is aware of or can reasonably be expected to have been aware of). In the case of off-premises and distance contracts the consumer generally has a right to cancel the contract,53 and in such cases the information to be provided by the trader includes information about the cancellation right and its method of exercise. Where a trader makes a telephone call to the consumer with a view to concluding a distance contract, the trader must disclose his identity and the commercial purpose of the call.54

49

SI 2013/3134 regs 10 and 13 and Sch 2. SI 2013/3134 reg 9 and Sch 1. 51 SI 2013/3134 reg 9(2); above, Sect. 2.1. 52 SI 2013/3134 reg 9(1). 53 See further below, Sect. 2.4. 54 SI 2013/3134 reg 15. 50

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Form of Information Required Under the 2013 Regulations

There is no general requirement of form for the creation of contracts in English law,55 so there is no particular form into which the information required by the 2013 Regulations must fit, except where the Regulations specifically provide; and the fact that the trader is required in circumstances defined by the Regulations to provide particular information to the consumer does not prevent his providing other information voluntarily. There are general rules under the Regulations—that something (including, therefore, information) is made available to a consumer only if the consumer can reasonably be expected to know how to access it56 and that information must be given or made available in a clear and comprehensible manner.57 Otherwise, there is no particular form in which information must be given before an on-premises contract, although there are specific provisions relating to off-premises and distance contracts, both of which include the requirement to inform the consumer about his cancellation rights. In the case of an off-premises contract, if the consumer has the right to cancel, a prescribed cancellation form must be given to the consumer before he is bound; and both the required information and any cancellation form must be given on paper or, if the consumer agrees, on another durable medium and must be legible.58 In addition, within a reasonable time after the conclusion of the contract (but in any event no later than delivery of goods or before performance of a service begins) the trader must give the consumer a copy of the signed contract, or confirmation of the contract, which must include all the required information unless he has already provided the information to the consumer on a durable medium prior to the conclusion of the contract.59 In the case of a distance contract the above details are varied to take account of the distance (and sometimes electronic) means by which the contract is concluded. For example, if the consumer has the right to cancel, a prescribed cancellation form must be given or made available to the consumer before he is bound; and in so far as the required information is provided on a durable medium it must be legible.60 In

55 Cartwright (2016), pp. 126–127. The main exception is the contract for the sale or other disposition of an interest in land, for which a written contract signed by both parties is required: Law of Property (Miscellaneous Provisions) Act 1989 s 2; but such contracts are outside the scope of the 2013 Regulations (reg 6(1)(c), (d)). 56 SI 2013/3134 reg 8. 57 SI 2013/3134 regs 9(1) (on-premises contract, “if that information is not already apparent from the context”), 10(1)(a) (off-premises contract), 13(1) (distance contract, “and in a way appropriate to the means of distance communication used”). 58 SI 2013/3134 reg 10(1), (2). 59 SI 2013/3134 reg 12. 60 SI 2013/3134 reg 13(1), (2).

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addition, within a reasonable time after the conclusion of the contract (but in any event no later than delivery of goods or before performance of a service begins) the trader must give the consumer confirmation of the contract on a durable medium, which must include all the required information unless he has already provided the information to the consumer on a durable medium prior to the conclusion of the contract.61

2.4

Sanctions for Failure to Provide the Required Information and in the Required Form

The trader’s failure to provide the information as required by the 2013 Regulations does not make the contract void or voidable, nor does it give the consumer the right to claim damages. Since there is no general duty of disclosure at common law, nor any general principle that breaches of statutory duties are actionable in tort under the common law,62 the breach by the trader of his duty under the Regulations will give rise only to those sanctions that are specified in the Regulations themselves (or in other statutes which refer to the Regulations). The Regulations do provide a mechanism for private law remedies to be available to the consumer. The contract is to be treated as including a term that the trader has complied with the Regulations requiring information to be provided,63 which has the effect of providing the consumer with a claim for breach of contract in cases where the information has not in fact been provided. Since 1 October 2015, this has been complemented by a new provision in the Consumer Rights Act 2015 to the effect that where the trader provides information required by the 2013 Regulations, the information that is provided is to be treated as included as a term of the contract.64 The range of remedies under the Consumer Rights Act is wider than the common law in case of non-conformity of the goods, digital contract or service with the contract.65 But taking these provisions together, the information requirements contained in the 2013 Regulations are now the basis not only of a duty of disclosure in favour of consumers (actionable for breach of contract if there is a failure to inform and the

61

SI 2013/3134 reg 16. Breach of statutory duty can be a ground of liability in tort, but only where it appears that Parliament expressly or impliedly so intended: Peel and Goudkamp (2014), Ch 8. 63 SI 2013/3134 reg 18. 64 Consumer Rights Act 2015 ss 11(4), 12(2) (goods contracts), 36(3), 37(2) (supply of digital content), 50(3) (services contracts). In addition, certain information in fact provided about the goods, digital content or service, even if not required by the Regulations, is incorporated into the contract. 65 Rights to reject, repair, replacement or price reduction for goods contracts (s 19), repair, replacement or price reduction for digital content contracts (s 42), and repeat performance or price reduction for services contracts (s 54). 62

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consumer can show loss) but also of a range of remedies where the duty is complied with but inaccurate information is provided. In the case of an off-premises or distance contract, with certain exceptions,66 the consumer has a right to cancel the contract within a period of 14 days from the date of the contract (or, in a contract for the supply of goods, from the date on which the goods come into the physical possession of the consumer or a person he identifies to take possession of them).67 Where the supplier fails to provide the consumer with the information on the right to cancel, the cancellation period is extended, and the right of cancellation is exercisable by the consumer until 14 days after the day on which supplier provides the information or, if he fails to provide it for 12 months, the longstop cancellation period is 12 months and 14 days from the day on which the contract was concluded (or the goods came into the physical possession of the consumer or his representative).68 In the case of off-premises contracts, it is also a criminal offence for the trader to fail to provide the required information about the consumer’s rights to cancel.69

2.5

Food Information Requirements

The principal requirements in the UK for provision of information in food labelling derive from EU law.70 Two general provisions are most significant, both of which are contained in EU Regulations which are directly applicable in Member States without further implementation.71 Regulation (EC) No 178/200272 contains a general prohibition against misleading consumers by labelling, advertising and presentation of food (including packaging). Enforcement is a matter for national law73; in England the enforcement is by local

66

E.g. contracts for the supply of prescription medicinal products; for passenger transport services, for off-premises contracts under which the payment to be made by the consumer is not more than £42; for goods or services contracts where the price is dependent on financial market fluctuations; for consumer-specified or personalised goods; for the supply of goods which are liable to deteriorate or expire rapidly; for contracts concluded at a public auction: SI 2013/3134 regs 27(2), 28. 67 SI 2013/3134 regs 29, 30. 68 SI 2013/3134 reg 31. 69 SI 2013/3134 reg 19. 70 See generally Madge (2013), paras 766 et seq. For general information see the website of the Food Standards Agency: http://www.food.gov.uk, and general Government guidance at http://www.gov. uk/guidance/food-labelling-giving-food-information-to-consumers. 71 Treaty on the Functioning of the European Union [2012] OJ C326/1 art 288. 72 Regulation (EC) No 178/2002 of the European Parliament and of the Council of 28 January 2002 laying down the general principles and requirements of food law, establishing the European Foods Safety Authority and laying down procedures in matters of food safety [2002] OJ L31/1, art 16. 73 Ibid art 17.2.

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food authorities (generally, the local council),74 and contravention constitutes a criminal offence.75 Regulation (EU) No 1169/201176 contains more detailed (but still general) provisions, prohibiting misleading food information as to the characteristics of the food, its effects or properties, and requiring food information to be accurate, clear and easy to understand for the consumer. This Regulation also contains considerable detailed regulation of food labelling, including mandatory requirements for food information to indicate such things as the list of ingredients, any allergens, minimum durability, the country of origin and a nutrition declaration77; as well as additional mandatory particulars for specific types or categories of food,78 and general requirements for the presentation of the mandatory information (conspicuous, visible, legible and in a minimum font size).79 In England, the Food Information Regulations 201480 provide enforcement mechanisms for this EU Regulation, and again it is the local food authorities that have the duty of enforcement. Not all breaches of the information requirements constitute criminal offences, but a new regime of improvement notices has been introduced by the 2014 English Regulations, with criminal offences normally committed only where there is non-compliance with an improvement notice.81 There are also domestic requirements under the Food Safety Act 1990, which creates criminal offences of falsely describing or presenting food by labelling, advertising or presentation.82 These legislative provisions do not give rise to a private right of action by the consumer, although there may be actions available under the general law in connection with labelling. Since there is no general duty of disclosure at common law83 the simple failure to label foods will not give rise to an action by the consumer, although misleading labelling (including presentation of foods which is misleading by reason of the omission of labelling information) may give rise to claims for misrepresentation, or for private rights to redress for misleading actions under Part 4A of the Consumer Protection from Unfair Trading Regulations 2008,84 or for common law

74 Food Safety and Hygiene (England) Regulations (2013 SI 2013/2996) regs 2(1), 5(6), Sched 2. Food authorities are designated by the Food Safety Act 1990 s 5. 75 Ibid reg 19(1). 76 Regulation (EU) No 1169/2011 of the European Parliament and of the Council of 25 October 2011 on the provision of food information to consumers [2011] OJ L304/18, art 7. 77 Ibid art 9. 78 Ibid art 10 and Annex III. 79 Ibid art 13. 80 SI 2014/1855. The domestic implementing Regulations take up certain derogations permitted by the EU Regulation in relation to the detailed labelling requirements. 81 Food Information Regulations 2014 (SI 2014/1855). 82 Food Safety Act 1990 s 15. 83 Above Sect. 2.1. 84 SI 2008/1277; below, Sect. 3.2.

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remedies for breach of contract or remedies for non-conformity of the goods under the Consumer Rights Act 2015.85

3 Misleading Commercial Practices86 3.1

Prohibition Against Unfair Commercial Practices in the Consumer Protection from Unfair Trading Regulations 2008

In England, the provisions protecting the consumer against misleading commercial practices are contained in the Consumer Protection from Unfair Trading Regulations 2008,87 which implemented the EC (now EU) Unfair Commercial Practices Directive.88 The 2008 Regulations prohibit unfair commercial practices, which are defined both in general terms and in more specific terms. A “commercial practice” is: any act, omission, course of conduct, representation or commercial communication (including advertising and marketing) by a trader, which is directly connected with the promotion, sale or supply of a product to or from consumers, whether occurring before, during or after a commercial transaction (if any) in relation to a product.89

“Product” is widely defined to include not only goods but also services, digital content, immovable property, right or obligations, and the full or partial settlement of a consumer’s liabilities,90 and therefore most contracts between traders91 and consumers92 are included. The Regulations also provide a general mechanism for consumer protection against a range of potentially unfair commercial practices, such as misleading price comparison websites, although there may often be other

85

Above, Sect. 2.4. Beale (2015), [38–145]-[38–191]. 87 Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277) as amended by (in particular) the Consumer Protection (Amendment) Regulations 2014 (SI 2014/870) to provide private rights of redress for consumers: see below, Sect. 3.2. 88 Directive 2005/29/EC of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market [2005] OJ L149/22. 89 Consumer Protection from Unfair Trading Regulations 2008 as amended reg 2(1). 90 Ibid. 91 “‘trader’ (a) means a person acting for purposes relating to that person’s business, whether acting personally or through another person acting in the trader’s name or on the trader’s behalf, and (b) except in Part 4A [private rights of redress], includes a person acting in the name of or on behalf of a trader”: Consumer Protection from Unfair Trading Regulations 2008 as amended reg 2(1). 92 “‘consumer’ means an individual acting for purposes that are wholly or mainly outside that individual’s business”: Consumer Protection from Unfair Trading Regulations 2008 as amended reg 2(1). 86

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regulatory mechanisms that overlap with the 2008 Regulations in their operation and which therefore provide additional and more specific protection.93 Under the general definition, a commercial practice is unfair if it contravenes the requirements of professional diligence, and it materially distorts or is likely to materially distort the economic behaviour of the average consumer94 with regard to the product.95 Two specific forms of unfair commercial practice are relevant to the question of information duties.96 A “misleading action” is a commercial practice which contains false information and is therefore untruthful in relation to certain prescribed matters (including the existence, nature and main characteristics of the product), and causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise.97 A “misleading omission” is a commercial practice which omits or hides material information, or provides material information in a manner which is unclear, unintelligible, ambiguous or untimely, or fails to identify its commercial intent and as a result causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise. For the purpose of misleading omissions, “material information” means the information which the average consumer needs, according to the context, to take an informed transactional decision; and any information requirement which applies in relation to a commercial communication as a result of an EU obligation.98 The 2008 Regulations use the benchmark of the average consumer, and do not provide special rules for particularly vulnerable consumers except in so far as the “average consumer” is read as referring to the average member of a group of particularly vulnerable consumers where the commercial practice is aimed at a clearly identifiable group of vulnerable consumers and is likely to materially distort the economic behaviour of only that group.99

93 See e.g. UK Regulators Network Final Report on Price comparison websites (27 September 2016, http://www.ukrn.org.uk/wp-content/uploads/2016/09/201609027-UKRN-PCWs-Report.pdf) paras 2.3–2.5 (2008 Regulations), 2.7–2.8 (competition law powers), 2.9–2.17 (voluntary accreditation schemes), 2.18–2.19 (direct regulation by Financial Conduct Authority in the context of financial services). 94 For the characteristics of the “average consumer”, see above, Sect. 1.3. 95 Consumer Protection from Unfair Trading Regulations 2008 as amended reg 3(3). 96 The third specific form is “aggressive commercial practices” under reg 7, which is focused not on (mis)information but on harassment, coercion or undue influence. 97 Consumer Protection from Unfair Trading Regulations 2008 as amended reg 5. 98 Consumer Protection from Unfair Trading Regulations 2008 as amended reg 6. 99 Consumer Protection from Unfair Trading Regulations 2008 as amended reg 2(5); above, Sect. 1.3. There appear however to be no cases which have applied this test to assess the misleading character of commercial practices: the only reported case referring to the “vulnerable consumer” in this context involved information provided by a trader selling security equipment which appears to have been regarded by the court as clearly misleading, although “especially” so where it was used in the sale to a 76-year-old widower who was vulnerable by reason of age and infirmity: R v X Ltd [2013] EWCA Crim 818, [2014] 1 WLR 591 [12].

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Criminal and Civil Consequences of Misleading Commercial Practices

The 2008 Regulations make it a criminal offence for the trader knowingly or recklessly to engage in a commercial practice within the general definition, or to engage in a misleading action or a misleading omission,100 subject to a due diligence defence.101 Enforcement in England is by local weights and measures authorities (generally, the local council), but the Competition and Markets Authority102 also has powers of enforcement.103 The Unfair Commercial Practices Directive was without prejudice to contract law and, in particular to the rules on the validity, formation or effect of a contract,104 and at first the implementation in England by the 2008 Regulations did not give the consumer any private right of action, nor did it generally affect the validity of the contract induced by an unfair commercial practice105—although of course there were already a number of remedies in private law (typically, for misrepresentation106) that would often be available for conduct which constituted a misleading commercial practice under the Regulations. However, in 2014 the 2008 Regulations were amended107 to insert a new Part 4A, providing consumers’ rights to redress against the trader for misleading actions by the trader in relation to the product (or by the producer of goods or digital content where the trader was aware or ought to have been aware of it) as long as the prohibited practice was a significant factor in the consumer’s decision to enter into the contract to buy the product, or to sell it to trader, or to make payment to the trader for its supply. These private rights of redress apply also to aggressive commercial practices, although not for breach of the general 100

Consumer Protection from Unfair Trading Regulations 2008 as amended regs 8 to 10; similarly, an aggressive commercial practice (art 11). 101 Consumer Protection from Unfair Trading Regulations 2008 as amended reg 17 ((a) that the commission of the offence was due to (i) a mistake; (ii) reliance on information supplied to him by another person; (iii) the act or default of another person; (iv) an accident; or (v) another cause beyond his control; and (b) that he took all reasonable precautions and exercised all due diligence to avoid the commission of such an offence by himself or any person under his control). 102 A body established by the Enterprise and Regulatory Reform Act 2013 s 25 to seek to promote competition, both within and outside the United Kingdom, for the benefit of consumers: see http:// www.gov.uk/government/organisations/competition-and-markets-authority. 103 Consumer Protection from Unfair Trading Regulations 2008 as amended reg 19. 104 Directive 2005/29/EC art 3.2. 105 Consumer Protection from Unfair Trading Regulations 2008 reg 2 as originally worded (“An agreement shall not be void or unenforceable by reason only of a breach of these Regulations”). 106 A contract is generally voidable for misrepresentation, and damages may be available in tort for loss caused by relying on a fraudulent or negligent misrepresentation: Cartwright (2016), p. 178; Beatson et al. (2016), Ch 9. 107 Consumer Protection (Amendment) Regulations 2014, SI 2014/870. See generally Department for Business Innovation & Skills, “Misleading and Aggressive Commercial Practices – New Private Rights for Consumers” (August 2014, available at http://www.gov.uk/government/publications/ misleading-and-aggressive-selling-new-rights-for-consumers).

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definition of unfair commercial practices, nor for misleading omissions; and transactions relating to immoveable property (except for certain residential leases), and the provision of regulated financial services, are not included.108 The rights to redress to which the consumer may be entitled under the 2008 Regulations are the “right to unwind” in respect of the contract, the right to a discount, and the right to damages. The consumer can, however, choose between exercising his rights under the Regulations, and claiming other remedies for misrepresentation, whether at common law, in equity or under any enactment,109 and may even cumulate remedies as long as they are not inconsistent and do not involve double compensation.110 Where the consumer has contracted for the supply of a product by the trader, the consumer exercises the right to unwind by clearly indicating (by words or conduct) to the trader that he rejects the product, and does so with the period of 90 days from the contract (or sometimes from a later date, such as the delivery of the goods or the first performance of services under the contract), and as long as the product is still capable of being rejected and the consumer has not exercised the right to a discount in respect of that contract and the same prohibited practice.111 The effect of the consumer’s exercising this right is that the contract comes to an end so that both parties are released from their obligations under it, the trader has a duty to give the consumer a refund and (in the case of contracts for the sale or supply of goods) the consumer must make the goods available for collection by the trader.112 Where the consumer has contracted to sell goods to the trader, the consumer exercises the right to unwind by clearly indicating (by words or conduct) to the trader that the contract is ended, and the consumer then has a right to the return of the goods (and the duty to repay the amount paid by the trader) or, if the goods cannot be returned in the condition they were in when sold by the consumer, a right to payment from the trader of the amount by which the market value of the goods when the trader paid for them exceeds the what the trader paid for them.113 The consumer’s right to a discount in respect of a business to consumer contract involves the right to receive back from the trader the “relevant percentage” of payments already made (or the reduction of payments not yet made) calculated by reference to the seriousness of the prohibited practice,114 except where the amount payable for the product under the contract exceeds £5000 and the market price of the 108

Consumer Protection from Unfair Trading Regulations 2008 as amended regs 27A-27D. A statutory claim for damages under s 2(1) Misrepresentation Act 1967 is not however available for a misrepresentation which constitutes a misleading action giving the consumer a right to redress under the 2008 Regulations. 110 Consumer Protection from Unfair Trading Regulations 2008 as amended reg 27L. 111 Consumer Protection from Unfair Trading Regulations 2008 as amended reg 27E. 112 Consumer Protection from Unfair Trading Regulations 2008 as amended reg 27F(1). 113 Consumer Protection from Unfair Trading Regulations 2008 as amended reg 27G. 114 25% if the prohibited practice is more than minor; 50% if it is significant; 75% if it is serious; 100% if it is very serious. The seriousness is assessed by reference to the behaviour of the person who engaged in the practice, the impact of the practice on the consumer and the time that has 109

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product at the time that the consumer entered into the contract was (and can be clearly evidenced to have been) lower than the contract price, in which case the discount is based on the difference between the market price and the contract price.115 This has the effect of depriving the trader of his profit over the market price. The consumer’s right to damages covers financial loss, and any alarm, distress or physical inconvenience or discomfort, which the consumer would not have incurred or suffered if the prohibited practice had not taken place, but does not include the right to be paid damages in respect of the difference between the market price of the product and the amount payable for it under a contract116—that is, it is not a remedy aimed at covering the core measure of loss covered by an action in tort but other, consequential losses. However, the damages are limited to loss that was reasonably foreseeable at the time of the prohibited practice,117 and there is no right to damages where the trader proves that the occurrence of the prohibited practice (i.e., his misleading action) was due to a mistake or reliance on information supplied to the trader by another person, or the act or default of a person other than the trader, or an accident, or another cause beyond the trader’s contract, and that the trader took all reasonable precautions and exercised all due diligence to avoid the occurrence of the prohibited practice.118

4 Unfair Contract Terms: Bargaining Power119 4.1

The General Approach to Unfair Contract Terms in English Law

We have already seen that there has been general domestic legislation in England on unfair contract terms since the Unfair Contract Terms Act 1977,120 which applied to both consumer contracts and non-consumer contracts, although the Consumer Rights Act 2015 has now taken over the provisions from the 1977 Act governing consumer contracts, as well as those necessary to implement the Directive on Unfair Terms in Consumer Contracts (1993).121 The Consumer Rights Act 2015 therefore now contains the general provisions on unfair contract terms in English law,

elapsed since the prohibited practice took place: Consumer Protection from Unfair Trading Regulations 2008 as amended reg 27I(1)–(5). 115 Consumer Protection from Unfair Trading Regulations 2008 as amended reg 27I(6) (amended by SI 2015/1629, reg 9(2)), 27I(7). 116 Consumer Protection from Unfair Trading Regulations 2008 as amended reg 27J(1)–(3). 117 Consumer Protection from Unfair Trading Regulations 2008 as amended reg 27J(4). 118 Consumer Protection from Unfair Trading Regulations 2008 as amended reg 27J(5). 119 Beale (2015) [38–192]-[38–200], [38–334]-[38–394]. 120 Above, Sect. 1.2. 121 Directive 93/13/EEC; above, Sect. 1.2.

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although there are certain other statutory provisions which also regulate terms, and the parties’ freedom to contract out of statutory protections, in particular contexts.122 It is useful, however, to see the general approach which was taken by domestic English law, apart from the implementation of the 1993 Directive, on the questions of (consumers’) bargaining power and transparency of terms. As already discussed,123 the common law took a strong position that it was for the parties, rather than the courts, to determine the terms of the contract, and there was no general judicial control over the terms of the contract based on the inequality of the parties’ bargaining power. However, where the issue was not the terms of the contract in general, but in particular clauses which seek to exclude or limit liability, the courts could see that there was a need for caution—not specifically in relation to “consumers” (who were not recognised as a special category at common law124) but on the basis that a party should not be taken to have agreed to give up or limit claims which he would otherwise have under the contract unless it was sufficiently clear that he did—in effect, an indirect control over the “fairness” of the contract.125 To that end, the courts developed two forms of judicial control of, in particular, exclusion of liability clauses126: strict tests to check (a) whether the clause was incorporated into the contract127; and (b) that the clause is sufficiently clear by it language to cover the liability that has arisen.128 The latter is commonly referred to as the contra proferentem rule of construction, but both in effect allocate to the stronger party (the trader, in a consumer contract) the burden of proof of the effectiveness of the clause before he can rely on it in his favour. The fact that this control is based on an inequality of the parties’ bargaining power has become clear in recent years: the courts have said explicitly that the contra proferentem rule normally has a very limited role in commercial contracts, negotiated between parties of equal bargaining power.129 But another reason for the decline of these (indirect) judicial controls has been the introduction of direct controls over unfair terms by legislation: soon after

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E.g. certain mandatory terms in residential leases for less than 7 years: Landlord and Tenant Act 1985 ss 11, 12; non-excludable liability for damage caused by defect in product: Consumer Protection Act 1987 s 7; non-excludable protections for employees: Employment Rights Act 1996 s 203. 123 Above, Sect. 1.1. 124 Above, Sect. 1.1. 125 Cartwright (2016), pp. 219–224. 126 They recognised that a limitation of liability clause may be more likely to reflect an agreed allocation of risk, and therefore could be read with less hostility than exclusion clauses and indemnity clauses: Ailsa Craig Fishing Co v Malvern Fishing Co Ltd [1983] 1 WLR 964, 966. 127 Cartwright (2016), p. 221; Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] QB 433, 439 (Bingham LJ, drawing an analogy with the use of a general principle of good faith in civil law systems). 128 Cartwright (2016), pp. 221–224. 129 K/S Victoria Street v House of Fraser (Stores Management) Ltd [2011] EWCA Civ 904, [2012] Ch 497 [68]; Persimmon Homes Ltd v Ove Arup & Partners [2017] EWCA Civ 373 [52].

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the Unfair Contract Terms Act 1977 came into force, the House of Lords already saw it as taking over the field as regards the policy in relation to unfair contract terms: This Act applies to consumer contracts and those based on standard terms and enables exception clauses to be applied with regard to what is just and reasonable. It is significant that Parliament refrained from legislating over the whole field of contract. After this Act, in commercial matters generally, when the parties are not of unequal bargaining power, and when risks are normally borne by insurance, not only is the case for judicial intervention undemonstrated, but there is everything to be said, and this seems to have been Parliament’s intention, for leaving the parties free to apportion the risks as they think fit and for respecting their decisions.130

The rationale of the Unfair Contract Terms Act 1977 was based, both implicitly and (in certain of its rules) explicitly on the inequality of bargaining power between the parties. Some provisions gave specific protections to consumers, greater than to non-consumers131; and the general control of clauses excluding and restricting liability for breach of contract was targeted at protecting parties who deal as a consumer or on the other’s written standard terms of business—thus dealing with, in essence, non-negotiated contracts.132 And in determining whether (for certain situations) an exclusion or limitation clause satisfied a test of “reasonableness”, guidelines were provided by the 1977 Act which included both the relative strength of the parties’ bargaining positions, and whether the party knew or ought reasonably to have known of the existence and extent of the term (having regard, among other things, to any custom of the trade and any previous course of dealing between the parties).133 The 1977 Act only applied, however, to clauses which excluded or restricted liability: it did not control the fairness of terms more generally. That had to wait for the EC Directive on unfair terms in consumer contracts in 1993,134 which was first implemented in the UK in 1994, then re-implemented in 1999135 and is now

130

Photo Production Ltd v Securicor Transport Ltd [1980] AC 827, 843 (Lord Wilberforce); similarly at 851 (Lord Diplock). 131 See e.g. Unfair Contract Terms Act 1977 (before amendment by the Consumer Rights Act 2015) ss 6(2) and (3), 7(2) and (3) (contracts for sale of goods or hire purchase, or other contracts for transfer of possession or ownership of goods: liability for breach of implied terms relating to conformity of goods with description or sample, or as to their quality or fitness for a particular purpose, could not be excluded or restricted as against a person dealing as a consumer; could be excluded as against a person dealing otherwise than as a consumer, but only in so far as the exclusion or restriction satisfied the “requirement of reasonableness” in s 11). 132 Unfair Contract Terms Act 1977 (before amendment by the Consumer Rights Act 2015) s 3 (subjecting such clauses to the “requirement of reasonableness” in s 11). 133 Unfair Contract Terms Act 1977 s 11 and Sch 2, which was aimed in particular at non-consumer contracts for the sale or transfer of property in goods (ss 6 and 7), but was treated by the courts as applying more generally, including to those consumer contracts where the test of “reasonableness” was applied. 134 Directive 93/13/EEC. 135 See above, Sect. 1.2.

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found in Part 2 of the Consumer Rights Act 2015. Part 1 of the Consumer Rights Act 2015 contains certain specific controls to protect consumers against clauses which are designed to exclude or restrict a trader’s liability for breach of statutory terms in contracts for goods, digital content or services136; these are simply non-excludable as a matter of policy without any further test relating to bargaining power or transparency, and are designed in effect to make the statutory terms mandatory in favour of consumers. However, the general control of unfair terms, contained in Part 2 of the Consumer Rights Act and based on—but extending—the Directive on unfair terms in consumer contracts, has a more nuanced set of tests.

4.2

Control of Unfair Terms by Part 2 of the Consumer Rights Act 2015

The general control is contained in section 62 of the Consumer Rights Act 2015, which provides that an unfair term of a consumer contract137—except for (generally) a term specifying the main subject matter of the contract or the price138—is not binding on the consumer, unless the consumer so chooses; and that a term is unfair “if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer.” In determining whether a term is fair, the nature of the subject matter of the contract is taken into account, and all the circumstances existing when the term was agreed and all the other terms of that or any related contract. In Schedule 2 of the Act there is a “grey list” (“indicative and non-exhaustive”) of terms of consumer contracts that may be regarded as unfair; but under section 65 there is an absolute restriction on clauses which exclude or restrict the trader’s liability for death or personal injury caused by negligence.139 These provisions implement the Directive on unfair terms in consumer contracts,140 although there are some significant extensions to the scope of protection offered to consumers.

136

Consumer Rights Act 2015 ss 31 (goods), 47 (digital content), 57 (services). Similarly, an unfair (non-contractual) consumer notice: although this is not the subject of this paper. 138 See below Sect. 4.2.2. 139 Consumer Rights Act 2015 s 65. This has its origin in the Unfair Contract Terms Act 1977 s 2 (which, after the amendment by the Consumer Rights Act, still applies to non-consumer contracts and notices). 140 Above, Sect. 1.2. 137

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Bargaining Power Under Part 2 of the Consumer Rights Act 2015

The Directive limited the scope of control to terms which have not been individually negotiated,141 thus identifying an inherent bargaining weakness in consumers which might be remedied in cases where the consumer was able to influence the substance of the term by negotiation. It was therefore aimed in particular at standard-form contracts. The implementations of the Directive in English law in 1994142 and 1999143 followed the Directive by limiting control to non-negotiated terms, but following a review by the Law Commission the new implementation in the 2015 Act applies to all terms, whether negotiated or not, on the basis that: This will affect very few cases. . . . [I]n practice the vast majority of negotiated terms fall within the exemption for main subject matter or price. Where terms about other issues are genuinely negotiated, they are unlikely to be found unfair. On the other hand, the current exemption for negotiated terms in the [Unfair Terms in Consumer Contracts Regulations144] encourages unnecessary argument and litigation. The legislation will be simpler and more easily enforced if the distinction between standard terms and negotiated terms is removed.145

In this context, there is therefore now no formal distinction in English law between standard terms and individually negotiated terms; nor does the Consumer Rights Act 2015 refer explicitly to the relative bargaining power of the consumer and the trader—in effect, it assumes that the consumer/trader relationship is in itself to be protected. However, this does not mean that the particular consumer’s bargaining power—and whether there was in fact negotiation between the parties over a particular term that the consumer later wishes to challenge—is irrelevant. The application of the core test of “unfairness” of the term—“good faith” and “significant imbalance”—will naturally take such things into account, as indeed is reflected in the Preamble to the Directive itself: “whereas, in making an assessment of good faith, particular regard shall be had to the strength of the bargaining positions of the parties. . .”146 The UK Supreme Court147 has applied the approach of the Court of Justice of European Union, which has said that in assessing whether imbalance arises “contrary to the requirement of good faith” within the meaning of the Directive, “the national court must assess for those purposes whether the seller or supplier, dealing

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Directive 93/13/EEC art 3. Unfair Terms in Consumer Contracts Regulations 1994 (SI 1994/3159) reg 3. 143 Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999/2083) reg 5. 144 Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999/2083). 145 Law Commission, “Unfair Terms in Consumer Contracts: Advice to the Department for Business, Innovation and Skills” (March 2013; available at http://www.lawcom.gov.uk/wp-content/ uploads/2015/06/unfair_terms_in_consumer_contracts_advice.pdf), xii. 146 Directive 93/13/EEC recital 16. The consumer’s bargaining position was taken into account by the House of Lords in assessing fairness in Director General of Fair Trading v First National Bank plc [2001] UKHL 52, [2001] 1 AC 481, although this was a decision on the 1994 Regulations, which expressly included the elements set out in recital 16 of the Directive in defining the test of good faith. 147 ParkingEye Ltd v Beavis [2015] UKSC 67, [2016] AC 1172 [105], [204]. 142

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fairly and equitably with the consumer, could reasonably assume that the consumer would have agreed to such a term in individual contract negotiations.”148 Although this statement is made in the context of the Directive, which is limited in scope to non-negotiated terms, it seems likely that an English court would take the same general approach to the interpretation of the 2015 Act.

4.2.2

Core Terms and Transparency of Terms Under Part 2 of the Consumer Rights Act 2015

So-called core contract terms are generally excluded from the unfairness test. According to section 64(1) of the Consumer Rights Act 2015: A term of a consumer contract many not be assessed for fairness . . . to the extent that— (a) it specifies the main subject matter of the contract, or (b) the assessment is of the appropriateness of the price payable under the contract by comparison with the goods, digital content or services supplied under it.

The scope of an earlier formulation of this exclusion,149 which is based on the Directive,150 was subject to debate, and the Supreme Court held in 2009, in the context of contracts between banks and consumers for the operation of current accounts, that “price” included charges levied for unauthorised overdrafts, therefore excluding such charging structures from judicial control.151 The Directive excludes terms on the main subject matter and price from review only if they are “in plain intelligible language”.152 The Consumer Rights Act 2015 has gone further—partly in response to a decision on bank charges,153 but also reflecting recent case-law of the Court of Justice154—and provides that the exemption applies only if the core term is transparent and prominent; and it expands on these terms to make clear that the purpose is to ensure that the consumer (or, at least, the average consumer) is properly informed about the core term before it becomes immune from challenge: (2) [Section 64(1), above] excludes a term from an assessment under section 62 only if it is transparent and prominent.

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Aziz v Caixa d’Estalvis de Catalunya, Tarragona i Manresa (Case C-415/11) EU:C:2013:164; [2013] 3 CMLR 5 [69]. 149 Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999/2083) reg 6(2). 150 Directive 93/13/EEC art 4.2. 151 Office of Fair Trading v Abbey National plc [2009] UKSC 6, [2010] 1 AC 696. 152 Directive 93/13/EEC art 4.2. 153 Office of Fair Trading v Abbey National plc [2009] UKSC 6, [2010] 1 AC 696; see Law Commission “Unfair Terms in Consumer Contracts: Advice to the Department for Business, Innovation and Skills” Part 2. 154 Whittaker (2017), p. 54.

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(3) A term is transparent for the purposes of this Part if it is expressed in plain and intelligible language and (in the case of a written term) is legible. (4) A term is prominent for the purposes of this section if it is brought to the consumer’s attention in such a way that an average consumer would be aware of the term. (5) In subsection (4) ‘average consumer’ means a consumer who is reasonably wellinformed, observant and circumspect.155

In addition, there is a general requirement that all written terms of a consumer contract be transparent—again, defined as being expressed in plain and intelligible language, and legible. No specific sanction is defined for breach of this general requirement, although no doubt it will be relevant to the application of the test of unfairness. There is also a provision that if a term could have different meanings, the meaning that is most favourable to the consumer is to prevail.156 In addition to the private law consequences between the parties to the consumer contract, the 2015 Act confers on the Competition and Markets Authority and other regulators investigatory and enforcement powers, including the power to obtain injunctions to prevent the continued use of unfair standard terms.157

5 Sector Specific Rules: The Financial Consumer Given the general approach in English law to fragmentation of information duties,158 it is not surprising that there are separate, specific duties of information in the financial sector, and even that there are different duties in different parts of the financial sector. Here two specific examples will be given: consumer credit and consumer hire contracts, and consumer financial services.

5.1

Consumer Credit and Consumer Hire

The Consumer Credit Act 1974 was originally a domestic provision designed to regulate consumer credit and consumer hire contracts, although it has been amended also to implement European Directives on consumer credit agreements within

155

Consumer Rights Act 2015 s 64. Consumer Rights Act 2015 s 69(1), in effect enacting the contra proferentem rule of construction for this context: above, Sect. 4.1. 157 Unfair contract terms guidance from the Competition and Markets Authority can be found on the Government website: http://www.gov.uk/government/organisations/competition-and-marketsauthority. 158 Above, Sect. 2.1. 156

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English law.159 Part V of the Act (as amended) makes provision for the formation of regulated consumer credit and regulated consumer hire agreements160 and either by its own provisions or by Regulations made under the Act it requires specified information to be provided to the debtor or hirer, and it regulates in considerable detail the form, content, and manner of execution of regulated agreements. The principal provisions of the Act on information and signature161 make clear that the purpose is to ensure that the debtor or hirer is fully informed and should not be misled. Regulations made under the Act set out very detailed requirements for the form of the agreement, provisions it must contain relating to the terms of the agreement itself, statements of protection and remedies available to debtors or hirers, and a signature box—and they even prescribe the order in which these things must be set out in the document and certain headings that must be used to draw the reader’s attention, and require that information must be presented in a clear and concise manner, with wording easily legible and of a colour readily distinguishable from its background.162 There are also detailed provisions for the method of signature.163 If an agreement fails to contain the required information, or to be signed in accordance with the statutory requirements, it is “not properly executed”,164 for which the sanction is that it is enforceable by the creditor against the debtor or hirer on an order of the court only.165

5.2

Consumer Financial Services

We have seen (above) the general information duties relating to distance contracts under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.166 Distance contracts for financial services have their own special

159

The latest is Directive 2008/48/EC of 23 April 2008 on credit agreements for consumers, [2008] OJ L133/66, which repealed and replaced Directive 87/102/EEC. 160 However, “consumer” here is understood very broadly: as an individual debtor, without any limitation to the loan being made for non-business purposes: Consumer Credit Act 1974 ss 8 (“consumer credit agreement”) and 15 (“consumer hire agreement”). 161 Consumer Credit Act 1974, ss 60, 61. 162 Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553, as amended), regs 2 (regulated consumer credit agreements) 3 (regulated consumer hire agreements), 6(2) (form of lettering on documents); Consumer Credit (Disclosure of Information) Regulations 2010 (SI 2010/1013); Consumer Credit (Agreements) Regulations 2010 SI 2010/1014) reg 3. 163 Consumer Credit (Agreements) Regulations 1983 reg 6; Consumer Credit (Agreements) Regulations 2010 reg 4. 164 Consumer Credit Act 1974 s 61(1). 165 Consumer Credit Act 1974 s 65(1). S 127 provides that where there is an application to enforce the improperly executed agreement, the court must exercise a structured discretion. 166 SI 2013/3134; above Sect. 2.

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regulation under the Financial Services (Distance Marketing) Regulations 2004,167 although they follow very similar lines to the general 2013 Regulations, generally tailored to the context of financial services contracts. The 2004 Regulations require specified information to be provided to the consumer by the commercial or professional supplier of services in the case of a contract concerning one or more financial services made through distance communication under an organised distance sales or service-provision scheme run by the supplier or an intermediary. Regulations 7 and 8 (and Schedules 1 and 2) set out the information required prior to the conclusion of the contract, and regulations 9 to 11 give the consumer the right to cancel, similar to the cancellation rights under the 2013 Regulations,168 except that in the case of the 2004 Regulations, where the cancellation period is extended because the supplier has not complied with the duty to provide information, there is no long-stop period so the cancellation right remains open until 14 days169 from the day when the consumer receives the last of the required information.170

6 Sector Specific Rules: The Digital Consumer 6.1

Extension of Consumer Protection to Cover Digital Contracts

In recent years the general policy of the UK legislator has been to bring digital contracts within the scope of general consumer protection legislation.171 When the Consumer Protection from Unfair Trading Regulations 2008 (dealing with unfair

167

SI 2004/2095 (as amended) implementing Directive 2002/65/EC of 23 September 2002 concerning the distance marketing of consumer financial services, [2002] OJ L271/16. There is no overlap between these Regulations, since the 2004 Regulations exclude from their operation provisions which would overlap with those which are already covered by other similar consumer protection provisions, such as the cancellation rights already provided for related agreements under the 2013 Regulations or for certain credit agreements under the Consumer Credit Act 1974: SI 2004/2095 reg 11 (as amended), or distance contracts which are also consumer credit contracts where the supplier has complied with Consumer Credit (Disclosure of Information) Regulations 2010: SI 2004/2095 regs 7(6), 8(1B), (1C). 168 The cancellation period is generally 14 days, as under the 2013 Regulations, except for distance contracts relating to life insurance or a personal pension, where the longer period of 30 days is substituted: SI 2004/2095 reg 10(5). 169 Or, in the case of life insurance or a personal pension contracts, 30 days: SI 2004/2095 reg 10(5). 170 SI 2004/2095 reg 10; cf the long-stop period of 12 months under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 reg 31. 171 See Government Response to Consultations on Consumer Rights (June 2013), Annex 2, available at http://www.gov.uk/government/uploads/system/uploads/attachment_data/file/274787/bis-13916-draft-consumer-rights-bill-governemnt-response-to-consultations-on-consumer-rights.pdf.

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commercial practices172) were amended in 2014 to give to consumers private rights to redress for misleading actions and aggressive commercial practices, the scope of the 2008 Regulations was extended to include commercial practices relating to the promotion, sale or supply of digital content, as well as goods and services173; and at the same time the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (imposing information duties in relation to on-premises, off-premises and distance contracts174) were extended to include contracts for digital content as well as goods and services.175 This pattern was completed by the Consumer Rights Act 2015, which contains detailed provision on the consumer’s rights under a contract for the supply of digital content,176 generally modelled on contracts for the sale or supply of goods: there are therefore (non-excludable) statutory terms relating to quality, fitness for purpose, and description of the digital content; and certain information provided by the trader about the digital content under the 2013 Regulations is to be treated as included as a term of the contract177 (giving rise, therefore to remedies for breach of contract for non-conformity— including the special consumer remedies under the 2015 Act: the right to repair or replacement, or to a price reduction178).

6.2

Consumers’ Consent to the Storage of Information or Access to Stored Information

The requirement under English law for a subscriber or user of terminal equipment to give consent before information can be stored or accessed on that equipment by a third party is set out in the Privacy and Electronic Communications (EC Directive) Regulations 2003,179 which implements the Directive on privacy and electronic communications (the “ePrivacy Directive”).180 A “user” is an individual using public electronic communications services,181 which therefore includes (but is not limited to) consumers.

172

Above, Sect. 3. Consumer Protection (Amendment) Regulations 2014, SI 2014/870 reg 2. 174 Above, Sect. 2.2. 175 Consumer Protection (Amendment) Regulations 2014 reg 9. 176 Consumer Rights Act 2015 Part 1, Chapter 3. 177 Consumer Rights Act 2015 ss 36(3), 37. 178 Consumer Rights Act 2015 s 42. 179 SI 2003/2426, reg 6 (as amended by SI 2011/1208). 180 Directive 2002/58/EC of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector, [2002] OJ L201/37, art 5 (as amended by Directive 2009/136/EC of 25 November 2009, [2009] OJ L337/11, art 2). 181 SI 2003/2426 reg 2. 173

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In order to satisfy the requirements of these Regulations, “clear and comprehensive information about the purposes of the storage of, or access to, that information” must be provided to the subscriber or user, who must give his or her consent— although this may be signified by amending or setting controls on the internet browser which the subscriber uses or by using another application or programme to signify consent. Moreover, in the case of repeated storage or access by the same person it is sufficient that the requirements are met in respect of the initial use. There is therefore a relatively low-level control over the giving of consent, since there are no requirements for the form in which the information about the purposes of storage or access must be given, nor exactly what information must be given; and consent can be signified quickly by clicking an answer on a web page. Guidance on the Regulations published by the UK Information Commissioner states182: [The Regulations] do not set out exactly what information you must provide or how to provide it – this is up to you. The only requirement is that it must be ‘clear and comprehensive’ information about your purposes. You must explain the way the cookies (or other similar technologies) work and what you use them for, and the explanation must be clear and easily available. Users must be able to understand the potential consequences of allowing the cookies. You may need to make sure the language and level of detail are appropriate for your intended audience. . . . To be valid, consent must be freely given, specific and informed. It must involve some form of positive action – for example, ticking a box or clicking a link – and the person must fully understand that they are giving you consent. You cannot show consent if you only provide information about cookies as part of a privacy policy that is hard to find, difficult to understand, or rarely read. Consent does not necessarily have to be explicit consent. However, consent must be given by a clear positive action. You need to be confident that your users fully understand that their actions will result in specific cookies being set, and have taken a clear and deliberate action to give consent. This must be more than simply continuing to use the website. To ensure that consent is freely given, users should be able to disable cookies, and you should make this easy to do. You should take particular care to ensure clear and specific consent for more privacyintrusive cookies, such as those collecting sensitive personal data such as health details, or used for behavioural tracking. The ICO will take a risk-based approach to enforcement in this area, in line with our regulatory action policy.

A person who suffers damage by reason of any contravention of any of the requirement of the Regulations is entitled to compensation, unless the defendant can prove that he took all reasonable care to comply.183 However, the Information Commissioner has powers of enforcement of the Regulations, either of his own motion, or at the request of the Office of Communications or of a person aggrieved by an alleged contravention.184

182

See https://ico.org.uk/for-organisations/guide-to-pecr/cookies-and-similar-technologies/. SI 2003/2426 reg 30. 184 SI 2003/2426 regs 31, 32. Details of enforcement actions taken are set out on the Information Commissioner’s website at https://ico.org.uk/action-weve-taken/enforcement/. 183

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A review by the European Commission of the Directive on privacy and electronic communications concluded that185: the consent rule to protect the confidentiality of terminal equipment failed to reach its objectives as end-users face requests to accept tracking cookies without understanding their meaning and, in some cases, are even exposed to cookies being set without their consent. The consent rule is over-inclusive, as it also covers non-privacy intrusive practices, and under-inclusive, as it does not clearly cover some tracking techniques (e.g. device fingerprinting) which may not entail access/storage in the device. Finally, its implementation can be costly for businesses.

and on 10 January 2017 the Commission adopted a proposal for a new ePrivacy Regulation, which would give a new definition of the scope of protection of information stored in and related to end users’ terminal equipment, and would use as its definition of the end-user’s consent the definition and conditions for consent used in the General Data Protection Regulation.186 The impact of this proposal on English law will depend on its progress before the UK leaves the EU, although the Commission’s original aim was that the new Regulation would apply from 25 May 2018.187

6.3

New Technologies and Information Asymmetries

The use of new technologies by traders may create new information asymmetries. The Law Commission in England has recently noted that188 Individuals, consumers and businesses demand modern, convenient methods for entering into binding transactions. Technological developments have changed the ways in which these transactions are made and will continue to do so at an ever-more-rapid pace

but also that consumers may be more likely to enter into agreements in haste or error if they use electronic signatures.189 The focus of the Law Commission’s study is the

185

Proposal for a Regulation of the European Parliament and of the Council concerning the respect for private life and the protection of personal data in electronic communications and repealing Directive 2002/58/EC (Regulation on Privacy and Electronic Communications) COM(2017) 10 final, 10 January 2017, Explanatory Memorandum, para 3.1; see https://ec.europa.eu/digitalsingle-market/en/news/proposal-regulation-privacy-and-electronic-communications. 186 Regulation (EU) 2016/679/EU of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, [2016] OJ L119/1: arts 4 (11) (“‘consent’ of the data subject means any freely given, specific, informed and unambiguous indication of the data subject’s wishes by which he or she, by a statement or by a clear affirmative action, signifies agreement to the processing of personal data relating to him or her”) and 7 (“conditions for consent”). 187 Proposal for Regulation, COM(2017) 10 final art 29.2. 188 Law Commission, “Electronic Execution of Documents” (Consultation Paper No 237, 2018) para 1.1. 189 Ibid para 1.21.

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electronic execution of documents, to facilitate the use of new technologies and to ensure the validity of transactions entered into by electronic means. Their provisional conclusion is that it is not for the general law of execution of documents to address consumer protection matters, but that, where necessary, specific legislation, such as the Consumer Credit Act 1974,190 can and does provide additional protections for vulnerable parties.191 There appears to be no plan to address directly the question of whether new information asymmetries might be created by new technologies, which might therefore call for new legislative responses, although the general policy of the UK legislator to bring digital contracts within the scope of general consumer protection legislation has already been noted.192

7 The Information Model Under Pressure and the Problem of Disinformation The potential hazards of (excessive) mandatory information for the law of consumer protection are of course discussed in the literature in England.193 Although (as we have seen in this paper) very many of the information requirements in English law flow from the implementation of EU rules, and to that extent the choice to use information as a source of consumer empowerment has an EU origin, there has generally been a similar view amongst UK Government agencies in favour of information requirements without significant internal critical review of the risks of information overload.194 190

Above, Sect. 5.1. Law Commission, “Electronic Execution of Documents” (Consultation Paper No 237, 2018) paras 1.22, 6.30. 192 Above, Sect. 6.1. 193 See esp Howells (2005). 194 See e.g. the DTI Consultation: Extending Competitive Markets: Empowered Consumers, Successful Business (July 2004) 4.1 (“Empowered consumers have the choices, information and skills to make decisions that give them a good deal. They are able to shop around; they have good information on products and services and the traders who provide them, and they are able to compare different deals in order to reach a decision that best suits their circumstances.”) See also the Impact Assessments produced for the Department for Business, Innovation and Skills in relation to implementation of the EU Consumer Rights Directive as regards information requirements and extension of the right to withdraw for off-premises contracts and for distance contracts (August 2012), available on the Government’s consumer protection policy pages at http://www.gov.uk/ government/policies/consumer-protection, and the Government’s Response to Consultations on Misleading and Aggressive Practices and the European Consumer Rights Directive (August 2013). That Response, as well as the Government’s Statement on Policy Reform and Responses to Pre-Legislative Scrutiny of the Bill which became the Consumer Rights Act 2015 (January 2014) list as the first of the “core consumer rights” the “right to clear and honest information before you buy”. The recognition of information overload is more recent in the EU context: Commission, “A European Consumer Agenda—Boosting confidence and growth” COM(2012)225 final, para 3.3. 191

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There is no specific legislation that deals with the problem of disinformation as a result of an overload of information.

References Beale H (ed) (2015) Chitty on contracts, 32nd edn. Sweet & Maxwell, London Beatson J, Burrows A, Cartwright J (2016) Anson’s law of contract, 30th edn. Oxford University Press, Oxford Cartwright J (2016) Contract law: an introduction to the English law of contract for the civil lawyer, 3rd edn. Hart, Oxford Cartwright J (2017) Misrepresentation, mistake and non-disclosure, 4th edn. Sweet & Maxwell, London Cross R, Bell J, Engle G (1995) Statutory interpretation, 3rd edn. LexisNexis, London Howells G (2005) The potential and limits of consumer empowerment by information. J Law Soc 32:349–370 Madge R (ed) (2013) Halsbury’s laws of England, vol 51. LexisNexis, London, with updates Mak V (2016) The consumer in European regulatory private law. In: Leczykiewicz D, Weatherill S (eds) The images of the consumer in EU law. Hart, Oxford Peel WE, Goudkamp J (eds) (2014) Winfield & Jolowicz on Tort, 19th edn. Sweet & Maxwell, London Whittaker S (2017) Distinctive features of the new consumer contract law. Law Q Rev 133:47–72

Information Obligations and Disinformation of Consumers: German Law Report Boris Schinkels

Abstract The German national report covers aspects regarding information/ disinformation of consumers according to German law and thus serves as a source for the general report. Key topics are the characteristics of the underlying consumer model, pre-contractual information in general (with a particular focus on transparency requirements), food information, misleading commercial practices and control of unfair contract terms. Regarding the latter the German rules for the control of standard contract terms significantly differ from the rules that specifically transform the Directive 93/13/EEC on unfair terms in consumer contracts (which is specifically discussed with regard to bargaining power). Sector specific observations cover the financial consumer and the digital consumer (especially addressing distance sales and data protection). Additionally, the national discussion regarding (mandatory) consumer information as a problem of information overload is being considered. Final observations regard measures relating to the education of consumers.

1 General Characteristics of the Consumer Model 1.1

National Consumer Model in a Europeanized Legal Order?

A “national consumer model” is not as such imposed directly by law. It can be drawn only in relying on dogmatic conclusions after a scrutiny of the body of national consumer law, which can be identified as rules addressing the legal position of a consumer. A central part of our consumer law thus comprises contract law, as can be derived from the definition of a consumer in § 13 of the German Civil Code (Bürgerliches Gesetzbuch, BGB). According to that rule one may by and large

B. Schinkels (*) Greifswald University, Faculty of Law and Economics, Chair for Civil Law, Private International Law, European Private Law and Comparative Law, Greifswald, Germany e-mail: [email protected] © Springer Nature Switzerland AG 2019 G. Straetmans (ed.), Information Obligations and Disinformation of Consumers, Ius Comparatum – Global Studies in Comparative Law 33, https://doi.org/10.1007/978-3-030-18054-6_3

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understand as consumer a natural person who contracts for purposes which are outside his trade, business, craft or (self-employed1) profession. The norm does not specify different types of consumers. Hence, rules obliging the other party to a private contract to inform the consumer in general do not differentiate between different levels of vulnerability of consumers. However, there is a different picture as regards the German Act against Unfair Competition (Gesetz gegen unlauteren Wettbewerb, UWG). On the one hand, it expressly refers to the definition in § 13 BGB (cf. § 2 II UWG). On the other hand, it allows to take into account particular vulnerabilities of special groups of consumers addressed by a commercial practice, especially gullibility, age, mental or physical handicaps (§ 3 IV UWG). Control of unfair terms in consumer contracts is governed by § 310 III BGB via recourse to § 13 BGB. Requirements of food labelling can be found in Regulation 1169/2011/EU on the provision of food information to consumers.2 This regulation refers to the consumer-terminology in Regulation 178/2002/EC.3 With regard to the notion of a German “national” consumer model one has to take into account the multi-layer or europeanized nature of our legal system. From an autonomous German perspective, there have been ideas of protecting weaker parties before the European concept of the consumer was imported to German legal culture. The climax of the autonomous discussion may be seen in the seventies of the twentieth century, when several monographs were dedicated to consumer protection.4 In 1977, the academic association of teachers of civil law (Zivilrechtslehrervereinigung) made consumer protection the general topic of its biennal conference. The academic discussion particularly accompanied the efforts of the legislator to implement the German act on the regulation of standard business conditions (Gesetz zur Regelung des Rechts der Allgemeinen Geschäftsbedingungen, AGBG), which entered into force in 1977. While there was dispute as to the proper means of consumer protection, one could not even reach consensus with regard to a consumer definition. Consequently, the said act against unfair standard business conditions did not even provide for a notion of consumer. It only lowered its strictness of control of standard contract terms that were stipulated towards merchants as defined in the German Commercial Code (Handelsgesetzbuch, HGB). It was not before the implementation of the Directive 93/13/EEC on unfair terms in consumer contracts5 that the consumer became an

1

Insofar the wording of the rule is different from most consumer directives. Regulation (EU) No 1169/2011 of 25 October 2011 on the provision of food information to consumers, amending Regulations (EC) No 1924/2006 and (EC) No 1925/2006 of the European Parliament and of the Council, and repealing Commission Directive 87/250/EEC, Council Directive 90/496/EEC, Commission Directive 1999/10/EC, Directive 2000/13/EC of the European Parliament and of the Council, Commission Directives 2002/67/EC and 2008/5/EC and Commission Regulation (EC) No 608/2004. 3 Regulation (EC) No 178/2002 of 28 January2002 laying down the general principles and requirements of food law, establishing the European Food SafetyAuthorityand laying down procedures in matters of food safety. 4 Cf. von Hippel (1974) and Simitis (1976). 5 Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts. 2

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express object of German rules against unfair standard contract terms, even though they are the core of German private law protecting weaker parties to contracts. Before that, Directive 85/577/EEC6 had already induced a europeanised definition of the consumer in our former Haustürwiderrufsgesetz, which entered into force in 1986. Insofar it seems to be fair to say that—from a perspective of German private law—the playing field of today is totally dominated by European law: The bulk of our national consumer (contract) law is directly induced by directives of the European Union. Insofar it may be national as regards the formal law making process but it is not autonomous as regards its content. Since national rules implementing European directives have to be interpreted in the light of the meaning given to the respective directive by the Court of Justice of the European Union (CJEU), they can only be understood in the light of a European consumer model. Thus the discussion amongst German scholars may be seen as national particularly with regard to their origin and their mother tongue. But their views of a model consumer always have a European perspective. Admittedly, there is some space for autonomous consumer rules, especially with regard to (older) European directives pursuing the concept of minimum harmonisation. But truly autonomous provisions of the German legislator hardly allow to establish an autonomous consumer model besides the European one.

1.2

Confident, Informed or Informable Consumer

The functioning of the single market is a central concern of European consumer law and thus of the corresponding rules of German consumer law. Economic growth shall be stimulated by making a confident consumer buy goods and ask for services with little regard to the problems of cross border transactions within the single market. Boosting consumer confidence is described as express aim in several European regulations regarding consumer contract law.7 Some German scholars describe consumer confidence as pivotal to European consumer law as a whole.8 The European Commission e.g. monitors consumer trust in online-sales and publishes the results in the Consumer Conditions Scoreboard.9 The CJEU10 has further specified the role model of the consumer as someone who is “reasonably well-informed and reasonably observant and circumspect”

6

Directive of 20 December 1985 to protect the consumer in respect of contracts negotiated away from business premises (85/577/EEC). 7 For example cf. Directive 2002/65/EC of 23 September 2002 concerning the distance marketing of consumer financial services [. . .], Recital 3. 8 Cf. Heiderhoff (2016) mn. 191. 9 Cf. Consumer Conditions Scoreboard: Consumers at home in the Single Market (2017). 10 See Judgement of 16 September 2014, SAT.1, C-329/02 P, ECLI:EU:C:2004:532, paragraph 24.

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(“consommateur moyen, normalement informé et raisonnablement attentive et avisé”; “Durchschnittsverbraucher, der angemessen gut unterrichtet und angemessen aufmerksam und kritisch ist”). This is not an empirical but a normative concept11 which implies a proper amount of rational and even selfish behaviour. But one does not necessarily have to understand this as totally synonymous to the classic definition of the “rational egotist” (homo oeconomicus or “econ”) as modelled by neo-classical economic theory. Insofar as the abilities of average consumers are crucial, it is not a priori impossible to take into account empirical findings of behavioural psychology as regards systematic errors and biases in choices made by average “humans”.12 The acknowledgement of irrational consumer behaviour in the decision Purely Creative13 may be read as a confirmation of this view. Additionally, it should be taken into account that there is a multitude of directives that probably do not rely on only one totally homogeneous model of informed rationality of consumer behaviour as basis for consumer protection. The informable consumer more easily fits as an explanation for market-complementing information than as an explanation for market correction. E.g. rendering void unfair contract terms is relevant where a market is not effective in respect of fairness—no matter whether the reason for this may be seen in inferior bargaining power, prohibitive transaction costs or even irrational behaviour of consumers. Insofar, consumer protection as provided by Directive 93/13/EEC does not specifically rely on consumer rationality. The mere fact that consumers do not even read the fine print14 is more important than the question whether it renders the picture of the reasonably observant consumer partially unrealistic. By contrast, the combination of information obligations towards consumers and consumers rights of withdrawal, as implemented by the Directive 2011/83/EU on consumer rights,15 especially makes sense insofar as the informed consumer makes better (rational) choices. The ideal of assuring an informed decision (of withdrawal) is highly plausible with regard to the typical information deficit even of the most rational consumer regarding the quality of goods bought via distance selling. Still, one may ask oneself if taking part in a promotional tour to a place miles from anywhere (leading to a contract concluded away from business premises) does not have to be taken itself as an indication of restricted consumer rationality. Some German scholars point out that the concept of the reasonably wellinformed and observant consumer and information obligations have an ambivalent 11

Cf. also Recital 18 of the Directive 2005/29/EC. With regard to the differentiation between “humans” and “econs” see Thaler and Sunstein (2009) Part I. 13 CJEU, judgment of 18. October 2012 – C-428/11, Purely Creative, ECLI:EU:C:2012:651, mn. 38; for an assessment of the decision see Scherer (2013), p. 705. 14 Cf. Wagner (2017), p. 1027: “Zehntausende verpflichten sich zum Kloputzen” (“tens of thousands commit themselves to toilet cleaning” via terms agreed to by a contract opening access to WLAN). 15 Directive 2011/83/EU of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC and repealing Directive 85/577/EEC and Directive 97/7/EC. 12

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relationship. In comparison to a less informed and observant model of the consumer the standard of the CJEU has especially strengthened the freedom of business transactions by treating the consumer as accountable. However, where the state of being reasonably informed is not identified as status quo but as a future goal to be achieved via information obligations, there may be an opposing tendency to consumer education and the danger of paternalism.16 Others expressly differentiate between informed and informable consumers—the latter seen as model for consumer contract law.17

1.3

Calls for Further Differentiation

In December 2010, the academic board of advisors of the former Federal Ministry of Nutrition, Agriculture and Consumer Protection has given the opinion18 that there should be more differentiation of groups of consumers, including trusting (vertrauende), vulnerable (verletzliche) and responsible (verantwortliche) consumers. Trusting consumers shall be those who do not want to and cannot take the time necessary to inform themselves and to achieve the expertise to take wellgrounded decisions especially in the fields of healthcare and finance.19 The vulnerable consumer shall especially cover persons excluded from social and economic interactions because of excessive indebtedness, sickness or lacking means of access to the internet.20 The given concept of the responsible consumer comprises people who actively inform themselves and others in order to optimize sustainability of consumption regarding ecological and social aspects of production and disposal of consumables.21

2 Pre-Contractual Information Requirements in General 2.1

General Information Obligations

Pre-contractual duties of entrepreneurs to provide consumers with information regarding the contract can be found especially in Art. 246 et seqq. of the Introductory Act to the Civil Code (Einführungsgesetz zum BGB, EGBGB). § 312a II BGB and Art. 246 EGBGB cover information obligations for consumer contracts in general.

16

See Möstel (2015), p. 906, 908 et seq. Cf. in that sense Rott (2015), p. 163, 164. 18 Wissenschaftlicher Beirat Verbraucher- und Ernährungspolitik beim BMELV (2010). 19 Ibid., p. 2. 20 Ibid., p. 2 et seq. 21 Ibid., p. 3. 17

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For example, the entrepreneur has to inform about his identity, about essential features and time of the performance offered, its total price including taxes and costs of deliverance as well as legal warranty for defects and the consumers right to withdrawal. Art. 246a and b EGBGB address contracts concluded away from business premises and distance marketing.22 Those rules have been created to transform the requirements of the Directive 2011/83/EU on consumer rights and of the Directive 2002/65/EC.23 Art. 247 EGBGB covers information obligations for credit agreements as reflected by Directive 2008/48/EC24 on credit agreements for consumers. Art. 248 EGBGB contains European induced25 information obligations regarding payment services. Those rules are complemented by information obligations in our Civil Code. There are duties to inform at the very beginning of the communication. For example, if an entrepreneur phones a consumer he has to disclose his identity and the commercial nature of the call first (§ 312a I BGB). Some information obligations are pre-contractual insofar as the information has to be given before the consumer declares to enter into the contract (e.g. Art. 246 I No. 1 EGBGB regarding essential features of goods or services offered). Other rules provide for information that has to be implemented into the contract (e.g. Art. 247 § 7 I EGBGB regarding credit agreements). Also there are provisions for the use of means of communication that do not allow sufficient pre-contractual information. Such information may be given later without undue delay (e.g. Art. 247 § 5 EGBGB addressing consumer credit agreements). That requirement may be met by information given after the conclusion of the contract. A post-contractual obligation can be found in § 312f BGB. According to § 312f I No. 1 BGB (addressing contracts concluded away from business premises and reflecting Art. 7 (2) Directive 2011/83/EU) a copy of the contract has to be provided on paper, while § 312f II No. 2 BGB (addressing distance marketing, cf. Art. 8 (7) Directive2011/83/EU) only asks for a durable medium (dauerhafter Datenträger, see § 126b BGB).

2.2

Voluntarily Added Information Complementing Mandatory Information Given by Businesses

In principle, businesses are allowed to add voluntary information to the information particulars imposed by. However, some information must be given via use of 22

For a survey see Bierekoven (2014), p. 283. Directive 2002/65/EC of 23 September 2002 concerning the distance marketing of consumer financial services [. . .]. 24 Directive 2008/48/EC of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC. 25 Cf. Directive 2007/64/EC of 13 November 2007 on payment services in the internal market [. . .] which s will be replaced by Directive (EU) 2015/2366 of 25 November 2015 on payment services in the internal market [. . .] in January 2018. 23

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standard forms (e.g. Art. 247 § 2 II EGBGB requiring the use of the Standard European Consumer Credit Information, cf. Annex II of Directive 2008/48/EEC). Also, there are model forms for information as regards contracts concluded away from business premises and distance marketing contracts (e.g. Annex I to Art. 246a § 1 EGBGB) The usage of such a form is not mandatory but triggers a legal assumption that the information given meets the requirements (Art. 246a § 1 II 2 EGBGB). That privilege will be lost by inserting additional information. Finally, any additional information may not result in mandatory information failing to meet required standards for it being clear and comprehensible.

2.3

Sanctions for Violation of Pre-Contractual Duties to Supply Information

First of all, not informing the other party correctly can affect the scope of contractual rights and duties. Wrong or missing information about promised goods may lead to the assumption of a defect as to quality and thus trigger the respective remedies of the buyer. Similarly, not informing the consumer of payments the entrepreneur intends to claim regarding taxes or costs of delivery results to such payments not being owed. This is expressly provided by §§ 312a II, 312e BGB and would otherwise follow from general rules of interpretation. Insofar, this is not a special aspect of consumer protection and there is no potential conflict with freedom of contract. The breach of duties to inform the other party prior to the conclusion of contract gives raise to claims for damages on the basis of culpa in contrahendo (§§ 280 I, 241 II, 311 II No. 1 BGB).26 This may include a claim for dissolution of a detrimental contract subsequently entered. Furthermore, not complying with information obligations may be seen as misleading commercial practice in the light of our Act against Unfair Competition (Gesetz gegen den unlauteren Wettbewerb, UWG, see infra, sub 4.). Simply leaving out particular information may be interpreted either as plain non-information or as misleading the consumer by the omission. Misleading omissions are a special category of unfair commercial practice (cf. § 5a UWG). Furthermore, there may be a breach of an information obligation by insufficient or wrong information, by delivering misleading information or by information that is not sufficiently transparent to meet statutory requirements. Unfair commercial practice may trigger claims for rectification or omission (§ 8 UWG), which may be raised by competitors and qualified organisations including such for the protection of consumers (amongst others). As regards the duty to inform about the details of the consumer’s right to declare withdrawal,

26

Wendehorst (2016), § 312a BGB mn. 38.

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a correct information is required to initiate the regular time limit for withdrawal (cf. § 356 III BGB).

2.4

Transparency Requirements

The already described rules addressing information obligations in Art. 246 EGBGB et seqq. expressly require the information given to be clear and comprehensive (klar und verständlich), e.g. Art. 246 I EGBGB, Art. 246a § 4 I EGBGB, Art. 246b § 1 I EGBGB, Art. 247 § 7 I EGBGB.

2.5

Forensic Experience Regarding Transparency

Most notorious are cases of incorrect information about the right of withdrawal.27 The question often determines the assessment of the validity of a declaration of withdrawal insofar as only a formally correct instruction triggers the regular time limit for the consumer to declare withdrawal (e.g. see § 356 III BGB). However, lack of transparency does not seem to be the dominant argument used to dismiss correct instruction. More often the reason for finding an information incorrect is that it is totally missing, incomplete, not sufficiently determined or wrong (wrongness and incompleteness may be seen as overlapping aspects). E.g. the Higher Regional Court (Oberlandesgericht, OLG) Koblenz had to decide a situation where an instruction indicated “two weeks/ one month” as period of withdrawal, which was further specified in a footnote. The question, whether that technique warrants sufficient transparency, was raised. The court, however, preferred to leave it open, finding that the instruction was wrong with regard to the circumstances triggering the limitation period.28 Meanwhile, the Federal Court of Justice (Bundesgerichtshof, BGH)29 has held that the concretion of such an instruction via footnotes clearly addressing consumers is not objectionable.30 In a case concerning an insurance contract the BGH had to assess the situation that a formally correct and typographically emphasized instruction about the right of withdrawal was accompanied by further non-emphasized information including a diverging (wrong) indication of the time limit for the withdrawal. Nonetheless the

27

The question of transparency of the information about the right to withdrawal is e.g. discussed by OLG Hamburg Judgment of 3. 6. 2010 – 3 U 125/09, MultiMedia und Recht (MMR) 2011, 100. 28 OLG Koblenz, Judgment of 19. 08. 2016 – 8 U 369/16, BeckRS 2016, 119080, mn. 32 et seqq. 29 OLG Koeln, Judgment of 24. 02. 2016 – 13 U 84/15, Verbraucher und Recht (VuR), 2nd guideline. 30 BGH Judgment of 14.3.2017 – XI ZR 442/16, NJW RR 2017, 812, 815, mn. 23.

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instruction was held to be sufficient,31 which implies that the inconsistency was neither seen as a case of indeterminacy nor as one of insufficient transparency. That finding was recently transferred to a case of distance marketing.32 In another recent decision concerning a consumer loan the BGH has held that the creditor may illustrate mandatory information regarding certain content of the agreement (according to § 492 II BGB, Art. 247 § 6 EGBGB—reflecting Art 10 (2) Directive 2008/48/EC) via recourse to examples of cases.33 Violation of other information obligations (neither concerning the right of withdrawal nor the construction of the contract) by solely failing the standard of transparency regularly does not play a significant role with regard to disputes between the parties of the contract. A claim for damages on the basis of culpa in contrahendo requires the breach of duty to be causal for a damage. This could especially be assumed where a correctly informed consumer would not have agreed to the specific terms of the contract. That, however, may be hard to establish.

3 Specific Food Information Requirements for Consumers 3.1

General Aspects

Food labelling is mainly governed by Regulation 1169/2011/EU on the provision of food information to consumers. It shall warrant informed consumer choices and make safe use of food, with particular regard to health, economic, environmental, social and ethical considerations (Art. 3 (1) Regulation 1169/2011/EU) The regulation defines mandatory particulars (Art. 9 Regulation 1169/2011/EU) as well as availability and placement of food information (Art. 12 Regulation 1169/2011/EU) and the presentation of mandatory particulars (Art. 13 Regulation 1169/2011/EU). Amongst others, there are requirements for the list of ingredients (Art. 18), respective quantitative indications (Art. 22 Regulation 1169/2011/EU) and a nutrition declaration (Art. 29 Regulation 1169/2011/EU et seqq.). Regarding the latter, there are again specific requirements of presentation (Art. 34 Regulation 1169/2011/EU). Voluntary food information is allowed subject to certain requirements (Art. 36 Regulation 1169/2011/EU) and may not be displayed to the detriment of the space available for mandatory information (Art. 37 Regulation 1169/2011/EU). As a general rule, food information shall not be misleading (Art. 7 (1) Regulation 1169/2011/EU). There is a requirement of transparency insofar as food information shall be accurate, clear and easy to understand for the consumer. (Art. 7 (2) Regulation 1169/2011/EU).

See BGH Judgment of 16. 12. 2015 – IV ZR 71/14, BeckRS 2015, 21001. BGH Judgment of 10. 10. 2017 – XI ZR 443/16, Wertpapiermitteilungen (WM) 2017, 2248. 33 BGH Judgment of 22. 11. 201 – XI ZR 434/15, Neue Juristische Wochenschrift (NJW) 2017, 1306. 31 32

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Marketing Techniques Regarding the Vulnerability of Consumers; Packaging Colours

E.g. Art. 13 (2) Regulation 1169/2011/EU requires mandatory information to be clearly legible. According to recital 26 and Art. 2 (2) m of the Regulation 1169/2011/ EU the requirement of legibility has to interpreted as covering aspects of the colour used and the contrast between print and background. However, this still relates to ease of reading34 and therefore does not specifically address psychological manipulation via colours. Furthermore, the regulation aims at maintaining fair information practices and prohibits misleading information (Art. 7 (1) Regulation 1169/2011/ EU). Different colours trigger different emotional responses. A red package may increase the expectation of spicyness of potato crisps while low-fat potato crisps often are sold in light blue packages since the colour is associated with slimness. However, as long as the idea of the reasonably well-informed and reasonably observant and circumspect consumer is held up, it is questionable whether the use of a colour for a package as such may suffice to establish a misleading productinformation with regard to purely emotional connotations, while there is formal correct information about ingredients and nutrition. By contrast, packaging colours may be misleading if, according to established usages, they induce the expectation that the package contains a different product. Furthermore, the ECJ has held that a correct list of ingredients of a fruit tea (referring to natural aroma tasting of raspberry and vanilla) may not be enough to satisfy the requirements of Art. 2 and 3 of Directive 2000/1335 where the product name includes the terms “vanilla” and “raspberry” and the package shows pictures of vanilla flowers and raspberries.36 Such presentation might trigger the expectation that the product contains genuine vanilla and raspberry aroma.

3.3

Rules About the Presentation of Food Information

According to Art. 13 (1) Regulation 1169/2011/EU: “mandatory food information shall be marked in a conspicuous place in such a way as to be easily visible, clearly legible and, where appropriate, indelible. It shall not in any way be hidden, obscured, detracted from or interrupted by any other written or pictorial matter or any other intervening material.” According to Art. 13 (2) “the mandatory particulars listed in Article 9 (1) shall be printed on the package or on the label in such a way as to ensure

34

Grube (2016), Art. 13 mn. 59. Directive 2000/13/EC of the European Parliament and of the Council of 20 March 2000 on the approximation of the laws of the Member States relating to the labelling, presentation and advertising of foodstuffs. 36 CJEU, Judgement of 4 June 2015, Teekanne – C-195/14, ECLI:EU:C:2015:361. 35

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clear legibility, in characters using a font size where the x-height, as defined in Annex IV, is equal to or greater than 1.2 mm.”

3.4

Sanctions for Not Supplying Mandatory Particulars in Accordance with the Presentation Requirements

Art. 8 Regulation 1169/2011/EU itself defines standards of compliance for food operators, but does not specify further sanctions. However, failure to correctly supply mandatory particulars may lead to the assessment of a misleading character of the food information in the sense of Art. 7 (1) Regulation 1169/2011/EU. In that case, the persons addressed in Art. 8 (1) Regulation 1169/2011/EU may not market or advertise the product (§ 11 I Lebensmittel-, Bedarfsgegenstände- und Futtermittelgesetzbuch, LFGB). Deliberate violation of that prohibition is a criminal offence (§ 59 I No. 7 LFGB). Negligent violation is an administrative offence (Ordnungswidrigkeit, § 60 I No. 2 LFGB). Furthermore, not providing mandatory information in accordance with Regulation 1169/2011/EU is seen as unfair commercial practice based on the violation of law (§ 3a Gesetz gegen unlauteren Wettbewerb, UWG).37 Non-compliance in that sense may especially be derived from the violation of presentation requirements. Competitors and qualified organisations including such for the protection of consumers (amongst others) may claim for rectification or omission (§ 8 UWG). Competitors may claim damages (§ 9 UWG).

4 Misleading Commercial Practices The German Act against Unfair Competition (Gesetz gegen unlauteren Wettbewerb, UWG) prohibits unfair commercial activities (§ 3 I UWG). It especially interdicts commercial activities addressing or reaching consumers which are contrary to the requirements of professional diligence and possibly alter the economic behaviour of the consumer (§ 3 II UWG reflecting Directive 2005/29/EC38 [Unfair Commercial Practices Directive]). For such consumer-related activities there is a detailed black list of inacceptable practices (Annex to § 3 III UWG which transforms Annex I of Directive 2005/29/EC). Further general categories are—amongst others—breach of law (§ 3a UWG), aggressive (§ 4a UWG) and misleading commercial practice. Commercial practice may mislead either actively (§ 5 UWG) or by omission (§ 5a UWG). For example, use of invalid standard terms is illegal and therefore regularly

Ohly (2016), § 3a mn. 64. Directive 2005/29/EC of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market [. . .] (‘Unfair Commercial Practices Directive’). 37 38

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amounts to an unfair commercial practice.39 However, with regard to the latter there is some uncertainty as regards activities towards consumers. It is unclear to what extent the concept full harmonisation pursued by the Unfair Contract Terms Directive (see recital 15 and Art. 4 Directive 2005/29/EC) leaves space for relying on the broad concept of breach of law within its scope of application, especially where the rule violated is not rooted in European provisions.40 If necessary, a restrictive interpretation within the scope of the directive has to be applied. The benchmark for assessing unfairness of commercial practices addressing consumers is the average consumer or, if the activity addresses a certain group of consumers, the average member of that group (§ 3 IV UWG).41 The statute expressly refers to gullibility, age, mental or physical handicaps. So if, for example, an activity specifically addresses inhabitants of a home for the elderly, the high average age of the addressed group has to be taken into account. By contrast, non-average vulnerabilities are not relevant when an internet service provider uniformly addresses all consumers within a certain region. Insufficient pre-contractual information may amount to misleading omission. Insofar, the means used for communication with consumers are relevant. For example, the necessary information about the character of the product offered has to be assessed in the light of the means of communication used (§ 5a III UWG). Against unfair practices there are claims for rectification or omission (§ 8 UWG42), which may be raised by competitors and qualified organisations including such for the protection of consumers (amongst others). By contrast, § 9 UWG provides claims for damages only for competitors, not for consumers. Consequently, most scholars deny consumers’ claims for damages in tort law (§ 823 II BGB) solely based on violation of § 3 UWG as well.43

5 Unfair Contract Terms 5.1

Different Categories of Non-Negotiated Terms

First of all, it should be made clear that German law knows two kinds of non-negotiated terms of contracts. As opposed to individually negotiated terms, our law provides a differentiation between standard terms and non-negotiated individual terms (in consumer contracts). Standard contract terms are such terms that have been drafted in advance with the intention of multiple use and that are unilaterally implemented by one party. With regard to such terms, it is not relevant,

39

Steckenborn (2012), p. 2324. Dassbach (2016), p. 441, 444. 41 For details see Götting and Nordemann (2016) § 5 UWG mn. 0.17. 42 For details see Dassbach (2016), p. 441. 43 Goldmann (2016, § 9) mn. 13. 40

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whether the stipulating party is entrepreneur. As regards contracts between entrepreneurs and consumers, § 310 III No. 2 BGB, which reflects Art. 3 (2) Directive 93/13/EEC, already covers contract terms that have been drafted in advance for single use in in the specific contract, i.e. non-negotiated individual terms. With regard to such contracts the entrepreneur is also deemed to have implemented previously drafted terms into the contract, unless they have been inserted by the consumer.

5.2

Control of Inclusion of Terms

There is a twofold system of control. On the one hand we have rules which increase the formal requirements for standard terms to be included in a contractual agreement (Einbeziehungskontrolle, §§ 305a et seqq. BGB). When used towards non-entrepreneurs, there has to be an express reference to the standard terms or, if that is unreasonable, an easily visible placard enabling the other party to reasonably take notice of the terms (§§ 305 II, 310 I BGB). By contrast, businessmen can consent to standard terms of undisclosed content. Additionally, individually negotiated terms have priority over conflicting standard terms (§ 305b BGB). Surprising stipulations do not become part of the contract (§ 305b I BGB). This provision covers terms that are unusual and which the other party cannot be expected to reckon.44 Benchmark for this test is the averagely observant contracting party. Insofar it can be taken into account whether the addressed group of potential co-contractors consists of consumers or businessmen45 E.g. assigning development costs to a buyer of real estate despite the agreement of an all-inclusive price has been held to be surprising.46 The same can be said with regard to the stipulation of a payment for usually gratuitous services.47 However, as regards transactions via internet, the problem of dubious providers trying to gull consumers is nowadays partially addressed by special requirements with regard to the undertaking of a liability to pay (see § 312 III BGB—“button solution”). Finally, the sanction of § 305b I BGB can be avoided by especially pointing out a term to the other party, insofar as this eliminates the problem of surprise.48 Of course, the burden of proof for sufficient indication lies with the stipulating party.

44 BGH Judgment of 26. 2. 2013 – XI ZR 417/11, Neue Juristische Wochenschrift (NJW) 2013, 1803, mn, 23. 45 BGH Judgment of 26. 7. 2012 – VII ZR 262/11, NJW-Rechtsprechungsreport (NJW-RR) 2012, 1261, mn. 12. 46 BGH Judgment of 29. 09. 1983, Neue Juristische Wochenschrift (NJW) 1984, 171. 47 Regional Court (Landgericht, LG) Berlin NJW-RR 2012, 424. 48 BGH, Judgment of 18. 02. 1992 – XI ZR 126/91, Neue Juristische Wochenschrift (NJW) 1992, 1822, 1823.

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Furthermore, there is an express contra proferentem rule (§ 305b II BGB). Amongst several alternatives to construe a standard term the most advantageous one for the other party has to be applied unless a possible detrimental interpretation leads to invalidity of that clause. In excluding standard terms from the contract the rules described here do not specifically rely on a test of fairness regarding their substance.

5.3

Control of Fairness

On the other hand there is a set of rules providing invalidity of stipulations that are deemed unfair with regard to their substance (Inhaltskontrolle, §§ 307 et. seqq. BGB). There is a list of clauses rendered invalid without further need or possibility to evaluate them as fair or unfair (Klauselverbote ohne Wertungsmöglichkeit, § 309 BGB), a list of clauses which specifically have to be judged as inappropriate (Klauselverbote mit Wertungsmöglichkeit, § 308 BGB) and a blanket clause (§ 307 BGB), which to some extent resembles Art. 3 (1) of the Directive 93/13/ EEC. According to Art. 3 I BGB standard terms are invalid if they disadvantage the other party contrary to good faith (Treu und Glauben). The general clause can especially be invoked insofar as the list referring to Art. 3 (3) in the annex of the Directive 93/13/EEC applies and none of the catalogues in § 308 et seq. BGB is deemed to fit. According to § 310 III No. 2 BGB, which reflects Art. 3 (2) of the Directive 93/13/EEC, the rules providing invalidity of stipulations that are deemed unfair with regard to their substance (Inhaltskontrolle, §§ 307 et. seqq. BGB) and the contra proferentem rule (§ 305c II BGB) also apply to non-negotiated individual terms in contracts between entrepreneurs and consumers. If, according to one of those two regimes, a non-negotiated contract term does not become part of the contract or is invalid, the rest of the contract stays valid (§ 306 BGB). By contrast, the ineffectiveness of an individually negotiated term of a contract renders the whole contract invalid, unless it can be established that the contract would also have been concluded without the invalid stipulation (§ 139 BGB).

5.4

Assessment of Bargaining Power

As has been explained, our law differentiates between standard contract terms and non-negotiated individual terms (in consumer contracts). The described control of standard contract terms is already triggered by the mere fact that one party has the power to unilaterally implement its standard contract terms. Insofar it is not relevant, whether this party acts as entrepreneur. The underlying autonomous doctrine as

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developed by our courts is older than the European-induced idea of specific consumer protection. The regime even applies when a consumer sells something via eBay and uses a pre-formulated exclusion of liability. If one accepts the traditional German view that the power to unilaterally implement non-negotiated terms into a contract is the core aspect of superior bargaining power,49 one has to come to the conclusion that even a consumer can have superior bargaining power as opposed to an entrepreneur. However, the special catalogues of unfair terms in §§ 308 et seq. BGB do not apply, if the other party acts as entrepreneur (§ 310 I BGB). But this does not categorically hinder redress to the blanket clause (§ 307 I BGB) with regard to clauses mentioned in the catalogues. As regards contracts between entrepreneurs and consumers, § 310 III No. 2 BGB already covers contract terms that have been drafted in advance for single use in in the specific contract, i.e. non-negotiated individual terms. With regard to such contracts the entrepreneur is also deemed to have implemented previously drafted terms into the contract, unless they have been inserted by the consumer. If, again, the power to unilaterally implement a non-negotiated term is seen as the core aspect of superior bargaining power, one can even speak of a lesser requirement of superior bargaining power on the part of the entrepreneur regarding the control of non-negotiated terms in contracts between entrepreneurs and consumers as opposed to the control of standard terms in other contracts.

5.5

Burden of Proof for Non-Negotiated Terms

Standard contract terms are such terms that have been drafted in advance with the intention of multiple use and that are unilaterally implemented by one party. Apart from consumer contracts, the burden of proof regarding the characterization of contractual stipulations as standard contract terms lies with the party relying on special control of such terms according to §§ 305 ff. BGB.50 As regards contracts between entrepreneurs and consumers, there is a control of contract terms that have been drafted in advance even for single use in in the specific contract, i.e. non-negotiated individual terms. With regard to such contracts the entrepreneur is deemed to have implemented previously drafted terms into the contract, unless they have been inserted by the consumer. Insofar, the burden of proof lies with the entrepreneur. The wording of § 310 III No. 2 BGB nonetheless indicates that it is up to the consumer to proof the drafting in advance and its causation of the consumer’s inability to influence the substance of the term.51 The first requirement seems to be in clear accordance with the Directive 93/13 EEC as Art. 3 (2) only contains a rule for the burden of proof regarding (pre-formulated)

49

Cf. Pfeiffer (2013) introduction mn. 23. Cf. Linck (2017) § 35 mn. 17. 51 Cf. Pfeiffer (2013) § 310 Abs. 3, mn. 23. 50

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standard terms. However, it is questionable whether national law may require causality between the pre-formulation and the consumer’s lack of influence on the substance of the term.52

5.6

Forensic Aspects

The question whether a term was individually negotiated or not will arise when one party relies on a clause and the other party states that the term was not individually negotiated. While the legal subsumtion is the task of the court, it is the parties who have to deliver the facts. If the parties’ statements contradict with regard to facts deemed relevant for the classification as standard term or non-negotiated individual term, the court will evaluate the indications already given by the parties: a claimant relying on a clause regularly adds a written version of the contract to his statement of claim. If it is contained in a specially printed or designed form, this prima facie indicates pre-formulation and unilateral implementation.53 If one clause of a form has been individually altered, this may be taken as a sign that other terms of the form were also subject to negotiation. Furthermore, a court thinking that additional evidence may be relevant will check if the party who bears the burden of proof has taken a formally correct motion to take evidence. If, after scrutiny of the evidence, the court is convinced that one version of the parties’ contradicting factual statements is true, it will take this version as basis for its legal assessment. If still in doubt (non liquet), the decision will be against the party bearing the burden of proof. There is no option to decide on the basis of balance of probabilities.

5.7

Exclusion of Core Contract Terms from the Control of Fairness

Apart from the requirement of transparency, the unfairness test is applicable to standard terms deviating from or complementing legal rules only (§ 307 III BGB). Since in our economy it is up for the market to fix prices, the equivalence of performance and reward promised is not subject to the specific test of fairness. Within the scope of application of Directive 93/13/EEC, this result is determined by the CJEU decision Kásler.54 The parties are also free to shape the specifics of a performance promised. With regard to consumer contracts, this rule has to be interpreted in light of Art. 4 (2) of the Directive 93/13/EEC.

See Pfeiffer (2013) § 310 Abs. 3, mn. 26 et seq. Cf. Kappus (2016), p. 33. 54 Preliminary ruling C-26/13 – Árpád Kásler and Hajnalka Káslerné Rábai v OTP Jelzálogbank Zrt, mn. 55, ECLI:EU:C:2014:282. 52 53

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Transparency Requirements

§ 307 III 2 BGB makes clear that the transparency control of non-negotiated terms even covers core contract terms while § 307 I 2 BGB provides that inappropriateness, which leads to invalidity of a term, can be derived from the mere assessment that it is not clear and comprehensible (klar und verständlich). Individually negotiated terms are not subject to a special requirement of transparency. The test is not restricted to formal and grammatical correctness. It shall warrant that the other party can understand the full meaning and range of a contract term.55 Insofar a contract term can even be intransparent if it clearly rules an aspect while not expressly informing about further consequences of that ruling. This concept applies to standard contract terms in all kinds of contracts as well as to non-negotiated terms in consumer contracts. As regards the latter, an equivalent view is expressed in the CJEU decision Amazon,56 according to which a choice of law clause in a consumer contract is unfair as long as it does not exclude potential misleading by informing the consumer that the effect of the clause is restricted by Art. 6 (2) of the Rome I Regulation. Regarding the control of standard contract terms as well as non-negotiated individual terms, the benchmark for the test is the intellectual capacity of an average customer (Durchschnittskunde), who is reasonably informed and thoroughly tries to understand a contract term.57 As regards Directive 93/13/EEC, this benchmark is predetermined according to the CJEU decision Kásler.58 While there is no further differentiation between groups of different vulnerability in general, one has to consider Art. 4 (1) of the Directive 93/13/EEC with regard to consumer contracts. This provision demands to take into account all the circumstances attending the conclusion of the contract. This leaves a range for considerations as to individual aspects of vulnerability of a customer. Accordingly, pre-contractual information should be relevant for the interpretation of non-negotiated terms in consumer contracts in general and therefore may influence the assessment of transparency. As regards autonomous German law (control of standard terms in contracts other than consumer contracts) there is a dispute whether standard contract terms have to be interpreted objectively or with regard to individual circumstances. However, even the Federal Court of Justice (Bundesgerichtshof, BGH) has accepted that explanations given to the customer before entering into the contract are relevant for the interpretation of a clause.59

Pfeiffer (2013) § 307 mn. 253. CJEU, Judgement of 28 July 2016, Amazon EU Sàrl, C-191/15 - ECLI:EU:C:2016:612, mn. 82, 2nd finding. 57 See Thüsing (2018) Transparengebot Rn. 2. 58 Preliminary ruling C-26/13 – Árpád Kásler and Hajnalka Káslerné Rábai v OTP Jelzálogbank Zrt, mn. 74, ECLI:EU:C:2014:282. 59 BGH, Judgement of 15.06.1983 – IV a ZR 31/82, Neue Juristische Wochenschrift (NJW), 1983, p. 2638; cf. further Lindacher and Hau (2013) § 305c mn. 111. 55 56

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Consequently, pre-contractual information should be taken into account when assessing transparency.

6 Sector Specific Rules: The Financial Consumer 6.1

Deviations from Other Sectors of Consumer Law

As a general principle of our contract law, the parties have to take care of their own interests. Even though the beginning of negotiations may cause duties to act thoughtfully with regard to the interests of the other party (§§ 311 II, 241 II BGB), every party has to bear the risk of own inefficient assessment of the available information. This idea is not radically altered by information obligations towards consumers. While there is the hope that an informed consumer makes more efficient choices, it is still his risk not to draw the right conclusions from the information given. This picture has been partially changed with the implementation of the Directive 2014/17/EU60 on credit agreements for consumers relating to residential immovable property. The directive pursues an ideal of responsible borrowing (see Art. 6 Directive 2014/17/EU) and requires the creditor to take into account the rights and interests of the consumer (Art. 7 (1) Directive 2014/17/EU). One way to shift risks is to replace information with advice. With regard to Art. 22 of the directive, § 511 BGB has implemented a regime of advice before the conclusion of a consumer credit agreement relating to real estate (as defined in § 491 III BGB). On the basis of an evaluation of the situation of the consumer and his goals the creditor may recommend one or more suitable product(s) or to declare that he cannot recommend any product and the consumer has to be provided with the respective declaration on a durable medium. Such a recommendation shifts the risk of wrongly assessing the relevant information. In case the recommendation was not appropriate, this amounts to a breach of duty towards the consumer which may lead to a claim for damages. However, there is a dispute whether the application of that regime requires a tacit consultancy contract61 or not.62 The first position would be in accordance with a more traditional view of private law, since the duty to advise correctly would be subject to a separate contractual promise. But the assumption of the creditor’s tacit consent to a gratuitous contract only designed to create his liability does not seem to be overly realistic. A similar (pre-contractual) duty to advise can be found with regard to insurance contract in § 6 of our Act on Insurance

60 Directive 2014/17/EU of 4 February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010. 61 Cf. In that sense Grüneberg (2018) § 511 mn. 2. 62 Krüger (2016), p. 397, 402 assumes a Rücksichtnahmepflicht (“obligation to be considerate of”) as defined in § 241 II BGB.

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Contacts (Versicherungsvertragsgesetz, VVG). However, the rule does not require the insurant to act as consumer. As regards credit agreements relating to real estate, the creditor also has to assess the creditworthiness of the consumer before the concluding of the contract (§ 500a BGB). Central standard for this is the prognosis whether the consumer will be able to fulfil his duties as borrower. The creditworthiness may not be essentially based on the value of the real estate that serves as security (§§ 505b II BGB, the rules reflect Art. 18 Directive 2014/17/EU). As a result of a defective or omitted assessment, the percentage rate of the subsequent credit agreement will be altered into certain rates customary in the market and the debtor may terminate without notice or compensation (§ 500d I BGB). This regime goes well beyond market complementation via mandatory information as it restricts market decisions.63 Especially older people have experienced a more restrictive lending practice after implementation of the rules. Most notably the regime may prevent would-be creditors from bank-financed purchases of real estate that homo oecomicus in a perfect market would conduct (for example where the offer is a true bargain).

6.2

Discussion Regarding the Adequacy of Extensive Information Obligations

Some scholars speak of an inflation of information obligations in comparing Directive 2008/48/EC with its predecessor.64 However, such critique seemingly did not result in legislative restraint regarding the comprehensiveness of information obligations as implemented by Directive 2014/17/EU. With regard to investment consulting, the dilemma of the need to give sufficient details for an informed decision about an extremely complex financial product and the limited capacities to process such information has led several scholars to the idea of completely replacing the information model by one of legal regulation of financial products (e.g. via licensing).65 Beyond addressing individual contracts, there is also the option of supervision of a market. The Regulation 1094/2010/EU establishing the European Insurance and Occupational Pensions Authority66 expressly aims at promoting transparency, simplicity and fairness in the market for consumer financial products or services across the internal market (Art. 9 (1)).

63

Schnauder (2014), p. 3. See Schnauder (2014), p. 3, with regard to § 491a BGB as induced by Directive 2008/48/EC on consumer credit agreements. 65 See Koch (2012), p. 485; Köndgen (2011), p. 283, 285; Klöhn (2006), p. 80 et seqq. 66 Regulation 1094/2010/EU of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority) [. . .]. 64

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There are also voices asking for “customer tailored” information, which means that there should be differentiations according to different target groups.67 The requirement to specify the annual percentage rate in consumer contracts before the conclusion of the contract (§ 492 II BGB, Art. 247 § 3 I No. 3 EGBGB) as unidimensional yet meaningful criterion for the comparison of credit offers seems to be a successful example of reducing complexity. Also, the Standard European Consumer Credit Information (cf. Annex II of Directive 2008/ 48/EEC) may facilitate the comparison of several offers.

7 Sector Specific Rules: The Digital Consumer 7.1

Specific Regimes Addressing Online Consumer Sales/ Distance Sales

Special rules for consumer contracts address typecast risks for consumers. These may be derived from the way the contract is concluded (distance marketing, electronic commerce, non-negotiated terms) or from the subject of the contract (e.g. credit agreements) or both (distance marketing of financial products). Besides the regime for distance marketing, we have a set of rules for electronic commerce (§ 312i BGB et seq.). The conclusion of a contract via use of tele-media triggers special information obligations and is subject to special requirements for the perfection of the contract especially via a “button solution” known from Art. 8 (2) Directive 2011/83/EU (§ 312j III BGB). By contrast, the rules for distance marketing also cover offline-distance-marketing (e.g. where the offer of the consumer is expressed via postcard and the acceptance happens in coincidence with delivery). That however, has become rare. As regards contracts with non-neuralgic content, the question whether there is distance marketing or not decides whether special information obligations (beyond the general ones in § 312a, Art. 246 EGBGB) and a right of withdrawal will apply. As regards a comparison of a distance selling contract of a non-neuralgic subject and a consumer credit contract concluded vis-à-vis, the structure of the consumer protection will the same in both situations: a combination of specific information obligations (§ 312d BGB and Art. 246a EGBG for distance marketing, § 491a BGB and Art. 247 EGBGB for consumer credit agreements) and a right of withdrawal (§ 312g BGB, § 495 I BGB). However, the typical online-nature of distance marketing is taken into account with regard to form requirements. A consumer credit agreement has to be in writing (§ 492 BGB) while § 312f II No. 2 BGB only prescribes that a copy of the contract is made available via a durable medium (dauerhafter Datenträger, § 126b BGB). Violation of the latter provision does not render the contract void. 67

Fasel (2011), p. 48.

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The Relevance of Reasonable Consumer Expectation

Consumer expectation matters e.g. with regard to our standards for assessing whether a delivered good does conform to a sales contract or is defective (§ 434 BGB transforming Art. 2 Directive 1999/44/EC on the sale of consumer goods68). The aspect of information shaping the expectation of the buyer is reflected by the relevance of the product information given not only by the seller himself (§ 434 I 1 BGB, Art. 2 (2) (a) Directive 1999/44/EC) but also via public statements of the manufacturer (§ 434 I 3 BGB). With respect to such information, Art. 2 (2) (d) Directive 1999/44/EC expressly refers to the concept of reasonable consumer expectation.

7.3

Data Protection: Requirements of Consent Regarding Storing and Processing Data

From 25 May 2018 Data Protection will be governed by the Regulation 2016/679/ EU (General Data Protection Regulation, GDPR69). The rights of the data subject shall be safeguarded by information obligations (Art. 13 et. seq. GDPR) that differentiate between personal and non-personal data. Additionally, there are requirements as to transparency and modalities of information (Art. 12 GDPR). Lawfulness of processing data not necessary for the performance of a contract or certain other privileged aims requires consent of the data subject (Art. 6 (1) (a) GDPR). Art. 25 (2) GDPR describes requirements of data protection by default with regard to the processing of personal data. These requirements shall ensure that the person concerned is protected against processing of data that could have been prevented by changing default settings. However, the range of Art. 25 (2) GDPR is limited insofar as it only addresses the controller as defined in Art 4 (7) GDPR (and not a manufacturer e.g. of a modem).70 Recital 30 GDPR indicates that cookies which allow to identify an individual directly or indirectly are considered as covering personal data. Consent must be freely given and requires clearly affirmative action (Art. 4 (11) GDPR). Bargaining power is reflected by Recital 43 GDPR: The assessment whether consent was freely given has to take into account a clear imbalance between subject and controller.

68 Directive 1999/44/EC of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees. 69 Regulation (EU) 2016/679 of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/ EC (General Data Protection Regulation). 70 Cf. Mantz (2018) Art. 25 mn 65.

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E.g. a banner on a website indicating the use of cookies with the only option to accept or acceptance as default option will not be enough to comply with these requirements. According to Recital 32 GDPR, pre-ticked boxes are not sufficient to constitute consent. Furthermore, if there is no option to refuse the processing of data not necessary for the service offered, consent is not given freely (cf. Art. 7 (4) GDPR).

8 The Information Model in General 8.1

Critique of Mandatory Information and Legislative Response

As already stated, the bulk of German private consumer law is not autonomous but determined by European directives. Consequently, the question may be understood as especially covering German assessments of the European legislator. Insofar it may be remarked that fundamental criticism of information overload is not only a recent phenomenon. Information load as a psychological problem was already well established in the seventies of the twentieth century.71 Already the information concept of the Directive 94/47/EC72 (first time-sharing directive) has been severely criticized. In her thorough analysis on the boundaries of consumer protection via information (dated 1998)73 Kind takes the findings of lesser accuracy of decisions through increased information and concludes bounded rationality of consumers74 especially when handling cognitive dissonances. She finds the idea of a consumer who takes mandatory information at the very place and time of the transaction as central basis of his decision not realistic.75 The consumer could not be seen as data processing machine that can easily be provoked to behave rationally by input of sufficient information.76 She already makes suggestions to improve the efficiency of information, namely to reduce the amount of information and to replace the right of withdrawal by a requirement to confirm the contract within a certain period77—the latter model resembles the reflection period option for the Member States provided by Art. 14(6) Directive 2014/17/EU. Furthermore, mandatory information should be required to be made recognisable as such to the consumer,78 and consumers

71

For a definition of information overload cf. Jacoby (1977). Directive 94/47/EC of 26 October 1994 on the protection of purchasers in respect of certain aspects of contracts relating to the purchase of the right to use immovable properties on a timeshare basis. 73 Kind (1998). 74 Kind (1998), p. 481. 75 Kind (1998), p. 527. 76 Kind (1998), p. 529. 77 Kind (1998), p. 534. 78 Kind (1998), p. 532. 72

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reluctance to draft a declaration of withdrawal should be reduced by offering a form for withdrawal79—meanwhile the idea of such a form (optional for the consumer) has been adopted by Art. 11 (2) Directive 2011/83/EU. Insofar, one is tempted to say that the European legislator is neither very fast as regards taking into account critique and alternative suggestions nor totally immune to the problem of path dependence. One much discussed option to streamline information can be seen in the traffic light rating system for nutrition values of food. According to a survey by the Society for Consumption Research (Gesellschaft für Konsumforschung, GfK) for the organisation foodwatch, executed in June 2009, 69% of all interviewed German consumers were in favour of such a system and 77% rejected a European prohibition of the mandatory implementation of such a system by national legislators.80 Also, the requirement to specify the annual percentage rate may be seen as a simple but meaningful key-figure allowing to compare competing loan offers. In 2011, the Institute for Consumer Journalism (Institut für Verbraucherjournalismus) has published a study for the Verbrauchzentrale Bundesverband e. V.—our predominant non-profit consumer advice centre—on the impact of information on consumer decisions81 suggesting reduction of information load especially via “customer tailored” information, which means that there should be differentiations according to different target groups.82 Additionally, it points out that with regard to mass products (mandatory) product information provided by the producer via internet may be an effective alternative to obligatory product information via the seller.83 Furthermore, the study indicates that product information provided by well reputed institutions carrying out product tests like the Stiftung Warentest (foundation for the test of goods) is of higher value than product information provided by the seller.84 Apart from that, the author of the study puts much emphasis on the need to educate consumers to improve their skills regarding the gathering and understanding of information.85 By contrast, there are also voices rejecting the concept of informed decision as such. As already stated, with regard to investment consulting some scholars take the opinion that the dilemma of the need to give sufficient details for an informed decision and the limited capacities to process such information should be resolved by abandoning the concept of information for the sake of legal regulation of complex financial products (e.g. via licensing).86 That would allow the consumer to behave as a “trusting” one with regard to regulated financial products.

79

Kind (1998), p. 533. Cf. Spiegel online (2009); further information can be obtained via: https://www.foodwatch.org/ de/informieren/ampelkennzeichnung/mehr-zum-thema/studie-vergleich-ampel-gda/. 81 Fasel (2011). 82 Ibid., p. 48. 83 Ibid., p. 56. 84 Ibid., p. 54 et seq. 85 Ibid., p. 53. 86 Koch (2012), p. 485; Köndgen (2011), p. 283, 285; Klöhn (2006), p. 80 et seqq. 80

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Remedying Information Overload?

The problem of mandatory information overload could be addressed by reducing rules defining information obligations. However, when comparing younger directives on consumer law with their predecessors (e.g. Directive 2011/83/EU with Directive 85/577/EWG and Directive 1997/7/EC), the trend seems to be in the opposite direction. Some scholars speak of an inflation of information obligations.87 To my knowledge, there is no specific legislation addressing the problem of information overload as regards the non-mandatory provision of information. In principle, giving too much information to the consumer in order to mislead him may amount to an unfair commercial practice. One could also think of someone implementing “distracting” information either into the set of mandatory information or into the standard terms of the contract. Such behaviour could especially be illegal with regard to the standards of transparency for mandatory information (Art. 37 of the Regulation 1169/2011/EU may be read as an indication for that thought) and for non-negotiated contract terms as described above. On the other hand, complying with mandatory legal requirements of information will, as a general rule, not amount to a breach of law or an unfair commercial practice. However, the BGH has already ruled that it is possible to assess a standard contract term simply repeating the wording of a statute as unfair for want of transparency.88 So, at least theoretically, where a statute itself fails to be transparent, it may be argued that it can be complied with only by redrafting the information it requires to convey. However, such an assumed statute would inevitably raise the question whether it still complies with higher ranking fundamental rights.

9 Measures Relating to the Education of Consumers The Verbraucherzentrale Bundesverband e. V. maintains a web presentation for consumer education (www.verbraucherbildung.de). Via that site it provides special material for use in schools in order to improve consumer skills. This material covers topics like finance, media, nutrition, sustainable consumption and consumer law. It takes into account different stages of education. To address the problem that consumer education as such is not a part of the mandatory contents of the curricula as defined by the provinces, there is material designed to be implemented in courses on specific subjects like languages, mathematics or social studies. Apart from that, schools that cooperate in a project and implement certain contents in their individual curriculum may be awarded the label “consumer school” (Verbraucherschule). Schnauder (2014), p. 3, with regard to § 491a BGB as induced by the second directive on consumer credit agreements. 88 BGH, Judgment of 9. 5. 2001 – IV ZR 138/99, Neue Juristische Wochenschrift (NJW) 2001, 2012. 87

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Furthermore, some provinces provide awards for schools excelling in consumerrelated education, e.g. Bavaria (Partnerschule Verbraucherbildung—“partner school consumer education”) and Baden-Wuerttemberg (Verbraucherschutzpreis für Schulen—“consumer protection award for schools”). However, these projects are dependent on the initiative of single schools or even single teachers. Therefore, it is hard to assume a widespread effect. Moreover, any consumer-targeted education approach will not help where the most fundamental skill for processing written information is missing: According to a survey performed in 2016,89 around 19% of the tested German fourth graders (aged around 10) did not have the reading skill to understand the general context and the storyline of a text as a whole (Kompetenzstufe III). Acknowledgement The paper is also published in Schmidt-Kessel (ed.), German National Reports on the 20th Congress of Comparative Law, Mohr Siebeck Tübingen 2018.

References Bierekoven C (2014) Neuerungen für Online-Shops nach Umsetzung der Verbraucherrechterichtlinie. MultiMedia und Recht (MMR), p 283 Dassbach C (2016) Der lauterkeitsrechtliche Unterlassungsanspruch. Neue Justiz (NJ), p 441 European Commission (2017) Consumer Conditions Scoreboard: Consumers at home in the Single Market 2017 edition, obtainable at: http://ec.europa.eu/newsroom/just/item-detail.cfm?item_ id¼117250 Fasel C (2011) 1, 2 oder 3 – bessere Informationen, bessere Entscheidungen? Eine handlungsorientierte Untersuchung zur Bedeutung von Information und Faustregeln im Entscheidungsalltag von Verbrauchern Studie vom Institut für Verbraucherjournalismus (ifv) GmbH an der SRH Hochschule Calw, erstellt im Auftrag des Verbraucherzentrale Bundesverbandes e.V. (vzbv) obtainable at: www.dietiwag.at/mat/vzbv.pdf Goldmann M (2016) § 9 UWG. In: Harte-Bavendamm H, Henning-Bodewig F (eds) Gesetz gegen den unlauteren Wettbewerb (UWG), 4th edn. C. H. Beck, Munich Götting H-P, Nordemann A (2016) Gesetz gegen den unlauteren Wettbewerb (UWG), 3rd edn. Nomos, Baden-Baden Grube M (2016) Art. 13. In: Grube M, Voit W (eds) Lebensmittelinformationsverordnung, 2nd edn. C. H. Beck, Munich Grüneberg C (2018) § 511 BGB. In: Palandt, Bürgerliches Gesetzbuch, 77th edn. C. H. Beck, Munich Heiderhoff B (2016) Europäisches Privatrecht, 4th edn. C. F. Müller, Heidelberg Hußmann A, Wendt H, Bos W, Bremerich-Vos A, Kasper D, Lankes E-M, McElvany N, Stubbe T, Valtin R (2016) IGLU 2016 - Lesekompetenzen von Grundschulkindern in Deutschland im internationalen Vergleich, p 15, obtainable at: https://www.fk12.tu-dortmund.de/c1ueb005/de/ Forschung/Abgeschlossene-Projekte/IGLU-PIRLS-2016.html Jacoby J (1977) Information load and decision quality: some contested issues. J Mark Res (JMR):569. https://www.jstor.org/stable/3151201?seq¼1#page_scan_tab_contents Kappus A (2016) Der “steinige Weg” des AGB-Verwenders zur Individualvereinbarung. Neue Juristische Wochenschrift (NJW), p 33

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Kind S (1998) Die Grenzen des Verbraucherschutzes durch Information – aufgezeigt am Teilzeitwohnrechtegesetz. Duncker & Humblot, Berlin Klöhn L (2006) Kapitalmarkt, Spekulation und Behavioral Finance. Duncker & Humblot, Berlin Koch J (2012) Grenzen des informationsbasierten Anlegerschutzes - Die Gratwanderung zwischen angemessener Aufklärung und information overload. Zeitschrift für Bank- und Kapitalmarktrecht (BKR), p 485 Köndgen J (2011) Grenzen des informationsbasierten Anlegerschutzes – zugleich Anmerkung zu BGH, Urt. v. 22. 3. 2011 – BGH 22.03.2011 Aktenzeichen XI ZR 33/10. Zeitschrift für Bankund Kapitalmarktrecht (BKR), p 283 Krüger U (2016) Neue Beratungspflichten bei Verbraucherdarlehen – ein Paradigmenwechsel? Zeitschrift für Bank- und Kapitalmarktrecht (BKR) 397:397 Linck R (2017) § 35 - Kontrolle allgemeiner Geschäftsbedingungen. In: Schaub, Arbeitsrechtshandbuch, 17th edn. C. H. Beck, Munich Lindacher W, Hau W (2013) § 305c BGB. In: Wolf M, Lindacher W, Pfeiffer T (eds) AGB-Recht, 6th edn. C. H. Beck, Munich Mantz R (2018) Art. 25. In: Sydow, Europäische Datenschutzgrundverordnung, 2nd edn. Nomos Möstel M (2015) Wandel des Verbraucherleitbilds? Eine Positionsbestimmung aus lebensmittelrechtlicher Perspektive. Wettbewerb in Recht und Praxis (WRP), p 906 Ohly A (2016) § 3a. In: Ohly A, Sosnitza O (eds) Gesetz gegen den unlauteren Wettbewerb, 7th edn. C.H. Beck, Munich Pfeiffer T (2013) Introduction, §§ 307, 310 BGB. In: Wolf M, Lindacher W, Pfeiffer T (eds) AGB-Recht, 6th edn. C. H. Beck, Munich Rott P (2015) Der “Durchschnittsverbraucher” – ein Auslaufmodell angesichts personalisierten Marketings?, Verbraucher und Recht (VuR), p 163 Scherer I (2013) Der EuGH und der mündige Verbraucher – eine Beziehungskrise? Wettbewerb in Recht und Praxis (WRP):705 Schnauder F (2014) Juris-Praxisreport-BKR 4/2014, p 3 Simitis K (1976) Verbraucherschutz – Schlagwort oder Rechtsprinzip? Nomos, Baden-Baden Spiegel Online (unknown author) (2009) Spiegel online, 24. July 2009, Verbraucher wollen Lebensmittel-Ampel Steckenborn A (2012) Verstoß gegen AGB als Wettbewerverletzungen, Betriebsberater (BB), p 2324 Thaler R, Sunstein C (2009) Nudge. Penguin Books, London Thüsing G (2018) Transparenzgebot. In: Graf von Westphalen, Vertragsrecht und AGB-Klauselwerke, 41th edn. C. H. Beck, Munich von Hippel E (1974) Verbraucherschutz, 1st edn. Mohr, Tübingen Wagner G (2017) “Zehntausende verpflichten sich zum Kloputzen” (“Tens of thousands commit themselves to toilet cleaning”). Zeitschrift für Europäisches Privatrecht (ZEuP), p 1027 Wendehorst C (2016) § 312a BGB. In: Münchener Kommentar zum BGB, 7th edn. C. H. Beck, Munich Wissenschaftlicher Beirat Verbraucher- und Ernährungspolitik beim BMELV (2010) Der vertrauende, der verletzliche oder der verantwortungsvolle Verbraucher? Plädoyer für eine differenzierte Strategie in der Verbraucherpolitik Stellungnahme des Wissenschaftlichen Beirats Verbraucher- und Ernährungspolitik beim BMELV, as of December 2010. Accessible via: https://www.vzbv.de/sites/default/files/downloads/Strategie_verbraucherpolitik_Wiss_ BeiratBMELV_2010.pdf

L’information et la désinformation des consommateurs : Rapport français Thomas Piazzon

Abstract French consumer Law resorts to two complementary techniques to improve consumer information. According to a more liberal approach, consumer law seeks first and foremost to secure market transparency and emphasizes free circulation of information. In a more recent approach, consumer law demands that traders disclose information which they owe to consumers under certain circumstances or when consumers seem to be in a particularly weak position. The present contribution must be read taking into account the particular French context, with its malleable features, and considering that French legislation has undergone a significant influence from European Law. The existing French consumer legislation on consumer information is hereby critically assessed in order to show its merits and shortcomings.

Résumé Au-delà de son objectif clairement affiché de protection des consommateurs, réputés plus faibles que les professionnels avec lesquels ils traitent, le droit de la consommation est une matière complexe qui mêle de multiples techniques afin de parvenir à ses fins politiques. S’agissant de promouvoir l’information des consommateurs, thème qui se veut central, le droit français utilise deux techniques qui renvoient à deux approches bien différentes, quoique complémentaires. Selon une logique libérale, somme toute ancienne, le droit de la consommation s’attache, d’une part, à assurer la police et la transparence du marché sur lequel l’information est censée circuler, en quelque sorte, d’elle-même. Tel est par exemple l’objet des règles relatives à l’interdiction des pratiques déloyales mises en œuvre par les professionnels ou des règles relatives à l’affichage public des prix. Dans une approche plus récente – moins confiante dans les vertus du marché –, le droit de la consommation force d’autre part les professionnels à délivrer les informations qu’ils détiennent aux consommateurs avec lesquels ils contractent ; obligation générale d’information, formalisme informatif et obligation de clarté dans la T. Piazzon (*) Université Panthéon-Assas (Paris II), Laboratoire de droit civil, Paris, France e-mail: [email protected] © Springer Nature Switzerland AG 2019 G. Straetmans (ed.), Information Obligations and Disinformation of Consumers, Ius Comparatum – Global Studies in Comparative Law 33, https://doi.org/10.1007/978-3-030-18054-6_4

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rédaction du contrat sont alors imposés par la loi, en particulier dans certaines hypothèses où la situation du consommateur semble particulièrement menacée (contrats conclus à distance ou hors établissement, domaine spécifique du crédit, consommation de services financiers. . .). C’est cette législation française pléthorique et à géométrie variable, désormais très dépendante des sources européennes du droit, que la présente communication s’attache à exposer, tout en s’interrogeant sur ses vertus et ses faiblesses.

1 Les caractères généraux du droit français de la consommation 1.1

Origine, fondements et objectifs du droit de la consommation

Dans son sens de protection d’une partie faible, le droit français de la consommation est apparu au début des années 1970 et son acte de naissance peut être précisément trouvé dans la loi n 72-1137 du 22 décembre 1972 relative à la protection des consommateurs en matière de démarchage et de vente à distance. Cette loi place déjà l’information, sujet de ce rapport, au cœur de son dispositif, puisqu’elle impose en particulier que certaines mentions figurent dans le contrat remis par le professionnel au consommateur. Il faut noter qu’un tel formalisme informatif, à cette époque, n’a rien d’inédit, car le législateur l’utilise déjà de longue date, en particulier depuis 1935 pour la vente de fonds de commerce. À son origine, le droit de la consommation recycle donc certaines techniques juridiques connues, en même temps qu’il en élabore de nouvelles, tel le droit de rétractation instauré par la loi de 1972 dans les domaines qui étaient les siens. Manifestement, le but de ces règles est de lutter contre le déséquilibre des forces, notamment juridiques et économiques, qui existe entre les professionnels et les consommateurs, déséquilibre qui paraît inhérent au développement du capitalisme et au paradigme libéral qui l’accompagne (standardisation des produits, multiplication des contrats d’adhésion, etc.). À cet égard, les juristes français citent volontiers une formule de Lacordaire, quitte à se détourner du sens que son auteur lui prêtait : « Entre le fort et le faible, (. . .) c’est la liberté qui opprime, et la loi qui affranchit ». De 1972 jusqu’aux années 1990, le jeune droit de la consommation prétend donc ouvertement lutter contre certains excès du libéralisme économique en se portant au secours des plus faibles. En regardant les choses de plus près, on peut cependant relever que l’idée de protection des consommateurs n’a pas attendu cette époque somme toute récente pour accéder à la vie juridique. Sans remonter aux règles romaines relatives à la police des foires et marchés, l’idée précise selon laquelle le libéralisme économique doit être domestiqué est évidemment plus ancienne. Dès le début du XXe siècle, le droit français s’attache en particulier à lutter contre les fraudes dont les commerçants peuvent se rendre coupables. Si le but de ces règles n’est pas encore de protéger une catégorie particulière de personnes (le terme même de « consommateur », au sens moderne, n’apparaîtra que plus tard), l’idée n’en est pas moins déjà présente que la

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confiance dans le libéralisme suppose une régulation de sa pratique. Tel est, aujourd’hui encore, l’objet du droit de la concurrence, matière qui entretient des liens évidents avec le droit de la consommation1. Pour que la compétition économique soit saine, il faut ainsi empêcher que les professionnels usent d’artifices ou de ruses pour convaincre leurs clients. C’est contre ces pratiques malhonnêtes qu’entendait lutter la grande loi du 1er août 1905 relative aux fraudes et falsifications – dont beaucoup de dispositions ont ensuite été intégrées dans le Code de la consommation, créé en 1993. Il ne s’agit pas encore, en 1905, de protéger une catégorie particulière d’individus qui seraient considérés comme plus faibles ; il s’agit seulement de prévenir les abus que peuvent commettre les professionnels, quelle que soit la personne avec laquelle ils sont en relation d’affaires, les consommateurs profitant par prolongement de ces règles de police du marché. Ce « rôle économique »2 du droit de la consommation demeure bien entendu d’actualité, comme en témoigne parfaitement l’intitulé même d’une loi française adoptée le 3 janvier 2008 : loi pour le développement de la concurrence au service des consommateurs. Certains parlent d’un droit objectif de la consommation, par opposition à un droit subjectif de la consommation. Tandis que le premier (droit objectif, apparu il y a plus de cent ans) repose sur la confiance dans le libéralisme et profite à tous en visant le bon fonctionnement global du marché, le second (droit subjectif, né dans les années 1970) est le signe d’une certaine défiance envers le libéralisme ; il correspond au droit des contrats de consommation et s’attache à protéger la partie faible, c’est-à-dire le consommateur au sens moderne et étroit du terme. Le consommateur n’est pas alors celui qui consomme, au sens économique (consommateur final), mais celui qui est présumé plus faible que le professionnel, figure à laquelle le consommateur (« homo juridicus » plus qu’« homo economicus », par conséquent3) s’oppose nécessairement, dans une relation qui est ici individualisée. Ainsi droit "objectif" et droit "subjectif" cohabitent-ils au cœur de notre droit de la consommation, donnant à celui-ci un caractère hybride. Or, sous l’influence du droit européen, l’aspect économique du droit de la consommation tend parfois à supplanter l’approche protectrice, au détriment, dans certains cas, de l’intérêt immédiat des consommateurs. En effet, bien que les politiques européennes en matière de protection des consommateurs soient en principe soumises au principe de subsidiarité4 (lequel autorise les États membres de l’Union à se montrer plus protecteurs des consommateurs que ne le sont les règles européennes, ce qui peut entraîner des divergences), les autorités européennes ne craignent pas, depuis le tournant des années 2000, de mettre en avant la nécessité de construire un marché commun5 pour imposer une harmonisation totale des règles du

1

Voir sur ce thème l’ouvrage fondamental de M.-S. Payet, Droit de la concurrence et droit de la consommation, Dalloz, Coll. Nouvelle bibliothèque de thèses, Vol. 7, 2001. 2 Selon l’expression de M. Piédelièvre (Droit de la consommation, Economica, 2e éd., 2014, n 33, p. 26). 3 M.-S. Payet, thèse préc., n 55 et s., p. 99 et s. 4 Voir Traité sur le fonctionnement de l’Union européenne (TFUE), Titre XV, art. 169, spéc. § 4. 5 TFUE, art. 114.

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droit de la consommation, quand bien même le degré de protection accordé aux consommateurs par les pays les plus avancés devrait, parfois, en pâtir. Au fond, la protection des consommateurs n’apparaît plus comme une fin en soi, mais comme un simple vecteur de construction d’un vaste marché intérieur via l’uniformisation des règles applicables dans tous les pays de l’Union. De ce point de vue, le leitmotiv européen selon lequel l’Union assure un « niveau élevé de protection des consommateurs »6 n’est, en lui-même, rien d’autre qu’un slogan politique aux relents technocratiques. Le droit contemporain de la consommation apparaît ainsi déchiré entre, d’une part, l’exigence de protection de la partie faible – exigence traditionnelle depuis les années 1970 – et, d’autre part, la fonction de simple élément régulateur du marché économique auquel certains souhaitent aujourd’hui le réduire7 – ce qui, au plan politique, ramène en quelque sorte le droit de la consommation au libéralisme triomphant du début du XXe siècle. À leur façon, les règles relatives à l’information du consommateur témoignent de ce déchirement.

1.2

Définition du consommateur bénéficiaire de la protection légale

Depuis la loi n 2014-344 du 17 mars 2014 relative à la consommation, le droit français pose une définition générale du consommateur dans un article « préliminaire », devenu article « liminaire » avec la recodification de la matière opérée par l’ordonnance n 2016-301 du 14 mars 2016 (qui a bouleversé la numérotation des règles et ne facilite donc pas, à court terme, l’accessibilité du droit français). Directement inspiré des directives européennes, ce texte dispose que le consommateur est « toute personne physique qui agit à des fins qui n’entrent pas dans le cadre de son activité commerciale, industrielle, artisanale, libérale ou agricole ». Cette définition garde le silence sur la manière dont doit être concrètement appréciée la position d’infériorité du consommateur. S’agit-il d’une personne raisonnablement bien informée, attentive et prudente, qui est capable d’analyser l’information qui lui est transmise et de la soupeser en vue de prendre une décision éclairée ? En vérité, ce silence n’a rien d’étonnant, car pour le droit français de la consommation (du moins dans son versant "subjectif", qui inclut la question de l’obligation générale d’information précontractuelle), le consommateur correspond à une figure abstraite : le droit présume d’une manière irréfragable sa position d’infériorité. Peu importe donc la réalité des compétences du La formule figure par exemple dans l’article 169 du TFUE ou à l’article 38 de la Charte des droits fondamentaux de l’Union européenne. Sur ce dernier texte, voir notamment Th. Piazzon, « Le droit de la consommation et la fondamentalisation du droit », Revue de droit d’Assas octobre 2015, n 11, p. 84, spéc. n 12 et s., p. 89 et s. 7 Voir notamment, sur cette question, Ph. Stoffel-Munck, « L’autonomie du droit contractuel de la consommation : d’une logique civiliste à une logique de régulation », RTD com. 2012, p. 705 ; S. Bernheim-Desvaux, « Le droit de la consommation, entre protection du consommateur et régulation du marché », Revue Lamy Droit des affaires mars 2012, n 69, p. 91. 6

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consommateur, que l’on raisonne d’un point de vue juridique (selon ses connaissances en droit) ou technique (en fonction de l’objet du contrat) ; peu importe également sa situation de fortune et la force de son « pouvoir de négociation ». Dès lors qu’une personne agissant à des fins privées ou domestiques contracte avec un professionnel, la protection s’applique, en principe, de manière automatique. Cette solution présente évidemment l’avantage de couper court à toute discussion relative aux forces et faiblesses réelles de tel ou tel consommateur et assure, par là même, l’efficacité de la protection. Cette logique se vérifie tout spécialement dans l’hypothèse fréquente où le droit de la consommation impose des mentions informatives précises, et mieux encore quand il les sanctionne de manière spécifique8. La différence est alors patente avec l’obligation générale d’information tirée du droit commun des contrats, où un tel automatisme est exclu, si bien qu’un manquement ne peut être caractérisé sans que l’on s’interroge sur la faute du professionnel et, par voie de conséquence, sur la légitimité de l’ignorance du créancier de l’information, en fonction de ses qualités (v. article 1112-1 nouveau du Code civil, issu de l’ordonnance du 10 février 2016 réformant le droit français des obligations). Dans le même temps, la règle classique selon laquelle le consommateur correspond à un type abstrait de personne en situation de faiblesse présumée ne donne qu’une vision partielle du champ d’application de la matière. Plusieurs précisions doivent en effet être apportées qui sont importantes pour la compréhension du droit français de la consommation. D’abord, dans le domaine du droit "subjectif" de la consommation, le bénéfice de la protection de la partie faible ne se limite pas toujours au seul consommateur stricto sensu. Aux côtés de celui-ci, il arrive en effet que le droit français – qui fait preuve sur ce point d’une originalité certaine – protège aussi ceux qu’ils nomment les « nonprofessionnels ». Cette notion, quelque peu déroutante, est apparue avec la loi du 10 janvier 1978 relative à la lutte contre les clauses abusives. L’article 35 de cette loi (devenu article L. 132-1 [ancien] du Code de la consommation en 1993) définit son champ d’application de la manière suivante : « Dans les contrats conclus entre professionnels et non-professionnels ou consommateurs (. . .) ». En 1978, il semble que cette adjonction des non-professionnels ait seulement eu pour but, dans l’esprit du Parlement, de définir la notion de consommateur qui, à cette époque, relevait seulement de la science économique. Qu’est-ce qu’un consommateur ? Un non-professionnel ! – sachant qu’à l’opposé, le professionnel pouvait être plus facilement appréhendé par le droit. Dès les années 1980, la jurisprudence va toutefois aller au-delà des intentions parlementaires en conférant un sens propre à la notion de non-professionnel, notion qui doit dès lors être distinguée de celle de consommateur. Au fond, cette interprétation vise à étendre la protection accordée par le droit de la consommation à des personnes qui ne peuvent pas être qualifiées de consommateur au sens strict. En matière de clauses abusives, en particulier, certains arrêts (peu nombreux) vont aller jusqu’à accepter qu’un professionnel puisse se prévaloir de la loi de 1978 dès lors qu’il est incompétent au regard de l’objet du

8 Par exemple en matière d’information relative à l’existence d’un droit de rétractation dans les ventes à distance et hors établissement (C. consom., art. L. 221-5, 2 ).

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contrat conclu et qu’il se trouve ainsi dans le même état d’ignorance que n’importe quel consommateur. Il en résultait qu’un professionnel pouvait en quelque sorte, à cette époque, être qualifié de. . . non-professionnel ! L’histoire est intéressante, car elle montre toutes les difficultés qu’a eues la Cour de cassation, au cours des années 1980, à intégrer la logique d’un droit de la consommation profondément novateur – et l’on trouve bien d’autres illustrations de ces difficultés, notamment en matière de sanctions (v. infra, 2.4.3). À partir du milieu des années 1990, le juge judiciaire fait toutefois machine arrière et, s’inspirant de la règle posée à cette époque par la loi en matière de démarchage, décide que le droit des clauses abusives ne s’applique pas aux contrats de fournitures de biens ou de services qui ont un « rapport direct » (notion entendue largement) avec l’activité professionnelle exercée par le contractant9. C’est dire que la protection des professionnels ne passera plus par le droit de la consommation, dont la Cour de cassation s’attache désormais à préserver le champ d’application spécifique. Il n’en reste pas moins qu’aujourd’hui encore, il existe en droit français une catégorie de personnes pouvant prétendre au bénéfice de certaines règles consuméristes dès lors que le législateur n’a pas réservé la protection aux consommateurs, mais a choisi de l’étendre aux « non-professionnels »10. Il s’agit des personnes morales. Tandis que le droit européen réserve l’application du droit de la consommation aux seules personnes physiques (soit parce qu’une directive le prévoit11, soit parce que la CJUE l’a décidé12), le droit français interne admet, dans certains cas, la protection des personnes morales (par exemple un syndicat professionnel ou un syndic de copropriété), à condition qu’il n’y ait pas de rapport direct entre l’objet du contrat et leur activité professionnelle éventuelle. Il résulte de ce dernier critère que les sociétés commerciales sont notamment exclues, par hypothèse, de la protection13, tandis que des doutes demeurent dans d’autres cas (par exemple au sujet des sociétés civiles immobilières), la jurisprudence soufflant le chaud et le froid selon les espèces qui lui sont soumises. Quoi qu’il en soit, le critère d’application du droit de la consommation devient ici purement formel : que le législateur ne vise que les « consommateurs » et seuls ceux-ci, entendus strictement, seront protégés (tel est le cas en matière d’obligation générale d’information précontractuelle, de vente à distance et hors établissement ou de crédit à la consommation) ; que le législateur vise également les « non-professionnels » et certaines personnes morales pourront bénéficier des règles protectrices (droit des clauses abusives par exemple). C’est cette originalité nationale que le législateur français a manifestement entendu consacrer, dans l’ordonnance du 14 mars 2016, en posant dans l’article liminaire du nouveau Code une définition générale du Voir Cass. 1re civ., 24 janvier 1995, n 92-18.227. Ex. : C. consom., art. L. 212-2, pour les clauses abusives ; C. consom., art. L. 215-3, au sujet de l’information relative à la tacite reconduction des contrats de prestations de services. 11 Tel est par exemple le cas de la directive n 2011/83/UE du 25 octobre 2011 relative aux droits des consommateurs, dont l’article 2, 1 , vise « toute personne physique qui (. . .) agit à des fins qui n’entrent pas dans le cadre de son activité commerciale, industrielle, artisanale ou libérale ». 12 Voir en particulier, en matière de clauses abusives (directive n 93/13/CEE du 5 avril 1993) : CJCE, 22 novembre 2001, aff. jointes C-541/99 et C-542/99. 13 Cass. 1re civ., 11 décembre 2008, n 07-18.128. 9

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non-professionnel ; il s’agit de « toute personne morale qui agit à des fins qui n’entrent pas dans le cadre de son activité commerciale, industrielle, artisanale, libérale ou agricole » ou, selon la dernière modification du texte, plus laconique mais moins sujette à interprétation, « toute personne morale qui n’agit pas à des fins professionnelles » (C. consom., art. lim., mod. L. n 2017-203, 21 février 2017). Tout neuf, ce texte n’est pas exempt d’incertitudes : exclut-il, contrairement au droit antérieur, qu’une personne physique soit qualifiée de non-professionnel ? Une personne morale qui poursuivrait un but lucratif peut-elle être qualifiée de non-professionnel dès lors qu’elle n’agit pas aux fins visées ? Deuxième précision, ensuite, la définition du consommateur donnée au titre du droit "subjectif" (et donc contractuel) de la consommation ne vaut pas pour le versant "objectif" de la matière – qui vise la régulation du marché. De ce point de vue, le nouvel article liminaire du Code de la consommation est d’ailleurs trompeur, en ce qu’il pourrait laisser penser que les obligations mises à la charge des professionnels par ce Code ne s’appliqueraient que dans la mesure où les professionnels traiteraient avec des consommateurs stricto sensu. Tel n’est évidemment pas le cas. Le champ d’application du droit de la consommation est donc résolument à géométrie variable : si les règles relatives à la protection des contractants (droit "subjectif" de la consommation) ne protègent que les consommateurs au sens strict (voire également les non-professionnels), celles qui relèvent du droit "objectif" de la consommation profitent à tous, y compris aux professionnels. Les règles d’étiquetage, par exemple, doivent être respectées par les professionnels sans que l’on ait à s’interroger sur la qualité potentielle du consommateur final. On peut dire la même chose des règles relatives à la sécurité et à la conformité des produits et services, des règles relatives aux fraudes et falsifications ou encore, pour ce qui est du champ précis de ce rapport, des règles relatives à l’information sur les prix et les conditions de vente (C. consom., art. L. 112-1 et s.). De ce point de vue, le droit de la consommation s’applique à tout professionnel en tant qu’il exerce une activité économique, quelle que soit la qualité de la personne avec laquelle il est susceptible de traiter. Certaines complications doivent cependant être signalées en portant le regard, d’une part, sur les professionnels tenus par les obligations du droit de la consommation et, d’autre part, sur les bénéficiaires de ces obligations. S’agissant des professionnels, la question de l’application des exigences consuméristes a pu se poser pour certaines prestations de service qui ne présentent pas un caractère standardisé. Imaginé pour pallier les dangers d’une économie libérale baignée par la standardisation des produits et services, le droit de la consommation a-t-il vocation à s’appliquer, par exemple, aux obligations d’information dont sont tenus les médecins ou les avocats ? De la même façon, s’agissant des contrats de vente, le droit de la consommation peut-il s’appliquer à la matière immobilière qui paraît étrangère, d’un point de vue économique, à l’acte de consommation14 ? S’agissant des consommateurs, bénéficiaires des exigences posées par la loi, ne convient-il pas de distinguer, pour

14

Ainsi, contrairement à la garantie des vices cachés du droit commun (C. civ., art. 1641 et s.), les règles relatives à la garantie de conformité du droit de la consommation (issues de la directive n 1999/44/CE du 25 mai 1999) ne concernent que les ventes mobilières.

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apprécier le comportement des professionnels, selon leurs qualités plus précises, au moins dans certains cas ? C’est ce vers quoi tend le droit des pratiques déloyales, domaine soumis depuis dix ans à l’emprise du droit européen (v. infra, 3). De manière très sommaire, la directive du 11 mai 2005 relative aux pratiques commerciales déloyales des entreprises vis-à-vis des consommateurs (dite « directive PCD ») et ses textes français de transposition (qui en constituent pour une large part un servile recopiage) prohibent plusieurs types de pratiques commerciales réunies dans le giron des pratiques déloyales. Celles-ci, qui bénéficient d’une définition générale, peuvent être sanctionnées de manière autonome (C. consom., art. L. 121-1). Au sein de ces pratiques déloyales, les textes distinguent deux souscatégories spécifiques : d’une part les pratiques agressives, qui ne peuvent être dénoncées que par les consommateurs au sens strict (art. L. 121-6) et, d’autre part, les pratiques trompeuses (art. L. 121-2) qui, pour certaines d’entre elles, peuvent être dénoncées non seulement par les consommateurs, mais encore par d’autres professionnels, c’est-à-dire par des concurrents. Des listes limitatives de pratiques « réputées trompeuses » ou « réputées agressives » complètent cette complexe architecture. Le fait que les professionnels puissent poursuivre la sanction de certaines pratiques trompeuses n’a évidemment rien d’une innovation, puisqu’il a toujours été admis par le droit interne, bien avant la « directive PCD », qu’un professionnel puisse par exemple dénoncer la publicité déloyale d’un concurrent. Mais cela invite à s’interroger sur la manière dont la faute commise par le professionnel, poursuivi sur ce fondement, doit être appréciée. Cette appréciation peut-elle être indépendante des forces et faiblesses des personnes concrètement visées par la pratique prétendument trompeuse ? En principe, l’appréciation de la licéité d’un comportement ne devrait pas dépendre des qualités subjectives de sa victime potentielle. Pourtant, le droit européen entend ici faire preuve de réalisme en distinguant en fonction de la cible visée par la pratique en cause (v. infra, 3). L’appréciation de la faute commise par le professionnel pourra donc varier, dans ce cas, en fonction des faiblesses spécifiques du groupe de consommateurs visé. Il s’agit d’un tempérament tout à fait justifié à l’approche en principe abstraite de la notion de consommateur. La troisième et dernière précision, enfin, est très spécifique. Dans un cas particulier, le droit français de la consommation tient compte de la vulnérabilité particulière de certains consommateurs. Cela concerne la sanction pénale de l’abus de faiblesse, qui est visé par deux incriminations distinctes, mais qui se recoupent dans une certaine mesure. L’article L. 121-8 du Code de la consommation (issu de la loi précitée du 22 décembre 1972 relative au démarchage), d’une part, punit le fait d’abuser « de la faiblesse ou de l’ignorance d’une personne » qui « n’était pas en mesure d’apprécier la portée des engagements qu’elle prenait ou de déceler les ruses ou artifices déployés pour la convaincre à y souscrire ou font apparaître qu’elle a été soumise à une contrainte ». L’article 223-15-2 du Code pénal (entré en vigueur le 1er mars 1994) incrimine, d’autre part, « l’abus frauduleux de l’état d’ignorance ou de la situation de faiblesse » de certaines catégories de personnes que ce texte énumère. Sont ainsi visées l’ignorance ou la faiblesse « soit d’un mineur, soit d’une personne dont la particulière vulnérabilité, due à son âge, à une maladie, à une infirmité, à une déficience physique ou psychique ou à un état de

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grossesse, est apparente ou connue de son auteur ». Est en outre protégée la « personne en état de sujétion psychologique ou physique résultant de l’exercice de pressions graves ou réitérées ou de techniques propres à altérer son jugement ». Si cette incrimination dépasse le champ du droit de la consommation, elle peut cependant s’y appliquer. Rien ne s’oppose par ailleurs à ce que la sanction pénale soit doublée d’une sanction civile, l’incrimination prévue par le Code de la consommation envisageant même cette hypothèse de manière expresse. Depuis la loi du 17 mars 2014, il est en effet prévu que « le contrat conclu à la suite d’un abus de faiblesse est nul et de nul effet » (art. L. 132-13). Si l’infraction a été poursuivie sur le fondement du Code pénal, les sanctions du droit commun pourront de leur côté s’appliquer (notamment la nullité du contrat pour dol15). En résumé, le droit français de la consommation ne prévoit pas – en principe – de types spécifiques de consommateurs dont l’existence aurait un impact sur le contenu de l’information ou la manière dont celle-ci doit être délivrée. Sauf à noter que certains « non-professionnels » peuvent parfois être protégés à côté des consommateurs stricto sensu, ceux-ci forment en principe une catégorie abstraite et unitaire de personnes irréfragablement présumées en situation de faiblesse par rapport aux professionnels, sans qu’il y ait à tenir compte de leur prudence raisonnable. En d’autres termes, la qualification de consommateur suffit normalement à déclencher la protection légale. Par exception, il existe cependant des règles qui peuvent tenir compte des qualités spécifiques de certains consommateurs dans le but d’accroître les contraintes pesant sur les professionnels. Tel est le cas en matière de pratiques trompeuses et pour les incriminations pénales liées à la faiblesse et la vulnérabilité particulières des consommateurs visés par la loi.

2 Les exigences d’information précontractuelle 2.1

L’obligation générale d’information

Le droit français de la consommation impose aux professionnels, dans leurs relations avec les consommateurs, une obligation d’information qu’il qualifie expressément de « précontractuelle » et de « générale ». La chose est manifestement de la plus haute importance dans l’esprit du législateur, puisqu’à la suite de son article liminaire, le Code de la consommation s’ouvre symboliquement sur ces dispositions (art. L. 111-1 et s.). Plusieurs fois remaniés, notamment par la loi du 17 mars 2014 en vue de transposer certaines règles européennes issues de la directive n 2011/83/UE du 25 octobre 2011, ces textes ne sont pas sans ambiguïté en ce qu’ils qualifient cette obligation d’information de générale. Cette généralité prétendue s’explique par le

Voir par exemple Cass. 3e civ., 26 octobre 2005, n 04-14.976 : « En retenant que cette convention avait été obtenue par une fraude pénalement et définitivement sanctionnée, [la cour d’appel] a pu en déduire l’existence d’un dol entraînant la nullité de l’acte d’échange ».

15

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fait que ces règles ont vocation à s’appliquer à tous les contrats de vente et de prestation de services conclus entre un consommateur et un professionnel. En ce sens, ces dispositions forment une sorte de droit commun des contrats de consommation, par opposition aux règles d’information spécifiques qui concernent tel ou tel type de contrat de consommation (ex. : ventes à distance et hors établissement16, contrats de services de communications électroniques17, contrats de fournitures d’électricité ou de gaz naturel18, contrats de crédit à la consommation19, etc.20). Pour ce qui est du contenu des informations exigées, les articles L. 111-1 et suivants sont en revanche assez précis, si bien que les obligations posées ne sont pas à proprement parler générales. En matière d’information, cela distingue nettement l’approche du droit de la consommation (qui est un droit de source essentiellement législative, empreint de précision) de l’approche du droit civil, qui pose quant à lui une obligation d’information véritablement générale, au titre du droit commun des contrats. D’origine jurisprudentielle et fondée sur la bonne foi contractuelle, cette obligation d’information de droit commun a également vocation à profiter aux consommateurs. Elle oblige les professionnels à renseigner leurs clients sur les caractéristiques du bien vendu ou du service offert, voire, en certains domaines, à orienter le choix de leurs clients en fonction de leurs besoins (obligation de conseil). Désormais consacrée par la loi (C. civ., art. 1112-2), cette obligation fondée sur le droit commun présente un aspect subjectif : son existence comme son intensité dépendent de l’objet du contrat (plus ou moins complexe ou dangereux, par exemple) et parfois des compétences du client. L’approche du droit de la consommation est au contraire objective et abstraite, c’est-à-dire standardisée, qu’il s’agisse des règles spéciales applicables à certains types de contrats ou de l’« obligation générale d’information précontractuelle » des articles L. 111-1 et suivants21. Des listes très précises d’informations devant être communiquées au consommateur sont en effet prévues. À titre d’exemple, l’article L. 111-1 dispose : « Avant que le consommateur ne soit lié par un contrat de vente de biens ou de fourniture de services, le professionnel communique au consommateur, de manière lisible et compréhensible, les informations suivantes : 1 Les caractéristiques

16

Voir C. consom., art. L. 221-5, relatif à l’« obligation d’information précontractuelle ». C. consom., art. L. 224-27. 18 C. consom., art. L. 224-3. 19 C. consom., art. L. 312-12. 20 D’une manière générale, l’article L. 111-3 du Code de la consommation précise en effet que « les dispositions des articles L. 111-1 et L. 111-2 s’appliquent sans préjudice des dispositions particulières en matière d’information des consommateurs propres à certaines activités ». L’alinéa 2 de même texte prévoit en outre des exclusions propres à certaines matières (assurances, mutuelles). 21 Une nuance importante doit cependant être signalée, dans la mesure où l’interdiction générale des pratiques trompeuses par omission (C. consom., art. L. 121-3, trouvant son origine dans la « directive PCD » de 2005) peut être regardée, en creux, comme posant en droit de la consommation une obligation véritablement générale d’information. Voir en ce sens J. Calais-Auloy et H. Temple, Droit de la consommation, Précis Dalloz, 9e éd., 2015, n 58, p. 63. 17

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essentielles du bien ou du service, compte tenu du support de communication utilisé et du bien ou service concerné ; 2 Le prix du bien ou du service, en application des articles L. 112-1 à L. 112-4 ; 3 En l’absence d’exécution immédiate du contrat, la date ou le délai auquel le professionnel s’engage à livrer le bien ou à exécuter le service ; 4 Les informations relatives à son identité, à ses coordonnées postales, téléphoniques et électroniques et à ses activités, pour autant qu’elles ne ressortent pas du contexte ; 5 S’il y a lieu, les informations relatives aux garanties légales, aux fonctionnalités du contenu numérique et, le cas échéant, à son interopérabilité, à l’existence et aux modalités de mise en œuvre des garanties et aux autres conditions contractuelles ; 6 La possibilité de recourir à un médiateur de la consommation dans les conditions prévues au titre Ier du livre VI ». Le même texte ajoute que « la liste et le contenu précis de ces informations sont fixés par décret en Conseil d’Etat » (al. 8 ; v. C. consom., art. R. 111-1 qui énumère, entre autres choses : les modalités de paiement, de livraison et d’exécution du contrat, les modalités de traitement des réclamations, la durée du contrat, les conditions de la résiliation des contrats à durée indéterminée ou à tacite reconduction, etc.). L’article L. 111-2 ajoute certaines informations en matière de prestation de services : « Outre les mentions prévues à l’article L. 111-1, tout professionnel, avant la conclusion d’un contrat de fourniture de services et, lorsqu’il n’y a pas de contrat écrit, avant l’exécution de la prestation de services, met à la disposition du consommateur ou lui communique, de manière lisible et compréhensible, les informations complémentaires relatives à ses coordonnées, à son activité de prestation de services et aux autres conditions contractuelles, dont la liste et le contenu sont fixés par décret en Conseil d’État ». Ces textes réglementaires sont, d’une part, l’article R. 111-2, qui contient une nouvelle liste de renseignements purement objectifs (statut et forme juridique de l’entreprise, coordonnées, numéro d’inscription au registre du commerce et des sociétés, etc.) et, d’autre part, l’article R. 111-3 qui, de manière plus intéressante, dresse une liste d’« informations complémentaires » que « tout professionnel prestataire de services communique au consommateur qui en fait la demande » : devis détaillé ou mode de calcul du prix « lorsqu’un prix exact ne peut pas être indiqué », référence aux règles professionnelles ou aux codes de conduite auxquels le prestataire est soumis, etc. Cette présentation des obligations d’information précontractuelle mérite d’être encore précisée sur plusieurs points importants. En premier lieu, il convient de relever que la directive du 25 octobre 2011 relative aux droits des consommateurs – dont certaines dispositions sont, comme on l’a vu, à l’origine du remodelage des textes précités – constitue sur ce point un texte d’harmonisation minimale, ce qui autorise les États membres de l’Union à édicter d’autres règles « générales » relatives à l’information des consommateurs. Tel est le cas du droit français qui pose certaines exigences supplémentaires, parmi lesquelles se trouvent notamment les suivantes : information due par le fabricant ou l’importateur de biens meubles sur « la période pendant laquelle ou de la date jusqu’à laquelle les pièces détachées indispensables à l’utilisation des biens sont disponibles sur le marché » (C. consom., art. L. 111-4), information spécifique sur les prix et conditions de vente « par voie de marquage, d’étiquetage, d’affichage ou

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par tout autre procédé approprié (. . .) selon des modalités fixées par arrêtés du ministre chargé de l’économie » (C. consom., art. L. 112-1 ; v. infra, 2.3.2, au sujet de la sanction de ces obligations d’information à destination du public), information sur les conditions sociales de fabrication des produits, mais seulement à la demande du consommateur (C. consom., art. L. 113-1), à quoi s’ajoute l’obligation faite aux professionnels d’utiliser la langue française « dans la désignation, l’offre, la présentation, le mode d’emploi ou d’utilisation, la description de l’étendue et des conditions de garantie d’un bien, d’un produit ou d’un service, ainsi que dans les factures et quittances » ; il en va de même pour « toute publicité écrite, parlée ou audiovisuelle » (loi n 94-665, dite « loi Toubon », du 4 août 1994, art. 2). Si les juges français ont estimé que la protection des consommateurs justifiait cette entorse potentielle au principe européen de la libre circulation des marchandises22, il n’est pas tout à fait certain que le juge européen partage cet enthousiasme linguistique, quand bien même le règlement n 1169/2011 du 25 octobre 2011, en ce qui concerne l’information des consommateurs sur les denrées alimentaires, exige par exemple que « les informations obligatoires (. . .) apparaissent dans une langue facilement compréhensible par les consommateurs des États membres où la denrée est commercialisée » (art. 15). Dans une affaire célèbre, la CJCE a jugé que de simples pictogrammes peuvent tout aussi bien faire l’affaire23 et le règlement de 2011 se fait l’écho de cette solution (art. 9, spéc. § 3). Pour le droit européen, on sait que la protection du consommateur est un objectif subalterne par rapport à la construction du marché intérieur, totem autour duquel se prononcent l’immense majorité des incantations bruxelloises. Très maladroitement, le Gouvernement français a tenté de noyer le poisson européen dans l’eau française, en posant l’exigence suivante : « En application de l’article 15 du règlement (UE) n 1169/2011 du Parlement européen et du Conseil du 25 octobre 2011 modifié concernant l’information des consommateurs sur les denrées alimentaires [on fait bon élève. . .], les mentions d’étiquetage des denrées commercialisées sur le territoire national sont rédigées en langue française [. . . mais on ne cède pas sur l’essentiel !] » (C. consom., art. R. 412-7). Nouvel exemple d’information due au consommateur, l’article L. 114-1 du Code de la consommation dispose que « les professionnels vendeurs ou prestataires de services remettent à toute personne intéressée qui en fait la demande un exemplaire des conventions qu’ils proposent habituellement ». Le non-respect de cette exigence de remise des contrats-types est pénalement sanctionnée, comme bon nombre des dispositions relatives à l’information des consommateurs (v. infra, 2.3.1 ; amende prévue pour les contraventions de la 5e classe, selon l’art. R. 131-1). Il existe enfin un certain nombre de règles spéciales en matière d’information fournie aux consommateurs via des supports spécifiques, comme les sites de comparaison sur internet. Ces règles ont été récemment introduites en France – et déjà modifiées. . . – pour alourdir les obligations pesant sur les professionnels concernés

22 23

Cass. crim., 14 novembre 2000, n 99-86.216. Voir, en matière de denrées alimentaires, CJCE, 12 septembre 2000, aff. C-366/98 (Casino).

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(L. n 2016-1321 du 7 octobre 2016)24. Elles sont rattachées à l’obligation générale d’information précontractuelle, bien que la perspective de la conclusion d’un contrat puisse être ici lointaine. La loi prévoit ainsi diverses dispositions applicables aux « opérateurs de plateforme en ligne » dont l’activité consiste notamment à opérer « le classement ou le référencement, au moyen d'algorithmes informatiques, de contenus, de biens ou de services proposés ou mis en ligne par des tiers » ; est également visée « la mise en relation de plusieurs parties en vue de la vente d'un bien, de la fourniture d'un service ou de l'échange ou du partage d'un contenu, d'un bien ou d'un service » (C. consom., art. L. 111-7). La loi fait obligation à ces opérateurs « de délivrer au consommateur une information loyale, claire et transparente sur : 1 Les conditions générales d'utilisation du service d'intermédiation qu'il propose et sur les modalités de référencement, de classement et de déréférencement des contenus, des biens ou des services auxquels ce service permet d'accéder (. . .) ». Lorsque la comparaison porte sur les prix et les caractéristiques de biens et de services, des textes réglementaires ont notamment pour objet de préciser les informations qui doivent être communiquées aux consommateurs (C. consom., art. D. 111-7 et s.). La loi du 7 octobre 2016 envisage aussi la situation des opérateurs « dont l'activité consiste, à titre principal ou accessoire, à collecter, à modérer ou à diffuser des avis en ligne provenant de consommateurs ». Ces opérateurs sont « tenu[s] de délivrer aux utilisateurs une information loyale, claire et transparente sur les modalités de publication et de traitement des avis mis en ligne » (C. consom., art. L. 111-7-2, et art. D. 111-16 et s.). Dans tous les cas, la loi tente d’assurer une meilleure transparence au sujet des liens contractuels ou financiers qui peuvent exister entre ces opérateurs et les sites auxquels ils se référent. En deuxième lieu, il convient de donner quelques précisions quant au moment où l’information doit être délivrée au consommateur. Comme nous l’avons vu, les textes du Code de la consommation relatifs à l’obligation « générale » d’information qualifient expressément celle-ci de « précontractuelle ». Ce que confirment les articles L. 111-1 et L. 111-2 en disposant que les informations énumérées sont dues « avant que le consommateur ne soit lié par un contrat de vente ou de fourniture de services ». Est-ce à dire que les obligations d’information s’épuisent dès avant la conclusion du contrat ? À l’évidence, une réponse négative s’impose, au moins pour trois raisons. D’abord, très mécaniquement, parce que de nombreux textes plus spécifiques exigent que les informations données avant la signature du contrat soient intégralement reproduites dans le contrat lui-même. Tel est le cas, par exemple, de l’article L. 221-9, al. 2, du Code de la consommation en matière de contrats conclus hors établissement. Ensuite parce que le droit commun des contrats ne limite pas l’obligation d’information à la seule phase précontractuelle. La jurisprudence civile française (non démentie par l’ordonnance du 10 février 2016) pose à cet égard une distinction – pas toujours évidente à mettre en œuvre – entre les

24

Voir notamment G. Loiseau, « La loi du 7 octobre 2016 et l’obligation d’information des opérateurs de plateformes », Communication, commerce électronique 2016, n 91.

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obligations d’information précontractuelles (censées déboucher sur une responsabilité extracontractuelle) et les obligations d’information contractuelles (débouchant sur une responsabilité contractuelle – la distinction entre ces deux types de responsabilités constituant une célèbre originalité française). Ainsi certaines informations, notamment relatives à l’usage du bien vendu ou aux modalités d’exécution d’un service, doivent-elles être données, ou certains conseils prodigués, après la conclusion du contrat, en particulier au cours de son exécution. Enfin, comme le souligne la doctrine, « le but [des articles L. 111-1 et L. 111-2 du Code de la consommation] n’est pas seulement d’éclairer le consentement du consommateur, il est aussi, une fois le contrat conclu, d’utiliser dans de bonnes conditions le bien ou le service, de sorte que la distinction faite par le droit civil entre obligation précontractuelle et contractuelle est ici inopérante »25. En dépit des termes utilisés par le Code de la consommation (i.e. en dépit de la référence au caractère précontractuel de l’obligation), une telle extension n’est pas surprenante, tant il est de la nature du droit de la consommation de brouiller les catégories traditionnelles du droit civil. En troisième lieu, il convient de s’interroger sur la manière dont l’information doit être matériellement donnée. Sur ce point, les articles L. 111-1 et suivants du Code de la consommation sont silencieux, puisqu’ils se contentent d’exiger que les informations énumérées soient « communqu[ées] au consommateur de manière lisible et compréhensible » (art. L. 111-1), ce qui ne préjuge pas du support matériel de l’information, la lisibilité imposant seulement, selon toute vraisemblance, une information écrite. On peut en revanche noter que l’article D. 111-4 (préc.), relatif à l’information sur la disponibilité des pièces détachées, vise « tout document commercial ou (. . .) tout support durable accompagnant la vente de biens meubles ». Bien d’autres textes spécifiques font aussi référence à un « support durable », comme par exemple l’article L. 221-13 du Code de la consommation au sujet des informations exigées en matière de contrats conclus à distance26. Dans ce même domaine, l’article L. 221-11 ajoute que « lorsque le contrat est conclu à distance, le professionnel fournit au consommateur, de manière lisible et compréhensible, les informations prévues à l’article L. 221-5 ou les met à sa disposition par tout moyen adapté à la technique de communication à distance utilisée ». Il est par ailleurs prévu que si la technique utilisée « impose des limites d’espace ou de temps pour la présentation des informations », seules les informations considérées comme les plus importantes sont fournies avant la conclusion du contrat (C. consom., art. L. 221-12). La ténébreuse abstraction de ces dispositions, issues du droit européen

J. Calais-Auloy et H. Temple, ouvrage préc., n 57, p. 61-62. Voir aussi, toujours à titre d’exemples, C. consom., art. L. 224-4, en matière de contrats de fourniture d’électricité ou de gaz naturel ; art. L. 224-73, au sujet des contrats d’utilisation de biens à temps partagé, la loi faisant ici référence (de manière plus exigeante ?) à une « support durable aisément accessible ». Adde C. consom., art. L. 222-6 (contrats conclus à distance portant sur des services financiers) ; art. L. 312-12 (crédit à la consommation) ; art. L. 313-6, visant, en matière de crédit immobilier, des informations « délivrées sur papier, sur tout autre support durable ou sous forme électronique ».

25 26

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(directive préc. du 25 octobre 2011), est sans doute de nature à nourrir la perplexité de la plupart des consommateurs (comme celle des professionnels), malgré la définition générale – plutôt lâche – du « support durable » que donne la directive de 2011, transposée sur ce point à l’article L. 221-1 du Code de la consommation : « Tout instrument permettant au consommateur ou au professionnel de stocker des informations qui lui sont adressées personnellement afin de pouvoir s’y reporter ultérieurement pendant un laps de temps adapté aux fins auxquelles les informations sont destinées et qui permet la reproduction à l’identique des informations stockées ». Le juge européen a eu l’occasion d’apporter quelques précisions relatives à la notion de support durable, en jugeant par exemple qu’une pratique commerciale qui consiste à ne rendre accessibles les informations prévues que par un lien hypertexte sur un site internet de l’entreprise ne satisfait pas aux exigences de la directive, dès lors que ces informations ne sont ni « fournies » par cette entreprise ni « reçues » par le consommateur et qu’un site internet tel que celui en cause dans cette affaire ne peut être considéré comme un « support durable »27. Toujours à titre d’exemple, en matière de contrats conclus hors établissement, on relèvera que le droit de la consommation fait référence à une information « sur papier ou, sous réserve de l’accord du consommateur, sur un autre support durable » (C. consom., art. L. 221-8). Dans un domaine particulier, on peut cependant relever que les exigences légales sont abaissées, puisqu’il n’est plus fait référence à un support durable. Il s’agit des contrats de services de communications électroniques, l’article L. 224-27 disposant que « tout fournisseur de services de communications électroniques met à la disposition des consommateurs, sous une forme claire, comparable, actualisée et facilement accessible, et tient à jour dans ses points de vente et par un moyen téléphonique ou électronique accessible en temps réel à un tarif raisonnable les informations suivantes : 1 Les informations mentionnées aux articles L. 111-1 (. . .) ». D’une manière plus générale, il convient encore de relever qu’au titre du droit commun des contrats, le Code civil pose une sorte de principe d’équivalence entre l’information délivrée sur papier et l’information communiquée par voie électronique. Ces dispositions sont issues de la loi n 2004-575 du 21 juin 2004 à l’intitulé volontariste : loi pour la confiance dans l’économie numérique. Ainsi, selon l’article 1125 du Code civil, « la voie électronique peut être utilisée pour mettre à disposition des stipulations contractuelles ou des informations sur des biens ou services ». L’article 1126 complète cette règle en prévoyant que « les informations qui sont demandées en vue de la conclusion d’un contrat ou celles qui sont adressées au cours de son exécution peuvent être transmises par courrier électronique si leur destinataire a accepté l’usage de ce moyen ». En quatrième et dernier lieu doit être évoquée la question de la charge de la preuve de l’exécution par les professionnels de leurs obligations d’information. À ce titre, le droit commun des contrats mérite encore une fois d’être convoqué, la jurisprudence civile ayant devancé le droit spécial de la consommation en dégageant la règle selon laquelle celui qui est légalement ou contractuellement tenu d’une

27

CJUE, 5 juillet 2012, aff. C-49/11.

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obligation particulière d’information doit apporter la preuve de son exécution28. D’abord posée à propos des obligations d’information pesant sur les médecins, cette solution a ensuite été étendue à d’autres domaines, notamment au vendeur professionnel. Une loi du 12 mai 2009 a consacré cette solution, très favorable aux intérêts des consommateurs, en matière d’obligation générale d’information précontractuelle. La règle figure désormais à l’article L. 111-5 du Code de la consommation : « En cas de litige relatif à l’application des dispositions des articles L. 111-1, L. 111-2 et L. 111-4, il appartient au professionnel de prouver qu’il a exécuté ses obligations ».

2.2

L’information à l’initiative du professionnel

À première vue, rien n’interdit aux professionnels d’ajouter, de leur propre initiative, certaines informations à celles imposées par la loi. Ce sujet appelle cependant quelques remarques. Dans une certaine mesure, d’abord, le droit encourage ces pratiques en réglementant les signes de qualité. Comme le relève un auteur, « pour que les consommateurs soient informés, la loi ne se borne pas à imposer des obligations aux professionnels. Elle met en outre à la disposition de ces derniers divers signes permettant aux consommateurs d’être renseignés sur la qualité des produits et des services mis sur le marché »29. Sans rentrer dans le détail d’une réglementation luxuriante – et, de ce fait, pas toujours très lisible pour les consommateurs, spécialement en matière de produits alimentaires –, notons simplement que l’intervention d’organismes indépendants permet aux professionnels d’obtenir diverses appellations, labels ou autres certifications pour les biens ou les services dont ils font le commerce, dans le but de les valoriser. Le droit national comme le droit européen interviennent à ce titre et, pour ce qui est du droit interne, les règles pertinentes figurent tant dans le Code de la consommation que dans le Code rural et de la pêche maritime ou le Code de propriété intellectuelle. S’agissant ensuite des initiatives purement volontaires des professionnels, chacun pressent que leur danger potentiel réside dans le flou qui peut être savamment entretenu entre information et publicité. Ainsi le droit de la publicité déloyale ou de nature à induire en erreur est-il de longue date confronté à des publicités qui cherchent à se dissimuler sous les atours d’informations objectives. Grâce à une

Cass. 1re civ., 25 février 1997, n 94-19.685. Il faut noter que la réforme du droit commun des obligations, opérée par l’ordonnance du 10 février 2016, a amendé cette solution en distinguant deux temps probatoires distincts, dans les termes suivants : « Il incombe à celui qui prétend qu’une information lui était due de prouver que l’autre partie la lui devait, à charge pour cette autre partie de prouver qu’elle l’a fournie ». 29 J. Calais-Auloy et H. Temple, ouvrage préc., n 64, p. 70. 28

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définition traditionnellement large de la notion de publicité30, la Cour de cassation française a parfaitement su contrôler ces pratiques. Celles-ci relèvent désormais du droit des pratiques commerciales trompeuses, tel qu’issu de la « directive PCD » du 11 mai 2005. Plus précisément, une information volontaire qui paraitrait tendancieuse pourrait tout à fait être qualifiée, au sens de l’article L. 121-2 du Code de la consommation, de pratique trompeuse par action (ou commission) – laquelle se distingue des pratiques trompeuses par omission (art. L. 121-3) qui reviennent indirectement à imposer une obligation d’information. Au reste, il est aisé de constater que dans la longue liste des pratiques « réputées trompeuses » de l’article L. 121-4 du Code de la consommation, on trouve bon nombre d’illustrations correspondant à une information volontairement trompeuse de la part des professionnels : « Présenter les droits conférés au consommateur par la loi comme constituant une caractéristique propre à la proposition faite par le professionnel » (10 ), « utiliser un contenu rédactionnel dans les médias pour faire la promotion d’un produit ou d’un service alors que le professionnel a financé celle-ci lui-même, sans l’indiquer clairement dans le contenu ou à l’aide d’images ou de sons clairement identifiables par le consommateur » (11 ), « formuler des affirmations matériellement inexactes en ce qui concerne la nature et l’ampleur des risques auxquels s’expose le consommateur sur le plan de sa sécurité personnelle ou de celle de sa famille s’il n’achète pas le produit ou le service » (12 ), « affirmer faussement qu’un produit ou une prestation de services est de nature à guérir des maladies, des dysfonctionnements ou des malformations » (16 ), « communiquer des informations matériellement inexactes sur les conditions de marché ou sur les possibilités de trouver un produit ou un service, dans le but d’inciter le consommateur à acquérir celui-ci à des conditions moins favorables que les conditions normales de marché » (17 ), etc. Dans toutes ces hypothèses, la prétendue information devra être qualifiée de pratique trompeuse. D’autres situations, qui ne figurent pas dans la liste de l’article L. 121-4, pourraient recevoir la même qualification sur le fondement de l’interdiction générale des pratiques trompeuses (C. consom., art. L. 121-2). Indépendamment de cette qualification, la Cour de cassation peut aussi sanctionner la faute qui consiste à diluer des informations exigées par la loi dans un flot d’informations secondaires qu’un contractant croit bon d’y ajouter31.

30

Selon la Cour de cassation, la publicité est définie comme « tout moyen d’information destiné à permettre au client potentiel de se faire une opinion sur les caractéristiques des biens ou services qui lui sont proposés » (Cass. crim., 14 octobre 1998, n 98-80.527). 31 Voir Cass. 3e civ., 26 janvier 1991, n 89-21.325 (nullité d’un congé en matière de bail rural).

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La sanction des obligations d’information précontractuelle

Les sanctions applicables aux obligations d’information sont extrêmement diverses et plusieurs distinctions doivent être opérées, notamment en fonction de la source de l’information exigée. Nous distinguerons trois hypothèses : l’obligation générale d’information, l’information à destination du public sur les prix et conditions de vente, le formalisme informatif.

2.3.1

L’obligation générale d’information

S’agissant d’abord de l’« obligation générale d’information précontractuelle » des articles L. 111-1 et suivants du Code de la consommation, il faut noter, de manière a priori surprenante, qu’aucune sanction expresse n’était spécifiquement prévue jusqu’à la loi précitée du 17 mars 2014 ayant institué un article L. 111-6 du même Code, devenu article L. 131-1 avec l’ordonnance de recodification du 14 mars 2016. Tout au plus le manquement à l’obligation générale d’information pouvait-il auparavant tomber sous la qualification du délit pénal de tromperie de l’ancien article L. 213-1 du Code de la consommation32. Désormais, selon le premier alinéa du texte nouveau, issu de la loi de 2014, « tout manquement aux obligations d’information précontractuelle mentionnées aux articles L. 111-1 à L. 111-3 est passible d’une amende administrative dont le montant ne peut excéder 3 000 euros pour une personne physique et 15 000 euros pour une personne morale ». Cette possibilité offerte aux agents de la Direction générale de la concurrence, de la consommation et de la répression des fraudes (DGCCRF) de prononcer des amendes administratives est l’une des plus notables innovations issues de loi relative à la consommation du 17 mars 2014 – on la retrouve du reste dans bien d’autres cas (par exemple en matière de clauses abusives33 ou de manquement aux règles sur le droit de rétractation dans les contrats à distance et hors établissement34). Plus simples et rapides à mettre en œuvre que les sanctions pénales, ces sanctions administratives ont clairement pour but, dans l’esprit du législateur, de renforcer l’effectivité du droit de la consommation en dissuadant les professionnels de manquer à leurs obligations. Selon l’avis unanime des commentateurs, encore faudrait-il, pour atteindre ce noble objectif, que l’administration soit dotée de moyens suffisants pour mener sa tâche à bien. . . Quoi qu’il en soit, la loi de 2014 présente l’avantage d’édicter une sanction expresse de l’obligation générale d’information précontractuelle, là où les textes 32 De manière assez audacieuse, la Cour de cassation avait décidé « que caractérise l'élément matériel du délit de tromperie la mise en vente d'un produit ne comportant pas l'étiquetage exigé pour informer l'acheteur des qualités substantielles de la marchandise vendue » (Cass. crim., 5 septembre 2000, n 99-85118). 33 C. consom., art. L. 241-2, pour les clauses de la liste "noire". 34 C. consom., art. L. 242-13.

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antérieurs se montraient silencieux. Est-ce à dire que les articles L. 111-1 et suivants ne formaient, avant cette loi, qu’un droit purement symbolique ? Une telle affirmation serait excessive, pour deux raisons. D’abord, la jurisprudence avait logiquement admis que le consommateur mal informé, au regard des exigences posées par ces articles, pouvait se fonder sur le droit commun afin de demander en justice soit des dommages-intérêts (qui pourraient désormais être obtenus par le biais de l’action de groupe instaurée par la loi du 17 mars 2014 ; C. consom., art. L. 623-1 et s.), soit la nullité du contrat conclu. Il est vrai qu’un vice du consentement (erreur ou dol) devait dans le second cas être prouvé, le seul manquement aux dispositions du Code de la consommation ne permettant pas d’obtenir l’annulation35 – en dépit des exhortations d’une partie de la doctrine36 et de quelques décisions rendues en ce sens par les juges du fond. Toutes ces solutions restent bien sûr d’actualité et il n’est pas rare, dans le domaine du droit de la consommation, que le juge judiciaire vise ensemble les dispositions du droit commun et celles de l’article L. 111-1 pour engager la responsabilité civile d’un professionnel ou prononcer la nullité d’un contrat en raison d’un défaut d’information. Ensuite, le manquement du professionnel aux obligations générales d’information précontractuelle peut très bien être qualifié de pratique trompeuse au sens de la « directive PCD » et de ses textes de transposition. À cet égard, il faut d’ailleurs relever que la liste des informations qui « sont considérées comme substantielles » par l’article L. 121-3 du Code de la consommation, relatif aux pratiques trompeuses par omission, évoque immanquablement, sur certains points, les prescriptions des articles L. 111-1 et L. 111-2. Les sanctions spécifiques des pratiques trompeuses peuvent alors s’appliquer : sanction pénale avant tout (C. consom., art. L. 132-2), éventuellement soumise à publicité (art. L. 132-4) et cessation de la pratique ordonnée par le juge (art. L. 132-8). Il faut relever que c’est dans l’application de ces règles d’origine européenne que les juges sont particulièrement invités à tenir compte des attentes raisonnables des consommateurs (v. infra, 6.2). Des dommages-intérêts, tout comme la nullité du contrat conclu, peuvent aussi et toujours être obtenus, dans l’hypothèse d’une pratique trompeuse, sur le fondement du droit commun.

2.3.2

Information sur les prix et conditions de vente

S’agissant ensuite de l’information publique relative aux prix et conditions de vente, rappelons que l’article L. 112-1 du Code de la consommation prévoit que « tout vendeur de produit ou tout prestataire de services informe le consommateur, par voie de marquage, d’étiquetage, d’affichage ou par tout autre procédé approprié, sur les prix et les conditions particulières de la vente et de l’exécution des services,

Voir par exemple Cass. 1re civ., 11 décembre 2008, n 04-19.033, au sujet de l’article L. 111-1. Voir par exemple J. Calais-Auloy et H. Temple, ouvrage préc., n 62, p. 63, les auteurs se fondant sur le fait (en lui-même peu convaincant) que les articles L. 111-1 et suivants sont d’ordre public (v. art. L. 111-8). 35 36

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selon des modalités fixées par arrêtés du ministre chargé de l’économie, après consultation du Conseil national de la consommation ». Outre les prix, cet article vise ainsi les « conditions particulières » du contrat, telles qu’une livraison à domicile ou une garantie de bon fonctionnement37. De très nombreux textes règlementaires ont été adoptés sur le fondement de ces dispositions, certains présentant un caractère relativement général (tel l’arrêté du 3 décembre 1987 relatif à l’information du consommateur sur les prix38), d’autres imposant au contraire une multitude d’informations très spécifiques dans les domaines les plus variés (publicité des prix sur les autoroutes, du prix du jambon et de l’épaule cuits sans os, du prix et tarifs des remontées mécaniques, publicité des tarifs de coiffure, des prix des fruits et légumes, des prestations funéraires, des tarifs des courses de taxi, etc.). Comme pour l’obligation générale d’information précontractuelle, la sanction de ces dispositions témoigne de leur rattachement à l’objectif de régulation du marché (donc au droit "objectif" de la consommation ; v. supra, 1.1) plus qu’à un souci direct de protection du consommateur. Leur origine législative en témoigne également, qui se trouve dans l’ordonnance du 1er décembre 1986 relative à la liberté des prix et de la concurrence. C’est dire que la sanction n’est point civile, mais pénale ou plutôt, désormais, administrative. Jusqu’à la loi du 17 mars 2014, ces règles d’information spécifiques étaient en effet sanctionnées par une amende prévue pour les contraventions de la 5e classe (C. consom., ancien art. R. 113-1), avec la possibilité d’un règlement transactionnel (ancien art. L. 141-2). Depuis la loi de 2014, seules des amendes administratives peuvent être prononcées (C. consom., nouvel art. L. 131-5, al. 1er). L’avenir dira si ce changement de nature de la sanction conduira à une meilleure effectivité des prescriptions légales. Du point de vue civil, en tout état de cause, la nullité du contrat conclu ou la condamnation du professionnel à verser des dommages-intérêts au consommateur suppose d’emprunter les voies du droit commun. C’est exactement la même logique qui s’applique pour les règles relatives à la conformité des produits et services (C. consom., art. L. 412-1 et s., qui visent en particulier « les modes de présentation ou les inscriptions de toute nature sur les marchandises elles-mêmes, les emballages, les factures, les documents commerciaux ou documents de promotion »), dispositions qui sont pour leur part issues de la loi du 1er août 1905 relative aux fraudes et falsifications – sauf à remarquer que la sanction demeure pénale en ce domaine (C. consom., art. R. 451-1). Le défaut d’information est ici révélateur d’une fraude.

J. Calais-Auloy et H. Temple, ouvrage préc., n 57, p. 62. Dont l’article 1er dispose : « Toute information sur les prix de produits ou de services doit faire apparaître, quel que soit le support utilisé, la somme totale toutes taxes comprises qui devra être effectivement payée par le consommateur, exprimée en euros ». 37 38

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Formalisme informatif (renvoi)

S’agissant enfin des mentions obligatoires imposées dans certains contrats, donc du formalisme informatif, les sanctions prévues par la loi – lorsqu’elles existent. . . – sont diverses : nullité, déchéance du droit aux intérêts en matière de crédit, etc. La question de leur mise en œuvre se pose avec une particulière acuité (v. infra, 2.4.3).

2.4

Les obligations de transparence (lisibilité et clarté de l’information)

Dans le sillage des règles relatives aux clauses abusives (v. infra, 4.2), de nombreuses dispositions du droit de la consommation exigent que les informations fournies aux consommateurs soient claires, ou lisibles, ou compréhensibles, ou transparentes, ou encore loyales. Au-delà de ces variantes de vocabulaire – parfois un peu déconcertantes (existe-t-il des différences de degré, sinon de nature, entre la clarté, l’intelligibilité et la compréhensibilité ?) –, deux exigences distinctes, quoique connexes, se trouvent ainsi posées : la première concerne la forme et la seconde le fond.

2.4.1

Illustrations

S’agissant, par exemple, de l’obligation générale d’information précontractuelle, les articles L. 111-1 et L. 111-2 du Code de la consommation imposent que les informations communiquées au consommateur le soient « de manière lisible et compréhensible ». La lisibilité renvoie à la forme, c’est-à-dire à la présentation de l’information. Concrètement, cela signifie que l’"agencement matériel" du texte doit favoriser le jaillissement de son sens, qu’il s’agisse de la taille des caractères employés (la loi posant parfois des exigences précises à ce sujet39), des couleurs et formes utilisées (le "gras" présente ici des vertus40) ou de « la qualité de l’impression

39

Voir par exemple, en matière de crédit, C. consom., art. L. 312-8 et L. 315-5 ; en matière d’investissement locatif ouvrant droit à une réduction d’impôt, art. L. 122-23. S’agissant du contrat de location avec option d’achat, l’article R. 312-14 exige très précisément des « caractères dont la hauteur ne peut être inférieure à celle du corps huit ». Dans des décisions très tatillonnes, les juges ont dû se prononcer sur la manière de mesurer les lettres (ex. : CA Rennes, 24 avril 1998 : CCC 1998, comm. n 122, note Raymond ; CA Metz, 7 juillet 2016 : LPA 9 janvier 2017, p. 12, obs. Lasserre Capdeville, décision prononçant la déchéance du droit aux intérêts pour un contrat de crédit à la consommation). 40 Au sujet du crédit immobilier, l’annexe à l’article R. 313-4 du Code de la consommation, relatif à la « fiche d’information standardisée européenne », prévoit que « la police est clairement lisible. Des caractères gras ou plus grands ou un arrière-plan différent sont utilisés pour les informations à mettre en évidence ».

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du document informatif ainsi que de sa lisibilité sur un écran numérique »41. À cet égard, l’article 1369-10 du Code civil prévoit que « lorsque l’écrit sur papier est soumis à des conditions particulières de lisibilité ou de présentation, l’écrit électronique doit répondre à des exigences équivalentes ». La lisibilité désignant ce qui peut être lu sans peine, il n’est pas interdit, par ailleurs, de rattacher à cette exigence l’obligation pour le professionnel de communiquer les informations requises dans une langue et un style qui soient, sinon élégants, du moins corrects. Au sens figuré, ce qui est lisible renvoie en effet à ce qui est « facilement intelligible », enseigne le dictionnaire Larousse. Ainsi passe-t-on logiquement de la forme au fond et de la lisibilité à la compréhensibilité, seconde exigence posée par les articles L. 111-1 et L. 111-2. À ce titre, le professionnel doit s’efforcer de rendre l’information accessible au consommateur moyen, en proscrivant par exemple « l’utilisation de sigles, d’abréviations, de formules elliptiques, obscures ou ambiguës ou encore de renvois systématiques d’une clause à une autre »42. Outre une information lisible et compréhensible43, le Code de la consommation fait également référence, dans les domaines les plus variés, à « une information loyale, claire et transparente »44, des informations « claires et compréhensibles »45, une information « claire et précise »46 ou « sous une forme claire, comparable, actualisée et facilement accessible »47, une information « claire et simple »48, etc. On ajoutera que la palme d’or de la quête de transparence peut être attribuée à l’article L. 122-11 du Code de la consommation qui exige que l’information relative au classement énergétique européen des produits soit faite « de façon aussi visible, 41

N. Sauphanor-Brouillaud, « Information des consommateurs. Règles communes à l’obligation d’information précontractuelle et à l’information sur les prix », JurisClasseur ConcurrenceConsommation, fasc. 845, n 54. 42 G. Paisant, « De l’obligation de transparence dans les contrats de consommation », in Mélanges en l’honneur du doyen Roger Decottignies, PUG, 2003, p. 233 et s., spéc. n 15, p. 241. 43 Prescrivant également la lisibilité et / ou la compréhensibilité, voir notamment C. consom., art. L. 111-4 (information sur les pièces détachées), art. L. 221-5 (information précontractuelle dans les contrats conclus à distance et hors établissement), art. L. 221-14 (information sur les caractéristiques essentielles dans les contrats conclus à distance), art. L. 222-5 (obligation d’information précontractuelle dans les contrats conclus à distance portant sur des services financiers), art. L. 312-32 (information sur le capital restant à rembourser en matière de crédit à la consommation). 44 C. consom., art. L. 111-7, en matière de sites comparatifs sur internet et de plateformes électroniques de mise en relation de plusieurs parties ; art. L. 111-7-2, à propos des avis en ligne. 45 C. consom., art. L. 313-6, informations générales en matière de crédit immobilier ; art. L. 215-1, information sur la reconduction tacite des contrats de prestations de services à durée déterminée ; art. L. 223-2, information sur la liste d’opposition au démarchage téléphonique ; art. L. 224-73, information précontractuelle pour les contrats d’utilisation de biens à temps partagé. 46 C. consom., art. L. 217-15, information relative à la garantie légale en matière d’obligation contractuelle de conformité. 47 C. consom., art. L. 224-27, information en matière de contrats de services de communications électroniques. 48 C. consom., art. L. 313-16, information sur l’évaluation de la solvabilité dans le domaine du crédit immobilier.

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lisible et intelligible que l’indication de leur prix de vente ». En somme, il n’est pas un texte de droit de la consommation relatif à l’information des consommateurs qui ne pose des exigences en matière de lisibilité et de clarté, voire de loyauté. Récemment, le législateur français s’est même essayé à encourager les professionnels à développer une sorte de politique de la clarté. En effet, selon l’article L. 111-7-1 du Code de la consommation, issu d’une loi du 7 octobre 2016, « les opérateurs de plateformes en ligne dont l’activité dépasse un seuil de nombre de connexions défini par décret élaborent et diffusent aux consommateurs des bonnes pratiques visant à renforcer les obligations de clarté, de transparence et de loyauté mentionnées à l’article L. 111-7 ». Les esprits pessimistes diront que cela ne mange pas de pain.

2.4.2

Mise en œuvre judiciaire

Comment les exigences de transparence sont-elles mises en œuvre par les juges ? Il faut d’abord relever que la question spécifique de la lisibilité et de la clarté de l’information ne semble pas nourrir une jurisprudence abondante (contrairement au thème de l’insuffisance de l’information), du moins au regard de l’obligation générale d’information précontractuelle spécifique au droit de la consommation49. Ainsi le contentieux se noue-t-il plutôt autour de la sanction particulière du défaut de clarté du contrat, sanction fulminée par l’article L. 211-1 du Code de la consommation : « Les clauses des contrats proposés par les professionnels aux consommateurs doivent être présentées et rédigées de façon claire et compréhensible. Elles s’interprètent en cas de doute dans le sens le plus favorable au consommateur (. . .) ». Sur ce fondement, il a par exemple été jugé que le professionnel doit s’abstenir d’utiliser des « termes exacts techniquement » mais trop complexes, en l’absence d’« explications claires »50. En pratique, les contrats d’assurance sont très souvent concernés51. La grande majorité des décisions disponibles concernent ensuite deux domaines particuliers : d’une part celui des offres de crédit (le crédit étant la source principale du contentieux en droit français de la consommation) et, d’autre part, celui des pratiques commerciales trompeuses, le défaut de lisibilité ou de compréhensibilité des informations fournies par le professionnel pouvant être dénoncé à ce titre. Les juges doivent alors mettre en œuvre les critères résultant de la « directive PCD » du 11 mai 2005, transposés aux articles L. 121-2 et suivants du Code de la consommation. L’article L. 121-3, en particulier, stigmatise comme trompeuse une

49 En droit commun, les décisions relatives à la lisibilité du contrat ne sont pas rares. Voir G. Paisant, article préc., spéc. n 14, p. 239 et s. 50 Cass. 1re civ., 11 mars 2010, n 09-12.535. 51 En matière de lisibilité du contrat, le Code des assurances pose d’ailleurs des exigences particulières (ex. : art. L. 112-4, au sujet des clauses des polices édictant des nullités, des déchéances ou des exclusions). Il en va de même dans d’autres matières, par exemple le droit bancaire.

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pratique commerciale qui « fournit de manière inintelligible, ambiguë ou à contretemps une information substantielle ». Dès avant 2005, la jurisprudence française sanctionnait les publicités de nature à induire en erreur dès lors qu’une offre commerciale apparaissait imprécise, ambiguë et se présentait « en caractères volontairement minuscules »52. Si le contentieux est ici fourni, il n’en reste pas moins assez rare que le défaut de lisibilité soit sanctionné en lui-même, indépendamment de toute imprécision ou ambiguïté sur le fond. Certains arrêts s’inscrivent néanmoins dans cette voie, comme lorsque la Cour de cassation, à la suite des juges du fond, sanctionne « la mention restrictive [figurant dans une publicité (obligation de souscrire un abonnement à internet) qui était] de 12 à 25 fois plus petite que la mention attractive » (le prix de l’ordinateur)53. Dans cette décision, les juges ont relevé que « si cette disproportion, classique en matière de publicité, n’est pas à elle seule de nature à induire en erreur le consommateur, encore faut-il que la partie du message relative au prix que devra rembourser effectivement et immédiatement le consommateur pour acquérir [l’]ordinateur, soit 6 766 francs (1 990 francs + 4 776 francs d’abonnement) et non les 1 990 francs annoncés, soit clairement lisible par lui ; que tel n’est pas le cas en l’espèce, compte tenu du support choisi pour le message publicitaire, à savoir des panneaux de 4 mètres sur 3 dont la finalité, quel que soit l’endroit où ils sont placés et même s’ils ne s’adressent pas exclusivement à des automobilistes roulant rapidement, est d’être vus de loin et globalement, ce qui empêche un examen attentif ». La décision est intéressante en ce qu’elle fait varier l’appréciation de la licéité en fonction de la nature du support publicitaire. La directive de 2005 a confirmé cette approche, l’alinéa 2 de l’article L. 121-3 prévoyant notamment que « lorsque le moyen de communication utilisé impose des limites d’espace ou de temps, il y a lieu, pour apprécier si des informations substantielles ont été omises, de tenir compte de ces limites ainsi que de toute mesure prise par le professionnel pour mettre ces informations à la disposition du consommateur par d’autres moyens ». Vraisemblablement pensé pour les publicités radiophoniques (à propos desquelles la DGCCRF a publié des « lignes directrices »54), ce texte pourrait s’appliquer à d’autres supports. Mais on voit que la lisibilité et la clarté du message sont alors moins en cause, à proprement parler, que ses insuffisances. Ainsi, dans les supports écrits, les petits caractères ne sont-ils pas forcément bannis, comme le décide l’arrêt précité. Dans une autre décision, plus récente et qui concerne la presse écrite, la Cour de cassation a ainsi jugé que « si les durées de validité des prix pratiqués sont mentionnées (. . .) en petits caractères, les messages restent néanmoins lisibles pour la cible visée, soit, le lecteur du journal dans lequel est insérée la publicité, lequel a le temps de lire le message dans son intégralité ; qu’en l’état de ces constatations et appréciations, faisant ressortir que le consommateur moyen auquel s’adressaient les messages publicitaires était informé du caractère promotionnel des prix

Cass. crim., 29 mars 1995 : Dr. pénal 1995, comm. n 183, note Robert. Cass. crim., 13 mai 2003, n 02-84.100. 54 BOCCRF 29 septembre 2011, n 8. Voir aussi Cass. crim., 1er septembre 2015, n 14-85.791. 52 53

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pratiqués (. . .) et de la durée de validité de ces prix, la cour d’appel a pu retenir que les publicités litigieuses n’étaient pas trompeuses »55. La lisibilité et la clarté du message doivent donc s’apprécier au regard du support de l’information publicitaire, mais aussi, comme le montre cet arrêt, au regard de la « cible visée », à savoir, en principe, le « consommateur moyen ».

2.4.3

Sanction des obligations de transparence

Les mentions informatives obligatoires renvoient à la question du formalisme contractuel. Depuis son origine législative, au début des années 1970, le droit de la consommation use et abuse de cette technique qui a suscité beaucoup d’interrogations. Ainsi la jurisprudence a-t-elle mis du temps, en pratique, à appréhender cette méthode particulière d’information et la doctrine a-t-elle eu du mal, d’un point de vue théorique, à en livrer une analyse convaincante. Si on laisse de côté ces interrogations fondamentales, la question la plus délicate est celle de la sanction de ces mentions obligatoires dans l’hypothèse où elles font défaut, sont incomplètes ou inexactes. Comme nous l’avons vu, ces sanctions brillent d’abord par leur diversité, si bien que l’absence de cohérence du régime applicable au formalisme informatif est souvent dénoncée par les auteurs. Tantôt le droit de la consommation fulmine expressément la nullité du contrat conclu56 – qui peut sembler, à première vue, la sanction la plus logique –, tantôt il prévoit d’autres sanctions, telles que la déchéance du droit aux intérêts (en matière de crédit57 ; déchéance totale ou partielle, dans la proportion fixée par le juge, selon les cas) ou le report du point de départ du délai de rétractation dans les contrats conclus à distance et hors établissement58. Sur la forme, une remarque relative à la technique législative issue de l’ordonnance de recodification du 14 mars 2016 s’impose à notre sens : en séparant matériellement les dispositions relatives aux sanctions des règles de fond qu’elles punissent, dans l’espoir (largement illusoire) qu’un regroupement formel des sanctions (par ailleurs imparfait. . .) favorise l’effectivité de celles-ci, le Gouvernement a rendu encore plus illisible le droit français de la consommation – surtout pour le "consommateur moyen" –, puisqu’il convient désormais de naviguer sans cesse dans le Code pour savoir comment chaque prescription légale est sanctionnée. . . Il est regrettable que le législateur, qui est censé s’adresser à tous,

Cass. com., 5 juillet 2016, n 14-26.095. Ex. : C. consom., art. L. 242-1, par renvoi à l’article L. 221-9, en matière d’information dans les contrats conclus hors établissement. 57 Ex. : C. consom., art. L. 341-4, par renvoi à l’article L. 312-28, en matière de crédit à la consommation. 58 C. consom., art. L. 221-20 : « Lorsque les informations relatives au droit de rétractation n’ont pas été fournies au consommateur dans les conditions prévues au 2 de l’article L. 221-5, le délai de rétractation est prolongé de douze mois à compter de l’expiration du délai de rétractation initial (. . .) ». 55 56

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confonde ainsi son rôle avec celui de la doctrine, qui s’adresse aux juges et aux juristes. Sur le fond, en revanche, cette diversité des sanctions applicables au formalisme informatif ne nous paraît pas critiquable. À chaque fois, le législateur a en effet tenté d’adapter la sanction pour aboutir à une protection efficace du consommateur – sans que, par une sorte d’effet pervers, la règle ne lui nuise. Cette logique est évidente pour la déchéance du droit aux intérêts, bien plus favorable à l’emprunteurconsommateur que ne le serait la nullité du contrat de crédit qui l’obligerait à rembourser le capital perçu. Mais, dans le même temps, on sent bien qu’une telle pente est glissante : à trop protéger le consommateur, la loi ne le "sur-protège"-t-elle pas ? Il semble qu’à une certaine époque, la jurisprudence ait pu craindre un effet d’aubaine pour le consommateur, d’où des décisions très discutables59, avant de finalement jouer pleinement le jeu du formalisme informatif. À tel point que la Cour de cassation en vint à rendre, à l’inverse, certaines décisions pouvant paraître trop favorables au consommateur. Ainsi décida-t-elle, par exemple, que l’absence d’information du consommateur démarché à son domicile sur l’existence d’une faculté de rétractation pouvait être sanctionnée par des dommages-intérêts (C. consom., ancien art. L. 121-31), quand bien même il n’était nullement démontré, en l’espèce, que le consommateur ait eu l’intention de renoncer à son achat60. Les dommages-intérêts venaient ainsi compenser la moins-value subie par l’acheteur qui avait payé les biens dix fois leur valeur vénale. Indirectement, le formalisme informatif permettait donc de sanctionner la lésion ! On voit dès lors combien la sanction désormais posée par la loi (un simple report du point de départ du délai de rétractation) apparaît plus nuancée et finalement plus juste. La diversité des sanctions du formalisme informatif n’est ainsi que le reflet de la complexité des finalités économiques poursuivies par la législation consumériste. La rigueur de la Cour de cassation dans la mise en œuvre du formalisme informatif peut aussi être démontrée dans deux hypothèses particulières. La première est celle dans laquelle le non-respect des mentions obligatoires n’a pas eu de conséquence sur le consentement du consommateur (pas d’erreur spontanée ou provoquée par une réticence dolosive). La doctrine a pu s’interroger, dans ce cas, sur l’opportunité de sanctionner l’irrespect des mentions obligatoires. Le formalisme informatif n’a-t-il pas simplement pour but, au fond, d’assurer par d’autres moyens que le droit commun la rectitude du consentement ? Or, si le consentement a été valablement exprimé, à quoi bon sanctionner l’absence des mentions obligatoires ? Le formalisme risquerait alors d’apparaître comme un prétexte permettant au consommateur de "sortir" d’une relation contractuelle dont il ne veut tout 59 Ainsi la Cour de cassation décida-t-elle par exemple, dans un arrêt ancien, que le non-respect des exigences légales en matière de crédit immobilier (fourniture d’un tableau d’amortissement) devait être « sanctionné non seulement par la déchéance du droit aux intérêts pour le prêteur, mais encore par la nullité du contrat de prêt » (Cass. 1re civ., 20 juillet 1994, n 92-19.187). Comp. finalement Cass. 1re civ., 23 novembre 1999, n 97-14.949 : « La seule sanction civile de l’inobservation des exigences prévues (. . .) est la perte, en totalité ou en partie, du droit aux intérêts ». 60 Cass. crim., 4 avril 2006, n 05-86.245.

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simplement plus ; le droit de la consommation, prime à la mauvaise foi, deviendrait un « truc pour gagner des procès », selon la formule désabusée d’un auteur, et son image de marque en serait atteinte61. Malgré ces critiques, la Cour de cassation ne craint pas de se prononcer en faveur d’une automaticité des sanctions. Ainsi a-t-elle jugé, dans un arrêt ancien dont la solution semble toujours d’actualité, que « la simple constatation par le juge de l’absence des mentions obligatoires exigées par [la loi de 1972 relative au démarchage] suffit à justifier la nullité du contrat conclu après démarchage à domicile »62. Cette jurisprudence est d’autant plus remarquable que la Cour de cassation, dans d’autres domaines portant également le sceau du formalisme informatif, a adopté une solution contraire63. Seconde preuve, encore plus patente, de la sévérité dont fait montre le juge français, celui-ci n’a pas hésité, du moins dans certains cas, à sanctionner par la nullité l’absence de mentions obligatoires – indépendamment, là encore, de tout vice du consentement –, alors même que les textes applicables n’édictaient aucune sanction civile. S’il est vrai que la jurisprudence n’est pas uniforme64, un arrêt très remarqué, rendu le 7 décembre 2004, s’est prononcé en ce sens au sujet des mentions obligatoires devant figurer sur les documents commerciaux en matière de vente d’objets d’ameublement65. En l’espèce, la Cour de cassation a jugé que l’ordre public, dont l’article 6 du Code civil impose le respect, justifie la nullité du contrat au motif que le bon de commande signé par le client ne comportait pas les mentions légales66. Outre ces sanctions civiles, il convient enfin de noter que les dispositions relatives aux mentions informatives obligatoires sont parfois sanctionnées pénalement (ou administrativement), soit, d’une manière générale, par le droit des fraudes et falsifications, soit par des règles spécifiques67.

Voir par exemple, très sévère, S. Piédelièvre, ouvrage préc., n 88, p. 80-81. Cass. 1re civ., 30 mars 1994, n 92-18.179. 63 Tel est par exemple le cas en matière de vente de fonds de commerce. 64 Voir par exemple Cass. 1re civ., 31 octobre 2007, n 05-15.601. Voir aussi, en matière de droit des assurances (assurance-vie), Cass. 2e civ., 19 mai 2016, n 15-12.767 : « Si la faculté prorogée de renonciation prévue par [l’article L. 132-5-2 du code des assurances] en l'absence de respect, par l'assureur, du formalisme informatif qu'il édicte, revêt un caractère discrétionnaire pour le preneur d'assurance, son exercice peut dégénérer en abus » ; Ph. Stoffel-Munck, « Formalisme informatif ad validitatem : retour à une logique civiliste ? », Revue des contrats mars 2017, p. 25. 65 Cass. 1re civ., 7 décembre 2004, n 01-11.823. 66 Motivation très discutable, dans la mesure où l’ordre public protégé par l’article 6 du Code civil est loin d’être systématiquement sanctionné par la nullité. Voir notamment B. Fauvarque-Cosson, « L’ordre public », in 1804-2004. Le Code civil, un passé, un présent, un avenir, Université PanthéonAssas (Paris II), Dalloz, 2004, p. 473 et s., spéc. n 11 et s., p. 480 et s. 67 Ex. : C. consom., art. L. 242-5, par renvoi à l’article L. 221-9, en matière d’information dans les contrats conclus hors établissement (sanction pénale) ; art. L. 242-13, pour les règles relatives au droit de rétractation dans les contrats conclus hors établissement ou à distance (amende administrative). 61 62

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Les exigences d’information spécifique en matière de produits alimentaires

L’étiquetage des produits alimentaires, d’abord appréhendé par le droit des fraudes et falsifications en 1905, fait aujourd’hui l’objet d’une législation pléthorique d’origine essentiellement européenne.

2.5.1

Présentation des règles

Désormais rattachée à la notion de conformité, la question est envisagée d’une manière générale par l’article L. 412-1 du Code de la consommation, déjà signalé, dont le I dispose : « Des décrets en Conseil d’État définissent les règles auxquelles doivent satisfaire les marchandises. Ils déterminent notamment : (. . .) 3 Les modes de présentation ou les inscriptions de toute nature sur les marchandises ellesmêmes, les emballages (. . .) en ce qui concerne notamment : le mode de production, la nature, les qualités substantielles, la composition y compris, pour les denrées alimentaires, la composition nutritionnelle, la teneur en principes utiles, l’espèce, l’origine, l’identité, la quantité, l’aptitude à l’emploi, les modes d’emploi ainsi que les marques spéciales facultatives ou obligatoires apposées sur les marchandises françaises exportées à l’étranger ». Si un certain nombre de textes spéciaux demeurent encore dans la législation interne, la matière n’en est pas moins dominée par des textes européens68, en particulier par le règlement n 1169/2011 du 25 octobre 2011 concernant l’information des consommateurs sur les denrées alimentaires, règlement qui, dans un souci de simplification du droit (mais pas vraiment des étiquettes !), a fusionné et remplacé divers textes antérieurs et a entraîné l’abrogation de nombreuses dispositions réglementaires françaises (C. consom., ancien art. R. 112-1 et s.) pour s’y substituer. Le règlement de 2011, après avoir donné une grandiloquente définition de l’information69 et bien signalé que son objectif majeur réside dans « la libre circulation des denrées alimentaires » (art. 3), dresse des listes de mentions obligatoires : une liste générale (art. 9 : dénomination de la denrée, liste et quantité des ingrédients, quantité nette, date limite de consommation, pays d’origine, mode d’emploi, déclaration nutritionnelle, etc. – le détail de ces exigences est précisé aux articles 17 et s.) et des listes spécifiques pour certaines catégories de denrées (art. 10 et Annexe III : denrées contenant des 68 Ainsi la partie réglementaire du Code de la consommation énumère-t-elle les différentes mesures d’exécution de l’article L. 412-1 en opérant d’innombrables renvois vers les sources européennes (spéc. art. R. 412-17 et s.). Le droit français en est rendu proprement illisible. 69 « L’information sur les denrées alimentaires tend à un niveau élevé de protection de la santé et des intérêts des consommateurs en fournissant au consommateur final les bases à partir desquelles il peut décider en toute connaissance de cause et utiliser les denrées alimentaires en toute sécurité, dans le respect, notamment, de considérations sanitaires, économiques, écologiques, sociales et éthiques » (art. 3, § 1). Le charabia technocratique est encore plus désastreux quand il se veut paternaliste.

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édulcorants, teneur élevée en caféine, date de congélation, etc.). Toutes ces obligations d’information sont assorties d’exceptions nombreuses et variées (par exemple en fonction des types d’emballage). À côté du règlement de 2011, d’autres textes européens imposent des obligations d’information qui sont parfois le reflet de graves préoccupations de santé publique, en particulier au sujet de la traçabilité et de la présence d’organismes génétiquement modifiés (v. C. consom., art. R. 412-20 et règlement n 1830/2003 du 22 septembre 2003). Existe-t-il, par ailleurs, des règles destinées à lutter contre certaines techniques de commercialisation manipulatrices mises en œuvre par les professionnels ? Dans une économie libérale, il va de soi que les professionnels ont le droit de chercher à retenir l’attention des clients par l’emballage et la présentation de leurs produits. Aussi les étiquettes mêlent-elles savamment information obligatoire et publicité. La limite, bien entendu, résulte du droit des pratiques trompeuses (v. supra, 2.2), mais aussi de certaines exigences posées par le règlement du 25 octobre 2011 en matière de présentation des mentions obligatoires (v. infra, 2.5.2). S’agissant de déjouer les tromperies, l’article 7 du règlement pose en outre une exigence expresse de « pratiques loyales en matière d’information » qui s’apparente à une déclinaison particulière de l’interdiction des pratiques déloyales par la « directive PCD » de 2005. Selon le § 1 de ce texte spécial, « les informations sur les denrées alimentaires n’induisent pas en erreur » sur un certain nombre de points non limitatifs, et notamment « en suggérant au consommateur, au moyen de l’apparence, de la description ou d’une représentation graphique, la présence d’une denrée ou d’un ingrédient déterminé alors qu’il s’agit en fait d’une denrée dans laquelle un composant présent naturellement ou un ingrédient normalement utilisé dans cette denrée alimentaire a été remplacé par un composant ou un ingrédient différent ». Pas de beaux fruits frais, par conséquent, pour illustrer l’emballage d’une boisson à base de produits chimiques ! Cet exemple rappelle une ancienne et célèbre affaire jugée par la Cour de cassation sur le fondement de la publicité de nature à induire en erreur70, l’étiquette pouvant constituer une pratique trompeuse, à ce titre condamnable, au même titre qu’une vidéo publicitaire.

2.5.2

Lisibilité des informations en matière de produits alimentaires

L’article 12 du règlement de 2011, intitulé « mise à disposition et emplacement des informations obligatoires », indique dans son § 1 (au style tout bruxellois. . .) que « pour toutes les denrées alimentaires, les informations obligatoires sur les denrées alimentaires sont fournies et rendues facilement accessibles ». Pour les denrées préemballées, ces informations « figurent directement sur l’emballage ou sur une étiquette attachée à celui-ci » (§ 2), sauf exception (§ 3 et 4). L’article 13 intéresse ensuite la « présentation des mentions obligatoires » et réglemente la lisibilité de celles-ci : « Sans préjudice des mesures nationales arrêtées en vertu de l’article

70

Cass. crim., 13 mars 1979, n 78-92.341 (affaire Tang).

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44, § 2 [qui concerne les denrées non préemballées], les informations obligatoires sur les denrées alimentaires sont inscrites à un endroit apparent de manière à être facilement visibles, clairement lisibles et, le cas échéant, indélébiles. Elles ne sont en aucune façon dissimulées, voilées, tronquées ou séparées par d’autres indications ou images ou tout autre élément interférant » (§ 1). La suite du texte réglemente la taille du corps de caractère, en fonction de la surface de l’emballage (« hauteur de x (. . .) égale ou supérieure à 1,2 mm » ou « 0,9 mm » selon les cas ; § 2 et 3). Plusieurs informations doivent par ailleurs apparaître « dans le même champ visuel » (§ 5). D’autres exigences de présentation sont posées par l’article 34 en ce qui concerne les indications nutritionnelles qui peuvent être présentées, « si la place le permet, sous forme de tableau, avec alignement des chiffres ». Le règlement de 2011 autorise la Commission à établir des règles de lisibilité par voie d’actes délégués et il prévoit que les dispositions européennes d’harmonisation peuvent être complétées par des « mesures nationales » prescrivant des « mentions obligatoires complémentaires, pour des types ou catégories spécifiques de denrées », si ces mesures sont justifiées par certaines raisons (santé publique, protection des consommateurs [laquelle n’est donc pas l’objectif principal. . .], répression des tromperies, etc. ; art. 39). Ces mesures « ne peuvent entraver la libre circulation des marchandises » (art. 38) et doivent être notifiées au préalable à la Commission et aux autres États de l’Union (art. 45). D’autres dérogations plus ciblées sont permises, par exemple au sujet des boissons alcoolisées71.

2.5.3

Sanctions

Comme bien d’autres règles consuméristes, les dispositions relatives à l’étiquetage sont dénuées de sanction civile expresse ; seul le droit commun des vices du consentement ou de la responsabilité peut donc s’appliquer. Des sanctions pénales, surtout, sont possibles : sanction des pratiques déloyales, dans l’hypothèse où cette qualification serait retenue, ou sanction du délit de tromperie (C. consom., art. L. 441-1 et L. 454-1). À cet égard, la Cour de cassation a jugé que la seule mise en vente d’un produit non conforme aux qualités substantielles présentées sur l’étiquetage suffit à caractériser l’élément matériel du délit de tromperie72. L’absence de préjudice n’a pas d’incidence, mais l’intention frauduleuse du professionnel doit en revanche être établie. De manière plus spécifique, enfin, l’article R. 451-1 prévoit que « les infractions aux dispositions des décrets pris en application de l’article L. 412-1 [préc.] sont punies de la peine d’amende prévue pour les contraventions de la 5e classe ».

71 Voir par exemple, en France, décret n 2012-655 du 4 mai 2012 relatif à l’étiquetage et à la traçabilité des produits vitivinicoles et à certaines pratiques œnologiques. 72 Cass. crim., 9 mars 1999, n 97-83.825.

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3 Pratiques commerciales trompeuses Les dispositions du Code de la consommation prohibant les pratiques trompeuses sont directement issues de la directive déjà évoquée du 11 mai 2005 relative aux pratiques commerciales déloyales des entreprises vis-à-vis des consommateurs dans le marché intérieur, texte d’harmonisation maximale (pour l’essentiel)73 ne laissant guère de marge de manœuvre aux législations nationales, comme la France l’a appris à ses dépens. Ainsi trois lois ont-elles été nécessaires pour mettre le droit français en conformité (relative) avec les exigences bruxelloises74. À la suite des textes européens (longs et techniques), le Code de la consommation distingue, comme on l’a vu, deux types de pratiques trompeuses (lesquelles forment une catégorie particulière de pratique déloyale, aux côtés des pratiques agressives). L’article L. 121-2, d’une part, définit les pratiques trompeuses par action (ou commission) en énumérant les « circonstances » dans lesquelles de telles pratiques sont commises ; est en particulier visée la pratique commerciale qui « repose sur des allégations, indications ou présentations fausses ou de nature à induire en erreur et portant sur l’un ou plusieurs des éléments suivants : a) L’existence, la disponibilité ou la nature du bien ou du service ; b) Les caractéristiques essentielles du bien ou du service, à savoir : ses qualités substantielles, sa composition, ses accessoires, son origine, sa quantité, son mode et sa date de fabrication, les conditions de son utilisation et son aptitude à l’usage, ses propriétés et les résultats attendus de son utilisation, ainsi que les résultats et les principales caractéristiques des tests et contrôles effectués sur le bien ou le service ; c) Le prix ou le mode de calcul du prix [etc.] ». L’article L. 121-3, d’autre part, définit, dans des termes que nous avons déjà cités, les pratiques commerciales trompeuses par omission. Un interminable article L. 121-4 contient enfin une liste de vingt-deux pratiques « réputées trompeuses, au sens des articles L. 121-2 et L. 121-3 » (sont essentiellement visées, en réalité, des pratiques trompeuses par action)75. La directive de 2005 étant d’harmonisation totale, les droits nationaux ne sauraient interdire d’autres pratiques que celles énumérées. Cette solution, posée par la CJUE, a causé – et cause encore – quelques tracas à la France, dont le droit procédait jusqu’alors par interdictions ou réglementations spécifiques (ventes liées, ventes avec prime, ventes sans commande préalable, loteries publicitaires payantes. . .), lesquelles n’étaient pas toujours compatibles avec la liste de l’article L. 121-4. . . La jurisprudence interne semble désormais

Voir CJUE, 29 avril 2009, n C-261/07. Loi n 2008-3 du 3 janvier 2008 pour le développement de la concurrence au service des consommateurs ; loi n 2008-77 du 4 août 2008 de modernisation de l’économie ; loi n 2011525 du 17 mai 2011 de simplification et d’amélioration de la qualité du droit. 75 On ajoutera que l’article L. 121-5 du Code de la consommation prévoit que « Les dispositions des articles L. 121-2 et L. 121-4 sont également applicables aux pratiques qui visent les professionnels et les non-professionnels ». A contrario, seuls les consommateurs stricto sensu peuvent dénoncer les pratiques agressives (art. L. 121-6 et s.) et les pratiques trompeuses par omission (art. L. 121-3). 73 74

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claire76 : en dehors des strictes interdictions européennes, il convient de prouver qu’une pratique est déloyale au sens de l’article L. 121-1 pour pouvoir en prononcer la sanction. En dehors de la liste européenne, l’automaticité des anciennes interdictions françaises cède donc la place à une appréciation circonstanciée, au cas par cas, du caractère déloyal ou trompeur de la pratique. Certains défenseurs des consommateurs y ont vu une régression de la protection, tandis que certains professionnels ont dénoncé une atteinte à la sécurité juridique. Dans l’un et l’autre cas, la vérité est certainement plus nuancée. Si l’on se concentre plus précisément sur le thème de l’information et des pratiques trompeuses, il faut relever que la loi pose des critères d’appréciation. Dans le Code français de la consommation, deux éléments importants figurent à l’article L. 121-1. Selon l’alinéa 2 de ce texte, « une pratique commerciale est déloyale lorsqu’elle est contraire aux exigences de la diligence professionnelle et qu’elle altère ou est susceptible d’altérer de manière substantielle le comportement économique du consommateur normalement informé et raisonnablement attentif et avisé, à l’égard d’un bien ou d’un service ». Deux conditions cumulatives sont ainsi posées, la seconde (altération du comportement économique du consommateur) étant la plus intéressante. Même si la France n’a pas transposé cet élément, les articles 6 et 7 de la directive de 2005 précisent que cette altération du comportement du consommateur consiste, pour la pratique commerciale en cause, à le pousser à « prendre une décision commerciale qu’il n’aurait pas prise autrement » – ce qui rappelle le caractère déterminant de l’erreur ou du dol en droit commun des contrats. La CJUE77 et la Cour de cassation78 s’attachent à ce que ce critère soit démontré, comme le prouve la jurisprudence relative à la question récurrente, à Paris comme à Luxembourg, des ventes d’ordinateurs équipés de logiciels préinstallés. Dans une récente décision79, la Cour de justice a estimé que « l’absence d’indication du prix de chacun des logiciels préinstallés ne constitue pas une pratique commerciale trompeuse »80, mais elle s’est montrée plus nuancée sur le fait que le professionnel ne propose pas, dans ses offres, la vente de l’ordinateur nu. Ainsi a-t-elle jugé que cette pratique n’est pas trompeuse, « à moins qu’[elle] soit contraire aux exigences de la diligence professionnelle et altère ou soit susceptible d’altérer de manière substantielle le comportement économique du consommateur moyen par rapport à

Cass. Com., 13 juillet 2010, n 09-66.970 ; Cass. com., 15 novembre 2010, n 09-11.161. Certaines décisions mettent cependant en œuvre un tour de passe-passe pour sauver des réglementations spécifiques en matière d’information, les juges français estimant qu’elles se situent « dans le droit fil de la directive » de 2005 (v. Cass. com., 14 février 2012, n 10-19.330). 77 CJUE, 16 avril 2015, aff. C-388/13. 78 Cass. com., 29 septembre 2015, n 14-13.472. 79 CJUE, 7 septembre 2016, n C-310/15 (question préjudicielle posée par la Cour de cassation française). 80 Rappr., se référant expressément à la décision de la CJUE, Cass. 1re civ., 14 décembre 2016, n 14-11.437. La Cour de cassation décide en revanche que les caractéristiques des logiciels préinstallés et leurs conditions d’utilisation sont des informations substantielles (Cass. 1re civ., 29 mars 2017, n 15-13.248, condamnation pour pratique trompeuse). 76

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ce produit, ce qu’il appartient à la juridiction nationale d’apprécier, en tenant compte des circonstances spécifiques de l’affaire au principal »81. La solution se comprend difficilement : alors que la Cour fait référence au « consommateur moyen » (tout comme la « directive PCD » (art. 5, § 2) et le Code de la consommation), ce qui semble renvoyer à une appréciation in abstracto du caractère trompeur82, elle estime par ailleurs qu’il faut privilégier les « circonstances spécifiques » de l’affaire, ce qui paraît au contraire privilégier une appréciation in concreto. . . Le second critère d’appréciation posé par l’article L. 121-1 concerne précisément cette question, et il est spécifique : « Le caractère déloyal d’une pratique commerciale visant une catégorie particulière de consommateurs ou un groupe de consommateurs vulnérables en raison d’une infirmité mentale ou physique, de leur âge ou de leur crédulité s’apprécie au regard de la capacité moyenne de discernement de la catégorie ou du groupe » (al. 2 ; rappr. dir. 11 mai 2005, art. 5, § 3). La loi, européenne comme française, refuse donc de rompre avec l’appréciation in abstracto ; mais elle adapte celle-ci dans l’hypothèse où la pratique commerciale vise une cible caractérisée. Dans son point 28, l’Annexe I de la « directive PCD » prend l’exemple classique des publicités s’adressant aux enfants83. On ajouterait volontiers à la liste des cibles caractérisées, dans nos sociétés européennes vieillissantes, les personnes âgées, voire les femmes selon un distrayant arrêt rendu par la cour d’appel de Paris au sujet d’un produit prétendument amaigrissant84 ! Toute cette savante construction relative aux pratiques déloyales et trompeuses constitue, en creux, un puissant moteur d’information, ne serait-ce qu’en permettant de lutter contre la "désinformation".

4 Information des consommateurs et droit des clauses abusives 4.1

Les clauses concernées

Contrairement à d’autres systèmes juridiques – et contrairement au droit européen de la consommation résultant de la directive n 93/13/CEE du 5 avril 1993 (art. 3) –, le droit français des clauses abusives ne distingue nullement, depuis son origine dans la loi du 10 janvier 1978, selon que les clauses du contrat ont fait ou non l’objet d’une négociation individuelle. Cette solution résulte des termes mêmes de l’article

81 Ces « circonstances spécifiques » pourraient par exemple concerner la façon dont l’information a été donnée aux consommateurs. 82 Le juge français tranche en ce sens. Voir Cass. com., 22 janvier 2014, n 10-10.800. 83 « Dans une publicité, inciter directement les enfants à acheter ou à persuader leurs parents ou d’autres adultes de leur acheter le produit faisant l’objet de la publicité » constitue une pratique trompeuse. Voir C. consom., art. L. 121-7, 5 (pratique agressive). 84 Voir, sur pourvoi, Cass. crim., 20 octobre 1999, n 98-80.361.

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L. 212-1 du Code de la consommation : « Ces dispositions sont applicables quels que soient la forme ou le support du contrat. Il en est ainsi notamment des bons de commande, factures, bons de garantie, bordereaux ou bons de livraison, billets ou tickets, contenant des stipulations négociées librement ou non ou des références à des conditions générales préétablies » (al. 6). La solution tranche par rapport à la récente condamnation des clauses abusives dans le droit commun des contrats, le nouvel article 1171 du Code civil, issu de l’ordonnance du 10 février 2016 (modifiée par sa loi de ratification du 20 avril 2018), ne visant que les contrats d’adhésion, par ailleurs définis comme ceux « qui comporte[nt] un ensemble de clauses non négociables, déterminées à l'avance par l'une des parties » (C. civ., nouvel art. 1110, al. 2, réd. L. 20 avril 2018). Sur ce point, le droit de la consommation se montre donc plus protecteur que le droit commun, ce qui peut sembler logique. La directive de 1993, qui pose une solution proche du droit civil français85, ne s’oppose pas à cette faveur faite aux consommateurs, puisqu’elle réalise seulement une harmonisation minimale. Un des avantages de la solution posée par le droit français de la consommation est bien entendu d’éviter tout débat sur le point de savoir si la clause a été négociée ou non par les parties. Mais encore faut-il relever que certaines clauses sont exclues – du moins par principe – du contrôle du déséquilibre significatif entre les droits et obligations des parties, donc du contrôle de l’abus. Selon le 3e alinéa de l’article L. 212-1, en effet, « l’appréciation du caractère abusif des clauses au sens du premier alinéa ne porte ni sur la définition de l’objet principal du contrat ni sur l’adéquation du prix ou de la rémunération au bien vendu ou au service offert (. . .) » (rappr. dir. 5 avril 1993, art. 4 § 2, et C. civ., art. 1171, al. 286). L’idée, toute simple et logique au regard du droit commun (C. civ., nouvel art. 1168), est que le contrôle de l’abus ne doit pas dégénérer en contrôle de la lésion dans les contrats de consommation87. Le droit de la consommation assortit toutefois cette exclusion d’une limite importante inconnue du droit civil : encore faut-il, pour échapper au contrôle de l’abus, que les clauses en question « soient rédigées de façon claire et compréhensible » (v. cidessous).

4.2

Transparence des clauses essentielles du contrat

La loi de 1978 ne posait pas cette dernière règle, contrairement à la directive de 1993 (art. 4, § 2). Lors de la transposition opérée par une loi du 1er février 1995, le

85 Selon le début de l’article 3, § 1, de la directive, « une clause d’un contrat n’ayant pas fait l’objet d’une négociation individuelle est considérée comme abusive (. . .) ». 86 La CJUE a jugé que la directive de 1993 ne s’oppose toutefois pas à un contrôle de l’adéquation du prix et de l’objet principal sur le fondement des clauses abusives (au nom de l’harmonisation minimale) dans un contentieux intéressant l’Espagne. Voir CJUE, 3 juin 2010, aff. C-484/08. 87 En droit commun, le 2e alinéa du nouvel article 1171 pose une règle identique.

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législateur français n’avait pas cru utile de faire figurer cette restriction dans la loi, estimant sans doute que l’exigence de clarté résultait déjà du droit commun et de la jurisprudence. Au reste, la loi de 1995 imposait d’une manière générale, et en conformité avec l’article 5 de la directive de 1993, que « les clauses des contrats proposés par les professionnels aux consommateurs [soient] présentées et rédigées de façon claire et compréhensible » (v. désormais C. consom., art. L. 211-1, préc.). Tenant toutefois compte du recours en manquement exercé contre les Pays-Bas sur cette question88, une ordonnance du 23 août 2001 a repris mot pour mot la formule de la directive qui impose une rédaction « claire et compréhensible » au titre spécifique du droit des clauses abusives. La loi n’apporte aucune autre précision : elle n’oblige pas le professionnel, en particulier, à informer le consommateur des conséquences des clauses essentielles du contrat et elle ne prévoit pas une protection plus élevée en termes de transparence pour les consommateurs vulnérables89. Il a d’ailleurs pu être relevé, voilà quelques années, que le droit français ne partageait guère l’enthousiasme du droit européen (et celui d’autres États membres de l’Union) pour les questions de transparence90 – ce mot étant au reste étranger aux lois consuméristes françaises ; cette remarque demeure vraie. Deux sanctions sont prévues par la loi en cas de non-respect de cette obligation européenne de transparence. La première, déjà rencontrée, résulte de l’article L. 211-1 (préc.) qui impose une interprétation favorable au consommateur des clauses obscures ou ambiguës. Quelques décisions ont été rendues sur ce fondement, qui concernent notamment, comme nous l’avons vu, des contrats d’assurance. Il faut relever que la Cour de cassation contrôle le respect par les juges du fond de cette interprétation in favorem. La deuxième sanction est prévue par le droit des clauses abusives lui-même : si la clause essentielle n’est pas claire ou compréhensible, l’article L. 212-1 prévoit, dans le sillage de la directive de 1993, que le contrôle de l’abus peut porter sur la définition qu’elle pose de l’objet principal du contrat et sur le prix qu’elle détermine91. Sur ce point, la jurisprudence française est bien peu fournie, tandis que la CJUE a eu l’occasion de poser plusieurs jalons importants, à la suite de questions préjudicielles posées par des États manifestement plus réceptifs que la France à ces exigences. Ainsi le juge européen a-t-il par exemple décidé que l’exigence de transparence n’impose pas seulement que la clause concernée soit intelligible pour le consommateur sur un plan grammatical, mais également que le contrat expose de manière transparente le fonctionnement concret du mécanisme

88

CJCE, 10 mai 2001, aff. C-144/99. Sur une tentative européenne de consécration de cette notion, voir S. Le Gac-Pech, « Le consommateur vulnérable : la nouvelle effigie du droit de la consommation », Revue Lamy Droit civil décembre 2012, n 99, p. 61. 90 Voir J. Rochfeld, « Les clairs-obscurs de l’exigence de transparence appliquée aux clauses abusives », in Liber amicorum Jean Calais-Auloy. Études de droit de la consommation, Dalloz, 2004, p. 981. 91 Pour les autres clauses (ne portant pas sur l’objet principal ou le prix), le « déséquilibre significatif », qui constitue la marque de l’abus, peut également résulter d’un défaut de clarté et de lisibilité. Voir par exemple Cass. 1re civ., 19 juin 2001, n 99-13.395. 89

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auquel se réfère la clause, de sorte que le consommateur soit mis en mesure d’évaluer, sur le fondement de critères précis et intelligibles, les conséquences économiques qui en découlent pour lui92. Faisant le lien entre le droit des clauses abusives et la question de l’information précontractuelle, la Cour de Luxembourg a également jugé que « l’examen du caractère abusif, au sens de l’article 3, § 1, de la directive 93/13, d’une clause contractuelle portant sur la définition de l’objet principal du contrat, dans le cas où le consommateur n’a pas disposé, avant la conclusion de ce contrat, de l’information nécessaire sur les conditions contractuelles et les conséquences de ladite conclusion, relève du champ d’application de cette directive »93. Par le truchement du droit des clauses abusives, la mauvaise information du consommateur peut ainsi déboucher, selon le droit européen, sur la nullité d’une clause contractuelle essentielle. Si ces solutions s’imposent évidemment à la France, il semble que l’on ne trouve nulle trace d’une telle démarche, pour l’instant, dans la jurisprudence interne. Au reste, la sanction de la nullité peut ici surprendre, car, au-delà d’une simple mise en jeu de la responsabilité civile et en l’absence de tout vice du consentement avéré, elle permet d’exercer un contrôle sur les éléments essentiels du contrat (notamment un contrôle du prix, donc de la lésion) sur la base d’un défaut de clarté. Au moins devrait-on échapper à une réfaction judiciaire du contrat, étrangère à la tradition juridique française, dans la mesure où l’article L. 241-1, al. 2, du Code de la consommation prévoit que « le contrat [dont une clause est jugée abusive] reste applicable dans toutes ses dispositions autres que celles jugées abusives s’il peut subsister sans ces clauses ». On peut ainsi penser que lorsque la clause portant sur un élément essentiel du contrat est stigmatisée comme abusive parce qu’opaque, la nullité, en principe partielle, devra céder le pas à une nullité totale – ce qui peut être défavorable au consommateur, particulièrement en matière de crédit.

5 Règles spécifiques en matière de consommation de services financiers 5.1

Présentation des règles françaises

Le domaine des services financiers est marqué par un haut degré de complexité, ce qui justifie un ensemble de règles spécifiques, notamment issues de la directive n 2002/65/CE du 23 septembre 2002 relative à la commercialisation à distance des services financiers, texte transposé en droit français par une ordonnance du 6 juin 2005. Modifiées à plusieurs reprises, ces règles ont en outre été complétées par la loi de sécurité financière du 1er août 2003, spécialement en ce qui concerne le 92

CJUE, 30 avril 2014, aff. C-26/13. Rappr. CJUE, 23 avril 2015, aff. C-96/14. CJUE, 21 décembre 2016, aff. jointes C-154/15, C-307/15 et C-308/15, spéc. § 51 (renvoyant à l’aff. C 92/11 jugée le 21 mars 2013). Voir D. 2017, p. 1096, note Poillot.

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démarchage financier. Face à des instruments et des techniques aussi complexes, on pourrait s’attendre à ce que la loi soit source de clarté, en particulier au sujet de l’information des clients. C’est malheureusement un constat inverse qu’il convient de dresser : non seulement ces dispositions sont très techniques sur le fond, mais encore manquent-elles singulièrement de lisibilité. Ainsi le Code de la consommation procède-t-il ici, plus encore qu’ailleurs, par de multiples renvois vers d’autres codes (en premier lieu le Code monétaire et financier (CMF), mais aussi le Code des assurances, le Code de la mutualité et le Code de la sécurité sociale ; C. consom., art. L. 222-17), y compris pour fixer le champ d’application des règles en question. . . Le Code multiplie également les exceptions aux principes qu’il pose, de sorte que le consommateur (notion pas toujours entendue dans un sens identique en droit financier. . .) a de quoi être perdu dans ce magma de textes au sein duquel de multiples règles tatillonnes se superposent, se recoupent, s’entremêlent et s’entrechoquent. Car, comme le prévoit avec lourdeur l’article L. 222-5 du Code de la consommation au sujet de l’information précontractuelle, « le présent article est applicable sans préjudice de l’application des obligations législatives et réglementaires spécifiques à chaque produit, instrument financier ou service proposé » (al. 9). On pense par exemple, du côté du Code de la consommation, aux nombreuses règles relatives au crédit à la consommation ou, du côté du Code monétaire et financier, aux règles concernant les conventions de compte bancaire. C’est dire que la matière est immense et ne saurait être exposée dans tous ses détails.

5.2

Les règles relatives à l’information

Si l’on s’en tient pour l’instant aux dispositions ayant pour origine la directive de 2002, une section spécifique est consacrée à l’« obligation d’information précontractuelle » (C. consom., art. L. 222-5). Par rapport aux autres contrats conclus à distance (C. consom., art. L. 221-5), ces règles ne présentent toutefois pas une grande originalité, sauf à noter que les textes sont ici plus précis, la loi renvoyant au décret le soin de fixer le détail des informations que le professionnel doit fournir au consommateur (art. R. 222-1 et s.). Certaines d’entre elles sont adaptées au particularisme des services financiers, comme par exemple les informations relatives aux intermédiaires, l’information sur le fait que le prix puisse dépendre « de fluctuations des marchés financiers sur lesquels le fournisseur n’a aucun influence » et, surtout, l’information sur les « risques particuliers » que peuvent comporter les produits et instruments proposés, lesquels doivent bien sûr être décrits et expliqués au consommateur (ici entendu strictement). Dans le domaine des services financiers, la sanction de ces règles demeure pénale (C. consom., art. R. 242-1 et s. : contraventions de la 5e classe), aucune sanction civile expresse n’étant édictée. Sur la forme, ces informations doivent être fournies « de manière lisible et compréhensible », ce qui rejoint tout à fait – sans que l’exigence soit renforcée – le droit "commun" de l’article L. 111-1 ou le droit spécial des contrats à distance (v. supra, 2.4.1). Sur le support de l’information, le parallèle s’impose

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encore, l’article L. 222-6 prescrivant, au stade de la formation du contrat, une information « par écrit ou sur un autre support durable », la définition de cette dernière notion étant rappelée par l’article L. 222-4. Des règles spéciales sont posées en ce qui concerne la « communication par téléphonie vocale » (C. consom., art. R. 222-2) : « Sous réserve de l’accord formel du consommateur », seules certaines informations, énumérées par ce texte, doivent alors être fournies. La logique est donc la même que pour les autres contrats à distance, sauf à noter que les textes sont ici plus détaillés (comp., en effet, C. consom., art. L. 221-12). Vieille mais précieuse prévalence culturelle du papier dans notre système de droit écrit, l’article L. 222-6, al. 3, ajoute qu’« à tout moment au cours de la relation contractuelle, le consommateur a le droit, s’il en fait la demande, de recevoir les conditions contractuelles sur un support papier ». Mais on quitte alors le strict domaine de l’information. Outre ces textes relatifs à l’information dans les contrats portant sur des services financiers conclus à distance, le Code de la consommation renvoie à d’autres corps de règles (essentiellement au Code monétaire et financier) le soin d’édicter les dispositions relatives au démarchage bancaire (certaines personnes morales sont alors protégées au même titre que les consommateurs – qui, de leur côté, ne le sont pas tous94. . .) et d’autres règles encore, au champ d’application plus général que les seuls contrats à distance, dans « les domaines bancaire, financier et des assurances (C. consom., art. L. 224-100 et s., renvoyant à différents chapitres du CMF ou du Code des assurances, pour chacun de ces trois domaines95). Enfin et surtout, le Code de la consommation règlemente avec un grand luxe de détails les deux opérations essentielles que constituent le crédit immobilier et le crédit à la consommation. Par la fréquence de leur application et leur contenu spécifique en matière d’information, ces règles sont les plus intéressantes, comme le montrent deux exemples emblématiques. Le premier exemple réside dans l’obligation faite au prêteur, en matière d’offre de crédit immobilier, de fournir à l’emprunteur « un échéancier des amortissements détaillant pour chaque échéance la répartition du remboursement entre le capital et les intérêts » (C. consom., art. L. 313-25), information ô combien éclairante pour l’emprunteur, mais que les établissements de crédit, au terme d’une lecture minimaliste des textes, ne s’étaient point empressés de respecter au lendemain de la loi du 13 juillet 1979. Mais une nouvelle loi du 12 avril 1996 a confirmé la stricte lecture qu’avait eue la Cour de cassation de cette exigence. Le second exemple concerne aussi bien le crédit à la consommation que le crédit immobilier et réside dans l’indication obligatoire du taux effectif global (ou du taux annuel effectif global, TEG ou TAEG) auquel l’opération de crédit est conclue (C. consom., art. L. 314-1 et s.). Sa réglementation est si complexe qu’un auteur n’a point hésité à

94

Voir CMF, art. L. 341-2. Pour les règles relatives à l’information, voir art. L. 341-12 du même Code. 95 Chacun de ces corps de règles édicte des règles d’information spécifiques en faveur des consommateurs.

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qualifier le TEG de « taux d’embrouille généralisée »96 ! Ce trait d’humour conduit à s’interroger sur une éventuelle simplification de ces règles d’information.

5.3

L’objectif de simplification de l’information

Le droit français est-il sensible, en matière de services financiers, aux sirènes du tropplein d’informations et au discours relatif à la nécessité de simplifier celles-ci ? Dans le langage politique actuel, le besoin de simplification de la vie des affaires est un leitmotiv inusable depuis une bonne quinzaine d’années. Le droit de la consommation paraît cependant rétif à ce mouvement de simplification dont les conquêtes sont pour l’instant bien timides. Le moins que l’on puisse dire, par exemple, est que la loi du 17 mars 2014 relative à la consommation, dernière "grande loi" en ce domaine, est loin de s’inscrire dans un mouvement de simplification. . . Si certains juristes critiquent de longue date l’engouement du droit de la consommation pour l’information tous azimuts, le mouvement législatif est loin de connaître une véritable inversion. À défaut de simplifier, une ambition plus mesurée peut cependant être trouvée, notamment sous l’impulsion du droit européen, dans la volonté de rationnaliser l’information, au profit des consommateurs eux-mêmes. Sur ce point, le droit du crédit peut à nouveau servir de laboratoire d’étude. En matière de crédit à la consommation, d’abord, la loi du 1er juillet 2010, transposant la directive n 2008/48/CE du 23 avril 2008, a supprimé les anciens modèles types de contrat au profit « d’une fiche d’informations, par écrit ou sur un autre support durable, [mentionnant] les informations nécessaires à la comparaison de différentes offres et permettant à l’emprunteur, compte tenu de ses préférences, d’appréhender clairement l’étendue de son engagement » (C. consom., art. L. 312-12, al. 1er97). La liste précise des informations devant être communiquées par le biais de cette fiche figure à l’article R. 312-2, tandis qu’une annexe à l’article R. 312-5 impose un modèle de fiche d’« informations précontractuelles européennes normalisées ». Une même volonté de rationalisation – qui a sans doute pour principal mérite de faciliter la comparaison des offres par le consommateur, comme l’affirme la loi – a ensuite gagné le crédit immobilier du fait de la directive n 2014/17/UE du 4 février 2014, l’article L. 313-7 du Code de la consommation instaurant, sur le même modèle, « une fiche d’information standardisée européenne » (v. art. R. 313-4 et son annexe). Dans l’un et l’autre cas, la loi prévoit que « toutes les informations complémentaires que le prêteur souhaite donner à l’emprunteur sont fournies dans un document distinct de la fiche mentionnée au présent article »

96

A. Brunet, in Drôle(s) de droit(s). Mélanges en l’honneur de Élie Alfandari, Dalloz, 2000, p. 231. Dans la même veine, l’article L. 312-28 dispose qu’« un encadré, inséré au début du contrat, informe l’emprunteur des caractéristiques essentielles du crédit [al. 1er in fine]. La liste des informations figurant dans le contrat et dans l’encadré mentionné au premier alinéa est fixée par décret en Conseil d’État [al. 2] ». 97

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(C. consom., art. L. 313-7, al. 3 ; v. aussi art. L. 312-13, al. 2). La mesure est importante, qui permet d’éviter que les informations légales ne soient "noyées" dans des considérations parfois plus publicitaires qu’informatives (v. supra, 2.2). En dépit de cette volonté de rationalisation par voie de normalisation ou de standardisation, la liste des informations à communiquer demeure très longue. À l’inverse, d’aucuns ont dénoncé une régression de l’information des consommateurs sur l’autel de l’harmonisation européenne du droit98. . . Rationalisation ou simplification peuvent-elles aller de pair avec la protection des consommateurs ? Des exigences d’information toujours plus nombreuses sont-elles nécessairement le gage d’une protection plus efficace ? Pour cette question de politique juridique, le droit du crédit constitue encore un excellent révélateur, car la protection du consommateur revêt ici une finalité spécifique qui tient à la prévention du surendettement. Or, face à l’explosion de celui-ci, il n’apparaît pas que l’information, même rationalisée, ait atteint son but.

6 Règles spécifiques en matière de vente et prestation de services ''en ligne'' 6.1

Présentation des règles françaises

Certaines règles spécifiques aux contrats de vente et de prestation de services conclus à distance ont déjà été évoquées et il va de soi qu’elles s’appliquent aux contrats "en ligne". Des exigences spéciales d’information précontractuelle (communes avec les contrats conclus hors établissement) sont notamment posées par l’article L. 221-5 du Code de la consommation. Leur principale spécificité tient à l’existence, en principe, d’un droit de rétractation dont la loi impose le rappel en même temps qu’elle oblige le professionnel à renseigner le consommateur sur les conséquences de l’exercice de ce droit. De manière très originale, le Code prévoit aussi qu’une information doit être donnée au consommateur lorsque, par exception, il ne bénéficie pas du droit de rétractation, encore que le contrat ait bien été conclu à distance (v. C. consom., art. L. 221-28). Ces règles sont complétées par les articles L. 221-11 et suivants qui se contentent notamment d’une simple mise à disposition, au profit des consommateurs, des informations exigées par l’article L. 221-5. L’article L. 221-14, introduit par la loi du 17 mars 2014 pour la transposition de la directive du 25 octobre 2011, est plus intéressant en ce qu’il envisage l’hypothèse particulière des « contrats conclus par voie électronique » et pose trois règles distinctes. La première ne constitue guère que la reprise des informations mentionnées à l’article L. 221-5. La deuxième est en revanche plus spécifique, qui vise à prévenir le risque pour le consommateur "en ligne" de s’engager sans en avoir

98

Voir notamment G. Biardeaud et Ph. Flores, « Crédit à la consommation. Décrets du 1er février 2011 et information de l’emprunteur : le compte n’y est pas ! », D. 2011, p. 688.

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réellement pris conscience : « Le professionnel veille à ce que le consommateur, lors de sa commande, reconnaisse explicitement son obligation de paiement. À cette fin, la fonction utilisée par le consommateur pour valider sa commande comporte la mention claire et lisible : commande avec obligation de paiement ou une formule analogue, dénuée de toute ambiguïté, indiquant que la passation d’une commande oblige à son paiement » (al. 2). Depuis la loi pour la confiance dans l’économie numérique du 21 juin 2004 (transposant la directive n 2000/31/CE du 8 juin 2000 relative au commerce électronique), une fameuse règle de fond concourt au même but : le "double clic" de l’article 1127-2 du Code civil99. Troisième règle, enfin, l’article L. 221-14 prévoit que « les sites de commerce en ligne indiquent clairement et lisiblement, au plus tard au début du processus de commande, les moyens de paiement acceptés par le professionnel et les éventuelles restrictions de livraison ». Ces dispositions sont sanctionnées par une amende administrative (art. L. 242-10). À ces règles s’ajoutent celles que nous avons déjà signalées (v. supra, 2.1) relatives aux sites de comparaison, de classement, de référencement et de mise en relation de plusieurs parties (art. L. 111-7) ainsi qu’aux sites ayant pour objet de collecter, modérer ou diffuser des avis en ligne provenant de consommateurs (art. L. 111-7-2). Des exigences spécifiques en matière de publicité par voie électronique sont aussi posées, notamment par les articles L. 122-8 et suivants du Code de la consommation, issus de la loi du 21 juin 2004. Ces règles, précisément relatives aux « offres et opérations promotionnelles proposées par voie électronique », font écho à l’interdiction de certaines pratiques trompeuses et sont à nouveau sanctionnées par une amende administrative (art. L. 132-26). La loi ajoute que les messages électroniques « indiquent une adresse ou moyen électronique permettant effectivement au destinataire de transmettre une demande visant à obtenir que ces publicités cessent » (art. L. 122-8, al. 2). D’autres règles importantes relatives à la prospection commerciale par voie électronique sont édictées par le Code des postes et des communications électroniques (CPCE ; v. infra, 6.3). Enfin, au croisement des contrats "en ligne" et des contrats portant sur des services financiers, un récent article L. 222-16-1 du Code de la consommation interdit la publicité par voie électronique relative à la fourniture de services d’investissement portant sur certains contrats financiers, lorsqu’elle est susceptible de s’adresser à des non-professionnels. Au bout du compte, les exigences d’information spécifiques en matière de contrats "en ligne" ne sont ni très nombreuses (par rapport à la catégorie plus large des contrats à distance) ni d’une grande originalité – sauf en ce qui concerne la publicité et la « prospection ». Elles sont par ailleurs récentes, pour la plupart d’entre elles, et éclatées entre différents codes ou dans diverses parties du Code de la consommation, ce qui les rend difficilement accessibles pour les consommateurs. Dans ce premier quart du XXIe siècle, c’est encore de manière décousue que le droit français traite du commerce électronique.

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« Le contrat n’est valablement conclu que si le destinataire de l’offre a eu la possibilité de vérifier le détail de sa commande et son prix total et de corriger d’éventuelles erreurs avant de confirmer celle-ci pour exprimer son acceptation définitive. »

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La protection des attentes raisonnables du consommateur

L’information du consommateur doit-elle être déterminée en fonction des attentes raisonnables qui sont les siennes ? Par tradition, ce standard ne joue pas un rôle important en France, surtout en comparaison des solutions adoptées par d’autres systèmes juridiques. Sous l’influence du droit européen, les choses évoluent toutefois, spécialement en droit de la consommation (mais aussi, désormais, en droit commun des contrats100). En matière de publicité pour le crédit immobilier, par exemple, l’article L. 313-5 du Code de la consommation, tout droit inspiré de la directive du 4 février 2014 (art. 10), dispose, de manière négative, qu’« il est interdit dans toute communication publicitaire et commerciale : (. . .) 2 De faire figurer toute formulation susceptible de faire naître chez le consommateur de fausses attentes concernant la disponibilité ou le coût d’un crédit ». Des règles d’inspiration similaires irriguent aussi la liste des pratiques réputées trompeuses par l’article L. 121-4, en particulier lorsque la loi interdit au professionnel de faussement donner certaines impressions au consommateur (20 à 22 ). En sanctionnant de longue date la publicité de nature à induire en erreur, il est vrai que le droit français protège sans le dire les attentes raisonnables, la validité des publicités humoristiques ou hyperboliques montrant aussi, en creux, que la sanction n’est pas justifiée lorsqu’aucune prévision légitime n’est flouée. En dehors du champ de l’information, les attentes légitimes du consommateur jouent un rôle important dans d’autres domaines du droit de la consommation, soit de manière expresse (en matière de conformité et de sécurité101), soit de manière diffuse (dans le domaine de la lutte contre les clauses abusives102). En revanche, il ne semble pas que ce standard soit appelé, du moins pour l’instant, à jouer un rôle particulier en droit positif du seul fait qu’un contrat soit conclu par voie électronique.

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Voir par exemple le nouvel article 1188 du Code civil, issu de l’ordonnance du 10 février 2016 : « Lorsque [la commune intention des parties] ne peut être décelée, le contrat s'interprète selon le sens que lui donnerait une personne raisonnable placée dans la même situation » (al. 2). Sur ce thème, voir d’une manière générale, en droit français, X. Dieu, Le respect dû aux anticipations légitimes d’autrui. Essai sur la genèse d’un principe général de droit, Bruylant-LGDJ, Coll. de la faculté de droit - Université libre de Bruxelles, 1995 et, plus récemment, G. Guerlin, L’attente légitime du contractant, thèse Amiens, 2008. Plus tourné vers le droit de la consommation, voir aussi J. Calais-Auloy, « L’attente légitime, une nouvelle source de droit subjectif ? », in Mélanges en l’honneur de Yves Guyon, Dalloz, 2003, p. 171. 101 Ex. : C. consom., art. L. 217-5, au sujet de la garantie de conformité au contrat ; art. L. 421-3 et L. 421-7, pour l’obligation générale de sécurité. 102 En matière de clauses abusives, les stipulations qui s’écartent du modèle dessiné par le droit supplétif peuvent parfois être jugées abusives en ce qu’elles trahissent les attentes raisonnables des consommateurs. Sur ce sujet, voir C.-M. Peglion-Zika, La notion de clause abusive. Étude de droit de la consommation, LGDJ, Coll. Bibliothèque de droit privé, t. 585, 2018, spéc. n 468 et s., p. 308 et s. En droit européen, la Cour de justice considère que, pour caractériser une clause abusive, « le juge national doit vérifier (. . .) si le professionnel, en traitant de façon loyale et équitable avec le consommateur, pouvait raisonnablement s’attendre à ce que ce dernier accepte une telle clause à la suite d’une négociation individuelle » (CJUE, 14 mars 2013, aff. C.-415/11, § 69).

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Il convient de mettre en avant un trait de caractère bien connu de nos sociétés de l’information et qui pose de redoutables difficultés, notamment juridiques. Il s’agit du fait que le consentement des sujets de droit en général, et des consommateurs en particulier, légitime presque toutes les formes de collecte, d’utilisation ou de divulgation de données personnelles. Si cette question dépasse largement le champ du droit de la consommation, elle n’en impose pas moins de s’interroger sur la manière dont le consommateur doit être informé, dans ce contexte, de ce à quoi il consent exactement. Dans ce domaine très technique, des dispositions d’apparition récente prétendent aujourd’hui protéger le consommateur. La plupart de ces initiatives proviennent du droit européen : directive précitée du 25 octobre 2011, mais aussi directive n 2002/ 58/CE, dite « vie privée et communications électroniques », modifiée en 2009 et qui devrait l’être à nouveau prochainement pour tenir compte du règlement n 2016/679 du 27 avril 2016 relatif à la protection des personnes physiques à l’égard du traitement des données à caractère personnel (RGPD). Si l’on s’en tient d’abord à des considérations contractuelles, la disposition la plus intéressante est celle qui concerne les options par défaut, autrement dit les "cases" qu’il est – ou qu’il était – d’usage pour les professionnels de pré-cocher dans leurs offres pour emporter sournoisement le consentement des consommateurs manquant de vigilance (par exemple en matière d’assurance annulation, pour la réservation de voyages ou de places de spectacle, ou en matière de garantie ou encore de type de livraison). Cette pratique a été interdite par la loi du 17 mars 2014 qui désigne la chose sous les termes peu éclairants de « paiement supplémentaire sans consentement exprès ». En effet, selon l’article L. 121-17 du Code de la consommation, « préalablement à la conclusion d’un contrat de vente ou de prestation de services, le professionnel s’assure du consentement exprès du consommateur pour tout paiement supplémentaire venant s’ajouter au prix de l’objet principal du contrat » (al. 1er). Cet article ajoute que « dans l’hypothèse où le paiement supplémentaire résulte d’un consentement du consommateur donné par défaut, c’est-à-dire en l’absence d’opposition expresse de sa part à des options payantes qu’il n’a pas sollicitées, le consommateur peut prétendre au remboursement des sommes versées au titre de ce paiement supplémentaire » (al. 2 ; dispositions d’ordre public). Si le texte ne semble pas avoir suscité de contentieux pour l’instant, on peut penser que certaines difficultés de preuve se poseront dans les litiges individuels. Même si des progrès restent à faire, les utilisateurs de sites commerciaux peuvent aisément se rendre compte que les pratiques ont commencé d’évoluer au lendemain de l’entrée en vigueur de la loi (voire dès avant, pour les professionnels les plus vertueux), dans le sens d’une meilleure protection du consentement effectif – peut-être du fait de l’amende administrative dont la loi menace une fois de plus les professionnels (C. consom., art. L. 132-22). S’agissant des données personnelles, le droit de la consommation prétend veiller à ce que celles-ci ne soient exploitées à des fins commerciales qu’avec le

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consentement spécifique103 du consommateur. Tel est l’objet de l’article L. 34-5 du code des postes et des communications électroniques (CPCE), précédemment mentionné et récemment modifié pour assortir ces exigences d’une énième amende administrative (al. 8). Aux termes du 1er alinéa de cet article, « est interdite la prospection directe au moyen de système automatisé de communications électroniques au sens du 6 de l’article L. 32, d’un télécopieur ou de courriers électroniques utilisant les coordonnées d’une personne physique, abonné ou utilisateur, qui n’a pas exprimé préalablement son consentement à recevoir des prospections directes par ce moyen ». Le 2e alinéa prévoit qu’« on entend par consentement toute manifestation de volonté libre, spécifique et informée par laquelle une personne accepte que des données à caractère personnel la concernant soient utilisées à fin de prospection directe ». La loi définit ensuite la notion de prospection directe (al. 3) et l’autorise, par exception, dans certains cas, notamment « si les coordonnées du destinataire ont été recueillies auprès de lui, dans le respect des dispositions de la loi n 78-17 du 6 janvier 1978 relative à l’informatique, aux fichiers et aux libertés, à l’occasion d’une vente ou d’une prestation de services » (al. 4). Tout comme l’article L. 122-8 du Code de la consommation (préc., au sujet des offres par courrier électronique), l’article L. 34-5, al. 4, du CPCE ajoute que le professionnel doit offrir au destinataire, « de manière expresse et dénuée d’ambiguïté, la possibilité de s’opposer, sans frais, hormis ceux liés à la transmission du refus, et de manière simple, à l’utilisation de ses coordonnées au moment où elles sont recueillies et chaque fois qu’un courrier électronique de prospection lui est adressé au cas où il n’aurait pas refusé d’emblée une telle exploitation ». Toutes ces règles aux origines européennes, qui peuvent paraître bien lourdes au juriste, sont utiles, comme en témoigne la boîte mail de ceux d’entre les consommateurs qui se montrent vigilants à lutter contre les messages indésirables. La question des "cookies" est encore plus délicate. En doit français, les règles applicables résultent de l’article 32, II, de la loi précitée du 6 janvier 1978 : « Tout abonné ou utilisateur d’un service de communications électroniques doit être informé de manière claire et complète, sauf s’il l’a été au préalable, par le responsable du traitement ou son représentant : - de la finalité de toute action tendant à accéder, par voie de transmission électronique, à des informations déjà stockées dans son équipement terminal de communications électroniques, ou à inscrire des informations dans cet équipement ; - des moyens dont il dispose pour s’y opposer ». Le texte poursuit : « Ces accès ou inscriptions ne peuvent avoir lieu qu’à condition que l’abonné ou la personne utilisatrice ait exprimé, après avoir reçu cette information, son accord qui peut résulter de paramètres appropriés de son dispositif de connexion ou de tout autre dispositif placé sous son contrôle ». Deux exceptions sont enfin prévues qui concernent les informations stockées dans l’équipement terminal de l’utilisateur ayant pour « finalité exclusive de permettre ou faciliter la communication par voie électronique » et les informations « strictement nécessaire[s] à la fourniture d’un service de communication en ligne à

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Sur cette notion légale, voir CE, 11 mars 2015, n 368624.

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la demande expresse de l’utilisateur ». En pratique, chacun a vu fleurir, depuis quelques mois, des banderoles plus ou moins colorées, en haut ou en bas des sites sur lesquels il navigue, pour l’inviter à se renseigner sur la "politique maison" en matière de "cookies" et pour souvent l’encourager, par exemple, à « accepter les cookies de tiers afin de profiter pleinement des fonctionnalités du site web ». . . Pour peu que le consommateur n’ait rien de mieux ou de plus pressé à faire que d’ouvrir ces liens, il y découvrira un vocabulaire généralement très technique qui ne peut que difficilement l’éclairer. . . Depuis bientôt quarante ans, la loi du 6 janvier 1978 énonce, dans un pompeux article premier (à la normativité toute molle), que l’« informatique doit être au service de chaque citoyen ». Ce noble objectif apparait bien difficile à atteindre lorsque ce citoyen tient un porte-monnaie entre ses mains.

7 Information et ''désinformation'' des consommateurs Les discours juridiques critiques à l’égard des obligations d’information ne sont désormais plus chose neuve en droit de la consommation. On peut sommairement en distinguer deux types. Le premier type de critiques – qui pourrait être jugé irrationnel voire inconvenant par les thuriféraires de la chose consumériste, mais qui demeure prégnant chez certains civilistes – consiste à dénoncer le droit de la consommation comme trop protecteur du consommateur, notamment au regard de l’importance conférée aux obligations d’information qui, du fait de l’automaticité fréquente des sanctions qui s’y appliquent, constituent autant de chausse-trappes n’ayant pour résultat que de conférer au consommateur un statut qui le rapproche du mineur non émancipé. « Un peu de formalisme protège, trop de formalisme opprime et spolie », résume un auteur104, tandis que d’autres peuvent s’interroger sur le caractère subversif du droit de la consommation105, matière qui nous ramènerait aux formules du droit romain. . . Le second type de reproches est plus sceptique que polémique : à trop vouloir informer le consommateur, en multipliant les obligations mises à la charge des professionnels, n’existe-t-il un risque de "noyer" celui que l’on entend protéger ? Ce risque ne confine-t-il pas à l’effet pervers lorsque, submergé par ces informations, le consommateur néglige pour cette raison même d’en prendre connaissance ? Comme trop d’impôt tue l’impôt, paraît-il, trop d’informations tuerait l’information ; en d’autres termes, « plus le contrat renferme de mentions ou de clauses, moins il a de chances d’être lu »106. Un tel discours peut à l’évidence servir de paravent à des

104 Ph. Simler, in De code en code. Mélanges en l’honneur du doyen Georges Wiederkehr, Dalloz, 2009, p. 753. 105 H. Temple, « Le droit de la consommation est-il subversif ? », in Liber amicorum Jean CalaisAuloy. Études de droit de la consommation, Dalloz, 2004, p. 1067. 106 G. Paisant, « De l’obligation de transparence dans les contrats de consommation », préc., n 12, p. 238.

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conceptions très libérales du droit qui n’ont d’autre objectif que d’alléger les contraintes pesant sur les professionnels. Encouragée par la philosophie libérale, au nom de la transparence du marché, l’information devenue pléthorique se retourne en effet contre elle. Quelles que soient leurs intentions, ces critiques ont-elles eu des effets sur le droit positif français ? Cette influence, dont on a pu signaler quelques manifestations (souvent d’origine européenne), pourrait être pudiquement qualifiée de modeste : rationalisation des informations en matière de crédit, par le biais de fiches « normalisées » ou « standardisées », invitation à ne mentionner que les informations les plus importantes au stade précontractuel, tandis que le détail est remis à plus tard, en matière de contrats à distance (C. consom., art. L. 221-11). En l’occurrence, ce "plus tard" se situe après la conclusion du contrat, mais cette solution doit être lue au regard du droit de rétractation instauré au profit du consommateur. Il s’agit là d’un point essentiel et le rallongement des délais de rétractation imposé par le droit européen est à cet égard significatif : cette période du repentir, postérieure à la conclusion du contrat, est aussi celle pendant laquelle le consommateur a le temps de prendre connaissance des informations qui lui ont été transmises. Au regard de celles-ci, il sera entièrement libre de reprendre le consentement qu’il a donné. Mais, par hypothèse, ce raisonnement n’est pertinent que là où existe un droit de rétractation. Dans les autres domaines, le chantier de l’allégement des obligations légales reste à mener, si tant est qu’il soit souhaitable. D’une manière générale, le thème de la surabondance d’informations conduisant à la "désinformation" n’a pas beaucoup excité l’imagination de la doctrine française (au-delà des critiques d’ordre très général), à tel point que ce disgracieux néologisme n’a pas conquis le vocabulaire des juristes français. On voit mal, en particulier, comment une information surabondante pourrait être qualifiée de pratique trompeuse, dès lors qu’elle résulte du seul respect des exigences légales. Il en va différemment, comme nous l’avons vu, dans le cas où le professionnel a glissé des "informations" volontaires parmi les informations légales. Un autre point peut retenir l’attention : celui du cumul éventuel entre les obligations spéciales résultant du droit de la consommation et l’application de l’obligation d’information de droit commun. Ce cumul doit-il être admis, vu l’absence de contradiction entre ces règles, ou doit-il au contraire être exclu pour conjurer la surabondance ? La réponse du droit français n’est pas certaine. Dans une affaire jugée en 1989, la Cour de cassation avait décidé « qu’il ne pouvait être reproché à l’établissement de crédit [ayant financé l’achat d’une voiture] d’avoir omis d’aviser son client de la poursuite du contrat de prêt en cas de vol du véhicule, dès lors que le législateur lui-même n’avait pas jugé utile de faire figurer cet avertissement sur le modèle-type qu’il avait lui-même rédigé » (pas de réticence dolosive)107. Le formalisme informatif excluait donc en principe l’application du droit commun. Mais quelques années plus tard, les mêmes juges estimeront, dans le domaine du crédit immobilier, que « la présentation d’une offre préalable conforme aux exigences de l’article 5 de la loi du 13 juillet 1979 ne

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Cass. 1re civ., 14 juin 1989, n 88-12.665.

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dispense pas l’établissement de crédit de son devoir de conseil à l’égard de l’emprunteur »108. À première vue contradictoires, ces solutions ne sont pas inconciliables, en vérité, si l’on précise que le devoir de conseil présente un contenu spécifique en matière bancaire (mise en garde contre un endettement excessif) – de sorte que le droit spécial exclurait l’information de droit commun, mais non ce type particulier de conseil. Reste que cette subtile articulation n’est pas certaine et qu’elle est critiquée par certains auteurs109. Sur ce sujet, le mot de la fin sera laissé à la plus éminente doctrine civiliste : « On ne saurait trouver meilleur exemple de l’espèce de course-poursuite qui se déroule entre le droit des obligations et le droit de la consommation : chacun prétendant remédier aux insuffisances de l’autre, notre droit devient toujours plus complexe et plus inintelligible à ceux qu’il est censé protéger »110.

Bibliographie Ouvrages Calais-Auloy J, Temple H (2015) Droit de la consommation, 9e éd. Précis Dalloz Payet MS (2001) Droit de la concurrence et droit de la consommation, Dalloz, Coll. Nouvelle bibliothèque de thèses, vol 7 Peglion-Zika C-M (2018) La notion de clause abusive. Étude de droit de la consommation, LGDJ, Coll. Bibliothèque de droit privé, t. 585 Piédelièvre S (2014) Droit de la consommation, 2e éd. Economica Terré F, Simler Ph, Lequette Y (2013) Droit civil. Les obligations, 11e éd. Précis Dalloz

Articles Bernheim-Desvaux S (mars 2012) Le droit de la consommation, entre protection du consommateur et régulation du marché. Revue Lamy Droit des affaires 69:91 Biardeaud G, Flores Ph (D. 2011) Crédit à la consommation. Décrets du 1er février 2011 et information de l’emprunteur : le compte n’y est pas !, p 688 Calais-Auloy J (2003) L’attente légitime, une nouvelle source de droit subjectif ? In: Mélanges en l’honneur de Yves Guyon, Dalloz, p 171 Le Gac-Pech S (décembre 2012) Le consommateur vulnérable : la nouvelle effigie du droit de la consommation. Revue Lamy Droit civil 99:61 Loiseau G (2016) La loi du 7 octobre 2016 et l’obligation d’information des opérateurs de plateformes. Communication, commerce électronique, 91

Cass. 1re civ., 27 juin 1995, n 92-19.212. Voir par exemple S. Piédelièvre, ouvrage préc., n 87, p. 80. 110 F. Terré, Ph. Simler et Y. Lequette, Droit civil. Les obligations, Précis Dalloz, 11e éd., 2013, n 262, p. 294. 108 109

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Paisant G (2003) De l’obligation de transparence dans les contrats de consommation. In: Mélanges en l’honneur du doyen Roger Decottignies, PUG, p 233 Rochfeld J (2004) Les clairs-obscurs de l’exigence de transparence appliquée aux clauses abusives. In: Liber amicorum Jean Calais-Auloy. Études de droit de la consommation, Dalloz, p 981 Sauphanor-Brouillaud N, Information des consommateurs. Règles communes à l’obligation d’information précontractuelle et à l’information sur les prix, JurisClasseur ConcurrenceConsommation, fasc. 845. Stoffel-Munck Ph (2012) L’autonomie du droit contractuel de la consommation : d’une logique civiliste à une logique de régulation, RTD com, p 705 Stoffel-Munck Ph (mars 2017) Formalisme informatif ad validitatem : retour à une logique civiliste ? Revue des contrats 25 Temple H (2004) Le droit de la consommation est-il subversif ?. In: Liber amicorum Jean CalaisAuloy. Études de droit de la consommation, Dalloz, p 1067

L’information et la désinformation des consommateurs : Rapport italien Gian Antonio Benacchio

Abstract This contribution draws on some questions that have arisen by the analysis of the European model of protection of consumers’ economic interests. The aim of the analysis was the necessity to highlight the defects and the shortcomings of this model, particularly with reference to information; this last aspect has always been conceived as the main tool of rebalancing the contractual relation between professionals and consumers, which has always been favouring the former. The analysis is carried out by taking the different information duties that burden the entrepreneur as a point of reference and which were regulated by the numerous EU directives, enacted in the last thirty years. The study analyses the results of the solutions based on commercial praxis, as well as on instruments and technological innovations applied to mass collective bargaining. The last part of the article will focus on the use of data gathered though internet accesses, a increasingly urgent and relevant theme. As a consequence, uninformed consumers might suffer much more serious and important effects than those caused by the imprudent purchase.

Abstract Cet article traite du thème de l'information en tant que instrument de rééquilibrage de la relation contractuelle entre le professionnel et le consommateur, fortement déséquilibrée en faveur du premier. L'analyse est réalisée en faisant référence aux différentes obligations d'information qui appartiennent à l'entrepreneur et qui sont contenues dans les nombreuses directives de l'Union européenne adoptées au cours des années; il se concentre non seulement sur le contenu de l'information obligatoire, mais aussi sur les conséquences en cas de leur violation ainsi que sur l'efficacité des recours et sanctions prévus. Le travail n'a pas l'intention de proposer des solutions alternatives pour un modèle d'information différent mais d'évaluer de façon critique le modèle européen et d'analyser les situations qui présentent des lacunes plus ou moins importantes. Enfin, une attention particulière est portée au problème, de plus en plus d'actualité et croissant, relatif à l'utilisation des données G. A. Benacchio (*) University of Trento, Faculty of Law, Trento, Italy e-mail: [email protected] © Springer Nature Switzerland AG 2019 G. Straetmans (ed.), Information Obligations and Disinformation of Consumers, Ius Comparatum – Global Studies in Comparative Law 33, https://doi.org/10.1007/978-3-030-18054-6_5

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collectées via internet, utilisation qui peut avoir des effets dévastateurs pour le consommateur pas pleinement conscient, bien supérieur à celui d'un achat imprudent d’un produit.

1 Introduction Les règles régissant la protection des consommateurs sont l’aboutissement de choix législatifs relativement récents, associés au rôle assumés par les consommateurs dans la société en tant que sujets passifs et particulièrement dignes de protection au sein du système de production et de distribution de masse. Nous pouvons faire remonter l’amorce de ce processus de réglementation aux premiers résultats obtenus dans les années 60 du siècle dernier par le mouvement du consumerism aux Etats-Unis1, auxquels suivirent, dans les années 80, les actions mises en place dans la plupart des pays européens (y compris en Italie)2 promues par les initiatives fondamentales de la Communauté européenne et, quasi simultanément, les premières initiatives dans l’hémisphère oriental du monde3. Concernant l’Union européenne, nous pouvons noter que l’intervention des institutions communautaires a permis, non seulement d’accélérer la formation et la croissance de la législation consumériste dans les États qui en étaient privés, mais aussi d’en garantir un développement plus uniforme et harmonieux dans les

1 Les questions en matière de publicité commerciale, de contrats standard par adhésion et de responsabilité du producteur ont été les premières à susciter l’intervention de la jurisprudence et du législateur d’outre-Atlantique, transformant de simples instances socio-politiques en leading precedents ou en actes législatifs et administratifs. Les solutions proposées ont constitué l’assise sur laquelle certains systèmes européens ont ensuite élaboré et reconstruit leurs propres modèles de protection. Sur ce thème voir Kotler (1973), p. 3. 2 Ce n’est que dans quelques États européens, tels que la Grande-Bretagne, la France ou l’Allemagne, que, déjà à partir des années 70 du siècle passé, certaines dispositions de caractère administratif, processuel et relevant du droit privé avaient commencé à identifier chez le consommateur, sujet passif du système de production et de distribution de masse, caractéristique de l’économie capitaliste, une personne particulièrement digne de protection. Voir, par exemple, parmi les actes les plus importants, en France la loi n. 23 du 10 janvier 1978 (dite loi Scrivener) sur les droits d’information et de protection du consommateur de produits et de services et la loi n. 22 sur le crédit à la consommation; en Grande-Bretagne, l’Unfair Contract Terms, de 1977, qui a introduit des formes de contrôle des contrats par adhésion; en Allemagne, l’Allgemeinen Geschäftsbedingungen Gesetz, de 1976, qui introduit la réglementation régissant les conditions générales de contrat (c’est le modèle qui servira de référence pour la directive en matière de clauses abusives; en Suède, l’institution, en 1971, de l’Ombudsman pour les consommateurs. En général, les interventions nationales manquaient réciproquement de coordination et répondaient à des traditions socio-culturelles diverses, à des programmes et à des politiques différentes. Ainsi certaines avaient-elles accordé la préférence à des interventions de type administratif, d’autres de type judiciaire, quelques-unes avaient préféré laissé une plus grande marge à l’autoréglementation des marchés, d’autres encore avaient favorisé une législation dans des secteurs donnés, tel que le secteur alimentaire, plutôt que dans d’autres. 3 Stearns (2006); Capelli (2013); Panza and Jùnhòng (2015), pp. 15–23; Rossi (2009), p. 445.

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systèmes nationaux, presque toujours dans le cadre du droit civil et commercial, notamment du droit des contrats4. Les initiatives politiques et législatives européennes se sont posé comme objectif la protection de la santé, la sécurité et la qualité des produits, la protection des intérêts économiques du consommateur5. De plus, dès les premiers documents la politique consumériste a identifié dans le droit à l’information (sur les produits, sur les instruments de protection et sur tout ce qui pouvait s’avérer utile à la protection économique et à la santé du consommateur) un des secteurs de plus grand intérêt, considéré comme déterminant pour accroître la confiance des consommateurs dans un marché de plus en plus global, transfrontalier, non enfermé à l’intérieur de confins nationaux6. Au fil des années, l’action du législateur a pris de l’ampleur aussi bien quantitativement, intéressant un nombre croissant de typologies de contrats des consommateurs, que qualitativement, entrant dans les détails, réglementant des aspects essentiels et décrivant de manière précise et méticuleuse les obligations et les devoirs des parties. Cette intervention, intense et massive, des sources européennes dans la législation en matière de consumérisme, accompagnée de la spécificité des solutions et du fait d’avoir dicté un substrat commun à toutes les interventions nationales dans ce secteur, a abouti à la formation d’un véritable nouveau droit européen des contrats7. 4 Bourgoignie (1988); Alpa and Andenas (2005), p. 153; Somma (2007); Cafaggi (2003); Navarretta (2007); De Cristofaro (2009); Castronovo (2005); Benacchio (2016), pp. 239–316. 5 Les motivations qui ont incité l’Union à élaborer une réglementation spéciale du secteur des contrats renvoient essentiellement à deux ordres de considérations: considérations d’ordre juridique: l’utilisation des contrats de masse, rédigés par l’entrepreneur et conclus moyennant une signature au bas d’un imprimé, ou par téléphone ou durant une émission de télévision ou via internet. Le développement exponentiel de ces contrats, accompagné de la diffusion des nouvelles technologies, a souvent pris au dépourvu les juges et les opérateurs juridiques, lesquels ont dû opter pour des solutions qui n’étaient toujours appropriées pour la protection du contractant faible; considérations d’ordre économique: la diversité de règles entre les systèmes nationaux déterminait une disparité de traitement entre les entreprises, selon qu’elles étaient assujetties à une réglementation plus restrictive et rigoureuse ou au contraire plus tolérante, ce qui se traduisait par une disparité économique. Étant donné que cette disparité pouvait causer des distorsions de la concurrence, un système uniforme de protection du consommateur aurait eu la fonction de garantir, quoique indirectement, le fonctionnement correct du marché unique. Sur ce thème voir Antoniolli Deflorian (2011), pp. 208–238. 6 Voici qu’émerge, déjà tout au début, la «double âme» de la législation «consumériste » européenne, visant d’une part, un niveau élevé de protection des consommateurs et, de l’autre, l’essor d’un marché dans le sens pro-concurrentiel (à savoir engendrer les effets les moins restrictifs sur le commerce intracommunautaire). Une « double âme » qui se reflète aussi dans les finalités attribuées à la transparence. En effet, les informations communiquées au consommateur non seulement lui facilite le choix entre plusieurs offres, mais elles activent des formes de contrôle diffus sur les conduites des entrepreneurs, en créant, ou du moins en facilitant, des «contraintes fondées sur la fiabilité et, suite à un jeu de concaténations, plus de consommations», Pagliantini (2012), pp. 1285–1286. 7 Dans la doctrine, et non seulement, on parle couramment d’européisation du droit des contrats, terme avec lequel il est fait référence à l’érosion progressive des particularités nationales moyennant

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L’instrument utilisé a été essentiellement celui des directives qui, selon le degré de définition de chacune des règles, peuvent se traduire par des effets d’harmonisation minimale sur les modèles nationaux, laissant aux législateurs des États la liberté de maintenir ou de définir des règles plus rigoureuses que celles énoncées dans lesdites directives8 ou d’harmonisation maximale lorsque les législateurs nationaux ne peuvent pas s’écarter des indications prescrites par la règle européenne. C’est la raison pour laquelle rares sont les directives qui définissent des règles d’harmonisation maximale dans le droit des contrats. En effet, le législateur de l’UE n’a pas toujours la force, la capacité, la détermination de dicter des règles strictes, précises et contraignantes pour les États. Souvent, à Bruxelles, la nécessité de parvenir à un ample accord pour l’approbation d’une nouvelle directive impose de devoir élaborer et proposer des solutions représentant un compromis, un moyen terme capable de concilier les desiderata des vingt-huit/vingt-sept différents systèmes juridiques nationaux. En général, le système des directives ne garantit aucunement une uniformisation suffisante des règles et les nombreuses dérogations accordées aux États finissent par perpétuer des solutions juridiques différentes qui ne favorisent pas le marché unique que l’Union européenne se propose d’atteindre. Que l’on songe, par exemple, aux obligations d’information précontractuelles: bien qu’une liste détaillée soit formalisée dans la directive 2011/83/UE (« sur les contrats des consommateurs »), la tâche de définir les sanctions à infliger en cas d’infraction, et de préciser qu’elles devront être «effectives, proportionnées et dissuasives», est laissée aux législateurs nationaux9. Or, le choix de ne pas définir de sanctions communes réprimant la violation des obligations prescrites laisse assurément planer plus d’un doute sur l’efficacité réelle de l’intervention visant à atteindre les objectifs d’harmonisation du droit. Que l’on considère en outre que, lors de ces toutes dernières années, l’activité du législateur européen est devenue frénétique: les nouvelles directives sont étendues à d’autres secteurs et à d’autres matières relevant jusqu’ici de la compétence des États,

l’insertion de nouveaux éléments d’empreinte européenne. C’est un processus qui intéresse, encore que selon des intensités différentes, tous les systèmes juridiques des États de l’UE et qui ne concerne pas uniquement les contrats des consommateurs mais d’autres secteurs, relevant aussi bien du droit privé (concurrence, sociétés, banques, assurances, etc.) que du droit publicadministratif (marchés publics, environnement, services d’intérêt général, immigration, etc.), et bien d’autres encore (droit pénal, du travail, de la propriété industrielle). Concernant les thématiques des consommateurs Alpa (2009); Chiné (2000); Lipari (2003); Basedow (1998), pp. 7–28; Alpa and Bessone (1980); Twigg-Flesner (2016). 8 D’un côté, cette solution laisse aux États une plus grande autonomie et favorise d’un côté leur ralliement au consensus lors de la phase d’approbation de la disposition réglementaire communautaire; de l’autre côté, elle peut néanmoins avoir des retombées négatives sur le degré d’harmonisation des règles. En effet, le modèle communautaire peut donner lieu à des divergences, même profondes, d’État à État selon le degré de précision et d’analycité des dispositions énoncées dans la réglementation devant être accueillie. 9 Voir l’article 24, directive 2011/83/UE.

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elles modifient parfois des règles édictées cinq, dix, voire vingt ans auparavant10. Il s’ensuit une stratification de règles qui désorientent l’opérateur juridique, le juge, l’avocat, juge, le spécialiste. Le législateur national lui-même a du mal à se conformer correctement aux solutions européennes, trop souvent devenues privées de certitude et d’interprétation non univoque11. On se demande, surtout ces dernières années, si ce modèle communautaire, axé sur les principes de transparence et d’uniformisation, est réellement efficace, avantageux et s’il suffit à rétablir l’équilibre entre deux parties ordinairement dotées de forces contractuelles différentes12. À partir de ces questions, ce travail se propose de souligner les défauts et les lacunes du système italien, et de proposer des solutions fondées sur les pratiques commerciales, sur les innovations technologiques et sur les instruments qui sont de plus en plus fréquemment appliqués à la négociation de masse.

2 L’information comme instrument principal pour la protection du consommateur Sous l’impulsion des règles communautaires est né en Italie un véritable modèle innovateur de protection du consommateur, partie contractuelle faible à laquelle notre système juridique n’offrait pas d’instruments de protection spécifiques13.

10 L’effet obtenu, est la multiplication des règles européennes avec lesquelles il faut se mesurer et auxquelles les législateurs nationaux doivent constamment s’adapter, contraints de modifier à plusieurs reprises non seulement les lois de mise en œuvre précédentes mais aussi les articles mêmes des codes nationaux, par définition destinés à ne pas devoir subir de continuelles révisions et modifications. Sur ce thème voir Castronovo (2013), p. 905. 11 Eu égard à ce qui est décrit, le rôle de la cour de Justice de l’UE n’est pas toujours concluant. S’il est vrai, en effet, que l’activité d’interprétation, d’unification et de perfectionnement des règles exercée par les juges européens, surtout à travers le remède du renvoi préjudiciel, a contribué de manière fondamentale à la construction du droit européen des contrats, on ne saurait ignorer que les règles de plus en plus nombreuses formulées par la Cour ne contribuent certes pas à assurer la clarté et la certitude du droit dont le consommateur non moins que tous les autres citoyens ont besoin. 12 Parmi les principaux commentateurs, voir Alpa and Catricalà (2016); Alpa et al. (2010); Pagliantini (2014); Graziadei (2011), pp. 191–288; Roppo (2014), pp. 25–45; Di Porto (2017). Il faut rappeler que déjà au milieu du siècle passé, le prix Nobel H. Simon a traité magistralement le sujet, l'un des premiers à s'interroger sur le fait que les obligations d'information surchargées peuvent susciter une prise de conscience pour faire un choix le plus correct; Simon (1955), pp. 99–118. 13 Notre Code civil italienne renferme quelques rares dispositions (applicables à tout type de rapport contractuel) qui font référence à des critères de correction, de loyauté, de transparence; par exemple, au devoir de bonne foi dans les négociations (art. 1337 C.C.), dans l’exécution du contrat (art. 1375 C.C.) ainsi qu’au moment de son interprétation (art. 1366 C.C.), obligations comprenant, comme on l’a toujours estimé, non seulement le devoir de correction mais aussi d’information et de transparence. Ce n’est que dans certains cas, graves et bien précis, qui auraient porté atteinte à la libre détermination de l’une des parties (dol, tromperie, erreur, violence, état de danger) que trouvent

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Il s’agit d’un modèle qui, nonobstant l’absence de toute systématicité, encore qu’il se soit développé en s’enrichissant progressivement de nouvelles solutions et quoiqu’il ait été modifié et rectifié à plusieurs reprises, a assurément contribué à faire en sorte qu’aujourd’hui le consommateur soit beaucoup plus protégé qu’il ne l’était il y a une trentaine d’années. C’est un modèle qui, comme nous l’avons dit, mise essentiellement sur la transparence et sur l’information précontractuelle, allant bien au-delà de l’obligation générique de bonne foi (objective) incombant aux deux parties contractantes14. Le législateur spécifie minutieusement une série d’obligations d’information, qui constituent un véritable contenu obligatoire du contrat. Ce qui remet en question ce qui avait été un emblème de la doctrine libérale: à savoir l’affirmation de l’autonomie privée comme intangible expression de la liberté de la personne de s’autodéterminer, de réglementer comme bon lui semble sa propre sphère juridique et économique, limitant ainsi l’action corrective de l’autorité judiciaire à des cas limites et marginaux. Si le contrat continue d’être une question tout à fait privée, l’État ne peut et ne veut plus tourner la tête de l’autre côté mais il se veut garant d’une meilleure équité sociale, d’une plus grande justice contractuelle, d’une défense des intérêts des personnes les plus faibles et dignes de protection.ù L’adaptation au cadre juridique européen a abouti, suite à une profonde réflexion sur toute la systématique inhérente aux contrats des consommateurs, à l’adoption d’un Code de la consommation15 recueillant en une unique sedes materiae la réglementation italienne relative aux rapports de consommation, rationnalisant, coordonnant et simplifiant le cadre réglementaire fragmentaire précédent. L’intervention n’est pas seulement de nature systématique: le législateur national agit également sur le contenu des règles, faisant émerger une nouvelle dimension de l’obligation d’information, affranchie de l’obligation, traditionnelle non moins que générique, de comportement respectant le principe de bonne foi.

application les instruments oordinaires de droit privé tels que l’annulation, la résolution, la résiliation, la perte d’effet, etc. 14 Comme il a été à juste titre souligné, «les devoirs d’information ne naissent pas du critère de correction . . . mais ils sont plutôt imposés par la loi car ils servent à combler l’asymétrie d’information . . . dans laquelle se trouve le contractant non professionnel au début du rapport», voir à ce propos Russo (2016), p. 64. Sur ce thème voir De Cristofaro (2012), pp. 30–80; Poncibò (2014), pp. 1–16; Battelli (2014), p. 1065; Plus généralement Sacco (1949); Bianca (1983), p. 206; Garofalo (2003). 15 Décret législatif n. 206 du 6 septembre 2005, «Code de la consommation». Le Code regroupe en plus de 150 articles toutes les dispositions édictées à partir de la fin des années 80. Le Code constitue le conteneur de toute intervention réglementaire successive, aussi bien de matrice européenne que nationale, apportant des avantages bien évidents en termes de simplicité, de clarté et de coordination majeure en matière de contrats des consommateurs. Pour certaines considérations générales sur le Code de la consommation, voir les contributions de nombreux auteurs: Alpa and Rossi Carleo (2005); Galgano (2007), p. 50; Capobianco and Perlingieri (2009); D’Amico (2015); Capo (2014); Gambino and Nava (2014); Cuffaro (2015); Minervini (2014).

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En effet, malgré la persistance du devoir générique de bonne foi et de loyauté, qui trouve dans le Code de la consommation une nouvelle, et plus précise, consécration («Les activités commerciales se fondent sur le respect des principes de bonne foi, de correction et de loyauté», article 39), le devoir d’information acquiert une connotation autonome et spécifique. Il est renforcé également dans le rapport par d’autres positions juridiques subjectives et d’autres concepts (par exemple la publicité et la forme du contrat) au point d’être défini, dans le Code de la consommation, comme étant un véritable droit fondamental16. De plus, si la structure initiale du modèle national répondait à un besoin de protection du consommateur en tant que sujet maximisateur de son utilité, de son avantage économique, à présent sous l’effet des évolutions successives, le consommateur est de plus en plus protégé comme personne, comme être humain disposant d’un droit à sa dignité (dispositions sur la publicité trompeuse qui répriment même la seule attitude visant à tromper la personne destinataire), d’un droit à la santé (dispositions en matière d’étiquetage alimentaire), d’un droit à l’indemnisation du préjudice moral (comme dans le cas du préjudice dérivant de vacances gâchées) et ainsi de suite.

3 Le sujet destinataire des informations L’expression consommateur n’est pas univoque, elle se prête à des interprétations, des significations et des définitions17 représentatives de situations diverses: consommateur peut l’être celui qui achète un produit, la personne ayant subi un préjudice, l’utilisateur d’un service public, l’assuré, l’investisseur, l’épargnant ou le client; parfois il peut même coïncider avec le citoyen ou «consommateur final». Toujours est-il que, comme l’établissent les sources communautaires et nationales, peuvent bénéficier des règles édictées aux fins de la protection du consommateur tous ceux qui achètent des produits ou des services à un entrepreneur/professionnel afin de satisfaire des besoins personnels ou familiaux et, partant,

16

Voir l’article 2, 2ème alinéa, lettres c) et e), du Code de la consommation, au regard desquelles « aux consommateurs et aux autres utilisateurs sont reconnus, comme étant fondamentaux, les droits: (. . .) c) à une information adéquate et à une publicité correcte; c-bis) à l’exercice des pratiques commerciales dans le respect des principes de bonne foi, de correction et de loyauté; (. . .) e) à la correction, à la transparence et à l’équité dans les rapports contractuels ». Sur ce thème cf. Russo (2016), p. 59; Barcellona (2011), p. 329; Micklitz (2016), pp. 859–889. 17 Il a également été question de l’opportunité de distinguer à l’intérieur de la catégorie du consommateur, à partir de quelques idées tirées de la législation communautaire, des types particuliers de consommateurs, dignes d’une plus grande protection. Ainsi a-t-on proposé, sous le profil dogmatique, une scission entre le concept de « consommateur moyen » et celui de « consommateur vulnérable », englobant dans ce dernier concept des catégories de sujets particulières, tels que les personnes âgées, les enfants, etc. Voir Zorzi Galgano (2010), p. 549; Guarino (2008), p. 251; Barba (2017).

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non professionnels, à savoir pour des finalités ne rentrant pas dans le cadre de leurs activités commerciales, industrielles, artisanales ou professionnelles. Ainsi le législateur considère-t-il l’objectif du contrat (qui doit être étranger à l’activité professionnelle) comme étant l’élément essentiel pour l’identification du consommateur, sa position de faiblesse dans le cadre de la négociation n’étant pas prise en compte. D’où le passage ultérieur: les protections contractuelles s’appliquent au consommateur en tant que tel, indépendamment du fait que celui qui s’engage par contrat est réellement le sujet faible lors de la négociation spécifique. Voilà quel est l’aspect qui distingue davantage le modèle de protection introduit par Bruxelles par rapport aux solutions déjà présentes dans le système juridique italien18. L’interprète italien, par exemple, trouve tout naturel d’associer la figure du consommateur à celle du contractant faible, sujet non expressément défini par le Code civil, dont les traits caractérisant émergent de la lecture des articles 1341 (conditions générales du contrat), 1342 (contrat conclu moyennant des imprimés ou préalablement rédigés par le professionnel) et 1370 (interprétation contre l’auteur de la clause) du Code civil. Entre ces deux figures il existe indiscutablement des points de contact, mais non pas une totale identité. Le consommateur peut assurément être considéré, d’une manière générale, comme un contractant faible19, à condition que l’on garde à l’esprit que, dans certaines situations, l’acheteur-consommateur n’est pas inexpérimenté mais doté de compétences égales ou supérieures à celles du professionnel. En bref, on ne saurait ignorer que, dans certaines circonstances, un consommateur peut très bien n’être pas un contractant faible, et qu’un entrepreneur peut être parfois un contractant faible.

18 Dans le domaine du droit des contrats, le législateur national part du principe que les sujets sont toujours pleinement conscients de leurs actions, qu’ils sont assurément capables de défendre leurs intérêts et que le meilleur résultat pour la société peut être obtenu par l’ensemble des échanges « librement » voulus par les individus. L’intervention de l’autorité visant à corriger un déséquilibre présumé a toujours été considérée comme un facteur de perturbation. Pour justifier et admettre une éventuelle intervention corrective de l’État, la disparité de pouvoir contractuel des parties ne suffisait pas; dans le cas concret, il fallait qu’il y ait eu une faiblesse particulière de la partie en tant qu’individu, et par conséquent n’appartenant pas à une catégorie structurellement plus faible. En ce sens, le législateur n’intervenait que lorsque se vérifiait une situation d’abus, d’exploitation de la part d’un des contractants. Il suffit de penser aux conséquences d’un contrat conclu en état de nécessité ou de danger, ou au contrat où le consentement était la conséquence d’une erreur ou arraché par la ruse. Voir Musy (2001), p. 234. 19 Les éléments qui peuvent déterminer la faiblesse naturelle du consommateur sont notamment une médioce capacité à évaluer, a priori, la qualité du bien ou du service offert et le fait de n’avoir guère de poids contractuel. Concernant le premier aspect, il est inconcevable de prétendre qu’un consommateur soit diligent au point de s’informer sur les qualités réelles des produits qui lui sont offerts, et donc sur l’avantage réel que peut lui apporter le contrat qu’il s’apprête à conclure. La seconde cause déterminant la faiblesse contractuelle du consommateur dérive d’un système d’achat et de distribution standardisé où il n’a pratiquement pas la possibilité d’intervenir.

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Cela signifie que les règles édictées en matière de contrats des consommateurs n’ont pas, toujours et seulement, pour objet la protection du contractant faible, mais qu’elles ont pour objet la protection du consommateur tout court. Le contractant faible, qu’il s’agisse d’un entrepreneur, d’un commerçant, de quiconque exerce une activité professionnelle ou de toute personne physique qui conclut un contrat avec une autre personne physique non entrepreneur, pourra éventuellement user de tous autres instruments nationaux tels que l’action résolutoire ou l’action en annulation du contrat pour erreur, violence ou dol, bien entendu si toutes les conditions prescrites pour exercer cette action spécifiques sont satisfaites. Mais jamais il ne pourra recourir aux règles édictées pour la protection du consommateur. En revanche, la personne physique qui aurait conclu un contrat en qualité de consommateur aura toujours la faculté d’utiliser les instruments européens à disposition, sans être obligée de fournir la preuve d’être un contractant faible. Toujours relativement à l’aspect subjectif, il est à remarquer que le système juridique italien n’identifie pas, en principe, des catégories différentes de consommateurs, de même qu’il ne distingue pas de catégories caractérisées par une «faiblesse», ou une «vulnérabilité», particulière: c’est pourquoi des informations particulières ou supplémentaires devant être fournies aux consommateurs particulièrement faibles ne sont pas prévues. Les seules exceptions sont celles qui sont en vigueur dans le cadre des pratiques commerciales trompeuses ou agressives. Dans ces cas précis, l’inexactitude des informations fournies (non moins que les modalités de transmission et leur éventuelle absence ou insuffisance) doit être évaluée eu égard au consommateur moyen ou au membre moyen du groupe (lorsque la pratique commerciale s’adresse à un groupe donné de consommateurs)20. La notion de consommateur moyen est, elle aussi, caractérisée: cette notion fait en effet référence à celle du consommateur normalement informé, et raisonnablement attentif et averti. Il s’ensuit que le consommateur moyen est une personne instruite, attentive, critique et capable de choisir sciemment, qui se distingue en cela du consommateur faible, superficiel ou facilement vulnérable. Le législateur estime que certaines catégories de personnes atteintes de handicaps physiques ou mentaux, ou ceux que leur âge, ou leur ingénuité, rend particulièrement vulnérables méritent une attention particulière ou une protection majeure. Dans ces cas, la fausseté des déclarations du professionnel doit être évaluée par rapport au membre moyen du groupe et au comportement raisonnablement prévisible21. Enfin, est en tout état de cause considérée comme trompeuse toute pratique commerciale qui, parce qu’elle est susceptible d’exercer un attrait sur les enfants et sur les adolescents, peut, voire indirectement, menacer leur sécurité.

20 21

Article 20, 2ème alinéa, et article 24, Code de la consommation. Article 20, Code de la consommation.

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4 Le contenu des informations Le modèle italienne, de dérivation communautaire, se caractérise par l’attention accordée au droit à l’information et à la transparence, conçues comme remèdes généraux à l’asymétrie d’information (ou cognitive) entre les parties, considérée comme étant l’une des principales causes de distorsion du marché22. Les informations qui doivent accompagner la conclusion des contrats avec les consommateurs sont rigoureusement et méticuleusement spécifiées par le législateur, minutieusement détaillées comme elles ne l’avaient jamais été auparavant dans notre système juridique. Certaines informations sont jugées obligatoires et essentielles pour tous les types de contrat, car particulièrement importantes, alors que d’autres sont susceptibles de variation selon les cas. En règle générale, avant la signature entérinant la conclusion du contrat, le professionnel doit fournir au consommateur des informations concernant: – les caractéristiques principales des biens et des services; – les données d’identification du professionnel, telles que, à titre indicatif, l’adresse géographique où il est établi, son numéro de téléphone, de télécopie et l’adresse de courrier électronique; – le contenu économique du contrat, qui ne se limite pas au montant que le consommateur doit payer en contrepartie des biens et des services, mais qui comprend l’engagement économique total (frais et coûts accessoires, tels que ceux de livraison, de transport, ou les frais postaux), ainsi que les modalités de paiement; – le contenu réglementaire du contrat, à savoir les modalités de livraison et d’exécution, les délais, la durée du rapport, les garanties légales et conventionnelles, etc.; – les instruments garantissant la protection effective du consommateur, par conséquent l’indication de tous éventuels formulaires, de codes de conduite contraignants liant le professionnel, la possibilité de recourir à des formes de résolution alternative des litiges qui pourraient surgir et les modalités d’exercice; – la possibilité d’exercer le droit de rétractation (s’il est prévu) et les modalités concrètes pour l’exercice de ce droit. Ce dernier est particulièrement important: au consommateur est ainsi reconnu un jus poenitendi c’est-à-dire le droit, obligatoire et incontournable, de résilier le contrat après sa conclusion. C’est l’expression, comme on peut aisément le comprendre, du rôle reconnu au consommateur et des finalités attribués à la pleine conscience du contractant dans le système de protection actuel: bien plus que la pure et simple connaissance, jusqu’à comprendre un véritable droit de réflexion.

22

Senigaglia (2007); De Cristofaro (2014), p. 917; Marini and Stolfi (1992).

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Il s’agit, comme nous l’avons anticipé, d’informations minimales obligatoires que le professionnel doit toujours fournir au consommateur avant la conclusion du contrat ou avant que le contrat ne produise ses effets. Puisqu’il s’agit d’informations minimales, rien n’empêche le professionnel de fournir des informations supplémentaires, même en quantité risquant de compromettre la finalité de l’obligation d’information. En d’autres termes, le destinataire pourrait être inondé d’un si grand nombre de données et de renseignements susceptibles de susciter chez lui la confusion et un sentiment d’incertitude sans qu’il y ait pour autant une véritable violation de l’obligation générale de clarté et de compréhensibilité de la communication, comme nous allons le voir. Mais ce n’est pas tout. Souvent font également l’objet d’une réglementation législative bien précise les modalités de communication des informations, qui doivent: être exprimées de manière «claire et compréhensible»; respecter les principes de bonne foi, de correction et de loyauté23 et d’accessibilité24 pour permettre au consommateur d’agir sciemment; être «appropriées à la technique de communication» utilisée, compte tenu aussi des modalités de conclusion du contrat ou des caractéristiques du secteur25. D’autres règles ne trouvent par contre application que pour certaines typologies contractuelles. Par exemple, pour les contrats conclus en dehors des établissements commerciaux, le professionnel doit fournir au consommateur les informations sur support papier ou, si le consommateur est d’accord, sur un autre support durable26. Les obligations d’information, si fortement détaillées, deviennent un des éléments essentiels et nécessaires des contrats conclus entre professionnels et consommateurs: le droit/devoir d’information n’est plus étranger aux opérations contractuelles mais il en fait partie intégrante, ce qui accroît les hypothèses d’invalidité ou d’inefficacité et donne origine à un phénomène qui est défini, dans la doctrine, comme contractualisation des obligations d’information27.

23

Article 39, Code de la consommation. Articles 67-undecies, 71 et 72, Code de la consommation. 25 Article 5, 3ème alinéa, Code de la consommation. 26 Des dispositions spéciales sont ensuite prévues pour les contrats conclus en dehors des établissements commerciaux, les contrats à distance, les contrats de vacances à long terme, les contrats à distance relatifs aux services bancaires, au crédit, aux assurances et d’investissement, les contrats ayant pour objet les services touristiques, les communications téléphoniques, les téléventes, le commerce électronique, le crédit à la consommation, la publicité des tarifs du transport maritime, la vente d’immeubles en multipropriété. Par exemple, pour ce qui concerne la multipropriété, les brochures d’information obligatoires doivent indiquer l’identité du proposant, la nature du droit formant l’objet du contrat, la période de jouissance du droit, la description précise de l’immeuble, les données relatives au permis de construire, les services et les structures communes à disposition de l’acheteur, les frais et les charges y afférents, les frais de gérance de l’immeuble, l’état d’avancement des travaux de construction, la garantie que les prescriptions contenues dans le permis de construire ont été respectées, la garantie quant à la réalisation effective, y compris la certification de conformité. 27 Sur ce thème, parmi les commentaires les plus récents, Febbrajo (2015), p. 479; rappelle que reconnaître une nature « contractuelle » à l’information signifie imposer une contrainte bien précise 24

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Et puis, il y a certains cas où le contrat n’est pas considéré comme conclu selon les règles, qui nous sont familières, du Code civil, mais sur la base d’autres principes et d’autres règles qui finissent par intéresser aussi le problème de la forme du contrat. Ainsi, dans les contrats téléphoniques, le consommateur se trouve-t-il lié non pas après avoir formulé oralement son acceptation mais seulement après avoir signé l’offre et l’avoir acceptée par écrit. En bref, seuls l’envoi de l’offre et l’acceptation, par écrit, du consommateur28 donnent naissance à la contrainte contractuelle. Pareillement, l’obligation rigoureuse de la forme écrite est prévue pour les contrats de vente de packages touristiques29. Un autre exemple a trait à l’exigence formelle requise dans les contrats à distance conclus par voie électronique: si l’envoi de la commande implique de presser un bouton ou une fonction analogue, l’invitation du professionnel devra reporter, facilement lisibles, les mots «commande assortie de l’obligation de payer» ou toute autre formulation équivalente30. À défaut de ces indications, le consommateur n’est pas lié par le contrat. De même, en matière de crédit nous trouvons une série de règles contraignantes sur la publicité informative ainsi que sur la documentation et sur les modalités de transmission des informations, lesquelles règles transforment la forme (écrite) en une forme dite de protection aux connotations très semblables à celles de la forme ad substantiam. Dans la doctrine, à propos de ce phénomène, on parle de néoformalisme pour souligner le fait que, par rapport aux principes de liberté et d’autonomie contractuelle qui ont caractérisé les systèmes juridiques occidentaux dès l’époque des codifications, l’on est passé à présent à prédéterminer obligatoirement de nombreux aspects du contenu du contrat31.

5 Les conséquences et les remèdes en cas de violation des obligations d’information L’exigence de garantir la protection effective du consommateur repose sur la prévision de protections et de sanctions «effectives, proportionnées et dissuasives»32, «adaptées à la gravité des atteintes à réprimer» en mesure de comporter une «effet réellement dissuasif»33.

au contenu du contrat, qui devra par conséquent reproduire fidèlement toutes les conditions économiques et réglementaires communiquées au consommateur. 28 Article 8, directive 2011/83/UE et article 52, 6ème alinéa, Code de la consommation. 29 Article 35, 1er alinéa, décret législatif 23 mai 2011, n. 79 (Code du tourisme). 30 Article 51, 2ème alinéa, Article 39, Code de la consommation. 31 Favale (2012), p. 582; Spadafora (2007); Sirena (2006); Benedetti (2002). 32 Article 24, directive 2011/83/UE. 33 Cfr. Febbrajo (2015), pp. 492–493, avec jurisprudence communautaire; voire aussi Gambino (2011); Recinto et al. (2014).

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Une première protection est celle qui fait déclencher la sanction en automatique, sans qu’il soit besoin de saisir des organes ou des sujets tiers, car déjà formulée dans les dispositions qui régissent les contenus et les modalités d’information. Ainsi, en cas d’infraction portant atteinte au devoir d’information inhérent à certaines données et informations importantes – entre autres l’existence du jus poenitendi et ses modalités d’exercice – la conséquence de l’information non correcte se traduit-elle par une prorogation du délai pour l’exercice du droit de rétractation, qui peut atteindre un an et 14 jours. Les délais courent à dater de conclusion du contrat ou à compter du jour où le consommateur reçoit le contrat. Si l’infraction a trait aux contraintes liées à la forme dans le cas des contrats à distance conclus par voie électronique (sites web, email, etc.) le consommateur n’est pas lié au contrat ou à la commande. Si le professionnel ne s’acquitte pas des obligations d’information relatives à tous les frais et aux autres coûts supplémentaires, y compris ceux afférents à la restitution des biens, le consommateur n’est pas tenu de supporter lesdits frais ou coûts supplémentaires34. Au cas où le prestataire violerait les obligations d’information précontractuelle de façon à altérer notablement la représentation des caractéristiques du contrat, la sanction consiste en la nullité du contrat ou la perte de son caractère contraignant. De même que n’est pas contraignante la clause abusive qui serait stipulée au contrat: ce cas échéant, la prévision d’une nullité de protection spéciale35 détermine l’inefficacité de la clause alors que le contrat demeure valide et produit ses effets pour tout le reste (principe de la conservation du contrat). Cette nullité de la clause est relative, dans le sens qu’elle opère uniquement au profit du consommateur. C’est au professionnel qu’il incombe d’apporter la preuve qu’il s’est acquitté, comme il se doit, des obligations d’information, et d’avoir acquis le consentement du consommateur à la conclusion du contrat. D’autres formes de protection renvoient aux organes administratifs et juridictionnels. À cet égard, nous pouvons citer: – instruments relevant du droit public-administratif, telles que les sanctions pécuniaires et l’obligation de modifier le comportement commercial, dont l’exercice est confié à l’Autorità Garante per la Concorrenza e il Mercato (AGCM), organisme administratif indépendant. Dans le système italien, Cette Autorité est en train de devenir une référence fondamentale pour la protection des consommateurs grâce aux tâches institutionnelles de plus en plus nombreuses et aux instruments d’intervention qui lui ont été peu à peu attribués. Elle peut intervenir de manière répressive en punissant les infractions commises en matière de pratiques commerciales déloyales, les clauses abusives et la violation des droits des consommateurs, moyennant des pouvoirs d’interdiction et de répression, ou de manière corrective moyennant des outils de négociation ou bien en

34 35

Article 49, Article 39, Code de la consommation. Article 36, Article 39, Code de la consommation.

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faisant fond sur la persuasion morale et sur sa propre autorité. À côté de ces mesures d’enforcement doit être reconnu le rôle fondamental que jouent les consommateurs et leurs associations à travers l’envoi d’input à l’Autorité concernant les pratiques du marché36; – instruments relevant du droit civil (nullité/annulabilité du contrat, inefficacité de la clause, garantie de conformité, action en cessation à fin d’obtention d’une ordonnance d’interdiction, réparation du dommage etc.), quelques-uns actionnables seulement à titre individuel, d’autres par l’intermédiaire des associations de consommateurs (ex. recours collectif ou class action); parmi ces instruments, il nous faut citer l’action en cessation37 moyennant laquelle les associations de consommateurs peuvent demander au juge de suspendre ou d’interdire l’utilisation des clauses dont le caractère abusif a été établi38. Digne de mention, enfin, l’extrême attention que le système juridique italien accorde ces dernières années à ce que l’on appelle les instruments alternatifs à la justice ordinaire qui permettent d’obtenir une indemnisation du dommage ou de voir reconnus d’autres droits sans devoir activer le lent, et coûteux, mécanisme de la justice. Négociation, conciliation, médiation, conciliation on-line, ombudsman bancaire, arbitrage etc. ne sont que quelques-unes des formules les plus courantes en la matière, exprimant tantôt des concepts analogues ou très semblables (ex. conciliation-médiation), tantôt profondément différents (conciliation, arbitrage, ombudsman etc.), mais ayant toutes en commun le fait de constituer un instrument très efficace, spécialement pour les litiges économiques les moins graves, pour obtenir la reconnaissance des droits dans de bref délais et à des coûts contenus39.

6 Problèmes et défauts de modèle et de système La possibilité d’effectuer sciemment des choix économiques dépend inévitablement des informations qui doivent être mises à disposition et de leur transparence (40). Le fait que l’Union européenne et les État membres ont fondé la politique de protection 36

Certains chiffres se rapportant à l’année 2016 peuvent aider à comprendre le rôle de l’Autorité: 112 procédures d’instruction engagées en matière de pratiques commerciales incorrectes, de publicité trompeuse et de droits des consommateurs; 4.924 réclamations envoyées par les consommateurs moyennant des formulaires électroniques; 9.297 coups de téléphone reçus au centre d’appels (pour informations et pour guider les consommateurs); plus de 53 millions d’euros de sanctions administratives pécuniaires infligées (+62% par rapport à 2015). Astazi (2010); Rossi Carleo (2015); Minervini (2012), p. 564. 37 Article 37, Code de la consommation. 38 Cafaggi and Micklitz (2009). 39 Bottino (2014); Rossano (2011); La Sorte (2016); Vaccà (2000); Castagnola et al. (2012). Au niveau européen, voir Scarchillo (2016). 40 Sacco and De Nova (2004), p. 617; affirment que «devient de plus en plus palpable que l’éventuel contractant est protégé afin que se forme dans les conditions les plus avantageuses son choix: de

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des consommateurs sur ces deux piliers, information et transparence, se confirme comme étant un choix stratégiquement correct qui ne peut que rallier tous les suffrages. Par contre, maints doutes surgissent dès qu’on analyse de plus près les règles énoncées aux pages qui précèdent: émergent des éléments et des caractéristiques du modèle de protection qui ne sont pas tout à fait efficaces, points faible d’une réglementation qui exigerait de faire l’objet d’une révision et d’une mise à jour.

6.1

Excès d’information, à savoir l’information devient désinformation

On sait qu’un excès d’information risque de se transformer en un manque d’information et, par conséquent, susceptible de devenir contre-productif. De plus, à mesure que les informations fournies augmentent, le destinataire cesse de les évaluer en passant directement à la phase de prise de décision basée sur des «premières impressions», inertie et désir (non rationnel) de ne pas changer le status quo (41). En même temps, il est plutôt évident que le modèle illustré plus haut abonde de données et d’informations à fournir. Que l’on songe, par exemple, au secteur du commerce électronique où il est imposé au professionnel de fournir trois types d’informations: (i) informations générales, concernant le prestataire de services et l’Autorité de surveillance compétente42; (ii) communications commerciales, destinées à promouvoir les contenus des biens et des services et la présentation de l’entreprise qui les offre43; (iii) informations sur les modalités de conclusion du

contracter, et de contracter à ces conditions-là. Pour qu’il puisse délibérer au mieux, il faut: – qu’il soit libre; – qu’il ait l’aptitude, la capacité, le temps de réfléchir; – qu’il connaisse et sache (c’est-à-dire qu’il soit informé). Pour qu’il puisse obtenir les conditions contractuelles souhaitables, il faut: – qu’il ne soit pas contraint; qu’il ait accès au marché; – qu’il puisse réfléchir; – qu’il soit informé». 41 En particulier, la recherche sur l'économie comportementale montre que les choix des individus sont conditionnés par des facteurs émotionnels qui échappent à l'hypothèse d'une rationalité parfaite, ce qui rend difficile l'appréciation de l'efficacité pratique des obligations d'information; sur le sujet, qui a value à D. Kahneman le prix Nobel d'économie, voir avec une référence particulière au droit bancaire et financier: Morera and Marchisio (2012), pp. 19–48; et Caterina (2012); dans une perspective plus générale: Di Porto (2017), p. 126. 42 Le nom, la dénomination ou raison sociale, le domicile ou le siège légal ainsi que tous autres renseignements qui permettent de contacter rapidement et de communiquer directement et efficacement avec le prestataire. 43 Elles doivent être directement identifiables comme telles; elles doivent indiquer les prix et les tarifs appliqués aux différents services de manière à mettre en évidence s’ils comprennent les taxes, les éventuels frais de livraison. Doivent être indiquées: les conditions pour l’exercice du droit de rétractation, les modalités de l’intervention du service après-vente et quantité d’autres informations ayant trait aux conditions régissant l’offre commerciale; doivent également être présentées clairement et sans ambiguïté les conditions permettant de bénéficier d’offres promotionnelles;

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contrat44. La quantité d’informations augmente encore lorsque le prestataire de services exerce une profession réglementée; ce cas échéant, devront être également fournis les éléments servant à identifier: l’ordre professionnel, ou tout autre institution analogue, auquel il est inscrit et le numéro d’inscription; le titre professionnel et l’État membre l’ayant délivré; les normes professionnelles et les éventuels codes de conduite en vigueur dans l’État membre où il est établi ainsi que leurs modalités de consultation. Aucune des informations prescrites comme obligatoires n’est superflue mais l’effet peut être dévastateur. Présumer que le consommateur, quiconque soit-il, non seulement le consommateur moyen, lira cette masse d’informations est utopique. Le modèle élaboré par l’Union européenne, et accueilli par les législateurs nationaux, devrait avoir une importante conséquence: responsabiliser le consommateur et l’inciter à faire sciemment un choix économique seulement à l’issue d’une procédure cognitive et décisoire. Mais, à l’épreuve des faits, cet objectif demeure seulement théorique, et risque même de devenir un piège pour le consommateur car s’il n’est pas en mesure d’apprécier avec toute l’attention que requiert cette masse considérable d’informations, il n’en reste pas moins que le fait de les avoir fournies met le professionnel à l’abri de tout risque de rétractation, de réclamations, de plaintes que devrait formuler le consommateur. Le devoir de fournir les informations et le droit de les recevoir se transforment en un droit (pour le professionnel) de fournir toutes les informations prescrites afin d’acquérir la certitude de l’ «intouchabilité» du contrat une fois qu’il a été conclu, et en un devoir (pour le consommateur) de s’informer à fond avant de conclure un contrat.

6.2

Les informations comme minimum ou maximum?

Le modèle actuel d’informations obligatoires repose sur le devoir de fournir une série d’informations «minimales». Cela veut dire que l’on ne saurait exclure qu’un professionnel puisse fournir, dans la publicité, sur les dépliants, d’autres informations non obligatoires. Ce qui pourrait avoir comme conséquence (pas toujours désintéressée) de désorienter le consommateur. Il est vrai que cette possibilité est en conflit avec la limite générale de clarté qui, si elle est dépassée, comporte que l’information,

tout aussi claires et explicites doivent être les informations relatives à des concours ou à des jeux promotionnels. 44 Plus précisément: a) les différentes phases de la conclusion du contrat; b) les modalités inhérentes à l’archivage et à l’accès au contrat; c) les moyens techniques mis à disposition du destinataire pour qu’il puisse identifier et corriger les erreurs commises lors de l’introduction des données avant l’envoi de la commande au prestataire; d) les éventuels codes de conduite de l’entreprise; e) les langues utilisées, à part l’italien, pour conclure le contrat; f) l’indication des instruments de composition des litiges.

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devenue excessive, pourrait être passible de sanction; assurément, cela ne favorise ni la certitude du droit ni la prise de conscience du contractant. Sans doute, prévoir que les informations obligatoires constituent non seulement un minimum mais aussi un maximum pourrait-il éviter des formes d’abus plus ou moins voulus et ciblés.

6.3

Une surproduction réglementaire

Voilà que se pose un autre problème: la surproduction réglementaire, dont on voit les premiers effets dans les décisions rendues par les juridictions du fond nationales. Dans les paragraphes 1, 4 et 5 nous avons indiqué, à titre d’exemple, que pour chaque cas contractuel le législateur a prévu non seulement des obligations d’information caractérisant ce contrat particulier, mais aussi des règles spécifiques ayant pour corollaire une très vaste série d’exceptions. Cette prolifération de règles et de sous-règles, de principes et d’exceptions, justes et compréhensibles mais non élaborées avec une optique unitaire, ne fait qu’alimenter les perplexités et les doutes quant à l’ampleur des obligations d’information et quant aux conséquences de leur violation. Le consommateur et l’opérateur juridique sont désorientés par cette hyperproduction de règles qui obscurcit la clarté du modèle et dessert en partie l’objectif poursuivi par le législateur. La responsabilité de tout cela n’est pas imputable uniquement au législateur italien, qui partage avec le législateur communautaire cet état de fait. L’action de ce dernier n’a pas réussi à créer un modèle systématique et définitif, ni à imposer un modèle européen de protection du consommateur doté de règles plus strictes, plus précises et plus contraignantes pour les opérateurs commerciaux et les professionnels45. Il en dérive un contexte réglementaire qui, pour ce qui a trait aux obligations d’information et à la notion de transparence, reste flou car manquant de contours suffisamment précis. Quand les lobbies des producteurs/commerçants/professionnels font entendre leur voix à Bruxelles, c’est non seulement bien compréhensible, défendable et juridiquement correct, admis et régi par le Traité, mais l’on ignore combien et dans quelle mesure ils parviennent à faire valoir leurs exigences et leurs requêtes. Il n’existe pas de preuve évidente de ce qu’est le rôle effectif des associations de catégorie dans la formulation de certaines règles ou dans l’élaboration de certains modèles de protection. Il suffit de penser, par exemple, au droit de rétractation ou de réflexion énoncé dans la directive européenne sur les ventes effectuées en dehors des établissements commerciaux au début des années 80, fortement voulu par le monde des entreprises. Faute de cette disposition, les opérateurs commerciaux se seraient en effet trouvés

45 Relativement à la question des Alternative Dispute Resolution vedi Benacchio (2017), pp. 1391–1408.

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exposés aux multiples et diverses règles de protection présentes dans chaque système juridique des États membres. Le choix opéré par la directive a donc garanti les opérateurs commerciaux puisque, à l’expiration du délai de rétractation, le consommateur n’a plus la possibilité de rompre le lien contractuel (sauf, bien évidemment, en cas de dol ou de violence).

6.4

L’insuffisante protection de l’individu contre les pratiques commerciales déloyales

La législation sur les pratiques commerciales déloyales s’applique avant, durant et après toute conduite commerciale aboutissant à la conclusion de contrats entre entreprises et consommateurs46; elle interdit aux professionnels de mettre en œuvre des pratiques commerciales déloyales, trompeuses et agressives dans les rapports instaurés avec les consommateurs, et elle introduit dans la liste des droits fondamentaux qui leur sont reconnus un nouveau droit, celui «à l’exercice de pratiques commerciales respectant les principes de bonne foi, de correction et de loyauté» (article 2, Code de la consommation)47. Ce nonobstant, les règles visant à protéger le consommateur contre les pratiques commerciales trompeuses sont exclusivement fondées sur un système de sanctions de nature administrative et sur la possibilité de demander au juge ordinaire d’interdire la poursuite de ladite pratique. Réprimer les conduites des professionnels constituant une pratique trompeuse relève de la compétence de l’Autorité garante de la concurrence et du marché (AGCM), laquelle intervient d’office, à la demande d’un seul consommateur ou de ses associations. Elle peut déclarer l’irrégularité de la pratique, en interdire la diffusion ou la poursuite et disposer l’application d’une sanction pécuniaire; dans les cas les moins graves, elle peut inviter le professionnel à cesser la pratique sans procéder à l’établissement de l’infraction, et par conséquent sans appliquer aucune sanction. 46

Étant donné que la définition de pratique commerciale trompeuse ou incorrecte comprend également la phase précédant la conclusion du contrat, et qu’elle concerne aussi la publicité, il est indéniable que l’évaluation du caractère trompeur ou non de la pratique commerciale doit prendre en compte tous les éléments de l’offre commerciale et, partant, du produit ou du service, y compris à titre indicatif, la forme ou l’aspect des produits, de leur conditionnement, le matériau d’emballage, la manière dont ils sont disposés sur les comptoirs de vente, le contexte d”exposition, etc. 47 L’identification d’une pratique commerciale incorrecte est fondée sur un comportement contraire à la diligence professionnelle et sur la capacité de fausser les choix économiques du consommateur moyen à savoir les pratiques qui risquent de compromettre, même seulement potentiellement, des choix économiques sciemment effectués. C’est ainsi que le législateur défend la liberté du consommateur de s’autodéterminer, de choisir en toute connaissance de cause, de prendre des décisions « informées » et de déterminer sa volonté contractuelle ou précontractuelle sans devoir subir aucune sorte d’influence externe, même indirecte à cause du caractère trompeur du message publicitaire; sur ce thème voir De Cristofaro (2008); Di Cataldo (2011), p. 803.

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Il est vrai que les consommateurs ont la faculté de saisir le tribunal ordinaire, mais seulement par l’intermédiaire de leurs associations uniquement afin de demander la cessation des comportements lésant leurs intérêts, et que l’entreprise adopte des mesures appropriées visant à corriger ou à éliminer les effets délétères des infractions établies (action en cessation)48. Actuellement, s’il agit tout seul, le consommateur se heurte à maints obstacles lorsqu’il entend recourir à la voie judiciaire ordinaire. À ce jour, restent en effet encore sans solution les difficultés à identifier le remède, parmi ceux que le Code civil met à disposition pour attaquer le contrat conclu suite à une pratique trompeuse ou agressive mise en œuvre par le professionnel. Aucune décision judiciaire ne peut aider en ce sens, et c’est précisément l’absence de précédents judiciaires sur ce point qui est symptomatique des difficultés que rencontre le consommateur lorsqu’il veut saisir l’autorité judiciaire49.

6.5

Clauses abusives, transparence et risques de la négotiation individuelle

Le système italien établit une triple classification des clauses abusives: (i) celles qui permettent au juge d’apprécier au cas par cas le caractère abusif de la clause; (ii) celles qui sont toujours considérées comme abusives et pour lesquelles il est impossible de fournir une preuve contraire (relevant de la liste noire); (iii) celles qui sont présumées être abusives sauf apport de preuve contraire (relevant de la liste grise), dans le sens que la présomption peut être réfutée si le professionnel parvient à fournir la preuve que nul déséquilibre significatif des droits et des obligations naissant du contrat ne s’est créé, ou bien que ladite clause est l’aboutissement d’une négociation individuelle50.

48

En fait, la constatation requise et les conséquences attendues de l’action en cessation correspondent à celles de la procédure engagée devant l’AGCM, et ne se différencient que par la nature des deux procédures: la première engagée devant la juridiction de l’ordre judiciaire, la seconde devant la juridiction de l’ordre administratif. Sur ce thème voir Cendon and Poncibò (2014). 49 D’autres problèmes concernent la réparation des dommages. Le consommateur, uti singuli, peut former une demande d’indemnisation des dommages fondée sur l’article 2043 du Code civil italien, mais étant donné que la charge de la preuve lui incombe, il doit démontrer la nature déloyale de la pratique, la culpabilité du professionnel, les préjudices subis et le lien de causalité entre la pratique et lesdits préjudices. Cette imposition ne peut être atténuée que lorsque l’action en indemnisation a été précédée du contrôle de l’AGCM. Un autre remède aux prétentions d’indemnisation du consommateur agissant seul pourrait être représenté par l’article 1337 du Code civil italien (violation du devoir de bonne foi dans les négociations) au cas où la pratique commerciale déloyale serait intervenue lors de la phase précontractuelle. Pour ce qui concerne le recours collectif, le système juridique reconnaît la possibilité d’intenter une class action pour l’indemnisation du dommage causé par une pratique commerciale déloyale. Voir, à ce propos, l’article 140-bis du Code de la consommation. 50 Selon la jurisprudence (p. ex. Cass. civ., arrêt n. 18785 de 2010) la négociation doit satisfaire à trois conditions: individualité, sérieux et effectivité. Eu égard à la condition de l’individualité de la

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Or, c’est précisément en ce qui concerne cette dernière catégorie de clauses, celles formant l’objet de négociation individuelle, que surgissent de nombreux doutes. En effet, la négociation directe entre les parties n’offre aucunement la garantie d’une composition équilibrée des clauses contractuelles; bien au contraire, précisément le fait de se trouver face à une partie particulièrement habile ou économiquement forte peut encore plus facilement induire le consommateur à ne pas évaluer correctement les clauses, ou à accepter, voire reservatio mentis, des solutions non optimales. À part le devoir de ne pas utiliser de clauses abusives, le Code de la consommation établit à la charge du professionnel le devoir de toujours formuler les clauses «de manière claire et compréhensible»51 pour permettre au consommateur d’avoir pleinement et effectivement connaissance du contenu du contrat et d’en apprécier tous les effets. La clarté et la compréhensibilité sont des instruments qui devraient assumer une connotation fortement substantielle permettant de connaître le contenu du contrat. À la vérité, l’absence de toute définition réglementaire quant à la signification de clarté et compréhensibilité des clauses contractuelles se trouve comblée par l’interprétation du juge et par l’action de contrôle (pouvoir d’interdiction et de sanction) l’AGCM. Il y a donc une délimitation en négatif, qui conduit à n’identifier que cas par cas et a posteriori toutes éventuelles violations des règles de clarté et de compréhensibilité52.

négociation, les juges estiment que celle-ci doit avoir eu pour objet toutes les clauses constituant le contenu de l’accord, prises en compte non seulement chacune indépendamment des autres mais aussi eu égard au sens global du contrat. En particulier, la Cour de cassation précise que les clauses faisant l’objet d’une négociation spécifique et individuelle, sérieuse et effective, sont soustraites aux formes de protection prévues par la réglementation sur la protection du consommateur; laquelle réglementation trouve en revanche application aux parties restantes du contrat qui n’ont pas fait l’objet de négociation. 51 Article 34, 2ème alinéa et article 5, 3ème alinéa, Code de la consommation. 52 Dans le modèle italien, l’évaluation du caractère abusif des clauses ne concerne pas les élements essentiels tels que l’objet et le prix. Le juge est investi du pouvoir d’effectuer toujours une appréciation sur la clarté et la compréhensibilité de la totalité du contenu du contrat, même sur l’objet et le prix, étant donné que le contrôle de transparence ne distingue pas entre clauses régissant le contenu réglementaire et celles inhérentes au contenu économique. Sur ce thème voir Giorgianni (2009), p. 209, qui rappelle en général que “tale formula legislativa assume un significato incerto ed è idonea, per la sua genericità, a ricomprendere una molteplicità di ipotesi ». Voir aussi Alpa (1996), p. 46; Buonocore (1995), pp. 1–41. Par exemple, les juges ont soutenu que l’indication de clauses contradictoires énoncées dans deux parties distinctes (sur la première page et au verso) ne permet pas à un consommateur, même quelque peu averti, d’en comprendre pleinement le sens; constitue également une infraction à la règle de transparence, l’usage d’un langage trop technique (notions financières) car la clause devient incompréhensible et ne permet pas d’évaluer avec précision la conséquence économique résultant de l’exercice du droit; la formulation générique de la clause rend, elle aussi, nébuleuse la portée des droits et des obligations des parties, et laisse pratiquement à son auteur la possibilité d’en déterminer le contenu durant l’exécution du contrat. Sur ce thème voir Smorto (2001).

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De surcroît, le modèle italien n’offre pas assez d’éléments de certitude pour ce qui concerne les conséquences qu’entraîne le manque de clarté et de compréhensibilité des clauses contractuelles. Une partie de la doctrine considère que ce manque comporte, pour le juge, la possibilité d’évaluer l’ éventuel caractère abusif, alors que l’autre partie estime que la nullité du contrat doit automatiquement en dériver. Aucune précaution particulière ni un niveau plus élevé de protection en matière de transparence ne sont prévus dans le cas d’un consommateur particulièrement vulnérable ou appartenant à des catégories faibles. En d’autres termes, alors que l’appréciation du caractère abusif ne tient pas compte de l’aspect économique, totalement laissé à l’autonomie des parties, seul le contrôle de transparence (sur la clarté et la compréhensibilité) les concerne également mais il est caractérisé par les limites indiquées.

6.6

Produits financiers et précautions spécifiques dans un contexte peu équilibré

La technicité et la particularité des produits et des services financiers rendent l’asymétrie d’information entre professionnel et consommateur plus grande encore que dans tous autres contrats. Ce n'est pas une coïncidence si le secteur de l'intermédiation financière se distingue des autres par son expérience plus mature et plus avancée en matière d'obligations d'information, aussi en raison des interventions européennes de 2008 après la crise. Ce qui devrait emporter l’adoption de modalités encore plus incisives permettant de mettre en évidence, au profit du consommateur, la nature et les risques du produit ou du service. Cette exigence, comme on le dira plus loin, est restée lettre morte alors que des règles particulières et des précautions spécifiques sont prévues en faveur de l’établissement financier (banque, compagnie d’assurance, etc.). Il s’ensuit qu’a été édictée une législation nationale qui, paradoxalement53, résulte dans l’ensemble offrir au consommateur une moindre protection que celle inhérente à tous les autres contrats. Les sources qui régissent dans le détail le devoir d’information sont hétérogènes54; toutefois, souvent les informations requises ne soulignent pas de

53

Il est à remarquer que dans ce secteur l’asymétrie d’information est plus marquée et que les intérêts économiques du consommateur sont plus importants. 54 Le Texte Unique de la Finance (TUF), le Texte Unique en matière bancaire (TUB), le Code des assurances privées et les nombreuses réglementations secondaires (de la Banque d’Italie, du Comité interministériel pour le crédit et l’épargne (CICR), de la Commission nationale pour les sociétés et la bourse (Consob), de l’Institut de surveillance du marché de l’assurance IVASS etc.) réglementent les types d’informations devant être communiquées au consommateur, surtout lors de la phase précontractuelle et les comportements commerciaux à adopter. Sur le sujet voir Dolmetta (2013); Sartori (2011); Alpa (2003); Capriglione (2015); du point de vue de l'analyse économique comportementale Rojas Elgueta and Vardi (2014).

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façon adéquate le risque et la nature de l’opération financière, et il devient difficile de confier l’effectivité de la protection à la preuve, non documentaire, du comportement de l’opérateur professionnel au moment de la négociation précontractuelle, lorsqu’il n’est pas correct ou s’il ne répond pas aux besoins d’information du consommateur. Cela se traduit par une protection apparente, en grande partie insuffisante, purement formelle qui profite davantage aux opérateurs professionnels, lesquels ont alors beau jeu de s’acquitter des obligations d’information documentaires (notes d’informations précontractuelles, établissement du profil de risque, etc.) sans que le consommateur en retire un avantage réel en termes d’informations. Cette affirmation est étayée par les dérogations prévues par la législation nationale dans le secteur des services financiers et qui peuvent être réparties en trois groupes. Le premier concerne le droit de rétractation et le jus variandi du professionnel. En effet, l’opérateur financier est autorisé à résilier le contrat à durée indéterminée en cas de juste motif, même à défaut d’avoir donné un «préavis raisonnable» (art. 33 c. consom., 3ème al.). Même en ce qui concerne le jus variandi, la réglementation prévoit une dérogation à la réglementation générale des clauses abusives permettant au professionnel de modifier – mais uniquement pour juste motif et à condition de respecter un délai de préavis congru – les conditions du contrat; à son tour, le consommateur a le droit de résilier le contrat (art. 33 C. consom.)55. Le deuxième groupe de dérogations permet au professionnel de services financiers de modifier, sans préavis, mais toujours en cas de juste motif, le taux d’intérêt ou tous autres coûts, moyennant communication immédiate au consommateur auquel est reconnu le droit de résiliation. Enfin, un troisième groupe de dérogations rend non applicables les dispositions relatives à la résiliation du professionnel, à la modification unilatérale du contrat, à la détermination du prix du produit ou du service, aux contrats ayant pour objet des valeurs mobilières, des instruments financiers ou d’autres produits dont le prix est lié à des indices ou à des taux que ne contrôle pas le professionnel, ainsi qu’à la vente ou à l’achat de devises étrangères, aux clauses d’indexation des prix et à certains autres cas. En bref, dans les contrats de services financiers ne sont pas considérées comme abusives les clauses qui permettent au professionnel de résilier des contrats à durée indéterminée sans préavis, de modifier le contrat, d’augmenter ex post le prix.

55

Si la prévision d’un ample jus variandi ne répond certes pas à l’exigence d’information préalable quant aux coûts et aux avantages de chacune des opérations que le consommateur réalise, et ne permet pas au client de vérifier qu’une parité de traitement lui a été réservée, il faut, d’autre part, reconnaître qu’obliger l’entrepreneur financier à respecter les engagements assumés également lorsque les situations économiques et/ou de marché ont changé, obligerait celui-ci à se protéger de quelque manière, voire en rendant plus lourdes les conditions appliquées et en transférant d’avance les risques sur l’ensemble des consommateurs.

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7 Le consommateur numérique, l’utilisation des Big Data et la discrimination contractuelle Si les modèles européen et italien se concentrent presque exclusivement sur les problématiques liées aux transactions contractuelles entre professionnel et consommateur, visant la protection des intérêts de celui-ci, par contre peu est dit, pour le moment, à propos d’un thème sous-estimé mais qui assume une importance qui va croissant et qui peut avoir des effets dévastateurs pour le consommateur inexpert, des effets bien plus graves que ceux d’un achat imprudent: l’utilisation des données collectées moyennant les accès à internet lors de l’achat de produits et de nombreux autres services. Sur ce thème ont une incidence les innovations technologiques et leur rapide diffusion à l’échelle mondiale, dont l’impulsion et les accélérations ont amorcé une vague de changements dans tous les contextes socio-économiques56. N’échappent pas à l’impact de ces faits complexes les rapports contractuels des consommateurs, de plus en plus délocalisés sur des plateformes numériques57 qui utilisent internet comme infrastructure et quantité d’autres services immédiatement accessibles en tout lieu à travers des dispositifs mobiles. La croissance exponentielle de ces marchés, étayée par cet extraordinaire progrès technologique, engendre certes d’énormes avantages économiques, offre un gain de temps, augmente le pouvoir d’achat, mais elle pose simultanément bon nombre de questions quant aux conséquences pour les individus et pour la société en termes non seulement de garantie des droits et des libertés fondamentales, mais aussi de niveaux de transparence et d’information à assurer aux fins de la protection des consommateurs58. Une première question concerne l’exhaustivité et l’appropriation des informations communiquées ou mises à disposition des consommateurs, par exemple sur le fonctionnement des plateformes et sur la propriété et la mobilité des données/ informations que les consommateurs mettent, eux aussi, à disposition pour réaliser l’opération commerciale. En effet, lorsque les consommateurs consultent les plateformes, quand ils achètent ou échangent des produits sur le web, les sites

56

Tirole (2016), p. 405; signale que le processus de numérisation de la société est en train de régir les changements économiques et sociaux du XXI siècle et de réformer tous les secteurs des activités humaines, de même qu’il a déjà modifié le commerce, la finance, les médias, les transports et les structures hôtelières. Pour l’auteur, ce processus aura bientôt une action radicale sur les secteurs des assurances, de la santé, de l’énergie, de l’instruction, tout comme sur les services professionnels en matière de médecine, justice et fiscale qui seront totalement refondés par des algorithmes intelligents et des robots. Voir aussi Floridi (2017); Becker (2014), pp. 213–218. 57 Référence est faite aux marchés sur lesquels le propriétaire de la plateforme numérique est aussi le vendeur (p. ex. Ikea, Amazon), et aussi aux marché sur lesquels le propriétaire de la plateforme se limite à mettre en contact vendeurs et consommateurs (p. ex. eBay, Alibaba). 58 Cozzio (2019); Barocas and Selbst (2016), p. 102; OCSE, Protecting Consumers In Peer Platform Markets: Exploring The Issues, Digital economy Papers, Parigi, 2016, n. 235; Di Porto (2016); Mezza (2018).

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préposés à ces activités prévoient des politiques d’information qui ne sont pas toujours lues et qui ne sont pratiquement jamais comprises. Ils signalent que des cookies seront installés sur les dispositifs des consommateurs et, d’une manière plus générale, garantissent la plus grande transparence. Il n’en reste pas moins que le contrat liant les usagers aux plateformes du web est, selon la terminologie des économistes, un contrat incomplet puisque les usagers ne sont pas en mesure de connaître exactement le risque auquel ils s’exposent. Par exemple, ils n’ont aucune notion sur les garanties de la plateforme en matière de sécurité informatique et ils ne prêtent guère attention à la cession de leurs données et/ou à leur traitement; quelques clics (s’ils sont prévus) suffisent à «formaliser» des actes de cession et de consentement au traitement, en échange de la possibilité de bénéficier gratuitement de services offerts par les plateformes (moteurs de recherche, réseaux sociaux, messages instantanés, vidéos en ligne) ou de pouvoir conclure des transactions commerciales. Dans ce contexte, les choix du législateur italien ne montrent pas, pour le moment, des changements sur la signification de la transparence et du modèle d’information à appliquer aux contrats et aux ventes en ligne. En d’autres termes, transparence et informations continuent de représenter la condition à travers laquelle réaliser des formes de contrat informé, consentement qualifié, consommateur averti. En ce sens, les solutions législatives ne vont pas outre la prévision du clic moyennant lequel le consommateur atteste: – avoir pris vision/lecture des informations inhérentes au contrat (ce qui ne fournit aucune certitude quant à la compréhension du consommateur concernant les droits et les devoirs naissant de la conclusion du contrat); – être informé du fait qu’à partir de ce moment il assume l’obligation de payer le prix en contrepartie de l’achat du bien ou du service acheté; – avoir accepté les conditions de traitement des données servant à l’exécution du contrat. Les clauses qui interdisent la revente à des tiers ou le partage des données restant presque toujours nébuleuses, la manière dont les plateformes utilisent les informations que communiquent les vendeurs et les consommateurs pour la réalisation de l’opération commerciale pèche pour le manque de clarté. Une étude conduite en Allemagne a mis en évidence que sur plus de 21 millions de pages web consultées, 95 pour cent monitoraient et transféraient des informations à des parties tierces59; une autre étude a relevé sur un million de sites web examinés plus de 80 mille «sujets tiers» auxquels sont communiquées les données relatives aux visites60. En moyenne, on a estimé que chaque fois qu’un utilisateur visite un site web ou qu’il se sert d’une application, les données recueillies sont transmises non seulement aux éditeurs mais aussi à 30 services de parties tierces. Le contexte a été minutieusement illustré dans le rapport de W. Christl et S. Spiekermann

59 60

Zhonghao et al. (2016), pp. 121–132. Arvind, Reisman (2017) http://randomwalker.info/publications/webtap-chapter.pdf.

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Networks of Control61, qui soulignent que «users are often not aware of how many companies receive information about their everyday lives, and our knowledge about how apps collect data and transfer it to third parties is limited, incomplete, and often outdated» (p. 52). En d’autres termes, «as data brokers often share data with others, it is virtually impossible for a consumer to determine how a data broker obtained their data (. . .) most consumers have no way of knowing that data brokers may be collecting their data» (pp. 121–122). Sur ce point, l’obligation contraignante pour tous les États de l’UE de communiquer au titulaire originaire tous éventuels transferts successifs à des tiers des données le concernant, introduite par le législateur européen, ne semble pas avoir résolu la question62: cette solution a comme obstacle la rapidité, la fréquence et le nombre des sujets impliqués. Une seconde question, non moins importante, concerne le degré de connaissance et d’information devant être garanti au consommateur sur le contenu du traitement des données, sur les résultats finaux que l’on peut en obtenir, sur l’utilisation qui en est faite (et par qui). Les développements des études en psychométrie et ré-identification, la tendance à mettre à disposition de plus en plus d’informations (personnelles et non) sur les plateformes numériques ou sur les espaces numériques communs, la diffusion des dispositifs mobiles «intelligents» (smart. . . -phone, -watch, -car, -glasses, etc.), la connexion des objets au réseau (Internet of Things o IoT), la croissance exponentielle des plateformes numériques et les capacités d’analyse des mégadonnées (Big Data) ont énormément accru la possibilité d’associer des données éparpillées dans le réseau à un individu, jusqu’à pouvoir l’identifier, permettant ainsi de reconstruire, de prévoir et d’orienter, en l’espace de quelques millièmes de secondes seulement, les comportements individuels et de groupe63. L’intervention des technologies sur les données se caractérise par le fait d’être «ubiquitous», «invisible» et «pervasive»64 et il n’est pas surprenant que les consommateurs ignorent substantiellement que lesdites données sont élaborées d’une manière non traçable et privée de transparence. 61

Christl and Spiekermann (2016), pp. 45–52. Le règlement (UE) 2016/679 – relatif à la protection des personnes physiques quant au traitement des données personnelles, ainsi qu’à la libre circulation desdites données – définit une série de contraintes (comportant l’obligation de fournir des informations) en cas de transfert des données personnelles vers des tiers (articles de 44 à 50); voir aussi Cozzio, Effetti della mutazione giuridica: la trasparenza come nuovo bene comune?, cit., et là les auteurs mentionnés. 63 Récemment sur ce thème, voir Christl and Spiekermann (2016), pp. 45–52; Mantelero and Vaciago (2013), pp. 161–169; Colangelo and Falce (2017). Pour implications sociologiques voire Lyon (2003, 2007). 64 Christl and Spiekermann (2016), pp. 118–122. Les auteures soulignent que “Consumers are often neither aware of what personal information about them and their behavior is collected, nor how this data is processed, with whom it is shared or sold, which conclusions can be drawn from it, and which decisions are then based on such conclusions. Both dominant platforms and smaller providers of websites, services, apps and platforms - generally speaking - act in a largely non-transparent way when it comes to the storage, processing and the utilization of personal data”. 62

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Par exemple, le traitement des données «cédées» aux plateformes (nom, adresse, code postal, email, etc.) va jusqu’à pouvoir identifier les différents dispositifs dont elles proviennent (téléphone, ordinateur, appareils ménagers, tout ce qui est connecté, numérisé ou archivé dans des banques de données numériques), ce qui permet de connaître profondément les personnes / consommateurs qui les utilisent. Dès lors, la vie numérique de ces données est constamment sous surveillance. Le parcours décrit n’est que l’un parmi tant d’autres, encore que le résultat final soit toujours identique: permettre de mesurer, segmenter, prévoir, faire la publicité. Ce sont des opérations que les technologies actuelles permettent d’exécuter de façon constante et instantanée. Lors de la phase d’élaboration, données et informations voyagent séparément de chaque consommateur pour être ensuite agrégées à d’autres (même d’autres consommateurs) et élaborées à travers des algorithmes en mesure d’accomplir des mesures très sophistiquées sur les comportements, sur les préférences, sur les opinions des individus et des groupes d’individus. Les connaissances en matière de psychologie et de psychométrie, de neurosciences et d’économie comportementale associées aux capacités informatiques actuelles aboutissent à des résultats qui doivent faire réfléchir: profils personnels, préférences commerciales, aptitudes sont reconstruits et rendent prévisibles et orientables les choix des consommateurs et non seulement de ceux-ci65. Les pratiques d’application, fort nombreuses, comportent des implications socioéconomiques qui, en l’absence de cadres réglementaires et de protections incisives, déterminent des discriminations contractuelles (les plus importantes, entre autres: différences de prix et d’offres, limites à l’accès aux services d’assurance, sanitaires, financiers, à l’emploi, non correcte représentation du contexte)66, manipulations, risques pour la sécurité, la confidentialité, l’auto-détermination dans les comportements, déséquilibres du marché. Vu ce niveau d’innovation, de nouvelles réglementations s’imposent pour garantir des formes adéquates de transparence et d’information des consommateurs. En particulier, ceux-ci devraient pouvoir avoir accès aux profils personnels, à leurs «doubles virtuels»67, élaborés par les algorithmes qui régissent les activités de data mining et conservés sur une bonne quantité des nombreuses plateformes du marché numérique et des opérateurs des données.

65 Ce sont des interventions dites de mass personalization (personnalisation de masse) tels que instant personalization (personnalisation instantanée), predictive marketing (marketing prédictif), personalized pricing (prix personnalisé) and election campaigns (campagnes électorales), etc.; Christl (2017), pp. 65–83. 66 Solove (2004), pp. 97 et ss. 67 Turkle (2015), pp. 365–366. Sur le thème voir aussi European Data Protection Supervisor (EDPS), Meeting the challenges of big data. A call for transparency, user control, data protection by design and accountability, Opinion 7/2015, novembre 2015; O’Neil (2016).

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En l’état actuel des choses, il n’y a en effet aucun lieu, public ou privé, où le consommateur a la possibilité de connaître, voire d’ajuster, son propre double virtuel afin de le rendre plus conforme à la manière dont il désire être représenté, ou de demander qu’il soit rectifié, complété, de signaler des erreurs (résultant de l’élaboration de l’algorithme); lesquelles erreurs ne sont pas virtuelles puisqu’elles finissent par avoir une forte incidence sur la présentation des offres de services d’assurance, financiers, sanitaires et, désormais, de presque tous les biens de consommation. Cette réglementation, vu les caractéristiques de ces marchés, outrepasse les éventuelles interventions que chaque État envisagerait de mettre en place et renvoie à l’exigence de dépasser les confins nationaux68.

8 Pour un modèle différent d'information et de transparence Ces trente dernières années de législation, européenne et nationale, en matière de protection du consommateur, ont grandement servi à diffuser et à développer une sensibilité « consumériste » vraiment notable. L’expérience de ces années devrait néanmoins nous avoir appris que, tout comme évolue la société, tout comme évoluent les pratiques commerciales, la technologie, les modalités de contact entre professionnel et consommateur, doivent également évoluer et s’adapter les instruments destinés à la protection des consommateurs. Peut-être le temps est-il venu de changer de stratégie et de se mettre au diapason de la nouvelle réalité. L’intention de l’auteur de cet exposé n’est pas proposer des solutions spécifiques pour un différent modèle d’information, mais plutôt de faire évaluer en sens critique les solutions adoptées et d’analyser les situations qui présentent des lacunes plus ou moins graves. Par exemple, à la lumière des considérations formulées dans les paragraphes qui précèdent, il faudrait réfléchir sur le fait que les modalités selon lesquelles les informations sont fournies sont tout aussi importantes que leur contenu. Une plus grande harmonisation, également à l’échelle européenne, de l’aspect formel des informations reportées sur les emballages ou dans la publicité afin mettre le consommateur dans la condition de reconnaître immédiatement quels sont les renseignements les plus importants qu’il désire vérifier ou comparer pourrait être une solution qui va dans la direction d’une plus grande transparence dans les transactions commerciales que l’Union européenne elle-même voudrait réaliser; il ne manque pas d’exemples existant en ce sens; que l’on songe au système des

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V. la Communication de la Commission au Parlement européen, au Conseil, au Comité économique et social européen et au Comité des régions, «Créer une économie européenne fondée sur les données», COM(2017) 9 final, du 10.01.2017.

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indicateurs tels que le TAEG pour le crédit à la consommation, qui pourrait être étendu à d’autres types de contrats69. Sur ce sujet s’est focalisée l'attention de l'Union européenne qui a présenté son propre plan d'action pour lutter contre la désinformation online, en référence non seulement à les fake news mais aussi à toutes les formes d'informations fausses et trompeuses, présentées sur le web (70) Un autre problème, comme nous l’avons vu, et toujours du point de vue formel, concerne la difficulté de repérer facilement les informations obligatoires. Et la place, toujours différente, qu’elles occupent sur l’emballage, non seulement ne permet pas leur acquisition immédiate mais rend impossible même la simple comparaison entre produits analogues ou similaires. À la lumière de ces réflexions mais surtout des faits divers, même le système de contrôle relevant du droit public sur les produits, notamment sur les produits financiers, ne semble pas optimal et en mesure d’intervenir efficacement pour empêcher ou interdire la commercialisation de certains produits71; à l’égard du modèle italien, il faudrait étendre le champ de compétence de l’AGCM (en tant qu’autorité administrative) en lui reconnaissant la faculté de juger les pratiques commerciales déloyales également dans le secteur financier, et lui attribuer un pouvoir d’interdiction plus incisif lorsque les comportements commerciaux incorrects portent atteinte aux principes de bonne foi, de loyauté et de transparence. L’objectif de garantir une compréhension plus complète des informations pourrait être atteint, comme on le propose de plus en plus fréquemment, par la mise en place d’interfaces standardisées qui mettraient en évidence – également au moyen de formats graphiques appropriés – uniquement les éléments les plus significatifs du contrat relativement au secteur d’application (ex. sécurité alimentaire, produits financiers), sans préjudice de la possibilité pour les consommateurs de pouvoir toujours prendre connaissance de la totalité des informations auxquelles ils ont droit. L’information, même si elle est transparente, pourrait ne pas suffire si le consommateur n’est pas capable de l’appréhender, de l’évaluer, de l’analyser. Et pourtant, quoique l’Union européenne ait toujours mis l’accent sur le fait qu’il faut que les États s’activent aux fins d’une meilleure éducation à la consommation, en Italie, il n’existe pas de sujets publics ou privés se consacrant à l’éducation des consommateurs, exception faite des associations de consommateurs. Les initiatives d’éducation financière promues par la Banque d’Italie et la Consob sont très certainement louables, mais la nature et l’histoire de ces deux organismes ne

69

Une certaine prudence serait de mise sur d’autres formes simplifiées identificatrices des risques renfermant un jugement (que l’on songe à la proposition – hypothèse à l’étude – d’indiquer par un feu rouge, orange, vert certains aliments dangereux pour les personnes affectées de problèmes de santé particuliers). 70 Communication de la Commission européenne, Tackling online disinformation: a European Approach, COM(2018) 236 final, 26 avril 2018. 71 Le problème a été soulevé également dans le cadre de la proposition de réforme structurelle du système bancaire, Regulation of the European Parliament and of the Council on structural measures improving the resilience of EU credit institutions Brussels, du 29 janvier 2014.

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sauraient garantir la neutralité du tiers requise pour éduquer les consommateurs sans finalité promotionnelle. Mais comme est fondamentale l’éducation du consommateur, tout aussi fondamentale devrait être l’éducation du professionnel, du commerçant, de l’entrepreneur; une éducation dont on ne parle pratiquement jamais et pour laquelle il n’existe pas d’initiatives appréciables mises en place en ce sens.

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Information Obligations and Disinformation of Consumers: Greek Law Report Antonios G. Karampatzos and Charalampos A. Kotios

Abstract This chapter summarizes the basic principles and legal provisions regarding consumer protection in Greece. Greek consumer protection law is heavily influenced by European law and significant similarities to other Member-states’ legislation are evident. The main focus of this chapter falls on the evaluation of General Transaction Terms, which are found in most commercial contracts and are rarely negotiated over with consumers, as they apply on a “take-it-or-leave-it” basis. Pre-contractual information duties of the seller and the rights of consumers vis-à-vis sellers arise both from sector-specific legislation as the Civil Code. Another significant aspect of Greek law is the protection of consumers against unfair and misleading commercial practices, whereas of particular interest are especially vulnerable consumer categories. Specific legal provisions apply to financial contracts concluded over distance, such as loan agreements or insurance policies, thereby granting consumers of said products a heightened level of protection. As distance contracts are now dominated by the use of the Internet, a targeted regulatory framework for “digital consumers” is required.

1 Introduction Greek consumer protection law is a product of recent history, which has been heavily influenced by the relevant EU legislation. Whereas the European Directives’ goal is a harmonized field of protection across Europe to enhance cross-border business-toconsumer (B2C) trade, the Greek legislator made the first attempt for a national consumer protection regime in 1991 with the short-lived Law 1961/1991. Only shortly after the law was replaced by Law 2251/1994, which is today the basic law governing consumer protection vis-à-vis producers in Greece. Greek case law up to that time depended on the application of Greek Civil Code provisions, which

A. G. Karampatzos (*) · C. A. Kotios National Kapodistrias University of Athens, Law School, Athens, Greece © Springer Nature Switzerland AG 2019 G. Straetmans (ed.), Information Obligations and Disinformation of Consumers, Ius Comparatum – Global Studies in Comparative Law 33, https://doi.org/10.1007/978-3-030-18054-6_6

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allowed for a successful protective field for Greek consumers despite the lack of targeted, special legislation. Over the years since its introduction, Law 2251/1994 has been often modified to adjust to EU rules. The Law regulates a wide field of issues related to consumer protection, such as the unfair contract terms, distance and online trading, unfair commercial practices and consumer class actions. While not being a Code itself, the Law has a systematic cohesion which succeeds in fashioning a complete system of consumer protection rules. Greek courts have effectively applied the Law and consumer associations have shown great diligence in protecting the interests of consumers through a number of class actions. The Law pioneers increased protection rules in relation to European directives, such as the special sensitivity for vulnerable consumer groups and its foresight for sustainable consumption. However, the Law is not without its flaws. The weakness of the Greek legislator in implementing Directives is apparent, as far as the Law’s internal consistency and overall efficiency are concerned. Certain cases arise where definitions contradict one another and detailed rules are implemented hastily, while their technical importance as well as the socio-economic impact of their application are overlooked. Despite those shortcomings, it can be argued that Greece has created a complete and effective framework in protecting consumers’ interests. The Report will be presented as follows: In Sect. 2, the general characteristics of the Greek model for Consumer Protection are set out. Certain core definitions will be explained (such as the notions of “consumer” under Greek law or of “average consumer” as interpreted in Greek— and European—case law) and also the differences in the scope of protection and the applied consumer benchmarks regarding pre-contractual consumer protection, unfair business practices, standard form contracts and special regimes will be examined. Section 3 of the Report focuses on pre-contractual information duties, transparency and disclosure requirements and concentrates on special obligations regarding the sale of food products. Section 4 presents the regulatory provisions against misleading commercial practices, i.e., what constitutes a misleading commercial practice, special rules for vulnerable groups of consumers and how such practices are dealt with by Courts. Section 5 highlights the issue of unfair contract terms and how the Law deals with the difference in bargaining power, when consumers contract vis-à-vis businesses. Section 6 deals with the special case of financial consumers and Sect. 7 tackles the issue of digital consumers, referring to those consumers engaged in online or distance shopping.

2 The General Characteristics of the Greek Consumer Protection Model 2.1

Applicable Legislation

The Greek consumer protection regime is, in essence, governed by a plethora of laws. The law of obligations, found in the Greek Civil Code, governs all

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transactions, either consumer-related or not. The basic principles apply to special legislation as well (such as the notions of bona fides, trade usages, etc.). The main law that nowadays governs consumer transactions is Law 2251/1994, which transposed Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts and has been accordingly amended, following subsequent EU legislation. Law 2251/1994 follows EU legislation on consumer protection, with certain adjustments to the economic, social and cultural characteristics of Greek society. It thus covers many different areas of consumer regulation, such as general terms of contracts, unfair commercial practices, liability of producers for defective products, etc. Other fields are covered by special laws, presidential decrees and ministerial decisions or codices (such as the Code of Foods and Beverages). When the provisions of consumer legislation cannot be enforced, the provisions of the Greek Civil Code are then to be applied.

2.1.1

Relevant Greek Civil Code Provisions

The Greek Civil Code (hereinafter: “GrCC”) provisions cover a broad field in the formation, interpretation and conclusion of juridical acts, contract law in general, nominate contracts, such as sale, and tort law. More specifically, the GrCC sets out provisions for the legal capacity of persons, the requirements for the validity of a juridical act, the possible defects in the declarations of will, as well as the offer and acceptance of a declaration of will; further, how the will of the person and contracts are to be interpreted and when juridical acts are deemed invalid or annullable, as well as pre-contractual liability. Furthermore, in the Second Book provisions are found regarding the formulation of a contract, the rights and obligations of the parties in reciprocal contracts, the case of an anomalous development of a contractual relationship (breach of contract) and tort liability. Finally, in all private law transactions there apply the basic principles of the GrCC, such as the abusive exercise of rights, good faith and protection from an excessively burdensome performance in case there has been an unforeseen change in circumstances after the conclusion of the contract.

2.1.2

Law 2251/1994

Law 2251/1994 is the basis for consumer protection law in Greece. In the first part, the Law sets out the protective regime for all business-to-consumer (B2C) transactions, whereas the second part governs class actions and matters of collective protection. It is noted from the outset that it is the State’s obligation to care for consumers, not only by generally protecting them but also by granting them specific rights. More specifically, the Law 2251/1994 contains provisions on the General Transaction Terms (included in standard, non-negotiable contracts of adhesion, drafted for an indefinite number of future transactions with an abstract number of consumers) and their judicial control, the contra proferentem interpretation of the terms, distance sales and online sales of goods, along with additional, special rights

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for certain consumer categories, special rules for the mental health of minors and the providers of services, prohibitions for misleading advertisements and commercial practices, aggressive commercial practices, consumer collectives, class actions, amicable settlement and sanctions for violation of the above mentioned suppliers’ obligations. The Law goes one step above the minimum harmonisation of the Directive 93/13/EEC and offers a broader protection as to where consumer protection applies. The Law also governs consumer transactions with public utility suppliers.

2.1.3

Special Legislation

The Greek legislator has transferred subsequent European Directives by means of Law, Presidential Decree or Ministerial Decision. Several of those laws incorporate new legislation in the already existing Law 2251/1994 and others simply apply in specific cases of consumer relations.1

2.2 2.2.1

The Greek Consumer Model The Notion of “Consumer” in Greek Law

There has been serious discussion as to where the protection of consumer law applies. Initial European legislation in the field was intended as a minimum harmonisation initiative, whereas subsequent amending Directives followed a maximum harmonization principle. The Greek legislator opted for an increased level of consumer protection, adopting a broad definition of the notion of “consumer”. Pursuant to Article 1 par. 4 of Law 2251/1994, a consumer may be “any natural or legal person or union of persons without legal personality, for whom the goods or services offered in the market are intended and who make use of those products or services, as long as they are the final receivers of such goods or services”. Furthermore, the recipient of commercial advertisements and promotional activities as well as guarantors are also regarded as consumers.2 The definition is thus wider than that of Article 2 par. 2 of Directive 93/13/EC, by including legal entities within the scope of protection. In addition, protection is not merely limited to persons acting for purposes outside their business, trade or professional activity; for the person obtaining the goods or services is worthy of the law’s protection, even when such

1

See the Table, Annex A at the end. See also the Supreme Civil Court—Plenary (Areios Pagos) Decision no. 13/2015, where the Court ruled that guarantors are considered consumers when assuming a guarantee in favour of a borrowing natural or legal person, as long as the latter is the final recipient of the loan (and thus a consumer) and the former is not acting in a professional capacity. 2

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goods or services were obtained for professional use, as long as that person was the final recipient.3 However, following subsequent European Directives intended as maximum harmonisation instruments, Law 2251/1994 also includes a narrow definition of consumer, applicable in certain consumer transactions. A consumer, when narrowly defined, is any natural person that acts for purposes which are irrelevant to its professional activities. Situations that employ the narrow definition are: • Doorstep and distance selling (Articles 3-4H) • Distance selling of financial services (Article 4I) • Unfair commercial practices (Article 9A(a)) The existence of—at least—two definitions of consumer may seem to lead to difficulties regarding interpretation and application of the relevant provisions and can lead to paradox conclusions. The broad definition is mainly employed while examining the unfairness of General Transaction Terms (Article 2), the sale of commercial goods and guaranties (Article 5), producer liability for defect products (Article 6), the health and safety of consumers (Article 7) and service provider liability (Article 8), but still exemptions exist. The application of each notion for individual protection should be made ad hoc, after the interpretation and teleological reduction of the protective scope, along with the case of an abusive exercise of rights (Article 281 GrCC) on consumers’ part—meaning here the ad hoc abusive invocation of the notion of consumer (Perakis and Livada 2015).

2.2.2

The Notion of “Supplier” in Greek Law

Greek law uses various definitions of the consumer’s counter party, each time according to the consumer transaction taking place. Pursuant to Article 1 par. 4 (b) of Law 2251/1994, which provides the “general” notion of the supplier, a supplier is “any natural or legal person which provides goods or services to the consumer in a professional capacity”. This definition also includes persons undertaking promotional activities. The above definition is applicable to the control of the General Transaction Terms (Article 2 of Law 2251/1994). In doorstep and distance selling, covered by Articles 3-4H, the supplier is more specifically defined: the supplier is, namely, “any natural or legal person, governed either by private or public law, which acts, even by means of agent acting for them or on their behalf, for purposes related to the commercial, business, trade or professional activities”. Other provisions extend the notion or provide further elements or emulate other persons as suppliers: for instance, Article 6 par. 2 replaces the supplier for the “producer” or the importer of goods and Article 8 par. 1 replaces the supplier with the “service provider” (Perakis and Livada 2015).

3

See Supreme the Civil Court Decisions no. 13/2015, 1738/2009, 16/2009 and 989/2004.

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The Consumer Benchmark: The “Average Consumer”

When investigating whether the law’s protection to a consumer should be awarded, certain characteristics allow for the construction of a consumer benchmark, which applies not to the definition of the consumer as required by article 1 part 4, but as a requirement for the ad hoc protection pursuant to the relevant provisions on specific transactions (Perakis and Livada 2015). Law 2251/1994 refers to the “average consumer” (Article 9C par. 2) without defining the notion further. According to Recital 18 of Directive 2005/29/EC, however, the benchmark used is that of “. . .the average consumer, who is reasonably well-informed and reasonably observant and circumspect, taking into account social, cultural and linguistic factors, as interpreted by the Court of Justice. . . ” (Commission Staff Working Document 2009). The above benchmark also applies beyond the scope of Directive 2005/29/EC on unfair commercial practices. The consumer benchmark (Delouka-Inglesi 2015), as used by national Courts,4 relies on a relatively well informed but inexperienced consumer that is not especially careful, suspicious or observant, but also is not gullible or careless (Perakis and Livada 2015). The law’s protective scope should not, therefore, encompass careless, completely indifferent and superficial observers, as that would expand the protective scope extensively. At the same time, though, the full application of the homo economicus benchmark narrows down the scope only to exceedingly diligent individuals. A substantive criterion for the ad hoc specification of the benchmark is the non-professional capacity of the final recipient involved in the transaction. If the person is an amateur in relation to the specific transaction taking place, irrespective of the professional or personal use of the products or services acquired, the protection of consumer law may be applied (Delouka-Inglesi 2014). In such instance, the consumer does not repeat the specific transaction frequently, so he/she does not possess the advanced knowledge, experience and bargaining skill that the supplier has.5 The limit to the application of the law’s protection is the general clause on abusive exercise of rights (Article 281 GrCC), which will be the case when experienced persons transact with businesses, invoking their inferior position despite having all necessary skills, knowledge and experience to conduct the specific transaction. Therefore, a reduction to the protective scope is deemed necessary when the application of the law would lead to unfair results. Depending on the particular circumstances of the transaction, the applicable provisions, the need to protect consumers as well as businesses from the abusive exercise of rights, the application of the law must be weighted ad hoc in each case (Delouka-Inglesi 2014). When there is a specific transaction involving a particular consumer group and not the broad public, then the “average” consumer is the member of the group that shows the needed care, diligence and information in their affairs. For instance, when

4 5

See the Athens Multi-Member Court of First Instance Decisions no. 5726/1960, and 3359/2003. See the Athens Court of Appeal Decision no. 1159/2012.

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a product is solely addressed to expert paediatricians, then the “average expert” should be protected and not the average doctor. The average consumer test is necessary for the application of each protective provision of Law 2251/1994. Pre-contractual information duties set out in Articles 3B and 3C (distance and doorstep selling), 4 (information duties for contracts excluding distance and doorstep selling, other than financial services), and 4I (distance selling of financial services) of Law 2251/1994 oblige suppliers to inform consumers in a manner that would enable the average—as defined above—consumer to decide whether to proceed or not with the transaction. Neither Greek Law nor the EU acquis set out explicitly a consumer benchmark (Giovanopoulos and Eleftheriades 2015). However, due to the nature of the relevant Directives as maximum harmonisation legislation and the need for coherence and integrity, the circumspect and well-informed consumer benchmark is applied; pre-contractual information must be presented in such a manner, that the average consumer can understand, evaluate and make an informed choice of contract. In this vein, the General Transaction Terms must be “. . .compiled [. . .] in a clear, precise and transparent manner to enable the consumer to fully perceive their meaning, and they are printed legibly on a visible spot of the document of the contract” (Article 2 par. 2 of Law 2251/1994). The supplier is required to form the contract in such a manner, that the average person reading the terms will be able to fully understand their meaning. In this case, the average consumer is not expected to have legal expertise in contract drafting. The wording of the document must thus be such that a reasonably observant and circumspect consumer (who does indeed try to read the General Transaction Terms) will be able to understand their rights and duties. A simple statement of applicable laws and provisions or volumes of the Government Gazette is not sufficient to ensure the real knowledge of the average consumer (Delouka-Inglesi 2014).

2.2.4

Vulnerable Consumers

Greek Consumer Protection law recognises the need to expand the scope of protection in cases where vulnerable consumers transact vis-à-vis businesses. Special care is taken for the mental health of minors (Article 7A of Law 2251/1994) and vulnerable consumers against unfair commercial practices (Article 9C of Law 2251/1994).

Protection of Minors Pursuant to Article 7A par. 1(a) of Law 2251/1994, suppliers are required to place on the market “products that, by their purpose, use or conditions of supply do not pose risks to the mental, psychological or moral growth of minors.” Indicatively, such products are considered those that may cause fear or anxiety to minors, promote (directly or indirectly) violent behavior and use of force, insult human decency,

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promote behavioral models that are not in accordance with the moral or legal rules of modern society or endanger the environment, lead to distinctions based on sex, race, religion etc. or lead to hazardous addictions (Article 7A par. 2). Article 7A par. 3 establishes a special Minors’ Protection Committee under the General Consumers’ Secretariat of the Ministry of Development to further protect minors. Due to the vulnerability of minors to modern technology, special attention is paid to the suppliers of electronic entertainment products such as video games; they must be classified according to the age to which they are addressed (Article 7A par. 5). That is accomplished by placing age labels on the product to clearly inform parents of the product’s suitability for their children. A failure to comply with the requirements set out in Article 7A of Law 2251/1994 may lead to tortious liability pursuant to Article 914 GrCC (:“Any person who, acting against the law and through their own fault, caused damage to another person shall compensate the latter”) due to breach of a protective legal provision. The supplier of hazardous products, as defined in Article 7A par. 1-2, and the failure to classify video games according to age groups can lead to joint and several liability (Article 926 GrCC) of both supplier and distributor of hazardous products (Valtoudis 2015). Furthermore, the Minister of Development may, after an opinion of the Minors’ Protection Committee, impose restrictive or corrective measures upon the trade of products that “under reasonable expectations, pose serious threat to the mental, psychological and moral growth of minors, such as a redress of their classification or set their commerce to terms” (Article 7A par. 3).

Other Cases of Vulnerable Consumers Apart from minors, Law 2251/1994 explicitly acknowledges the need to protect other vulnerable consumer groups by virtue of Article 9C par. 3 on unfair commercial practices. The provision—as a general clause—states that “commercial practices which are likely to materially distort the economic behavior only of a clearly identifiable group of consumers who are particularly vulnerable to the practice or the underlying product because of their mental or physical infirmity, age or credulity in a way which the trader could reasonably be expected to foresee, shall be assessed from the perspective of the average member of that group. This is without prejudice to the common and legitimate advertising practice of making exaggerated statements or statements which are not meant to be taken literally” (this provisions is identical to that of Article 5 par. 3 of Directive 2005/29/EC). Therefore, it is recognized that cases may arise where certain consumers may lack the necessary capabilities to make informed, rational decisions and thus require an enhanced legislative protection.6

According to the European Commission (2009), “. . .The reasons mentioned by Article 5 as the basis to establish the vulnerability of a specific category of consumers are listed indicatively and cover a wide range of situations”. 6

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Pursuant to the aforesaid provision, consumers may be deemed vulnerable due to their age, mental or physical infirmity and credulity. Indicatively, especially vulnerable consumers are considered to be elderly people, children and teenagers (European Commission 2009). However, the trader involved in the commercial practice must reasonably be able to foresee the probability of influencing the economic behavior of said consumers. The “foreseeability” test aims, on the one hand, at disheartening dishonest traders from fraudulent commercial practices which are addressed to the public but target only a specific consumer group, and on the other hand, at protecting honest traders from being liable vis-à-vis especially naïve and credulous consumers. Accordingly, when assessing the unfairness of a commercial practice, the “average” consumer of a vulnerable consumer group is taken as a benchmark (Delouka-Inglesi 2014). The extended protection to vulnerable consumers against unfair, misleading and aggressive commercial practices is apparent in the several per se prohibitions of Articles 9F-9H. Such prohibitions include: – The allegation that the products can facilitate profit from gambling (Article 9F (p)). – The false allegation that the product can cure disease, malfunctions or malformations (Article 9F (q)). – The inclusion, in an advertisement, of a direct pressing invitation to children to buy or convince their parents or other adults to buy for them the advertised products (subject to Article 7 of Presidential Decree 100/2000 as applicable) (Article 9H (e)).

3 Consumer Information Before the Conclusion of the Contract 3.1

Pre-contractual Information Duties

Even before the conclusion of the contract, consumers must be provided with sufficient information about the supplier, the products or services of interest and the conditions that will govern the contract, such as the rights and obligations of the parties, if it is finally concluded. This enables consumers to make an informed choice of product or service and reduces transaction costs by having the suppliers provide the (more easily collected by them) information rather than requiring from consumers to spend time and resources in search for information.

3.1.1

Pre-contractual Information in General

The “general clause” governing pre-contractual information disclosure is found in Article 4 of Law 2251/1994 under the title “Information requirements for contracts

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other than the ones concluded over distance or doorstep selling”. The exemption is necessary, due to the specific increased disclosure requirements for distance and doorstep selling found in Article 3 of Law 2251/1994 (see under Sect. 2.1.2 below). Pursuant to Article 4, the supplier must provide certain information (even) before the consumer is bound by contract or a respective offer to conclude a contract. The required information must be provided in a clear and comprehensible manner. Consumers must be familiarized with the following matters: • The main characteristics of the goods or services, to the extent necessary for the medium used and the goods or services. • The supplier’s identity, such as the commercial name, the geographic location of its business premises and its phone number. • The total price of the goods and services (including V.A.T. and every other fee) or, for cases in which the nature of the goods or services does not allow that, the manner in which the price will be determined, plus other encumbrances such as shipping or post costs. • Occasionally, how payment, delivery and execution are conducted as well as the deadline within which the supplier shall have to deliver the goods or offer the service. • The supplier’s business policy for handling complaints. • A reminder of seller liability for real defects and the lack of agreed properties, pursuant to Articles 534 ff. GrCC (on sales contract), of after sales service and, occasionally, of commercial guarantees and the respective requirements. • The duration of the contract, when applicable, or the terms for the (automatic) extension or termination of indefinite contracts. • Where applicable, the operational details of digital content and technical protection measures as well as the disclosure with respect to any defect of hardware or software that the supplier is or should be aware of. The above mentioned information must be provided to the extent that it “. . .is not obvious by the circumstances”. Nonetheless, Article 4 does not specifically define how the disclosure is conducted, i.e., through a tangible medium or digitally. Pursuant to the general clause of Article 288 GrCC (: “The debtor is obliged to fulfil her/his performance according to the demands of good faith, also taking into account the trade usages”), good faith demands that the consumer receives, reads and understands pre-contractual information sufficiently, regardless of being redirected to the supplier’s webpage or obtaining a hard-copy document of the information. The fulfillment of the above requirement will be judged ad hoc. Furthermore, Greek law requires that information must be provided before conclusion of the contract for the provision of water, natural gas and electricity, district heating and the sale of digital content which is not provided through a tangible medium (Article 4 par. 2). However, the above information disclosure is not required for day-to-day transactions which are concluded simultaneously (Article 4 par. 3). Finally, the obligations set out in Article 4 do not exclude the application of specific or further requirements to the aforesaid (Article 4 par. 4).

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Additional/Voluntary Information at the Pre-contractual Stage

Specific contracts, such as the distance marketing of financial services or e-commerce, may require additional information, due to the nature of the contract or the goods or services provided. For example, pre-contractual information on distance marketing of financial services must be provided in writing or through a physical medium which the consumer can access (Article 4H par. 5(a) of Law 2251/ 1994) and which contains a wide array of information concerning the supplier (such as their main activity, any business address that the consumer can reach the supplier, information of the agent, if any, the competent regulatory authority, if any, etc.— Article 4H par. 3 (a) I), the financial service itself (the service’s main characteristics, all costs including costs incurred due to the nature of the service over distance or other fees that are not collected by the supplier—Article 4H par. 3 (a) II) and the financial service contract concluded distantly (such as withdrawal rights, the minimum duration of the contract, the right to terminate the contract unilaterally etc.— Article 4H par. 3 (a) III). The supplier is not forbidden from providing additional information at this stage; it may as well be a marketing technique to disclose more (detailed) information than market competitors. However, any voluntary information must not lead to an information overload of the consumer, achieving the opposite result from the intended, or enticing the consumer in such a manner that the contract appears more attractive than it really is, which would not have happened had the voluntary information not been provided. Such information would conflict with the obligations set out in Articles 2, 3-4, 9-9I of Law 2251/1994 on unfair commercial practices as well as the provisions of the GrCC. Legal limits are set by Articles 197-198, 288 GrCC on good faith at the pre-contractual stage. The general principle of Article 288 on good faith gives rise to ancillary obligations of the parties, such as the obligation to inform their counterparties sufficiently and efficiently, avoiding any information that would confuse or perturb them.7

3.1.3

Possible Sanctions Due to Lack of Pre-contractual Information

A violation of the duty to provide information at the pre-contractual stage may lead to both administrative and civil sanctions against the supplier that did not duly inform the consumer. Law 2251/1994 also enables consumer associations to defend the rights of consumers through a series of class actions before civil courts.

7

See the Greek Supreme Civil Court Decision 1028/2015.

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Administrative Sanctions Pursuant to Articles 13A and 13B of Law 2251/1994, a consumer may file a report of the breach with the General Secretariat for Consumers and the supplier under scrutiny is called upon to provide answers. If there are grounds for a sanction, the Minister of Development may (jointly or independently) make recommendations for compliance under a set deadline and omission of the violation in the future, impose a fine from 1.500€ to 1.000.000€ or suspend the supplier’s business for a period of 3 months to 1 year, depending on the severity and the repetition of the violation. Should the supplier not respond to the summons from the General Secretariat, the fines are much lower, from 500€ to 50.000€ (Article 13A par. 2 and 3).

Civil Sanctions Through Class Action A class action may be filed by a consumer association which has at least 500 members and if the breach of law harms the interests of at least 30 consumers, pursuant to Article 10 par. 16 of law 2251/1994. The competent Multi-Member Court of First Instance may order the omission of the violation in the future (even before it has taken place), compensation for moral damages, issue an injunction to secure consumers’ claims until the issuance of an enforceable ruling and recognize the consumers’ right to seek restitution damages.

Culpa in Contrahendo Furthermore, the supplier’s violation of pre-contractual information duties of Law 2251/1994 also constitutes a conduct against good faith and commercial practice pursuant to Article 197 GrCC. Should the consumer suffer damages due to the supplier’s omission, regardless of the conclusion or not of the contract, the consumer has a right to seek compensation pursuant to Article 198 GrCC. Furthermore, the breach of information duties at a pre-contractual stage, deriving from the principle of good faith (pursuant to Articles 197 and 288 GrCC), may also give rise to tort claims (Article 914 GrCC) (Tsolakidis 2009).8

3.2

Transparency Requirements

The purpose of the expansive pre-contractual information duties is to enhance the bargaining strength of consumers when transacting with businesses. Consumers lack

8 See, for instance, the Greek Supreme Civil Court Decision no. 24/2016, Patras Multi-member Court of First Instance Decision no. 244/2015.

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sophistication, technical knowledge and legal expertise to know beforehand the entire process of the transaction, from the conclusion of the contract to its fulfillment or termination, and their respective rights and obligations. By obtaining information on the intended transaction, as well as on the person of the supplier, consumers are more aware of the conditions that will govern their future contractual relationship. The enhanced information therefore enables consumers to make informed choices, as far as the counterparty, the good or service and the specific terms of the contract are concerned. To that extent, information disclosure requirements are in harmony with the fundamental principle of private autonomy; every person should be able to choose to conclude—or not—beneficial contracts and avoid disadvantageous transactions. However, it is imperative that consumers receive all information in a manner fit for the average consumer to understand the particulars of a future transaction. Law 2251/1994 obliges suppliers to provide information in a clear, comprehensible and unambiguous way.9 The principle of good faith (Article 288 GrCC) is of paramount importance in assessing the information necessary for consumers. It is up to the Courts to decide ad hoc whether the required information from a certain supplier was provided to a certain consumer in such a way that the latter would be able to make an informed decision and whether the provision or lack of certain information, had it been provided correctly, would have led the consumer to a different decision. The good faith principle should not, however, overburden suppliers by obliging them to ‘teach’ consumers; the consumer benchmark is thus necessary when determining whether the information provided was clear and comprehensible to the average, circumspect consumer. Moreover, the pre-contractual information duty of suppliers, as a duty of clarification and protection of their contractual partner, should not extend to matters on which the consumer had to or could obtain information on its own.10 This approach is specified, for instance, in Article 4 par. 1 of Law 2251/ 1994, as suppliers must provide information “in a clear and comprehensive manner, if such information is not apparent under the circumstances”.

3.3

Special Requirements for Foodstuff

Due to the importance of transparency in the European Market, great care has been given in establishing a special regime for the information of food consumers. Unlike most other products or services, food is a necessity good, meaning that every person will contract to the acquisition of food on an almost daily basis. To ensure For instance, Article 3B: “. . .the supplier provides the consumer, in a clear and understandable manner, with the following information”; Article 4H par. 3: “. . .the consumer must be informed by distance communication means in an explicit and understandable way, heeding the principles of good faith in commercial transactions and the provisions for the validity of juridical acts, for the following aspects, the commercial purpose of which must be expressed clearly”, etc. 10 See the Supreme Court Decision no. 1435/2015. 9

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transparency in the foods market and safeguard the health of consumers, the European Union has opted for the harmonization of information obligations by means of Regulation, repealing and including older Directives in its new legislation.11 Apart from Regulation 1169/2011, there are numerous other Regulations and Directives on special categories of food and beverages, additives, nutrients, special ingredients, etc. The option chosen serves “the interests of the internal market by simplifying the law, ensuring legal certainty and reducing administrative burden, and benefit [s] citizens by requiring clear, comprehensible and legible labelling of foods”.12 Greek law is thus largely harmonized to that of EU Member-States, with the addition of special national laws, such as the Greek Code of Foodstuffs, Beverages and Objects of Common Use (the “Food Code”), as amended, and Law 4235/2014. A variety of Ministerial Decisions, Presidential Decrees, Sanitary Decisions and decisions of the Supreme Chemical Council also apply, often amending the Food Code. The primary authority for food in Greece is the Food Control Authority under the Ministry of Agriculture, as well as other public bodies such as the General State Chemical Laboratory and the National Medical Organization.13

3.3.1

Information Requirements in the Acquis Communautaire

Recent European legislation on food consumer protection is based on the “general principle of food law [a] to provide a basis for consumers to make informed choices in relation to food they consume and [b] to prevent any practices that may mislead the consumer”.14 The first (a) point is accomplished by streamlining the necessary information all food products should clearly and readily provide to potential consumers, while the second (b) point is achieved through the prohibition of misleading information concerning the characteristics of food, its properties or the lack of medical properties thereof. This prohibition extends to misleading advertising15 and to the prohibition of unfair and misleading commercial practices.16

11

Regulation (EU) No. 1169/2011 of the European Parliament and of the Council of 25 October 2011 on the provision of food information to consumers, amending Regulations (EC) No. 1924/ 2006 and (EC) No. 1925/2006 of the European Parliament and of the Council, and repealing Commission Directive 87/250/EEC, Council Directive 90/496/EEC, Commission Directive 1999/ 10/EC, Directive 2000/13/EC of the European Parliament and of the Council, Commission Directives 2002/67/EC and 2008/5/EC and Commission Regulation (EC) No 608/2004 Text with EEA relevance, OJ L 304, 22.11.2011, pp. 18–63. 12 Regulation (EU) No. 1169/2011, Recital 9. 13 The National Medical Organization regulates food supplements and dietetic foods. 14 Recital 4, Regulation 1169/2011. 15 Recital 20, op.cit. 16 Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market, OJ L 149, 11.6.2005, p. 22.

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Labeling Requirements Food business operators’17 obligations regarding food information18 concentrate on communicating all necessary information to consumers in a clear and comprehensible manner: food information must be accurate, clear and easy to understand (Article 7). There are differences in presenting the information, depending on whether the food is addressed to mass caterers and final consumers as pre-packaged food or to other business operators for packaging. In the case of business-to-business provision of non-prepacked food, the supplying business operators must provide “sufficient” information to the recipients in order to enable them to inform consumers on the particulars of the product (Article 8, par. 2,8). Prepacked food information must be found directly on the package or on a label attached thereto (Article 12 par. 2) and contain the following particulars: • • • • • • • • • • • •

the name of the food, the list of ingredients, certain listed ingredients or processing aids, the quantity of certain ingredients or categories thereof, its net quantity, its minimum durability, any special storage conditions and/or conditions of use, the details of the food business operator, the country of origin, when necessary, instructions for the use of the food, the alcoholic strength of beverages containing more than 1.2% alcohol, and a nutrition declaration.19

The aforementioned information must be provided by means of words and numbers, unless special symbols or pictures may convey the information to consumers in an adequate manner (Article 9 par. 2, 3). Information must be in a language understood by consumers (Article 15). Furthermore, mandatory food particulars must be placed obviously on a package, be clearly visible and legible, possibly indelible and in no way hindered or obscured (Article 13 par. 1). There are also provisions for a certain font size for words on packages (Article 13 par. 3, 4, 5). Detailed obligations on food particulars are provided in Section 2 of Regulation 1169/2011, whereas Annex III provides a list with food that requires additional particulars.

17 I.e., the natural or legal persons responsible for ensuring that the requirements of food law are met within the food business under their control (definition of Article 3 par. 3 of Regulation 178/2002). 18 Defined as information concerning a food and made available to the final consumer by means of a label, other accompanying material, or any other means including modern technology tools or verbal communication (Article 2 par. 2a of Regulation 1169/2011). 19 Article 9 par. 1 of Regulation 1169/2011.

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Prohibition of Misleading Information Apart from obligations relating to the clarity and plainness of food information, which aims at helping consumers make informed decisions about their nutritional needs, diet and lifestyle, Regulation 1169/2011 prescribes that food information shall not be misleading. This prohibition refers to food information presented on the package but also to advertising and the presentation of foods (Article 7). Food presentation is understood as the particular characteristics relating to shape, appearance or packaging, the packaging materials used, the way in which they are arranged and the setting in which food is displayed.20 A food business operator is allowed to add voluntary information to the label or package of a product under the strict condition that the additional information shall not mislead or confuse the consumers or be detrimental to mandatory information.21

3.3.2

National Food Information Regulation

The Food Code specifies the conditions under which food may be sold in Greece. Food products from third countries must fulfill the requirements of Greek (and European) law regarding ingredients and packaging (Article 7). In case food supplements, additive substances, new technologies or nutritionally enriched food are used, products must be first approved by the Supreme Chemical Council (Article 5). Moreover, the Food Code dictates the general requirements for the presentation of food information to consumers and special provisions for oils, fish, meat, coffee and tea, preserved food etc. Various administrative measures, penalties and processes on food and animal feed are concentrated in Law 4235/2014.

Greek Labeling and Clarity Requirements The extensive Article 11 of the Food Code presents the labelling, presentation and advertising requirements intended for final consumers as well as mass caterers such as restaurants, hospitals and canteens. Pursuant to paragraph 2 of the Article, the label and the labelling process may not: • be such as to mislead the consumer, especially – as to the food’s nature, identity, properties, composition, quantity, durability, production location and process, – attribute properties that the food does not possess, – present a characteristic as special to the product, when it is a general characteristic of all products of the same type,

20 21

Article 7 par. 4(b) of Regulation 1169/2011. Article 36 of Regulation 1169/2011.

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• attribute to the food or beverage certain traits that relate to the prevention or treatment of diseases or hint thereto. Furthermore, the above prohibitions apply to the presentation of the food and especially to the shape, packaging, the used material for the package, the manner of the food’s provision, the place of distribution and commercial advertisements. As to the content of the label, it must contain the following information (Article 2 par. 3): • the name of the food, • the list of ingredients and the quantity of certain listed ingredients or processing aids, • the net quantity of prepacked food, • its minimum durability, • any special storage conditions and/or conditions of use, • the details of the food business operator, • the country of production or origin, if the omission could mislead consumers as to the true origin of the product, • instructions, when their omission does not permit the proper use of the food, • the alcoholic strength of beverages containing more than 1.2% alcohol. The name of the product may not be replaced by a commercial brand or mark and, in any case, caution must be shown so that the use of a common name, by which the product is known on a market in the Member-State that the product is produced, does not confuse consumers. The specific state of the product (e.g. ground, frozen, smoked etc.) must be included in the label, if the omission of the product could confuse consumers. Pursuant to Article 2 par. 10 of the Food Code, the indication for pre-packed food must be placed either on the package or on a label attached thereto. The necessary information must also be stated on the packaging of the product (such as carton boxes). When the product is addressed to the final consumer but is still at a commercial stage before the final sale, the necessary information must always accompany the goods or precede their receipt, even when a label is not (yet) placed. The label’s content must be clear, comprehensible, easy to read, written on an obvious point of the package, and indelible. Under no circumstances should information be covered, hidden or obscured, by other images or indications. Additionally, the information about the name, net quantity, expiration date and alcoholic content (when contained) must be in the same visual field. Pursuant to Article 2 par. 12, no food may be sold in Greece when the necessary information is not in Greek, unless the full information of consumers may be achieved through other means, determined by European legislation. The use of more languages on the product is not forbidden. Furthermore, pursuant to Article 2 par. 13, the number of the lot, indicated by the letter “L”, must also be indicated on the product; certain products, such as agricultural goods, are exempted. Article 11A of the Food Code regulates the indication of nutritional information for products addressed to the final consumers, as well as places of mass catering. Nutritional information must be presented in a cell format and include the weight and

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value of nutrients, as well as the percentage of the daily nutritional quantity of 100 g/ ml of the product (or per portion, should it be less than that).

Penalties Due to the importance of food and the sensitivity attributed to the clear, unambiguous information of food consumers, violations of national and European provisions on food information (and food safety in general) are scrutinized extensively. Articles 2-36 of Law 4235/2014 provide a wide list of possible violations and the administrative measures against them. When a food product is improper as to the labeling requirements, presentation or commercial advertisement, especially in cases where this omission misleads consumers, it may be confiscated by the authorities (Article 6 par. 1(b) of Law 4235/2014). The same applies when the omission of important information may cause harm to a certain consumer group or the information is not presented in Greek. The competent authorities may address recommendations to violators and demand corrective measures. In case such measures are not adopted by violators, an administrative fine may be imposed according to Article 23, ranging from 500 to 60.000 € per violation. When the violation may compromise the health of consumers, the fine may reach up to 500.000 €. In case of serious offences, criminal charges may also apply (both those of Article 27 as well as of the Greek Criminal Code).

4 Commercial Practices Commercial advertisements and practices are the primary means of businesses to inform consumers about new products and services offered in the market. Consumers are thus able to learn about new products and their characteristics, properties and benefits. However, technological advances in the field of mass media communication and the development of the internet have strengthened businesses’ marketing strategies and have made consumers more susceptible to coercion. The need arose for a regime that would both encourage free competition and prohibit businesses from manipulating consumers. Greek Law 3587/2007 integrated Directive 2005/29/EC on unfair business-toconsumer commercial practices and amended Law 2251/1994, in order to fully harmonize Greek law with the community acquis. Thus, the consumer protection regime was expanded by prohibiting unfair, misleading and aggressive commercial practices. Articles 9-9I of Law 2251/1994 regulate communications of businesses to consumers, mainly focusing on advertisements (Article 9), and the prohibition of unfair, misleading and aggressive commercial practices and omissions (Articles 9C, 9D and 9H respectively).

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Misleading Commercial Practices

A commercial practice is misleading, when it – either contains false information and is therefore untrue or – it can mislead the average consumer, even if the included information is objectively true, and – leads or may lead the average consumer22 to proceed to a transaction that they would otherwise not conclude. The benchmark of the misleading character of a commercial practice is the truthfulness of its contained information and its understanding on the part of the average consumer. Even when a commercial practice is subjectively untrue to the average consumer, it may be considered misleading (Delouka-Inglesi 2014). The key-point here is the general impression a certain commercial practice creates to the average consumer and not the impression of singular information. Furthermore, the fallacy in the consumers’ perception must be material and not all false commercial practices, but only those that can causally be connected to the decision of a transaction under false impressions should be regarded as misleading (DeloukaInglesi 2014). When a commercial practice targets a specific group of consumers that may be especially vulnerable due to mental or physical infirmity, age or credulity, the average consumer of that group is taken as a benchmark for the possibility of fallacy in transaction decisions.

4.2

Misleading Actions

Pursuant to Article 9D par.1, a commercial practice is considered misleading “if it includes false information and is, therefore, untrue, or if, in any way, including its total presentation, it misleads or may mislead the average consumer, even if the information is, objectively, correct with regard to one or more of the information mentioned below and, in any case, it leads or may lead the consumer to make a transaction decision which otherwise he would not make”. Article 9D par. 2 states that any commercial practice that, in its real context, considering all its characteristics and the circumstances, leads or may lead consumers to conclude a transaction that they otherwise would not conclude is considered misleading, such as comparative advertising and failure of the supplier to follow a commitment to a code of behavior or conduct. This is especially important in light of the new Code of Conduct. Information that must not be false concerns: – the existence or the nature of a product,

22

As in detail above, Sect. 2.2.3.

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– the main characteristics of the product, such as availability, benefits, dangers, execution, composition, accessories, after-sales support to the consumer and handling of complaints etc., – the extent of the commitments of the supplier, the motives for the commercial practice and the nature of the procedure of sales, every statement or symbol pertaining to direct or indirect sponsoring or approval of the supplier or the product, – the price or the method for its calculation, or the existence of a special low price, – the need for service, spare part, replacement, or repair, – the nature, the characteristic features and the rights of the supplier or their representative, such as their identity and assets, their qualifications, capacity, approval, corporate relation, connection and ownership of rights of industrial, commercial or intellectual property, or their awards and distinctions, and – the rights of the consumer including the right for replacement or return in accordance with Article 5 (of Law 2251/1994) (Delouka-Inglesi 2014).23

4.3

Misleading Omissions

Furthermore, pursuant to Article 9E par. 1, a commercial practice may be misleading due to an omission of essential information.24 Article 9E par. 2 also considers the provision of unclear and ambiguous information provided to the consumer as a misleading omission (in addition to the concealment of such information), provided that the commercial goal of the practice was unclear and the consumer concluded a transaction that, under provision of adequate information (Delouka-Inglesi 2014), would not have concluded. Pursuant to Article 9E par. 4, essential information that must be clearly and unambiguously provided to consumers at the stage of an invitation to purchase contains: • the main characteristics of the product, to the extent that they are recommended in relation to the means and the product, • the supplier’s address and identity, such as his/her trade name, and if appropriate, the address and the identity of the supplier on behalf of whom the representative acts, • the price, including taxes or if, due to the nature of the product, the price cannot be reasonably fixed in advance, the method on the basis of which the price is calculated, and if necessary, all additional charges for dispatch, delivery or post

23 24

The requirements in this part should be viewed as exclusive and not indicative. A commercial practice is considered misleading if, in its real context, considering all its characteristics and the circumstances, as well as the restrictions of a specific means of communication, it omits essential information needed by the consumer, depending on the specific framework, to make a well-founded transaction decision, and therefore it leads or may lead the average consumer to make a transaction decision which he would not make otherwise.

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office, or, if these charges cannot be reasonably calculated in advance, reference of the fact that such additional charges may be required, • the arrangements for payment, delivery, execution, and handling of complaints, if they deviate from the requirements of professional conscientiousness, • for products and transactions, if there is a right for repudiation or cancellation, withdrawal etc. The above mentioned information must be provided in a clear, unambiguous manner to consumers before the transaction is concluded, i.e., at the pre-contractual stage. An omission or provision of obscure information, on which a consumer materially and causally based his/her decision to transact, should thus be treated as both breach of the general obligation for pre-contractual information transparency and violation of the prohibition of misleading commercial practices. Additionally, when information is transmitted via a certain medium that imposes a restriction of time or space, the fallacy test takes into consideration both the restrictions and the efforts of the supplier to render the—necessarily left out— information accessible to consumers (Article 9E par. 3). Law 2251/1994 provides a “black list” of commercial practices that are per se forbidden as misleading. The same list of forbidden practices is found in legislations of all Member-States integrating Directive 2005/29/EC and may only change by an amendment of the Directive. Article 9F of Law 2251/1994 forbids 23 commercial practices as misleading, however certain forbidden commercial practices are already forbidden by provisions of other laws (Delouka-Inglesi 2014).

5 General Transaction Terms Most every day consumer transactions involve a singular business concluding contracts with an unknown number of individual consumers. As it would be very costly both in time and money and thus inefficient to the business to individually negotiate the terms of each contract concluded daily, commercial practice has led to the rise of standard form contracts (or contracts of adhesion or General Transaction Terms—hereinafter “GTTs”). They allow for the business to draft a pre-formulated set of contracts that will be used indefinitely in transactions in the future, creating economies of scale. Consumers are then expected to either conclude the contract on the basis of the specific General Transaction Terms used by a business or negotiate individual terms. Should the business be unable or unwilling to negotiate individual contracts, the only other option left to consumers is to not transact at all. The aforesaid development has influenced both the principle of private autonomy, as consumers are expected to contract on a “take-it-or-leave-it” basis, and the bargaining power of the parties. By the use of GTTs, the basic principle of contractual freedom, based on Article 361 GrCC, is inflected. A person may freely choose its contractual partner as well as the content of the contract, to the extent mandatory law provisions allow. When contractual terms are negotiated individually, the

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balance in bargaining strength is preserved twofold: first, the consumer can influence, through negotiations, the content of the contract, especially the content of the accidentalia negotii; second, the consumer is aware of the contract, its precise content and the parties’ respective rights and obligations in such a way that leaves only little room for surprises and miscomprehension. However, the terms of a contract containing GTTs are not always clear to consumers and, being drafted by legal experts for the business, they will usually encumber the consumers and release businesses from many obligations. Furthermore, consumers lack the power to influence the drafting and negotiating of such contracts (Karampatzos 2016). On certain occasions, when GTTs apply in public utilities, consumers lack any contractual freedom whatsoever. It thus became expedient to regulate GTTs so that the increased bargaining power of businesses is not used against consumers, leading to market distortions and inefficiency.

5.1

The Prohibition of Unfair GTTs

The Greek legislator, implementing Council Directive 1993/13/EC, included the protection of consumers against unfair GTTs in Article 2 of Law 2251/1994. Until then, the general clauses of the GrCC (such as Articles 178, 281 and 288) were the main protection of consumers against unfair contract terms. Pursuant to Article 2 par. 1 of Law 2251/1994, consumers are not bound to the contract where GTTs apply, when they were innocently unaware of them. This applies to those cases when the supplier did not clearly indicate the existence of such terms to the consumer or did not provide access to the terms. The judicial control of GTTs starts by first considering the inclusion whatsoever of the relevant terms in a contract, which requires the prior consent of the consumer by an incorporation agreement. While this requirement is not explicitly stated by Article 2 of Law 2251/1994, it could and should be so inferred by the provisions of the Civil Code relating to the formulation and interpretation of contracts (Articles 185 ff. GrCC) (Dellios 2015). The main content of such an agreement would be that the specific GTTs that have been pointed out to the consumer will apply in the (commercial) contract. Should the consumer agree to the inclusion of GTTs but different terms appear by the conclusion of the contract, then Article 2 par. 1 of Law 2251/1994 comes into play. The terms can either be incorporated in the document of the contract as a whole, which is then signed, or be clearly referred to in the main document. Subsequently, the exact meaning of each term agreed upon must be interpreted. As contractual terms, GTTs are interpreted according to GrCC provisions on the interpretation of juridical acts/contracts and the general guidelines stemming therefrom, such as the ascertainment of the true meaning of a term, the intention of the parties, and good faith (Articles 173, 200 GrCC). However, Article 2 par. 3 of Law 2251/1994 especially provides that if individually negotiated terms contradict those found in the GTTs, the latter recede and the former govern the contract. In this case,

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the party claiming that a term was a product of individual negotiation must also prove this allegation (Dellios 2015). If a term found in the GTTs is ambiguous as to its meaning, so that two or more interpretations of the term could be possible, or different terms in the GTTs contradict each other, the one most favourable for the consumer applies (ambiguitas contra proferentem), pursuant to Article 2 par. 4 (b) of Law 2251/1994. The final—third—step is the control of the GTTs’ content. At this point, courts must decide whether the provisions laid out by the terms are legitimate, fair and not abusive. Detailed information is set out in Article 2 par. 6-7 of Law 2251/1994. The protection against unfair GTTs is also provided for every contract term which is not considered a GTT but which similarly was not the product of individual negotiation, either (a) for pre-formulated contracts that were used only once (Dellios 2008)25 or (b) for not pre-formulated terms used without individual negotiation (Article 2 par. 10) (Dellios 2008).26 Said provision considers any contractual term, whose content could not be influenced by the consumer, a contractual term that is not a product of individual negotiation and thus extends the control of Article 2 to them as well (Dellios 2015). Individual negotiation is takes place when (a) discussions between the parties take place regarding the formulation of the terms and (b) the supplier shows “practical readiness” to accept the result of the discussions; however, this could well lead to incidents where unfruitful negotiations deprive the consumer of the extended protection of the above provision (Dellios 2015). The theoretical solution to the problem might be that the consumer must be given the ability to participate in negotiations, regardless of their making use of it or not and regardless of whether the negotiation resulted in the consumer’s desired result (Dellios 2015).27 The burden of proof that the contract and its specific terms were product of individual negotiation falls to the supplier. It is also inferred that the supplier must prove that, exceptionally, a single transaction was governed by individually negotiated contracts and not GTTs (Dellios 2008). Due to the inversion of the burden of proof, consumers may plead that no negotiation took place and it falls to suppliers to prove that the final contract and the terms therein were indeed the product of

25

Such a contractual term endangers the contract’s equilibrium, as it has been pre-drafted by the supplier and constitutes a means that significantly neutralizes the consumer’s negotiation flexibility and its ability to overturn, however the chance of the supplier investing time and effort in drafting those terms in their own favor, in comparison to GTTs, is reduced. 26 Such are cases where the supplier suggests a term and the consumer readily accepts its inclusion in the contract. Even though judicial control is extended to such terms (as also determined in Article 3 par. 1 of Directive 93/13/EEC), there is no presumption of the consumer’s lack of negotiating selfdetermination. 27 The consumer’s ability is considered both objectively, by taking into account the location of the parties, the duration of the negotiations, the complexity of the transaction, the foreseeability of legal consequences, as well as subjectively, by regarding the consumer’s experience, the type of the transaction, the parties’ literacy and education, their age, their lack of knowledge of the technical language etc.; see Dellios, supra fn. 47, pp. 110–111, who further distinguishes between “the ability to negotiate” and “the lack of influence in the terms’ content”.

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negotiation (Dellios 2008).28 It suffices that the supplier proves that the terms were individually negotiated; an exchange of emails containing draft terms which were reviewed by each of the parties or some meetings of the parties in person would point to that direction. On such occasion, the supplier would still contract with a consumer in the broad sense of Law 2251/1994, but the protective scope of Article 2 of Law 2251/1994 would not apply. The material contractual terms are those that regulate the main elements of the specific contract (essentialia negotii). In case of a sale, for instance, such terms refer to the sale object (performance) and the price thereto (counter-performance), the time of the goods’ delivery and the time of payment. In this case, the sale object and payment are considered objectively equal, despite the fact that a party may err; as long as the transaction is based on the free will of the contracting parties, the law does not interfere to protect the contracting parties from their own miscalculation (Dellios 2008). The price of a good or service and the extent of the main performance are usually the only matters that consumers notice and examine at the time of the conclusion of a contract.29 On a European level, Directive 1993/13/EC paved the way for the aforesaid approach, as the assessment of the unfair character should not extend to the main subject-matter of the contract nor the quality/price ratio of the goods or service supplied (recital 19 as well as Article 4 par. 2 of the Directive). The European Court of Justice30 considers that contractual terms that form the main subject-matter of the contract are “those that lay down the essential obligations of the contract and, as such, characterise it. By contrast, terms ancillary to those that define the very essence of the contractual relationship cannot fall within the notion of the ‘main subject-matter of the contract’. It is for the referring court to determine, having regard to the nature, general scheme and the stipulations of the loan agreement, and its legal and factual context, whether the term concerned constitutes an essential element of the debtor’s obligations, consisting in the repayment of the amount made available by the lender”.31 Nevertheless, Law 2251/1994 does not contain a provision similar to that of Article 4 par. 2 of the Directive. This omission of the Greek legislator, making a conscious choice by extending the scope of protection beyond that of the Directive (Article 8 of the Directive), would allow courts to assess the unfair character of every term of a consumer contract, even those that refer to the price or the quality of a

28

In the case of terms under (b), their exceptional nature and the reduced chance of deteriorating the consumer’s position should be treated differently both materially, by applying the provisions of the GrCC (Articles 174, 178, 179), and procedurally, by placing the burden of proof on the consumer, as the opposite would amount to a breach of basic principles of civil procedural law. 29 See the Greek Supreme Civil Court Decision no. 1219/2001and the Greek Council of State Decision no. 1210/2010. 30 See Jean-Claude Van Hove v. CNP Assurances SA, C-96/14, ECLI:EU:C:2015:262; Kásler et Káslerné Rábai, C-26/13, EU:C:2014:282; Caja de Ahorros y Monte de Piedad de Madrid, C-484/ 08, EU:C:2010:309; Matei, C-143/13, EU:C:2015:127. 31 Matei, C-143/13, EU:C:2015:127, par. 54.

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good. Case law, though, has since solved the divergence, deciding that the price/ good relation is not taken into account to assess the unfair character of a GTT, as long as the term is written in a clear and comprehensible manner and does not violate the principle of clarity; the critical issue here is not whether the price is reasonable for the goods or services provided, but the terms and conditions which could affect the price or repayment.32

5.2

The Principle of Clarity and Terms of the Contract

Directive 1993/13/EC introduced the principle of clarity relating to contractual terms that have not been individually negotiated, already in its 20th recital, as well as in the provisions of Articles 4 par. 2 and 5 (a). Contractual terms offered to consumers must be drafted in a clear, comprehensible manner and must be brought to the attention of consumers. In case of doubt as to the intended meaning of a term, the interpretation most favorable to the consumer must be followed. However, Law 2251/1994 does not contain an explicit provision on the principle of clarity; case law introduced and evolved the principle as a conclusion from the Law’s content and ratio.33 The principle of clarity is, additionally, an expression of the consumers’ “information model”; the basis of the concept is that consumers should be self-aware and responsible by having a wealth of information provided in order to enhance decision making in a competitive market (Dellios 2008). The principle of clarity revolves around three main specifications: – the principle of clear and comprehensible drafting of the terms, – the principle of definite or determinable content of the terms, and – the principle of foreseeability of the terms or else the prohibition of unexpected, surprising or misleading terms (Dellios 2008).34 The extensive list of indicative unfair terms found in Article 2 par. 7 of Law 2251/ 1994 further strengthens the view that obscure terms are considered by definition unfair (Dellios 2008). The drafter of the transaction terms must assure that consumers understand fully the content and meaning of those terms; to that purpose, the concept of the “average” consumer should be utilized in ascertaining whether the terms were presented in an adequately clear and comprehensible manner, fulfilling

32

See the Greek Supreme Civil Court Decisions no. 15/2007, 7/2011, 1001/2010, 1495/2006, Thessaloniki Court of Appeal Decision no. 312/2010, Athens Magistrate Court Decisions no. 4052/2009, and 1335/2009. 33 See Greek Supreme Civil Court Decision no. 1030/2001, Dikaio Epichiriseon & Eterion 2001, p. 1126. 34 See the Greek Supreme Civil Court Decisions no. 652/2010, 430/2005, 1101/2004, 1011/2004, 1030/2001; Thessaloniki Court of Appeal Decision no. 6547/2009; Athens Court of Appeal Decisions no. 3210/2008, and 5253/2003; Thessaloniki Multi-Member Court of First Instance Decisions no. 1213/2016 and 353/2016.

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the specifications of the principle of clarity. Moreover, the European Court of Justice has interpreted the principle of clarity broadly, ruling that the clear and comprehensible drafting does not remain in the written text but must enable specific consumers to make informed and welfare enhancing choices; therefore, the succinctness of a term is based on the text and syntax thereof, whereas the comprehensibility refers to the subjective ability of a certain consumer to realize the term’s true meaning.35 Material contractual terms are eligible for the unfairness test when they are obscure as to their meaning, i.e., when the principle of clarity has been violated. The violation consists primarily in the disturbance of the contractual balance between the parties’ rights and obligations in the sense of Article 2 par. 6 of Law 2251/1994 and could potentially lead to the consumer abstaining from exercising certain rights or succumb to rights and claims that the supplier appears to have.36 Since consumers tend to be more interested in the essentialia negotii than specific ancillary terms (accidentalia negotii), suppliers will usually be specific and receptive in explaining the main conditions of the contract; obscureness and vagueness in that regard will then extend judicial control to the material contractual terms as well, as mentioned above. In the case of individually negotiated (special) terms, it could be argued that the principle of clarity also covers their interpretation, despite their superiority against GTTs pursuant to Article 2 par. 3 of Law 2251/1994, following both the reasoning of the relevant case law as well as the conjoining principles of the Civil Code’s provisions on good faith (Article 288) and the interpretation or supplementation of vague contracts (Articles 173, 200, 371-373). Even then, judicial control of the unfairness of the terms is possible, as Article 2 of Law 2251/1994 is applicable even when one or some terms have been individually negotiated, when it is assumed that an adhesion contract has taken place.

6 Consumers of Financial Goods and Services The rise and constant growth of the financial sector has influenced consumer protection to a great extent, all the more in the aftermath of the global financial crisis of 2008. Due to the nature of financial products as sophisticated and, usually, highly technical, consumers are confronted with difficulty in understanding and differentiating between similar products. The lack of experience also contributes to the belief that, when transacting in financial product markets, consumers require extensive and detailed information in order to make rational and advantageous decisions.

35

See Jean-Claude Van Hove v. CNP Assurances SA, C-96/14, ECLI:EU:C:2015:262, par. 40,41; Bogdan Matei και Ioana Ofelia Matei v. SC Volksbank România SA, ECLI:EU:C:2015:127, C-143/13, par. 70 ff. 36 See Greek Supreme Civil Court Decision no. 652/2010.

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Such enhanced information duties towards consumers are mainly found in insurance, banking and securities law. Apart from the provisions of Law 2251/1994 that may also apply,37 targeted legislation exists in all the above mentioned fields. Information requirements in insurance contracts are regulated in Law 2496/1997. Greek Securities law is based on the Markets in Financial Instruments Directive, Markets in Financial Markets Regulation38 and the Prospectus Directive, as they have been amended39 and been transposed in national law, mainly Laws 3606/2007 and 3340/2005 respectively. Finally, the protection on credit agreements for consumers follows the Consumer Credits Directive and the amending Directive 2014/ 17/EU and is incorporated in Greek Law by means of the Ministerial Decision Z1-699/2010 and Law 4438/2016 respectively.

6.1 6.1.1

Increased Information Requirements Law 2251/1994

Article 4I of the Law 2251/1994 governs distance marketing of consumer financial services. The development of online-sales platforms and the intangible nature of the goods and services offered allows for fast and easy transactions. However, due to the superior organization and sophistication of suppliers, as well as their informational advantage, consumers stand at a loss in bargaining strength (Despotidou 2015). Consumers also lack the familiarity with distance sales of financial products and cannot receive explanations and pose questions at the limited time and due to the ease of the sale’s conclusion (Despotidou 2015). Article 4I par. 3 contains extensive pre-contractual information duties. Suppliers must provide information regarding themselves, the financial service, the contract and the right of consumers to seek extrajudicial dispute resolution. Suppliers must also provide consumers with the contractual terms before the conclusion of the contract (Article 4I par. 5). Information must be provided in a clear and comprehensive manner, following good faith and the principle of clarity, based on the apprehension of the average consumer; According to Despotidou (2015), the size and font of script, the structure of a text and the location of provided information (such as small print) therein are accordingly evaluated. Should suppliers provide incomplete, erroneous or false information, then the contract is considered null and void in favor

First and foremost Article 4I of the Law, which governs financial services contracts concluded by distance. 38 Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No. 648/2012 Text with EEA relevance. 39 MiFID II (Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU Text with EEA relevance) has not yet, at the time of writing, been transposed in Greek Law. 37

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of the consumer (Article 4I par. 8). Finally, Article 4I par. 9 states that additional (extended) pre-contractual information requirements of specific European and national legislation still apply.

6.1.2

Specific Legislation

Due to the special characteristics of the different financial goods and services, targeted legislation differentiates the information required at each stage and for each good or service. Regulatory bodies and authorities further impose on supervised entities meticulous disclosure and transparency obligations, which only enhance the protection of financial consumers. In insurance law, the insurer must inform the insured if the contract is governed by general or special transaction terms, note the fact on the part of the insurance policy where individual contract terms are agreed upon, and also deliver any of the former terms along with the policy (Article 2 par. 4 of Law 2496/1997). Furthermore, the insured must be informed of any changes in the policy that were not included in the application, the right of objection to such changes (along with a respective draft of a declaration of objection) and the right of withdrawal from the contract (Article 2 par. 5 of law 2496/1997). In securities law (Liappis 2012), relevant legislation requires issuers to provide the public, at the time of the initial public offering, with a prospectus containing, in a brief but clear manner, any information deemed necessary40 for investors to make informed decisions on acquiring securities (Article 7 of Law 3401/2005). Investment services providers are required to seek information about their clients and assess their budget, portfolio, assets, experience and exposure, in order to recommend a certain investment or product (Article 25 of Law 3606/2007). Information duties are more individualized in that respect and move away from the “average consumer” model; professional investors (as in Article 6 par. 1) enjoy inferior protection in comparison to that of private investors. Moreover, investment services providers must also disclose any conflicts of interest, participation in compensation schemes and any other cost and encumbrances ensued. Special pre-contractual information requirements in consumer credits oblige suppliers to provide, in a clear and compendious manner, the kind of credit offered, the identity of the institution and any expenses, costs, annual interest rate, etc. (Article 5-6 of Ministerial Decision Z1-699/2010). Similar information must also be provided in the credit contract, including periodic account analysis (Articles 10 ff.). Further consumer protection is achieved by the gathering of information by suppliers concerning the consumers’ solvency and creditworthiness (Article 8).

40 As to the minimum requirements, see Articles 3-26 of Commission Regulation (EC) No. 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council as regards information contained in prospectuses as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements.

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Information Simplification

The extended and detailed information requirements mentioned above may contribute to an increased protection regime for consumers, but at the same time risk confusing and discouraging consumers to the opposite effect. The provision of a technical and intricate torrent of information might overwhelm most (average) consumers, who lack the time, experience and, in the case of financial services, knowledge of the product particulars, to properly evaluate information and make rational decisions. Karampatzos (2016) additionally makes a (behavioral) economic approach to the issue, underlying the diminishing marginal utility of excessive information, which may lead consumers to make worse decisions—after a certain amount of information, the contribution-value of every new piece of information diminishes in relation to the cost in time and energy to accumulate and evaluate it. The simplification of information goes beyond the obligation for clear, comprehensible presentation of all principal factors; it should enable consumers to be objectively able to comprehend and utilize information and only focus on those matters of the contract that substantially influence their choices (Despotidou 2015). Greek scholars tend to agree that information-overload can prove dangerous for the interests of consumers and suggest the provision of less information to a greater effect (Despotidou 2015). Moreover, maximum information that is provided to consumers must not be confused with optimal (Karampatzos 2016). It is also accepted that European consumer legislation is unfortunately not moving in that direction (Despotidou 2015); hence, Greek law is bound to the above paradigm of (excessive) information provision. Honorable exemptions of real efforts for simplification can be made, though. One such would be the Standard European Consumer Credit Information sheet (Chasapis 2015),41 which contains, in a few pages, all essential information regarding the type of credit offered. Furthermore, most investment services providers, pursuant to Law 3606/2007, issue a pre-contractual information sheet, available online, which outlines the main services, duties, rights and obligations. The document is (usually) not large and enables consumers to inquire, at their leisure and before any contact whatsoever, about a potential transaction.

7 Consumers in Digital and Distance Transactions The developments in computer and network technology have paved the way for the evolution of a vast market of online transactions, adding them to the field of off-premises and distance selling of goods and services. Consumers are nowadays far more familiarized with the various “e-shop” platforms available to them, enabling consumers to transact from the comfort of their homes. However, the 41

Directive 2008/48/EC, Article 5; Ministerial Decision D Z1-699/2010, Article 5.

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nature of the transactions and the lack of simultaneous negotiation and conclusion of contracts involve various risks to the interests of consumers. European legislation (and, subsequently, Greek law) has moved in the direction of full harmonization of national legislations in an effort to create a single, crossborder, online market of goods and services, with a clear, transparent framework. Parallel primary goal is an increased level of protection for consumers involved in off-premises, distance and online transactions. Both aims were the ratio behind the recent Consumer Rights Directive (CRD), which amended and modernized previous legislation. CRD was transposed via Ministerial Decision Z1-891/2013 and incorporated in Articles 3-4J of Law 2251/1994. The changes in the regime were intended to boost consumer confidence in distance transactions and improve the welfare of both consumers and businesses. The framework for e-commerce is further solidified by Presidential Decree 131/2003.

7.1

Provisions of the CRD

Consumer protection based on CRD provisions mainly concerns pre-contractual information duties of suppliers, the right of consumers to withdraw from a contract when concluded off-premises or over distance, as well as various consumers’ rights regarding the time of delivery of goods, the transfer of danger, expenses due to means of payment, phone communications and additional payments (Karampatzos 2016). Pursuant to Article 3B of Law 2251/1994, information on 20 different parameters must be provided to consumers before any binding commitment. Such information refers to the identity and means of communication of the supplier, the price and the characteristics of the product offered, any additional expenses for delivery, the rights of consumers in case of delivery of a defective product and the right of withdrawal (Karampatzos 2016). The latter is heavily emphasized; consumers must be informed of the period, in which the right can be exercised, possible exemptions that may apply for the specific product (for example, certain contracts mentioned in Article 3L), the specific rights and obligations of each party, should consumers inform the suppliers of a withdrawal. If the consumer is not thus informed, the right of withdrawal extends from 14 calendar days to 12 months from the day that the supplier was obliged to inform the consumer (Article 3F par. 1) (Karampatzos 2016). The supplier bears the burden of proof that the consumer has been duly informed on the required matters. Principle consequence in case of a violation of the information duties is the annulment of the contract in favor of the consumer, i.e., only the consumer can invoke and exercise the above mentioned right (Article 3B, par. 8, 9). Suppliers may provide, on a voluntary basis, the required by Article 3B information using the standard format contained in Annex B of Law 2251/1994. Any information provided must enable consumers to make informed decisions; a consumer must understand beyond doubt that, by placing an order for a product via a distance selling platform, an obligation to pay is assumed. Otherwise, the consumer

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is not bound by the contract and is not obliged to pay. Should the means of purchase lack the space or time for all information to be presented, (at least) the essential information concerning the full price, the identity of the supplier, the right of withdrawal and the period of the contract must be offered (Article 3D, par. 3, 4). Moreover, all provided information at the pre-contractual stage is afterwards incorporated in the contract and binds the parties (Article 3B par. 5). Differences in the contractual terms must explicitly be agreed upon by both supplier and consumer; unilateral changes do not bind the consumer. If the supplier does not provide information about additional charges and expenses, the consumer is not obliged to pay any such expenses or, additionally, he/she may consider the contract null and void. Article 3B par. 7 further refers to potential, additional information requirements of Law 3844/2010 and Presidential Decree 131/2003 as more specific and thus applicable. Should any conflict of provisions arise, the ones of the special laws apply—instead of those of Article 3B.

7.2

E-Commerce

Presidential Decree 131/2003 governs information society services and, thereafter, online transactions (e-commerce). It applies to service providers (any person providing information society services) on the one hand and both to consumers and non-consumers on the other. Article 4 par. 1 obliges service providers to provide easy, direct and continuous access to information of a general nature, such as the name, location, communication, approval or commercial union, if any, etc. As stated in the provision, such information is provided in a parallel manner to that of Articles 3-4J of Law 2251/1994. It is provided not only to customers but to any user of the Internet. Moreover, all commercial communication must be clear and the terms, offers or advertisements recognizable and presented clearly and precisely (Article 5). Recipients of the service must be informed at least on the following matters in addition to those of Law 2251/1994 (Article 9): – the technical stages until the conclusion of the contract, – whether the service provider will file the contract and if the consumer may have access to it later, – the technical means that will enable the tracing and correction of mistakes in electronic use before the assumption of the order, – the languages that may be used for the contract, – any applicable codes of conduct, and – individual or general transaction terms must be provided in a manner suitable to their storage and reproduction. However, contracts that are concluded entirely over private, individual communication (such as e-mails) are exempted. Individually negotiated contracts from persons that are not consumers are not covered by the obligations of the Presidential

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Decree. Therefore, the aforementioned requirements are regarded as jus cogens only in B2C transactions, in contrast to those of Article 4, which must always be applied (Alexandridou 2010).

7.3

Storage and Access to Information

Another important aspect of the use of information society services is the perusing, storage and safety of data collected from consumers by service providers (broadly considered, including e-shops, suppliers and services). Consumers often lack the knowledge and information of how their online transactions function, how transactions are concluded and what finally happens with given information, such as billing, address and preferences. Greek law classifies the above matter as pertaining to the protection of personal data information and privacy. The Hellenic Data Protection Authority (H.D.P.A.) is the competent supervisory body for the safety of users of information society services. The recent Law 4070/2012 implements Directive 2009/136/EC on e-safety and regulates, among other matters, the use of “cookies” by websites (along with Laws 3471/2006 and 2472/1997). A cookie can be defined as a small piece of data that a website asks a user’s browser to store on the computer or mobile device. The cookie allows the website to “remember” the user’s actions or preferences over time; it should not be confused with malicious software, such as spyware or viruses. Cookies can be divided in many different categories, based on the function they perform (WP29 2012). The installation of cookies is primarily allowed only after consent from the user. Pursuant to Article 4 par. 5 of Law 3471/2006, the storage of information or access to stored information at a terminal device is only allowed after consent, after clear, extensive information of the user. Consent is defined pursuant to Article 2(k) of Law 2472/1997 as the free, explicit and specific declaration of will, expressed in definite manner, in full conscience, after the user has been informed about the processing of collected data. Such consent must be given through a positive action, in writing or by technical means (practically, through the user’s browser page), must be accessible at all times and is revoked freely (Article 5 par. 3 Law 3471/2006). Indeed, most internet browser systems allow users to observe any cookies they have agreed to, can delete them easily and also setup their browser’s settings to automatically reject certain cookies (such as cookies collecting data for advertisements) (WP29 2011, 2013). Information must be provided regardless of the consent of the user for the use of cookies. The identity, the reason for the processing, the recipients of the data, the right of access and the right of objection and any subsequent changes are subject to

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the user’s approval.42 An internet service provider or a third party may thus install a cookie only when the user has been informed and agrees to the installation. Consent may be given by adequate technical means such as pop-up windows and once for all cookies of the same provider, or by modifying the browser settings, and can be withdrawn at any time. Certain cookies that are indispensable for the use of a certain webpage are not subject to consent and are installed automatically (Article 4 par. 4 of Law 3471/2006). In most cases, clear icons will appear at the user’s interface notifying about the existence and use of cookies, with a webpage link nearby (named “learn more. . .”) that users can follow in order to learn about what kind of cookie will be installed. A reference in the GTTs would not suffice as clear information. Therefore, the system is considered an “opt-in” system, where users must actively accept the use of cookies on their terminal devices. However, the case of certain websites showing a “banner” which indicates that a continuation of use of the website is considered—implicitly—as consent should hardly be deemed in compliance with the need for explicit action. Even when users do not consent to the use of cookies, they can freely browse the webpage they are visiting, but certain contents might not be accessible (i.e., such as an e-shop or a multimedia service), especially when third-party cookies are involved As the cookie provisions are part of European legislation, European businesses (and businesses targeting EU citizens) are expected to comply. National legislation is applicable to all businesses, either based in Greece, or addressing Greek users. However, courts or competent regulatory authorities have not yet addressed an issue of cookie policy violation. Violations of the provisions set out above may lead to sanctions, either administrative ones (imposed by the DPA) or criminal ones (Articles 21-22 of Law 2472/1997, 15 of Law 3471/2006).

7.4

Consumers in a Digital Age

According to the OECD (2017), in 2015, 25% of Greek consumers made more than half of their purchases online, in comparison to 9% in 2014. Recent studies have shown a steady increase in online transactions. According to the Greek Statistical Authority (2017), more than 36% of consumers made at least one online transaction for goods and services in the first trimester of 2017, which was an increase of 11% in relation to the previous year. Most sought-after goods are clothing and sportswear, electronic devices, travel services (such as tickets and car rentals) and hotel services. The research also showed a favoritism towards Greek businesses, as 84.9% of consumers has made purchases from Greek businesses, while only 30.2% of the sample made a cross-border transaction. Of all consumers, 8.8% faced a difficulty with the transaction, such as fraud or delivery of a defective product.

42

Article 1 of Regulation No. 1/1999 of the HDPA.

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Greek consumers, however, do not show trust in making transactions of higher value; only 9.1% made a transaction over the Internet for a value of 500€ and above and 3.7% of over 1000€. Especially financial transactions are barely made online, as per the study’s result, since consumers purchased financial goods and services sparingly: 0.8% of the total bought shares, bonds or other investment products over the Internet. 3.6% bought insurance goods and services and only 1.4% received a loan or other credit facility. Of the total population of Greece aged 16–74, 49.2% has never made an online transaction. The Consumer Ombudsman, the competent authority for the intermediation in consumer complaints, reports that most problems in online transactions relate to the exercise of the consumers’ right to withdrawal, insufficient pre-contractual information of buyers and the due delivery of products and services (Consumer Ombudsman 2017). There has been a 9% increase, in relation to 2016, of complaints regarding online transactions, with a mediation success rate of 85%. The above information is promising, as increasingly more consumers turn to the Internet for their purchases. The steady rise of digital consumers shows a change in shopping trends and more and more Greeks save time and effort by visiting electronic stores for their needs, as digital literacy and access to networks increase. Codes of conduct for electronic transactions and the effective application of consumer law by the Consumer Ombudsman, before judicial intervention, provide incentives for consumers to make online transactions in a safe and well-regulated environment. The EU’s digital initiative, particularly the harmonization of the supply of digital content and the upcoming e-Privacy regulation, will likely change how consumers feel about their online behavior and promote an increased consumer confidence in the digital.

8 Concluding Remarks Despite some ambiguities of Law 2251/1994, mainly due to the subsequent (and often rushed) harmonization efforts of the Greek legislator, theoretical approaches by scholars to interpretations of the Law’s provisions, significant efforts from consumer associations and consumer protection authorities, as well as a large depository of case law (influenced by the ECJ’s interpretations of the aqcuis), have shaped the Greek regime on consumer protection as a successful tool for safeguarding consumers’ interests. However, there is still room for improvement. European Consumer Protection Law has ensured that the citizens of the EU are among the most protected consumers in the world. It adapts quickly to changes in commercial practices and trends, but still needs to address the challenges of the digital age, promote awareness of consumers’ rights (especially when it comes to the Internet and online services) and reconcile differences in the enforcement of consumer rights (such as potential sanctions). Greek Consumer Protection Law is sure to follow suit.

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Annex: Main Greek Legislation Greek Legislation (Government Gazette no.) Greek Code of Foodstuffs, Beverages and Objects of Common Use (788/Β’/31.12.87) Law 2251/1994 (Α’ 191/16.11.1994) Law 2496/1997 (A’ 87/16.05.1997) Presidential Decree 131/2003 (B’ 116/16.05.2003)

Law 3340/2005 (A’ 257/17.10.2005)

Law 3587/2007 (Α’ 152/10.07.2007)

Law 3606/2007 (A’ 195/17.08.2007)

Law 3844/2010 (Α’ 63/3.5.2010)

Ministerial Decision Z1-699/2010 (B’ 917/23.06.2010)

Law 4070/2012 (A’ 82/10.04.2012)

Incorporating EU Legislation (if any)

Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts Directive 2000/31/EC of the European Parliament and of the Council on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market Directive 2010/73/EU of the European Parliament and of the Council of 24 November 2010 amending Directives 2003/71/EC on the prospectus to be published when securities are offered to the public or admitted to trading and 2004/109/EC on the harmonization of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market Text with EEA relevance Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (‘Unfair Commercial Practices Directive’) Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC Directive 2009/136/EC of the European Parliament and of the Council of 25 November 2009 amending Directive 2002/22/EC on universal service and users’ rights relating to electronic (continued)

272 Greek Legislation (Government Gazette no.)

Ministerial Decision Z1-891/2013 (Β’ 2144/ 30.8.2013)

Law 4438/2016 (A’ 220/28.11.2016)

A. G. Karampatzos and C. A. Kotios Incorporating EU Legislation (if any) communications networks and services, Directive 2002/58/EC concerning the processing of personal data and the protection of privacy in the electronic communications sector and Regulation (EC) No 2006/2004 on cooperation between national authorities responsible for the enforcement of consumer protection laws Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/ EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European Parliament and of the Council Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010 Text with EEA relevance

References Alexandridou E (2010) E-commerce law (Greek and European), 2nd edn. Sakkoulas Publications, Athens Article 29 Working Party (2013) Working Document 02/2013 providing guidance on obtaining consent for cookies, WP 208 Article 29 Working Party (2011) Opinion 15/2011 on the definition of consent, WP 187, 2011 Chasapis C (2015) Thoughts on the harmonization of Greek Law to Directive 2014/17/EC regarding real estate credit contracts to consumers. Efarmoges Astikou Dikaiou kai Politikis Dikonomias 8:714–725 Commission Staff Working Document (2009) Guidance on the Implementation/application of Directive 2005/29/EC on unfair commercial practices, SEC1666 Consumer Ombudsman (2017) National Report 2017 Data Protection Working Party (2012) Opinion 04/2012 on cookie consent exemption Dellios G (2008) Individual and collective consumer protection from the lack of material negotiation of contract terms. Sakoulas Publications, Athens Dellios G (2015) Commentary of Article 2 of Law 2251/1994. In: Alexandridou E (ed) Consumer protection law (European – National), 2nd edn. Nomiki Vivliothiki, Athens, pp 88–169 Delouka-Inglesi K (2014) Consumer law (European and Greek). Sakkoulas Publications, Athens Delouka-Inglesi K (2015) Commentary of Articles 9, 9a – 9i. In: Alexandridou E (ed) Consumer protection law (European – National), 2nd edn. Nomiki Vivliothiki, Athens, pp 554–650 Despotidou A (2015) Commentary of Article 4I of Law 2251/1994. In: Alexandridou E (ed) Consumer protection law (European – National), 2nd edn. Nomiki Vivliothiki, Athens, pp 299–397

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Giovanopoulos R, Eleftheriades N (2015) Commentary of Articles 3, 3a – 3c of Law 2251/1994. In: Alexandridou E (ed) Consumer protection law (European – National), 2nd edn. Nomiki Vivliothiki, Athens, pp 170–264 Greek Statistical Authority (2017) The use of electronic commerce: year 2017, Press Release Karampatzos A (2016) Private autonomy and consumer protection – a contribution to behavioral economic analysis of law. P.N. Sakoulas, Athens Liappis D (2012) Investors’ compensation and capital markets law. Nomiki Vivliothiki, Athens OECD (2017) Competition assessment reviews: Greece 2017. OECD Publishing, Paris Perakis E, Livada C (2015) Commentary of Article 1. In: Alexandridou E (ed) Consumer protection law (European – National), 2nd edn. Nomiki Vivliothiki, Athens, pp 33–87 Tsolakidis Z (2009) Pre-contractual liability in the Civil Code system. Efarmoges Astikou Dikaiou kai Politikis Dikonomias 3:264–277 Valtoudis A (2015) Commentary of Article 7a of Law 2251/1994. In: Alexandridou E (ed) Consumer protection law (European – National), 2nd edn. Nomiki Vivliothiki, Athens, pp 524–526

L’information et la désinformation des consommateurs : Rapport roumain Raluca Bercea et Dan Adrian Cărămidariu

Abstract This chapter analyzes the most important Romanian regulations on the relationship between professionals and consumers, in particular those having as object the pre-contractual information obligation, deceptive trade practices, unfair contract terms and their repression in contracts between professionals and consumers, including those from the problematic field of banking and financial services. The chapter takes into account the case-law of the High Court of Cassation and Justice of Romania, as well as the opinions and criticisms formulated by the national doctrine. In order to be consistent with the other contributions from this section, the national report which constitutes the subject of this chapter closely follows the topics discussed at the congress.

Résumé Le présent chapitre fait l’analyse des plus importantes réglementations de droit roumain relatives aux rapports entre professionnels et consommateurs, en particulier en ce qui concerne l’obligation d’information précontractuelle, les pratiques commerciales trompeuses, les clauses abusives et la répression de celles-ci dans les contrats entre professionnels et consommateurs, y compris dans le domaine sensible des services bancaires et financières. Le chapitre prend en compte la jurisprudence de la Haute Cour de Cassation et Justice de la Roumanie, ainsi que les opinions et critiques formulées par la doctrine nationale. Dans un souci d’uniformité avec les autres contributions de cette même section, le rapport national que fait l’objet de ce chapitre suit de près les questions discutées à l’occasion du congrès.

R. Bercea (*) · D. A. Cărămidariu (*) Université de l’Ouest, Faculté de Droit, Timisoara, Romania e-mail: [email protected]; [email protected] © Springer Nature Switzerland AG 2019 G. Straetmans (ed.), Information Obligations and Disinformation of Consumers, Ius Comparatum – Global Studies in Comparative Law 33, https://doi.org/10.1007/978-3-030-18054-6_7

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1 Les caractéristiques générales du modèle d’information du consommateur Le modèle de consommateur avec qui opère la législation nationale s’appuie sur le modèle de l’économie du marché, le droit national de la consommation prenant comme point de départ les dispositions constitutionnelles selon lesquelles la Roumanie a une économie du marché, basée sur la concurrence et la libre initiative, alors que l’État roumain est un État social qui prend toutes les mesures censées garantir le développement économique et la protection sociale, assurant, à la fois, la liberté du commerce et la protection de la concurrence loyale.1 Ceci étant, le droit national de la consommation, bien qu’impliquant le modèle d’économie du marché fondé sur l’existence d’un homo oeconomicus, qui agit raisonnablement en vue de maximiser son utilité, accepte pourtant que le marché n’est pas infaillible, les instruments du droit de la consommation tendant à corriger certains échecs de celui-ci.2 En même temps, le droit national de la consommation essaie de répondre à des préoccupations de nature sociale, correspondant aux désidératas de l’État social énoncés dans la Constitution: la diminution des coûts engendrés par le comportement des producteurs, mais supportés par la collectivité, et le garantissement du transfert d’une partie du profit de ceux-ci au bénéfice du consommateur, soit une plus juste distribution des bénéfices économiques. Par conséquent, c’est le principe de l’inégalité compensée, à caractère directeur dans la réglementation des rapports entre les professionnels et les consommateurs, qui représente l’élément essentiel du modèle économique appuyant le droit national de la consommation. Cette compensation s’opère, bien évidemment, par des instruments légaux spécifiques, mais aussi par des mesures à caractère administratif prises par l’État, par exemple en matière d’instruction du consommateur, présumé comme étant moins informé que le professionnel qui lui vend des biens ou services (art. 39-41 du Code national de la consommation3). Par contre, le droit interne de la consommation ne comprend pas des références concrètes au modèle économique qui caractériserait le consommateur. La loi présume le modèle de l’économie du marché, basé sur la concurrence et la libre initiative, et accepte que les échecs du marché doivent être corrigés. Sera également présumé que la personne qui consomme des biens et services pour satisfaire ses besoins se trouve dans un rapport d’infériorité économique, donc juridique, qui devrait être corrigé. La législation interne définit le consommateur comme toute personne physique ou tout groupe de personnes physiques constituées dans une association qui agit dans un but qui excède à son activité commerciale, industrielle ou de production, artisanale ou libérale (Ordonnance du Gouvernement no. 21/1992 sur la protection 1

Muraru and Tănăsescu (2008), pp. 1272–1290; Bercea (2011), pp. 34–51. Vasilescu (2006), pp. 1–63; Goicovici (2006), pp. 7–14. 3 La Loi no. 296/2004, republiée dans le Moniteur Officiel de la Roumanie, Première partie, no. 224/22 mars 2008. 2

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des consommateurs4), cette définition étant reprise telle quelle par d’autres actes normatifs spécifiques. Dans la perspective de la législation nationale, donc, ne présentent relevance ni le niveau d’intelligence ou de perspicacité du consommateur, ni son savoir juridique, ni même son pouvoir financier. L’on a, au contraire, affaire à une définition légale objective, qui part du présupposé que le consommateur serait faible et ignorant, qu’il ne saurait connaître les secrets de l’activité du professionnel, ce qui le rendrait crédule et facile à manier par le professionnel. Capable juridiquement, le consommateur subit pourtant une incapacité de facto, l’intervention du législateur étant nécessaire dans le but de surmonter cette incapacité. L’incapacité doit être comprise dans une perspective économique, dans le sens que le consommateur est dépourvu des ressources nécessaires pour négocier avec le professionnel d’une position d’égalité économique, en s’informant en détail sur le contrat qu’il est en train de conclure. Ceci ne veut pourtant pas dire que le consommateur est présumé comme étant complètement ignorant, mais que, concrètement, le consommateur est présumé comme étant une personne moyennement informée, raisonnablement diligente, capable de comprendre les explications qu’on lui offre et de prendre une décision raisonnable sur la base des informations dont il dispose et qu’il peut se procurer des ressources dont il dispose. Dans ce sens, selon l’art. 2 lett. m) de La Loi no. 363/2007 sur le combat des pratiques incorrectes des commerçants dans leurs relations avec les consommateurs et l’harmonisation des réglementations avec la législation européenne sur la protection des consommateurs5, l’on comprend par consommateur moyen « le consommateur considéré comme étant raisonnablement informé, attentif et prudent, compte tenu des facteurs sociaux, culturels et linguistiques ». La définition du consommateur moyen est prise en compte par les juges nationaux qui, dans l’appréciation du comportement du consommateur, se rapportent à ce standard, en l’appliquant compte tenu des solutions proposées en la matière par la Cour de Justice de l’Union Européenne6.

4

Publiée dans le Moniteur Officiel de la Roumanie, no. 212/28 août 1992. Publiée dans le Moniteur Officiel de la Roumanie, Première partie, no. 899/28 décembre 2007. 6 Voir, par exemple, à cet égard, La Haute Cour de Cassation et Justice, la 2e Section Civile, la Décision no. 441/2016 : « Dans l’analyse du caractère certain et sans équivoque de la rédaction de la clause sur la commission de risque et de la possibilité des requérants de la comprendre, le juge doit avoir en vue la notion de consommateur moyen. Prenant comme point de départ la définition donnée, au consommateur moyen, par l’art. 2 lett. m) de La loi no. 363/2007, qui prend en compte le consommateur considéré comme étant raisonnablement informé, attentif et prudent, compte tenu des facteurs sociaux, culturels et linguistiques, la Loi no. 193/2000 réglemente dans son premier article la catégorie des contrats faisant son objet, respectivement tout contrat conclu entre les professionnels et consommateurs pour la vente des biens ou la prestation des services, qui comprendra des clauses claires, sans équivoque, pour la compréhension desquelles les connaissances de spécialité ne sont pas nécessaires. La notion de consommateur moyen peut également être prise en compte dans le droit communautaire de la concurrence. Ainsi, par exemple (CJCE 18 mars 1993), dans l’affaire Yves Rocher, la Cour de Justice a pris en compte les attentes d’un consommateur moyen, communément informé, qui est, raisonnablement, attentif et averti, 5

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Il n’existe d’autres critères opératoires ni dans la réglementation de l’obligation d’information pré-contractuelle ou d’étiquetage des produits ni dans la réglementation des pratiques trompeuses, des clauses abusives ou des ventes à distance, la définition ci-dessus étant, chaque fois, utilisée, sauf pour ce qui est de l’hypothèse du groupe de consommateurs vulnérables pris en compte par l’art. 4 alinéa (2) de la Loi no. 363/2007, dont la vulnérabilité est issue « des raisons d’infirmité mentale ou physique, d’âge ou crédulité », à condition, toutefois, que le professionnel ait raisonnablement pu prévoir le comportement économique du consommateur vulnérable.

2 Les exigences d’information précontractuelle: l’obligation générale d’information 2.1

L’obligation générale imposée aux professionnels de fournir aux consommateurs une information pré-contractuelle

L’art. 3 lett. b) de l’Ordonnance du Gouvernement no. 21/1992 sur la protection des consommateurs et l’art. 27 lett. b) de la Loi no. 296/2004 sur le Code de la Consommation réglementent, d’une manière identique, le droit du consommateur à une information complète, correcte et précise sur les caractéristiques essentielles des produits et services, droit auquel correspond l’obligation corrélative du professionnel de prendre les mesures nécessaires pour assurer l’équilibre spécifique au droit de la consommation, par hypothèse même disproportionné, afin d’informer le consommateur déjà à un moment antérieur à l’accord des volontés. Dans l’hypothèse des acquis des biens, l’art. 14 de la Loi no. 296/2004 consolide le contenu de l’obligation d’information et institue l’obligation de faire parvenir aux consommateurs toutes les informations nécessaires pour l’utilisation, selon leur destination initiale, des biens vendus.

soulignant le lien qui existe entre la correctitude des transactions commerciales et la libre concurrence. Dans le même sens, plusieurs décisions de la Cour de Justice des Communautés Européennes pourront être mentionnées, rendues relativement à des aspects qui concernent la protection des consommateurs, qui utilisent la notion de consommateur dans un sens relevant également pour le droit communautaire des affaires. Ainsi, comme il s’ensuit des jugements rendus par la Cour dans les affaires Langguth (29 juin 1995, C - 456/93), Springenheide (16 juillet 1998, C - 210/1996) et Darbo (4 avril 2000, C - 465/98), le consommateur auquel se réfèrent les dispositions communautaires qui poursuivent l’information adéquate de celui-ci est un consommateur moyen, communément informé, qui est, raisonnablement, attentif et averti. Dans les affaires mentionnées, les considérants des jugements de la Cour visent des personnes physiques. Ainsi, les requérants ont –ils été suffisamment attentifs et avertis lorsqu’ils ont décidé le refinancement aussi bien des cinq crédits antérieurement obtenus d’une autre institution bancaire que du crédit en montant de 403.500 CHF obtenu en 2007 ».

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L’art. 3 lett. b) de l’Ordonnance du Gouvernement no. 21/1992 sur la protection des consommateurs et l’art. 27 lett. b) de la Loi no. 296/2004 sur le Code de la Consommation portent expressément sur l’information du consommateur de manière à permettre à celui-ci de prendre la décision de contracter tout en connaissant les caractéristiques essentielles du produit ou service qu’il a l’intention d’acquérir. Le but déclaré des dispositions légales est la protection du consentement du consommateur lors de l’étape pré-contractuelle, ce qui place naturellement le moment où le professionnel est obligé d’accomplir son obligation d’information avant que l’accord de volontés soit formé. Dans certaines hypothèses, l’information préalable gagne des implications spécifiques à des domaines particuliers de réglementation. Par exemple, vu l’impératif d’assurer une information adéquate, une protection supplémentaire est instituée au bénéfice du consommateur prenant la forme du droit de réfléchir et de se retirer. Des dispositions régissant des contrats spécifiques (l’Ordonnance du Gouvernement no. 106/19997 ou l’Ordonnance du Gouvernement no. 130/20008) assurent au consommateur, pour une durée limitée, la prérogative légale de rétracter son consentement initial. Le droit de réfléchir et de se retirer est, donc, institué pour une durée limitée, lors de laquelle le consommateur a la possibilité de s’assurer des qualités du produit ou du service. Pendant ce délai-là, le consommateur est titulaire d’un droit potestatif portant sur la conclusion définitive du contrat, ou, au contraire, sur la révocation de celui-ci, sans qu’il ait à répondre pour cette décision. L’information des consommateurs sur les produits et services offerts se réalise, obligatoirement, par les éléments d’identification et caractérisation de ceux-ci, qui doivent être inscrits de manière visible, lisible et facile à comprendre, dans une forme qui ne permette qu’ils soient effacés, sans qu’ils soient placés dans des positions obscures, interrompus par des desseins ou images, selon le cas, sur une étiquette ou sur l’emballage de vente ou, encore, dans une carte technique ou par des instructions d’usage qui accompagnent le produit ou le service, selon la nature de celui-ci. Le contenu et la forme des informations transmises sont recouverts par le concept de « formalisme informatif » spécifique au droit de la consommation, destiné à assurer l’intégrité du consentement du consommateur et à rééquilibrer de manière équitable le rapport de forces entre le professionnel et le consommateur. L’existence simultanée d’un support écrit en roumain (posée par l’art. 50 de la Loi no. 296/2004) apparaît comme nécessaire dans le contexte de la réglementation relativement détaillée du contenu minimum des informations qui tombent sous l’incidence de l’obligation d’information.

7

En vigueur du 30 septembre 1999 jusqu’au 12 juin 2014, abrogée et remplacée par l’Ordonnance du Gouvernement no. 34/2014, publiée dans le Moniteur Officiel de la Roumanie, no. 427/11 juin 2014. 8 En vigueur du 2 octobre 2000 jusqu’au 12 juin 2014, abrogée et remplacée par l’Ordonnance du Gouvernement no. 34/2014, publiée dans le Moniteur Officiel de la Roumanie, no. 427/11 juin 2014.

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L’éventuel ajout volontaire, par le professionnel, d’informations supplémentaires à celles, le cas échéant, prévues par la loi

Même si la législation roumaine ne comprend aucune disposition expresse dans ce sens, il est unanimement accepté que le professionnel peut fournir aux consommateurs des informations supplémentaires censées individualiser les produits et services offerts, au point de vue qualitatif. Le plus souvent, les informations supplémentaires sont offertes à travers des signes distinctifs ou symboles aptes à édifier le consommateur sur les caractéristiques distinctives des produits. Par conséquent, donc, l’information supplémentaire est communément fournie par l’apposition de la marque individuelle, des indications géographiques ou de la dénomination d’origine contrôlée, susceptibles de localiser l’origine des produits et des marques de certification. Ces dernières attestent la conformité des produits et services effectuée par un tiers certificateur par rapport à des standards préétablis.

2.3

L’absence de l’information précontractuelle : sanctions, culpa in contrahendo, rapport avec l’autonomie des parties et le pouvoir de négociation dans le système roumain de droit, standard des attentes raisonnables du consommateur

Dans l’hypothèse de l’enfreinte de l’obligation d’informer les consommateurs, l’art. 50 al. (1) lett. d) de l’Ordonnance du Gouvernement no. 21/1992 prévoit une sanction contraventionnelle. La sanction de l’amende, instituée comme sanction principale, peut être complétée par des mesures censées limiter les préjudices engendrés aux consommateurs, tels, par exemple, l’interdiction définitive ou temporaire de commercialiser les produits, le retrait du circuit de la consommation humaine ou la destruction des produits dangereux interdits définitivement à la commercialisation, dans le cas où celle-ci serait l’unique modalité d’enlever le danger. Parmi les hypothèses d’application de ces mesures se retrouvent également les situations où l’obligation d’information préalable a été violée, par exemple si les produits présentent le délai de valabilité/la date de durabilité minimale/la date limite de consommation expiré(e). La sanction contraventionnelle principale peut s’accompagner de sanctions contraventionnelles complémentaires, réglementées par l’art. 56 de l’Ordonnance du Gouvernement no. 21/1992 (la fermeture temporaire de l’unité pour une durée qui ne dépasse pas 6 mois; la fermeture temporaire de l’unité pour une durée entre 6 et 12 mois; la fermeture définitive de l’unité, la suspension ou le retrait définitif, selon le cas, de l’avis, accord ou autorisation d’exercer une activité).

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La responsabilité contraventionnelle n’exclut pas la responsabilité du professionnel pour les dommages causés au consommateur, selon le droit commun. La législation spéciale prévoit toute une série de remèdes applicables dans des situations particulières : à titre d’exemple, (i) selon l’article 10 de L’Ordonnance du Gouvernement no. 34/2014 – qui transpose telles quelles les dispositions pertinentes de la Directive 2011/83/UE – si le professionnel omet d’informer le consommateur de son droit de rétractation, comme l’exige l’article 6, paragraphe 1, point h), le délai de rétractation expire au terme d’une période de douze mois à compter de la fin du délai de rétractation de 14 jours initial. En même temps, si le professionnel a communiqué au consommateur les informations prévues au paragraphe 1 du présent article dans un délai de douze mois à compter du jour où le délai a légalement commencé à courir [les mêmes règles que celle prévues par l’art. 9 alinéa 2 de la Directive s’appliquent à cet égard], le délai de rétractation expire au terme d’une période de quatorze jours à compter du jour où le consommateur a reçu les informations respectives; (ii) la sanction contraventionnelle complémentaire consistant à obliger le professionnel de remettre le contrat en état de conformité avec les dispositions légales dans 15 jours, selon l’art. 88 de l’Ordonnance du Gouvernement no. 50/2010.

2.4

L’existence des règles qui imposent la transparence et la manière dont l’information doit être présentée au consommateur

Les principes de l’obligation d’information s’orientent vers trois standards à respecter cumulativement. D’une part, selon l’art. 44 et l’art. 45 de la Loi no. 296/2004 et, respectivement, selon l’art. 18 et l’art. 19 de l’Ordonnance du Gouvernement no. 21/1992, les informations transmises au consommateur doivent être complètes, étant établis les standards minimum qui doivent être portés à la connaissance des consommateurs. La doctrine nationale a développé ce standard, concluant que les informations qui tombent sur l’incidence de l’obligation de communication au consommateur doivent couvrir aussi bien l’étape précontractuelle que la période d’implémentation et exécution du contrat. Le deuxième standard de la transparence se réfère à l’intelligibilité des informations transmises au consommateur. Selon l’art. 18 et l’art. 19 de l’Ordonnance du Gouvernement no. 21/1992, les informations seront transmises au consommateur de manière visible, lisible et facile à comprendre. La compréhensibilité des informations ne se réfère pas seulement à leur sens grammatical, mais aussi au besoin d’informer le consommateur sur les implications que la conclusion du contrat aura dans son patrimoine. Des applications spécifiques de ce standard sont à retrouver dans l’Ordonnance du Gouvernement no. 50/2010 sur les contrats de crédit de

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consommation9, dans le système de laquelle les informations précontractuelles doivent être fournies par écrit, le professionnel devant utiliser une certaine police (Times New Roman) et une certaine dimension des caractères (12). Enfin, l’information transmise au consommateur doit être correcte et refléter les caractéristiques réelles du produit ou service commercialisé, d’une manière qui ne crée de confusion et qui n’induise en erreur le consommateur, lui permettant de prendre une décision assumée.

2.5

La manière dont les juridictions nationales apprécient les exigences de transparence des informations transmises aux consommateurs

Dans la pratique judiciaire, les exigences de transparence des informations transmises sont analysées par rapport au consommateur moyen, raisonnablement informé, attentif et averti. Egalement, elles sont analysées par rapport à la mesure dans laquelle les informations fournies par le professionnel ont pu assurer une décision informée vu les circonstances personnelles du consommateur. Ainsi, par exemple, seront rejetées les prétentions d’un consommateur qui exerce comme juge et qui prétend ne pas avoir compris les stipulations d’un contrat, qui seraient rédiges dans des termes trop compliqués pour le consommateur moyen. Dans une telle situation, les juridictions retiendront qu’elles ne se trouvent pas devant un consommateur moyen, mais devant un diplômé en droit, qui ne saurait prétendre qu’il ne comprend les conditions dans lesquelles il s’oblige. Les juridictions internes tendent à appliquer de manière extensive les standards de transparence, afin d’assurer une protection accrue au consommateur. Dans ce sens, la pratique judiciaire est constante à mettre à la charge du professionnel la preuve d’avoir accompli de manière satisfaisante son obligation d’information préalable, une clause standard visant cette circonstance et acceptée par le consommateur n’étant pas suffisante à cet égard.

2.6

Les sanctions prévues pour le cas où le professionnel omet de faire parvenir au consommateur une information obligatoire

La réticence du professionnel peut être considérée comme une pratique trompeuse si, le contexte factuel et les moyens d’information utilisés par le professionnel

9 Publiée dans le Moniteur Officiel de la Roumanie, Première partie, no. 389/11 juin 2010. Pour un commentaire sur cet acte normatif, voir Goicovici (2014).

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permettent à celui-ci d’omettre une information essentielle, nécessaire au consommateur moyen pour décider en connaissance de cause, déterminant celui-ci de prendre une décision qu’il n’aurait pas prise autrement, selon les dispositions de la Loi no. 363/2007, auxquelles on fera référence au point no. 3.

2.7 2.7.1

Les conditions particulières d’information des consommateurs concernant les produits alimentaires Les particularités des conditions légales imposées pour l’étiquetage des produits alimentaires

Selon l’art. 52 al. (1) de la Loi no. 296/2004, pour ce qui est des produits alimentaires, le professionnel a l’obligation d’informer le consommateur relativement à la dénomination du produit, la dénomination et/ou la marque du producteur, la quantité et, selon le cas, le délai de valabilité ou la date de la durabilité minimale, la liste d’ingrédients, les éventuels risques prévisibles, le mode d’emploi, de manipulation, de dépôt et maintien, les mentions supplémentaires pour les groupes de produits, d’autres mentions requises par la loi. En règle générale, selon l’art. 17 de la Loi no. 150/2004 sur la sûreté des produits alimentaires et de la nourriture des animaux10, dans l’hypothèse des produits alimentaires, l’exigence de la loyauté des informations transmises s’étend également à la publicité et à tous les moyens d’information mis à la disposition du potentiel consommateur.

2.7.2

Le traitement des techniques manipulatoires de marketing qui exploitent le fait que les consommateurs sont plus faciles à persuader lorsqu’ils ne s’engagent pas à prendre des décisions conscientes, par exemple l’usage de couleurs particulières pour l’emballage

Selon l’art. 34 lett. d) de l’Ordonnance du Gouvernement no. 97/2001, les autorités exécutives nationales ont été mandatées d’adopter des actes normatifs visant à interdire la vente des aliments sous des dénominations, accompagnées d’informations ou présentées de manière à induire en erreur, tout comme à interdire la publicité des produits pour lesquels sont utilisées des présentations graphiques ou des informations susceptibles d’induire en erreur. Puisque les pratiques incorrectes par lesquelles les consommateurs peuvent être induits en erreur diffèrent selon la nature du service ou du produit, des réglementations spécifiques ont été émises pour les diverses catégories dans

10

Publiée dans le Moniteur Officiel de la Roumanie, Première partie, no. 462/24 mai 2004.

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lesquelles ceux-ci peuvent être encadrés (par exemple, l’Ordre du Ministère de l’Agriculture et du Développement Rural no. 1541/1219/433/201411).

2.7.3

L’existence des règles qui indiquent comment les informations relatives aux produits alimentaires doivent être présentées aux consommateurs

Le système national de droit comprend à cet égard des règles spéciales qui diffèrent en fonction de la catégorie d’aliments dans laquelle s’inscrit le produit commercialisé. Par exemple, les règles sur l’étiquetage des produits, qui entrent sous l’incidence de l’Ordre du Ministère de l’Agriculture et du Développement Rural no. 1541/1219/ 433/2014 mentionné ci-dessus, sont décrites en détail dans l’art. 11 de cette réglementation.

2.7.4

L’existence des sanctions à appliquer dans l’hypothèse où un professionnel omet de fournir au consommateur des informations obligatoires

La responsabilité suit, en principe, le régime de droit commun en la matière, soit la responsabilité contraventionnelle du professionnel, à laquelle s’ajoute la possibilité du consommateur d’accéder à des remèdes réparateurs spécifiques à la responsabilité civile.

3 Les pratiques commerciales trompeuses Les actes normatifs nationaux qui sanctionnent les pratiques commerciales trompeuses sont la Loi no. 363/2007 pour combattre les pratiques incorrectes des commerçants envers les consommateurs et pour l’harmonisation des réglementations nationales avec la législation européenne sur la protection des consommateurs12 et, respectivement, la Loi no. 158/2008 sur la publicité trompeuse et la publicité comparative13. Selon l’alinéa (1) de la Loi no. 363/2007, « une pratique commerciale est incorrecte si les conditions suivantes sont cumulativement remplies : a) la pratique est contraire aux exigences de la diligence professionnelle; b) la pratique déforme ou est susceptible de déformer essentiellement le comportement économique du

11

Publié dans le Moniteur Officiel de la Roumanie, no. 393/24 avril 2014. Publiée dans le Moniteur Officiel de la Roumanie, Première partie, no. 899/28 décembre 2007. 13 Publiée dans le Moniteur Officiel de la Roumanie, Première partie, no. 559/24 juillet 2008. 12

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consommateur moyen à qui elle accède ou à qui elle s’adresse ou le comportement du membre moyen d’un groupe lorsque une pratique commerciale s’adresse à un groupe quelconque de consommateurs ». L’alinéa (2) du même texte concerne le groupe vulnérable de consommateurs. Ainsi, « les pratiques commerciales susceptibles de déformer essentiellement le comportement économique d’un groupe vulnérable de consommateurs, clairement identifié, doivent être évaluées dans la perspective du membre moyen du groupe. Le groupe de consommateurs est essentiellement vulnérable à la dite pratique ou au produit auquel celle-ci se réfère pour des raisons d’infirmité morale ou physique, d’âge ou de crédulité, le comportement économique de celui-ci pouvant être raisonnablement prévu par le commerçant. Cette disposition ne porte pas atteinte aux pratiques publicitaires communes et légitimes consistant à faire de déclarations exagérées ou des déclarations qui ne sont pas destinées à être prises comme telles ». Dans le sens de la Loi no. 363/2007, les pratiques commerciales incorrectes sont, en particulier, les pratiques trompeuses et les pratiques agressives. Une pratique commerciale est considérée comme étant une action trompeuse si elle comprend des informations fausses ou, dans toute situation, y comprise de présentation générale, induit en erreur ou est susceptible d’induire en erreur le consommateur moyen si bien que, dans les deux hypothèses, ou bien elle détermine, ou bien elle est susceptible de déterminer le consommateur de prendre une décision relative à une transaction que celui-ci n’aurait pas prise, même si les informations en question sont, en fait, correctes, par rapport à l’un ou l’autre des éléments suivants : (i) l’existence ou la nature du produit; (ii) les principales caractéristiques du produits, telles : la disponibilité, les avantages, les risques, la fabrication, la composition, les accessoires, l’assistance accordée après-vente et l’instrumentalisation des réclamations, le mode et la date de la fabrication ou de la prestation, la livraison, la capacité de correspondre à sa destination, l’utilisation, la quantité, les spécifications, l’origine géographique ou commerciale, les résultats que l’on peut obtenir par son utilisations, les résultats ou les caractéristiques essentiels des tests ou contrôles effectués sur le produit; (iii) la période pour laquelle le commerçant s’engage, les raisons de l’utilisation de la pratique commerciale et la nature de la vente, ainsi que toutes les déclarations et tous les symboles qui induiraient, directement ou indirectement, un lien entre le produit ou le commerçant et une sponsorisation ou approbation; (iv) le prix ou le moyen de calcul du prix ou l’existence d’un avantage spécifique du prix; (v) la nécessité du service, d’une pièce séparée, du remplacement ou de la réparation; (vi) la nature, les compétences et les droits du commerçant ou du représentant de celui-ci, tels : l’identité et le patrimoine, ses qualifications, son statut, autorisation, affiliation ou ses liens, les droits de propriété industrielle, d’auteur ou commerciale, les récompenses et distinctions reçues; (vii) les droits du consommateur, y compris le droit de bénéficier de réparation, remplacement ou restitution du prix suite à la résolution du contrat, tels que prévus par la Loi no. 449/2003 sur la vente des produits et les garanties y associées14 ou encore les risques que le consommateur pourrait courir.

14

Republiée dans le Moniteur Officiel de la Roumanie, Première partie, no. 347/ 6 mai 2008.

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Une pratique commerciale est également réputée comme trompeuse si, étant donné la situation de fait, à savoir toutes les caractéristiques et circonstances de celle-ci, ou bien elle détermine, ou bien elle est susceptible de déterminer le consommateur moyen de prendre une décision relative à une transaction que celuici n’aurait pas prise autrement. Dans cette hypothèse, l’action trompeuse est déterminée par: (i) toute activité de commercialisation concernant le produit, y compris la publicité comparative, créant une confusion avec un autre produit, marque, nom ou d’autres éléments distinctifs d’un concurrent; (ii) la violation par le commerçant de l’obligation prévue dans le code de conduite qu’il s’est obligé de respecter, si (ii1) son engagement ne représente pas une aspiration, étant ferme et pouvant être vérifié; (ii2) le commerçant indique, dans le cadre d’une pratique commerciale, qu’il s’est engagé à respecter le code. Une pratique commerciale est également réputée comme étant une omission trompeuse si, étant donné la situation de fait, à savoir toutes les caractéristiques et circonstances de celle-ci, ainsi que les limites des moyens de communication utilisés pour transmettre l’information, elle omet une information essentielle, dans le contexte, pour que le consommateur moyen prenne une décision en connaissance de cause et, par conséquent, ou bien elle détermine, ou bien elle est susceptible de déterminer celui-ci de prendre une décision relative à une transaction qu’il n’aurait pas prise autrement. Une pratique commerciale est, également, réputée comme étant une omission trompeuse lorsque le commerçant cache ou il offre de manière non claire, inintelligible, ambigüe ou à contretemps une information essentielle ou lorsqu’il n’indique pas l’intention commerciale de sa pratique, si celle-ci ne résulte pas déjà du contexte, et lorsque, dans toute situation, le consommateur moyen est déterminé ou susceptible d’être déterminé de prendre une décision relative à une transaction qu’il n’aurait pas prise autrement. Dans l’hypothèse où les moyens de communication utilisés pour transmettre les pratiques commerciales imposent des limites dans l’espace ou le temps, au moment où l’on déterminera si la pratique a été ou non trompeuse, ces limites seront prises en considération, tout comme les éventuelles mesures prises par le commerçant en vue de mettre l’information à la disposition du consommateur par tout autre moyen. Une pratique commerciale est réputée comme agressive si, étant donné la situation de fait, à savoir toutes les caractéristiques et circonstances de celle-ci, elle limite ou est susceptible de limiter de manière significative la liberté de choix ou le comportement du consommateur relativement au produit, par harcèlement, contrainte, y compris l’usage de la force physique ou l’influence non justifiée, et, par conséquent, elle détermine, ou bien elle est susceptible de déterminer le consommateur moyen de prendre une décision relative à une transaction que celuici n’aurait pas prise autrement. Pour déterminer si une pratique commerciale a recours au harcèlement, contrainte, y compris l’usage de la force physique ou l’influence non justifiée, les éléments suivants seront pris en compte: (i) le moment et l’endroit où la pratique est mise en œuvre, sa nature et/ou sa persistance; (ii) le recours à la menace, à un langage ou comportement abusif; (iii) l’exploitation, en connaissance de cause, par le

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professionnel, de tout malheur ou circonstance particulière d’une gravité propre à altérer le jugement du consommateur, dans le but d’influencer sa décision à l’égard du produit; (iv) tout obstacle non contractuel onéreux ou disproportionné imposé par le professionnel lorsque le consommateur souhaite faire valoir ses droits contractuels et notamment celui de mettre fin au contrat ou de changer de produit ou de fournisseur; (v) toute menace de mesures qui ne sauraient être légalement prises. Dans tous les cas, l’Annexe 1 à la Loi no. 363/2007 comprend une liste de pratiques incorrectes, si bien qu’il n’est plus besoin de vérifier les conditions énoncées pour qu’une pratique soit considérée comme ou bien trompeuse, ou bien agressive. Selon l’art. 15 alinéa (1) de la Loi no. 363/2007, l’utilisation par les professionnels d’une pratique incorrecte est interdite, constitue une contravention et sera sanctionnée par une amende. Les contraventions seront constatées à la requête des consommateurs, des associations qui, selon la loi, y ont un intérêt légitime, ou d’office par les représentants de l’Autorité Nationale pour la Protection des Consommateurs. En infligeant l’amende comme sanction, l’agent qui constate la contravention peut également proposer le sursis de l’activité du professionnel jusqu’à la cessation de la pratique commerciale incorrecte. En infligeant l’amende comme sanction, l’agent qui constate la contravention peut également disposer, comme sanction complémentaire, la restitution du prix du produit ou du service, selon le cas, dans un délai de 15 jours maximum à commencer du jour où le contrevenant aura pris connaissance de l’avis de contravention. Dans le sens de la Loi no. 158/2008 sur la publicité trompeuse et la publicité comparative15, l’on comprend par publicité toute forme de présentation commerciale, industrielle, artisanale ou libérale, dans le but de promouvoir la vente de biens ou services, y compris biens immeubles, droits et obligations. La publicité trompeuse est définie comme toute publicité qui, de quelque manière que ce soit, y compris par le mode de présentation, induit ou est susceptible d’induire en erreur les personnes à qui elle s’adresse ou qui prennent contact avec elle et qui, vu son caractère trompeur, peut affecter le comportement économique de ceux-ci, préjudiciant, donc, ou pouvant préjudicier un concurrent. Enfin, on comprend par publicité comparative la publicité qui identifie explicitement ou implicitement un concurrent, des biens ou services offerts par celui-ci. La Loi no. 158/2008 interdit la publicité trompeuse, la publicité comparative étant permise seulement sous certaines conditions. Pour déterminer si la publicité est trompeuse, l’on doit prendre en considération tous les aspects de celle-ci, notamment toute information que celle-ci comprend relativement à : (i) les caractéristiques des biens et services, telles la disponibilité, la nature, le mode d’exécution, la composition, la méthode, la date de fabrication des biens ou de prestation des services, si ceux-ci correspondent à leur but, destination, quantité, paramètres techniques et fonctionnels, origine géographique ou

15

Publiée dans le Moniteur Officiel de la Roumanie, Première partie, no. 559/24 juillet 2008.

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commerciale, résultats attendus suite à leur utilisation ou résultats et caractéristiques essentielles des tests et contrôles effectués concernant les produits et services; (ii) le prix ou mode de calcul du prix et les conditions dans lesquelles les biens sont distribués et les services prestés; (iii) la nature, les attributions et les droits du professionnel qui a recours à la publicité, tels son identité et ses biens, les qualifications et la détention de ses droits de propriété industrielle, commerciale et intellectuelle, de ses prix et distinctions. La publicité comparative est réputée légale si elle remplit, cumulativement, les conditions suivantes: (i) elle n'est pas trompeuse, selon les dispositions de l’art. 3 lett. b) et de l’art. 5 de Loi no. 158/2008, et selon les dispositions des art. 5-7 de la Loi no. 363/2007; (ii) elle porte sur des biens ou services répondant aux mêmes besoins ou ayant le même objectif; (iii) elle compare objectivement une ou plusieurs caractéristiques essentielles, pertinentes, vérifiables et représentatives de ces biens ou services, dont le prix peut faire partie; (iv) elle ne discrédite ni ne dénigre les marques, dénominations commerciales, autres signes distinctifs, biens, services, activités ou la situation d’un concurrent; (v) dans le cas des produits portant une dénomination d’origine, elle se réfère, cas par cas, aux produits portant la même dénomination; (vi) elle ne profite pas de manière déloyale de la réputation d’une marque, d’une dénomination commerciales ou d’autres signes distinctifs relevant d’un concurrent ou de la dénomination d’origine des produits concurrents; (vii) elle ne crée pas confusion entre les commerçants, à savoir celui qui fait la publicité et un concurrent ou entre les marques, biens, dénominations commerciales, d’autres signes distinctifs, biens ou services appartenant à celui qui fait la publicité et ceux d’un concurrent. La violation par les commerçants des dispositions de la Loi no. 158/2008 constitue une contravention et sera sanctionnée par l’amende entre 3000 et 30000 lei. Le constat de la contravention et l’application de la sanction seront accomplis par les représentants du Ministère des Finances Publiques ou, selon le cas, de l’Autorité Nationale pour la Protection des Consommateurs.

4 Les clauses abusives – le pouvoir de négociation 4.1

Le traitement des termes standards par rapport aux termes négociés individuellement

Le Code civil roumain réglemente expressément aussi bien la notion de « contrat d’adhésion » que la notion de « clause standard ».16 Selon l’art. 1175 du Code civil, un contrat est qualifié comme contrat d’adhésion si ses clauses essentielles sont imposées ou rédigées exclusivement par l’une des

16

Turcu (2011), pp. 124–125, 173–203; Baias et al. (2014), pp. 1303, 1335–1339.

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parties ou suite aux instructions de celle-ci, l’autre partie n’ayant que la possibilité de les accepter comme telles ou de refuser de conclure le contrat. L’art. 1202 du Code civil définit les clauses standard comme étant des stipulations contractuelles préalablement établies par l’une des parties en vue d’un usage général et répété, inclues dans le contrat sans être négociées avec l’autre partie. Selon la réglementation interne, les clauses négociées vont toujours prévaloir sur les clauses standard. Dans l’hypothèse où les clauses standard comprennent des stipulations contractuelles relatives à la limitation de la responsabilité, à l’institution du droit unilatéral de dénonciation ou du droit de surseoir l’exécution des obligations en faveur de la partie ayant formulé les clauses standard ou, encore, des stipulations qui prévoient au détriment de l’autre partie la déchéance de ses droits ou du bénéfice du délai, la limitation du droit d’opposer des exceptions, de restreindre sa liberté de contracter avec d’autres personnes, le renouvellement tacite du contrat, la législation applicable, les clauses compromissoires ou qui dérogent aux normes qui régissent la compétence des juridictions, celles-ci ne sauront produire des effets que dans la mesure où elles sont souscrites et acceptées par l’autre partie. Selon l’art. 1269 du Code civil, les stipulations inscrites dans les contrats d’adhésion seront interprétées à l’encontre de celui qui les a proposées.

4.2

Le pouvoir de négociation du consommateur par rapport au pouvoir du professionnel

Dans son ensemble, le système visant à protéger les consommateurs des clauses abusives s’appuie sur la disproportion d’instruction et de force entre les particuliers et les professionnels, qui projette sur le plan du contrat un déséquilibre significatif entre le pouvoir de négocier les clauses contractuelles, qui, le plus souvent, sont imposées comme telles. C’est cette prémisse que prennent en compte les réglementations nationales visant à sanctionner les clauses abusives. L’art. 2 de la Loi no. 193/2000 sur les clauses abusives dans les contrats conclus entre professionnels et consommateurs17 définit le consommateur comme toute personne physique ou groupement de personnes physiques constitués en associations qui, selon un contrat tombant sous le coup de la présente loi, agissent à des fins qui n'entrent pas dans le cadre de leur activité commerciale, industrielle, de production, artisanale ou libérale. Selon le même texte, le professionnel se caractérise par rapport aux fins commerciales poursuivies. La nature juridique du contrat qui comprend des clauses alléguées comme abusives n’est pas relevante, le législateur mettant l’accent sur la qualité des parties et le mécanisme de formation du contrat. 17

Republiée dans le Moniteur Officiel de la Roumanie no. 556/7 août 2012.

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L’adoption des critères qui portent sur la qualité des parties et la manière dont le contrat a été conclu engendre une présomption relative selon laquelle la convention n’a pas été conclue par des parties se trouvant dans des positions symétriques, mais dans les conditions d’un pouvoir diminué, voire aboli, du consommateur d’influencer le contenu contractuel.

4.3

La charge de la preuve qu’une clause a été individuellement

Selon l’art. 4 alinéa (3) de la Loi no. 193/2000, dans l’hypothèse où le professionnel prétend que l’une ou plusieurs des clauses standard pré-formulées qui composent le contrat ont été directement négociées avec le consommateur, c’est le premier qui a la charge de la preuve. La preuve peut être rapportée par tout moyen permis par la loi, n’étant, en principe, pas suffisants les écrits pré-formulés du professionnel, selon lesquels le consommateur reconnaît, à la conclusion du contrat, que le contrat dans son ensemble a été négocié et qu’il représente sa volonté.

4.4

La contestation du caractère « individuellement négociée » d’une clause. L’appréciation des juridictions

Les juridictions internes ont constamment considéré que l’insertion d’une clause dans une convention, comprenant des mentions sur la négociation de l’une ou plusieurs des stipulations qui la composent, n’est pas en mesure de renverser la présomption du manque de la possibilité du consommateur d’influencer les dispositions contractuelles. Dans ce sens, la Haute Cour de Cassation et Justice a décidé que le caractère négocié d’un contrat de crédit ne pouvait être apprécié en raison de la simple signature du contrat, puisque, dans l’hypothèse de ces contrats, les parties ne se trouvent dans une position d’égalité ni en ce qui concerne leurs savoirs, ni en ce qui concerne leur pouvoir de négociation (Décision no. 3864/2014). Par une décision récente, la Haute Cour de Cassation et Justice a apprécié que la présomption relative du caractère abusif ne pouvait être renversée que par l’intermédiaire des preuves écrites fournies par le professionnel qui attestent le caractère négocié des clauses et la possibilité directe du consommateur d’en influencer le contenu (Décision no. 992/2014). De même, la pratique judiciaire a apprécié que les explications ou discussions éclaircissantes en marge du contenu des clauses contractuelles ou la circonstance que le professionnel avait offert au consommateur un délai de réflexion sur celles-ci n’y conféraient pas un caractère négocié.

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L’exclusion des « clauses essentielles » du test du caractère abusif

L’art. 4 alinéa (6) de la Loi no. 193/2000 exclut, en règle générale, du test du caractère abusif les clauses qui portent sur la définition de l’objet principal du contrat, ainsi que les clauses associées aux conditions du paiement, d’une part, ou aux services et produits offerts en échange, de l’autre. L’exclusion des clauses réputées pour essentielles du contrôle institué par le système de protection du consommateur est conditionnée par les exigences de compréhensibilité. Autrement dit, dans la mesure où les clauses, y compris celles qui portent sur l’objet principal du contrat, ne sont pas exprimées dans un langage facilement intelligible, elles peuvent être considérées comme abusives.

4.6

La transparence des clauses contractuelles (essentielles)

La problématique du contenu de l’exigence d’intelligibilité des clauses relatives à l’objet du contrat a fait l’objet d’une analyse développée aussi bien par les juridictions internes que par la Cour de Justice de l’Union Européenne. Les juridictions ont apprécié que, même si la prémisse d’établir le caractère non équivoque et intelligible des clauses du contrat était que celles-ci soient correctes au point de vue grammatical, cette circonstance de fait n’était pourtant pas suffisante. Le but de l’obligation d’informer le consommateur consiste à assurer la possibilité de celui-ci d’apprécier y compris les conséquences que le contrat ou certaines de ses clauses engendreront dans son patrimoine, sens dans lequel la doctrine et la jurisprudence apprécient que les exigences de compréhensibilité visent non seulement la correctitude grammaticale des termes utilisés pour la rédactions des clauses, mais aussi la mesure dans laquelle le consommateur se voit assurer les moyens par lesquels il peut se représenter les effets économiques du contrat. D’autre part, le degré de transparence des clauses essentielles est analysé in concreto, selon des circonstances factuelles. Conformément à l’art. 4 alinéa (5) de la Loi no. 193/2000, la nature abusive d’une clause contractuelle sera évaluée compte tenu de la nature des produits et services faisant l’objet du contrat au moment où celui-ci a été conclu, de tous les facteurs ayant déterminé la conclusion du contrat, des autres clauses du même contrat et des clauses des autres contrats dont celui-ci dépend. Dans cette perspective, même en l’absence d’une réglementation expresse qui classifie les degrés de vulnérabilité du consommateur et lui assure une protection différenciée selon ce critère, l’analyse des exigences de transparence tiendra, bien évidemment, compte d’une telle circonstance. Puisque, en principe, la sanction de l’annulation des clauses essentielles du contrat devrait être évitée, vu les difficultés de la mise en pratique qu’une telle sanction suppose, et parce que une telle mesure placerait, en réalité, le consommateur, dans une position encore plus difficile si les effets du contrat

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cessaient de manière anticipée, il est généralement accepté que la sanction la plus juste serait l’interprétation d’une telle clause au bénéfice du consommateur. Etant donné que la loi interdit expressément l’insertion par les professionnels des clauses abusives dans les contrats que ceux-ci utilisent dans l’exercice de leur activité professionnelle, le consommateur se verra également reconnaître le recours en réparation du préjudice subi par l’exécution dans des conditions défavorables d’une telle clause, par l’effet même d’un recours visant à attirer la responsabilité du professionnel.

5 Les règles particulières: le consommateur de services financiers 5.1

La différence

Les impératifs tels la clarté, la compréhensibilité, le sérieux, la capacité de comparer l’information dérivent de l’évolution du comportement du consommateur de services et du consommateur de biens physiques. La diversification des moyens de communication et de réception rapide de l’information ont rendu les consommateurs de services et biens physiques conscients que les impératifs mentionnés devaient en fait s’appliquer dans tous les secteurs de consommation. L’application récente de toutes ces mesures dans le secteur financier de la consommation a été déterminée aussi bien par des facteurs sociaux des plus variés, tels: (i) l’accroissement de la demande pour les produits d’usage prolongé (en particulier les immeubles d’habitation et les voitures); (ii) le manque des ressources propres intégrales de financement; (iii) l’augmentation relativement rapide du prix de ces produits; (iv) la tendance des habitants d’acquérir en propriété leurs immeubles d’habitation, au détriment des locations; (v) les politiques de marketing des financeurs, que par des facteurs conjecturaux, tels (i) le développement personnel, suite aux périodes de travail passées à l’étranger; (ii) l’apparition de besoins non satisfaits; (iii) un comportement d’achat impulsif. Tous ces facteurs réunis, la disponibilité des financeurs est apparue aussi, générant des rapports complexes et problématiques entre ceux-ci et les consommateurs. Dans l’évolution de l’application des mesures spécifiques, plusieurs étapes sont à distinguer, à commencer par une prise de conscience réduite de ces mesures, à une époque où les consommateurs étaient peu intéressés par leur protection, accordant attention plutôt à leur but final, l’acquisition des biens. Même si la législation interne avait, déjà en 2004, mis à la disposition des consommateurs un Code de la Consommation, les consommateurs de produits financiers ont été peu conscients des éléments de protection, voire des droits qui leur ont été ainsi conférés. Ce ne sera qu’au moment de la crise économique de 2008 que les consommateurs ont commencé à véritablement prêté attention aux éléments de protection mentionnés, devenant plus sélectifs dans leurs choix. Quant au secteur

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financier, celui-ci est devenu l’un des secteurs le mieux réglementés pour ce qui est de la protection des consommateurs.18 Néanmoins, il serait correct d’affirmer que le système actuel de mesures visant le secteur financier représente, en fait, le résultat du constat d’une insuffisante protection des consommateurs face à la diversité de leurs besoins et des types différents des techniques de marketing utilisées par les financeurs.

5.2

Les effets des éventuelles critiques formulées par la doctrine

Les critiques issues du milieu juridique représentent un élément important dans l’évolution des moyens de protection des consommateurs de produits financiers. Il est de notoriété que le droit national relatif à la protection des consommateurs de produits financiers s’explique, en principal, comme résultat des critiques des spécialistes en droit sur la manière peu transparente dont les informations difficiles à comprendre par les consommateurs – par exemple, l’évolution des intérêts, la marge fixe, certaines commissions - étaient présentées ou fournies.19 En réponse à ces critiques, l’évolution législative s’est poursuivie dans le sens que la négociation porte surtout sur l’explication et la compréhension détaillée des termes contractuels, la négociation de toutes les clauses contractuelles, y compris des clauses relatives au prix du contrat qui, antérieurement, étaient peu négociées, sur les délais effectifs de réflexion. Ainsi, sont essentielles l’explication et la compréhension des conséquences économiques qu’engendrent les différentes clauses contractuelles sur le patrimoine du consommateur. Par exemple, l’explication du mode de calcul du taux d’intérêt annuel effectif permet au consommateur de comprendre le coût total du crédit. Par conséquent, la négociation actuelle permet de rapprocher les contrats ayant comme objet les services financiers des contrats négociés, ceux-ci n’étant plus perçus comme des contrats d’adhésion. Nous n’avons pas identifié des critiques selon lesquelles les informations offertes aux consommateurs seraient plus compréhensives ou élaborées, surtout en raison du fait que le système national est en train de traverser une étape lors de laquelle les rapports entre les professionnels et les consommateurs de services financiers sont en train de s’améliorer, suite à une époque où les premiers avaient été accusés d’avoir de manière répétée enfreint leurs obligations de protéger les consommateurs.

18 19

Mihali-Viorescu (2015). Piperea (2018).

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Les médias ont exprimé des opinions relatives à la nécessité d’une meilleure communication20 entre les professionnels et les consommateurs, si bien que plusieurs mesures ont été prises à cette fin. Selon l’Ordre no. 433/2009 relatif aux mesures d’information des consommateurs émis par l’Autorité Nationale pour la Protection des Consommateurs, les opérateurs économiques sont obligés d’afficher, dans un endroit visible dans les lieux commerciaux, ou, selon le cas, les lieux de prestation de services, une annonce comprenant le numéro de téléphone TEL INFO – CONSUMATOR: 0800 080 999 – ligne téléphonique d’appellation gratuite, ainsi que les adresses, les numéros de téléphone/fax et les adresses de e-mail des commissariats départementaux pour la protection des consommateurs ou du Commissariat pour la Protection des Consommateurs de Bucarest, auxquels se rattache l’opérateur commercial. En matière des services financiers, pour une meilleure information des consommateurs sur la possibilité de recourir à des modalités alternatives de solution des litiges, par l’intermédiaire de SAL-Fin21, les entités autorisées, réglementées et/ou surveillées par l’Autorité de Surveillance Financière, ont l’obligation d’afficher à leur siège et sur leurs web sites des informations relatives à la possibilité de solutionner les litiges par l’intermédiaire de SAL-Fin22. Plus précisément, le consommateur sera informé de son droit d’avoir recours à une solution alternative du litige et sur les conditions d’un tel recours, selon le Règlement no. 4/2016 de l’Autorité de Surveillance Financière23 et l’Ordonnance du Gouvernement no. 38/201524. La nécessité d’identifier des méthodes d’information intelligentes ou mieux dirigées vers le consommateur représente un désidérata permanent, étant utilisés, dans ce but, tous les moyens classiques et modernes d’information. Tels seront, par exemple, les notifications communiquées par les services postaux classiques, les communications envoyées par la poste électronique, les SMS (services de messages courts), la correspondance par les interfaces électroniques les plus diverses (le compte personnel du type « Homebank »).

20

http://www.ziuaconstanta.ro/comunicate-de-presa/institutii-mass-media-comunicate/legeaprotejeaza-consumatorii-de-produsele-defecte-dar-o-informare-mai-buna-este-necesara-40285. html. [consulté le 30 septembre 2018]. 21 L’entité nationale de règlement alternatif des litiges dans le domaine financier non bancaire. Sur l’efficacité de ces procédures, voir Popa (2016), pp. 84–97. 22 http://www.salfin.ro/2016/07/22/informarea-consumatorilor-de-catre-entitatile-autorizatereglementate-sisau-supravegheate-de-catre-a-s-f. [consulté le 30 septembre 2018]. 23 Publié dans le Moniteur Officiel de la Roumanie no. 706/12 septembre 2016. 24 Publié dans le Moniteur Officiel de la Roumanie no. 654/28 août 2015.

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6 Les règles concernant un domaine particulier : le consommateur en milieux électronique 6.1

Les éventuelles dérogations des conditions imposées aux ventes s’adressant consommateurs off line

Le principe applicable à tous les types de vente est consacré par l’art. 2 alinéa 1 c) de l’Ordonnance du Gouvernement no. 99/2000 republiée25, ayant pour but l’information correcte et la protection des intérêts des consommateurs, respectivement la possibilité d’assurer les produits et les services sur le marché de voisinage de ceux-ci. Selon l’art. 34 de l’ l’Ordonnance du Gouvernement no. 99/2000, la vente à distance est une vente au cour de laquelle l'acheteur et le vendeur ne se rencontrent pas physiquement, réalisée suite à une offre de vente adressée au consommateur par le professionnel qui utilise, pour la conclusion du contrat, exclusivement des techniques de communication à distance. La vente on line est réputée vente à distance. Selon l’art. 35 de la même loi, la vente directe (off line) représente la pratique commerciale par laquelle les produits ou les services sont offerts par le commerçant directement aux consommateurs, en dehors des espaces de vente en détail, par l’intermédiaire des vendeurs directs, qui présentent les produits et les services offerts. La Loi no. 449/2003 sur la vente des produits et les garanties y associées26, republiée, n’institue pas des obligations spécifiques aux divers types de ventes, sauf en ce qui concerne les produits vendus aux enchères, hypothèse où la vente ne saurait être que directe, les mesures de protection des consommateurs ne s’appliquant pas. L’Ordonnance d’urgence du Gouvernement no. 34/2014 sur les droits de consommateurs dans les contrats conclus avec les professionnels et pour la modification et complétion de certains actes normatifs27 établit des normes de protection du consommateur (informations destinées aux consommateurs, le droit de retrait des contrats à distance ou des contrats conclus hors établissements commerciaux) qui protègent en particulier les consommateurs ayant conclu des contrats on line, sans pour autant déroger des principes régissant les obligations des professionnels des contrats off line. Par exemple, cette ordonnance interdit aux commerçants d’imposer des conditions qui pourraient décourager le client d’exercer son droit de se retirer du contrat (en retournant le produit). Pour conclure, l’on peut affirmer que les typologies différentes des ventes on line et off line ont déterminé la réglementation des modalités en quelque mesure différentes de protection (par exemple, en ce qui concerne l’obligation de notifier

25

Publié dans le Moniteur Officiel de la Roumanie no. 603/31 août 2007. Republiée dans le Moniteur Officiel de la Roumanie, Première partie, no. 347/6 mai 2008. 27 Publiée dans le Moniteur Officiel de la Roumanie, no. 427/11 juin 2014. 26

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les autorités), mais sans des conséquences particulières sur l’impact dans la protection des consommateurs. Il n’existe, donc, pas des différences substantielles entre les obligations d’information dans l’hypothèse des ventes online et, respectivement, offline, mais seulement des types procéduraux différents, adaptés au spécifique de chacune des variétés de commerce. Selon nous, les attentes raisonnables aussi bien des consommateurs que de l’autorité de surveillance de la protection des consommateurs bénéficient d’un cadre législatif adéquat à la dynamique et au spécifique actuels du commerce. Les particularités des ventes on line ont engendré la nécessité de protéger le consommateur qui, en principe, ne peut voir ou tester les produits avant l’achat, à la différence de la vente off line. Cette réalité a demandé au législateur de prendre des mesures assurant au consommateur la possibilité de retourner le produit, sans limitations injustifiées ou abusives, imposées par le professionnel. Mais il est incontestable que l’activité commerciale on line bénéficie d’une vitesse et d’une capacité d’innovation et de développement qui ne sont nullement propres au commerce off line et impliquant une mise à jour permanente des méthodes de protection du consommateur. C’est à ces buts qu’ont su répondre les modifications législatives récentes du système national de droit.

6.2

La limite des attentes du consommateur raisonnable

Le droit interne n’établit ni la limite des attentes raisonnables du consommateur, ni le degré de protection sollicité par les consommateurs, ceux-ci relevant de la compétence de l’autorité administrative centrale. La Gouvernement de la Roumanie, par l’Autorité Nationale pour la Protection des Consommateurs, représente l’autorité qui agit pour la prévention et le combat des pratiques portant atteinte à la vie, santé, sécurité et aux intérêts économiques des consommateurs.

6.3

L’information du consommateur sur ce à quoi il consent

La Loi no. 677/2001 pour la protection des personnes quant au traitement des données à caractère personnel et à la libre circulation de ces données ne saurait légitimer toute forme de collection, utilisation, dévoilement des données personnelles. Le consommateur doit être informé de manière bien précise sur l’objet de son consentement. Tout traitement des données à caractère personnel, à l’exception de quelques hypothèses où le traitement est expressément interdit, peut être effectué seulement si la personne visée y avait consenti de manière expresse et sans équivoque, ceci représentant le principe fondamental en matière de protection des données à caractère personnel. Néanmoins, il existe des situations où le consentement n’est

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pas nécessaire, celles-ci devant pourtant être justifiées par une nécessité d’intérêt publique ou provenant d’actes juridiques qui impliquent la partie dont les données ont été traitées. En particulier, le consommateur doit être informé de ce que les données à caractère personnel faisant l’objet du traitement seront conservées dans une forme qui permette l’identification des personnes visées pendant le temps strictement nécessaire à l’accomplissement de l’objectif qui était poursuivi lors de leur collecte. La conservation des données pour une durée plus étendue, dans des buts statistiques ou des données présentant un intérêt historique ou scientifique se fera en respectant les garanties prévues pour le traitement des données à caractère personnel par les normes régissant ces domaines et uniquement pour la période nécessaire à l’accomplissement de ces objectifs. La personne auprès de laquelle sont recueillies des données à caractère personnel la concernant est informée, sauf si elle l’a été au préalable, par le responsable du traitement ou son représentant: de l’identité du responsable du traitement et, le cas échéant, de celle de son représentant; de la finalité poursuivie par le traitement auquel les données sont destinées; du caractère obligatoire ou facultatif des réponses; des conséquences éventuelles, à son égard, d’un défaut de réponse; des destinataires ou catégories de destinataires des données; des droits légaux qu’elle tient des dispositions de la réglementation en particulier un droit d’accéder aux données, un droit de les rectifier et un droit de s’opposer à leur utilisation. Pour se voir protéger ses données personnelles, toute personne visée a le droit d’obtenir du responsable du traitement, sur demande et gratuitement pour une sollicitation par année, la confirmation que les données la concernant son ou ne sont pas traitées par celui-ci. En ce qui concerne les données enregistrées de manière illégale, aucune négociation entre le consommateur et l’opérateur ne serait possible, ce dernier étant obligé par la loi de bloquer, supprimer ou rendre anonymes les données dont le traitement n’est pas conforme. Toute personne a le droit de s’opposer, à tout moment, pour des motifs bien fondés et légitimes ayant à voir avec sa situation particulière, au traitement de ses données, sauf si celui-ci répond à une obligation légale. En cas d’opposition justifiée, le traitement ne pourra plus viser les données en question. La personne visée a le droit de s’opposer à tout moment, gratuitement et sans aucune justification, à ce que les données la concernant soient traitées dans le but de marketing direct, au nom de l’opérateur ou d’un tiers, ou qu’elles soient dévoilées à des tiers dans un tel but. Selon la Loi no. 506/2004 sur le traitement des données à caractère personnel et la protection de la vie privée dans le domaine des communications électroniques, le consentement de tous les visiteurs du web-site est requis avant l’envoi de cookies dans les ordinateurs de ceux-ci. En soi, le cookie ne sollicite pas de renseignements à caractère personnel en vue d’utilisation et, dans la plupart des cas, n’identifie pas personnellement les usagers d’internet. Par conséquent, dans la perspective du traitement des données à caractère personnel, l’expéditeur de cookie ne saurait être assimilé à un opérateur de données personnelles. Le professionnel peut prouver que l’usager a accepté la politique de cookies faute de désactiver ceux-ci.

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7 Le modèle d’information sous pression et la question de la désinformation La législation nationale actuelle ne s’est pas préoccupée de protéger le consommateur d’un surplus d’informations par lesquelles le professionnel tenterait, en fait, de tromper le consommateur, une telle hypothèse pouvant, en principe, être couverte par la législation en vigueur mentionnée ci-dessus. Le droit national de la consommation ne comprend pas de normes qui réglementent le fait de désinformer le consommateur suite au surplus d’informations. La législation en vigueur sanctionne aussi bien l’omission du professionnel de mettre à la disposition du consommateur des informations essentielles que sa tentative de créer une confusion dans l’esprit du consommateur pour que celui-ci prenne une décision qu’il n’aurait pas prise autrement. Néanmoins, la loi ne mentionne pas parmi les actions du professionnel susceptibles d'être qualifiées pour trompeuses la mise à disposition d’une quantité trop importante d’informations. En théorie, au moins, il existe les prémisses qu’un tel comportement soit encadré comme manœuvre trompeuse, en vue de la législation en vigueur, s’il a engendré des conséquences dommageables pour le consommateur.

8 D’autres observations pertinentes Les mesures éducatives que la loi prévoit comme une obligation incombant à l’Etat par ses autorités compétentes, soit l’Autorité Nationale pour la Protection des Consommateurs, la Banque Nationale de la Roumanie ou l’Autorité pour la Surveillance Fiscale, ainsi que les associations des consommateurs, complètent les normes juridiques incidentes en la matière, mais il n’existe pas assez de données permettant à conclure sur leur effectivité. De manière empirique, l’on peut constater que, suite à la crise économique de 2008 – 2009 et ultérieurement, les institutions de crédit sont devenues plus circonspectes et les consommateurs ont évolué au point de vue de leur éducation. En général, l’Autorité Nationale pour la Protection des Consommateurs organise des sessions ayant pour but d’informer et d’éduquer les consommateurs selon les lignes directrices établies au niveau européen par le DG Justice et Consommateurs de la Commission Européenne. En ce qui concerne l’utilisation des nouvelles technologies et des nouveaux instruments numériques, par exemple en matière de crowd lending ou de crowd funding, tout comme l’utilisation des technologies du type blockchain et des contrats smart28, le législateur roumain reste, pour l’instant, dans l’expectative. Les raisons de cette réserve en sont, d’une part, le degré faible de pénétration des tels instruments

28

Kulms (2017), pp. 53–67.

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et technologies en Roumanie et, d’autre part, l’absence d’une réglementation unitaire au niveau de l’Union Européenne, qui soit transposée en Roumanie ou qui, éventuellement, serve pour source d’inspiration au législateur national. Par conséquent, il manque, pour l’instant, les initiatives nationales – qu’elles soient législatives ou doctrinales – qui traitent des questions soulevées par le développement des nouvelles technologies informationnelles.

Références bibliographiques Baias F, Chelaru E, Constantinovici R, Macovei I (2014) Noul Cod civil. Comentariu pe articole, 2d edn. Editura C. H. Beck, Bucharest Bercea L (2011) Fundamentele constituționale ale protecției consumatorului. Pandectele Române 12:34–51 Goicovici J (2006) Dreptul consumației. Editura Sfera Juridică, Cluj-Napoca Goicovici J (2014) Creditele pentru consum și de investiții imobiliare. Editura C. H. Beck, Bucharest Kulms R (2017) Multifinanțarea sau crowdlending-ul – o alternativă la banking. Revista Română de Drept Privat 2:53–67 Mihali-Viorescu L (2015) Clauzele abuzive în contractele de credit. Editura Hamangiu, Bucharest Muraru I, Tănăsescu ES (2008) Constituția României. Comentariu pe articole. Editura C. H. Beck, Bucharest Piperea G (2018) Protecția consumatorilor în contractele comerciale. Editura C. H. Beck, Bucharest Popa F (2016) Reprezintă mecanismele instituite prin Ordonanța Guvernului nr. 38/2015 un remediu efectiv al supraîndatorarii consumatorului român de credite? Revista Română de Drept al Afacerilor 5:84–97 Turcu I (2011) Noul Cod civil republicat, 2d edn. Editura C. H. Beck, Bucharest Vasilescu P (2006) Consumerismul contractual. Repere pentru o teorie generală a contractelor de consum. Editura Sfera Juridică, Cluj-Napoca

Information Obligations and Disinformation of Consumers: Polish Law Report Monika Namysłowska and Agnieszka Jabłonowska

Abstract The chapter discusses the Polish legal framework, which aims to empower consumers through information and protect them against disinformation. It presents the perspective of one of the Central and Eastern European countries, in which the development of consumer law, for the most part, took place after the economic and political transformation post-1989 and was profoundly affected by the later EU accession. The chapter examines national legal provisions implementing key European directives on consumer protection such as Directive 93/13/EEC on unfair terms in consumer contracts, Directive 2005/29/EC concerning unfair business-to-consumer commercial practices and Directive 2011/83/EU on consumer rights and sheds light on the relevant enforcement practice. It draws attention to the instances, where applicable domestic law goes beyond or departs from the European model, beginning with the definition of a ‘consumer’ set out in the Polish Civil Code. The discussion of the crosscutting issues, such as pre-contractual disclosure duties and transparency in advertising, is subsequently complemented with the sectorspecific insights on financial and digital markets.

1 General Characteristics of the Consumer Information Model 1.1

Introductory Remarks

Polish tradition of consumer protection is, for historical reasons, considerably less established compared to the countries, which joined the European Union prior to 2004, not to mention its founding members. Although instances of transactional imbalance had already been discussed in the early 1980s, the need for a more systematic framework of consumer protection was recognized only after the political M. Namysłowska (*) · A. Jabłonowska University of Łódź, Department of European Private Law, Łódź, Poland e-mail: [email protected]; [email protected] © Springer Nature Switzerland AG 2019 G. Straetmans (ed.), Information Obligations and Disinformation of Consumers, Ius Comparatum – Global Studies in Comparative Law 33, https://doi.org/10.1007/978-3-030-18054-6_8

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and economic transformation from 1989 onwards.1 Critical from this point of view was the adoption of the Constitution of 1997,2 in which the protection of consumers from activities threatening their health, privacy and safety and from dishonest market practices was identified as a task of public authorities. Over subsequent years reform measures were introduced in order to align national framework with international— particularly European—standards.3 Up until today the law of the European Union remains of principal relevance to the Polish consumer protection system, even though several independent initiatives were also recently developed at the national level.4 Consumer law puts pressure on the fundamental distinction between private and public law, on which many continental legal systems, including the Polish one, traditionally rely. Special treatment of business-to-consumer (B2C) relationships does not sit easily with the underlying assumptions of the civil law, in which all legal subjects are supposed to be placed on equal legal footing. Certain protective adjustments to this general model have nevertheless been accepted due to a perceived factual inequality of consumers and traders.5 Rules on consumer information, regarded as least intrusive to the traditional private law method,6 are among key measures employed by the legislator in order to re-establish the contractual balance. At the same time, an essentially market-related approach of the EU consumer law has not been without effect on the national legal framework. From this perspective, consumer’s ability to take informed transactional decisions is recognized as vital to the proper functioning of the market economy.7 Besides the substantive level, economic orientation of the Polish consumer law is also visible at the enforcement stage. It is worth noting that the relevant public authority, the President of the Office of Competition and Consumer Protection

See generally: Łętowska (2002), pp. 2–10. Article 76 of the Constitution of the Republic of Poland (Konstytucja Rzeczypospolitej Polskiej) of 2 April 1997, Dz.U. 1997 nr 78 poz. 483. 3 Implementation of a considerable body of consumer law directives was a condition for Poland’s accession to the European Union in 2004; Gnela (2013), p. 56. 4 As evidenced by the adoption of the Act of 5 August 2015 amending the Act on competition and consumer protection and other legal acts (Ustawa o zmianie ustawy o ochronie konkurencji i konsumentów oraz niektórych innych ustaw), Dz.U. 2015 poz. 1634, which entered into force in 2016, and the Act of 16 September 2011 on the protection of the rights of the buyer of a residential unit or a single family home (Ustawa o ochronie praw nabywcy lokalu mieszkalnego lub domu jednorodzinnego), Dz.U. 2016 poz. 555 (codified version). See generally: Piszcz and Namysłowska (2016) and Strzelczyk (2013). 5 See e.g. judgment of the Court of Appeals in Warsaw of 28 April 2015 (VI ACa 775/14). 6 The right to be informed might, in particular, be aligned with the general principles guiding the performance of contractual obligations set out in Article 354 of the Civil Code, see: Act of 23 April 1964—Civil Code (Kodeks cywilny), Dz.U. 2017 poz. 459 (codified version); Pachuca-Smulska (2013), p. 44. 7 See e.g. judgment of the Supreme Court of 4 March 2014 (III SK 34/13). 1 2

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(President of UOKiK), is responsible not only for the protection of consumers, but also of the competition. On a more general note, the importance of public enforcement in the analysed field is one of the remarkable particularities of the Polish framework and will be addressed in more detail further below.

1.2

Consumer Definition

A definition of consumer, which provides a benchmark for most national acts referring to that category, is enshrined in Article 221 of the Polish Civil Code. It defines consumer as a natural person who performs a legal act with a trader for purposes not directly related to his or her business or professional activity. The definition is therefore composed of four elements. It is, firstly, limited to natural persons, secondly, linked to the performance of a legal act, thirdly, that legal act needs to remain in a direct connection to a particular economic role played by the person at hand, and, finally, it needs to have a trader as its addressee. Before reaching its current wording, consumer definition applied by the Polish legislator used to leave more room for interpretation. For example, a definition laid down in the old Article 384 §3 of the Civil Code simply referred to ‘a person’ without excluding legal persons from its scope. The provision was, however, only applicable for a very short time and was eventually repealed before Poland’s accession to the EU, as it was feared that a broader consumer notion—and thus a broader scope of consumer protection—could adversely affect the position of Polish traders in the internal market.8 Similar considerations could have led the national legislator to opt against the extension the consumer notion to non-governmental organisations or to micro-, small- and medium-sized enterprises, even though such a possibility is often left open by the EU law.9 Consumer notion is furthermore determined by the personal features of consumer’s counter-party—the trader. Interestingly, this additional criterion, which further restricts the consumer definition, was only introduced in 2014.10 The respective amendment was, nevertheless, merely a codification of the otherwise established practice.11 The object-related element of the consumer definition, namely reference to a ‘legal act’ (czynność prawna), has recently sparked some debate in the context of 8

Pajor (2014), p. 254. See e.g. recital 13 of Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/ 44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European Parliament and of the Council (Consumer Rights Directive) [2011] OJ L304/64. 10 The amendment was introduced together with the adoption of the Act of 30 May 2014 on consumer rights (Ustawa o prawach konsumenta), Dz.U. 2017 poz. 683 (codified version). 11 See e.g. judgment of the Supreme Court of 13 June 2012 (II CSK 515/11); Sokołowski (2012), pp. 116–117. 9

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insurance contracts. In a 2015 resolution, the Polish Supreme Court held that a party injured in a car accident and claiming compensation from the insurer based on the agreement concluded by the latter with the injuring party, does not perform a legal act towards the insurer and therefore cannot benefit, at least not directly, from enforcement actions carried out by the President of UOKiK.12 It is hardly objectionable, however, that the consumer protection authority, as well as common courts in the private enforcement procedure, may conduct proceedings related inter alia to misleading advertising, whereby similarly no legal acts between traders and consumers are performed.13 The above-cited resolution might, therefore, not be the most representative example of the Supreme Court’s jurisprudence. Greater significance should rather be attached to the last, functional, element of the consumer definition identifying the purpose of the legal act as not being directly related to one’s business or professional activity. The requirement of a ‘direct’ connection does not follow immediately from the corresponding European legislation and provides national judges with a wider margin of discretion.14 As such, it allows the courts to take mixed-purpose contracts into account, which remains in line with the current European tendency.15 At the same time, however, application of the discussed criterion also leads to controversies, such as in the recent case concerning the status of investors in a foreign exchange market.16 An amendment of the direct connection requirement was discussed as part of the Civil Code reform, but was eventually rejected.17 Overall, despite the existence of a codified definition, personal scope of consumer protection in Poland continues to be varied and depends on the nature and scope of protection, which the legislator aimed to provide for a given situation.18 This differentiation may result from the interpretation of constitutive elements of the consumer definition or from a particular consumer model applied in the case at hand (see below). The use of a different consumer definition might furthermore be mandated under the applicable sector-specific law. Consumer definitions, which can be found in such specific acts, are not always at variance with the general notion

12

Resolution of the Supreme Court of 9 September 2015 (III SZP 2/15); see also: Kohutek (2016), p. 87; cf. judgment of the Supreme Court of 16 April 2015 (III SK 42/14). 13 See e.g. order of the Supreme Court of 15 March 2000 (I CKN 1325/99). 14 The extent of this margin has been subject to criticism, see e.g. Rządkowski (2016), p. 929. 15 Recital 17 of Directive 2011/83/EU. 16 In the order of 8 August 2016, the Court of Appeals in Lublin (I ACz 631/15) held that a person investing in a foreign exchange market cannot be considered as a consumer since such an investor must possess extraordinary knowledge of the financial market, which is not available to a regular consumer and is not needed to meet his or her typical needs. This finding was, however, successfully contested before the Supreme Court (IV CSK 667/16) in line with the official position of the President of UOKiK on the matter; for discussion of other borderline situations see: Chojecka and Nowak (2016), p. 68. 17 See e.g.: Sieradzka (2015), p. 251. 18 Pajor (2014), p. 250.

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enshrined in Article 221 of the Civil Code. For example, Article 2(18) of the Telecommunication Law defines consumer as a natural person requesting access to the publicly available telecommunication services or making use of such services for purposes not directly related to his or her business or professional activity. In other cases, however—either as a result of legislative imprecision19 or contestable jurisprudence20—setting a boundary between the notion of a consumer and the broader notions, such as customer or even legal subject, may appear problematic.

1.3

Consumer Model

As mentioned above, the actual scope of protection granted to consumers in specific cases often depends on the applicable consumer model, which encompasses elements such as knowledge, experience and the level criticism required of consumers in the given transactional circumstances. Also in this respect, the emerging consumer image reveals a strong influence of the EU law, particularly of Directive 2005/29/EC concerning unfair business-to-consumer commercial practices (UCPD).21 Consequently, the category of an ‘average consumer’—defined in Article 2(8) of the Act on countering unfair market practices22 as a person who is adequately informed, attentive and careful—has become a dominant benchmark.23 This is a very important development given that the national jurisprudence, pre-dating the establishment of a market economy in Poland, used to perceive consumers as not careful and forgetful.24 While the use of a stricter consumer benchmark had originally been limited to the law on unfair market practices, following the approach of the UCPD, the model has gradually been applied to other areas as well. This is true not only with regard to

19

See: Act of 29 August 1997 on travel services (Ustawa o usługach turystycznych), Dz.U. 2016 poz. 187 (codified version), which generally refers to a ‘customer’, but in Article 11 provides for a subsidiary application of consumer law; Cybula (2012), pp. 169–170. 20 See the discussion of cases concerning liability of financial institutions for the damage caused to consumers due to fraudulent conduct of their employees in Sect. 1.3 further below. 21 Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (Unfair Commercial Practices Directive) [2005] OJ L149/22. 22 Act of 23 August 2007 on countering unfair market practices (Ustawa o przeciwdziałaniu nieuczciwym praktykom rynkowym), Dz.U. 2016 poz. 3 (codified version). 23 See, in particular: judgment of the Supreme Court in case III SK 34/13 (n 7), mentioning an established ruling practice; similarly: judgments of the Supreme Court of 29 November 2013 (I CSK 87/13), 8 May 2014 (III SK 45/13) and of 16 April 2015 (III SK 24/14); judgments of the Court of Appeals in Warsaw of 14 November 2014 (VI ACa 116/14), 30 November 2015 (VI ACa 1685/14) and of 22 March 2017 (VI ACa 1863/15). 24 See e.g. judgment of the Supreme Court of 23 April 2008 (III CSK 377/07).

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other legal instruments, which refer to the risk of consumer deception (unfair competition,25 trademark law26), but also to the provisions on unfair terms,27 pre-contractual information28 and even general tort law. As regards the latter, attention should be drawn to several recent judgments related to the liability of financial institutions for the damage caused to consumers due to fraudulent conduct of their employees.29 In these cases, the general consumer model was successfully invoked by defendants in order to limit the scope of their liability. This interpretative direction could be a cause for concern, especially considering that other elements of the consumer model, established in the Act on countering unfair market practices, have not been embraced by the Polish courts with an equal enthusiasm. Indeed, Article 2(8) of the Act on countering unfair market practices in fine specifies that the relevant assessment should be made “with account taken of social, cultural, linguistic factors and the belonging of the particular consumer to a specific consumer group, which shall be understood as a consumer group that can be unambiguously identified and is particularly receptive to the influence of a commercial practice or the product to which the commercial practice applies, due to its specific characteristics, such as age, physical or mental disability”. Social, cultural and linguistic factors as well as consumer’s vulnerability are, however, rarely invoked to justify a more protective jurisprudence. Admittedly, in one of its judgments the Court of Appeal in Warsaw observed that the legal awareness of Poles could not be compared to the expertise of their Western counterparts, who had been exposed to consumer education for decades.30 Nonetheless, this line of interpretation should rather be perceived as an exception, and is in any case losing relevance as the system of consumer protection in Poland becomes more mature.31 The situation appears to be more nuanced in the context of administrative proceedings carried out by the President of UOKiK. Indeed, the consumer protection authority is reportedly trying to take the special position of the vulnerable consumers into account. According to an unofficial source, if an investigated practice appears to be targeted at a specific age group, the UOKiK officials pay attention to the personal identification numbers of its addressees. Certain enforcement efforts are also clearly directed towards practices, which are most likely aimed at the elderly or the sick, for

25

Ibidem. See e.g. judgment of the Court of Appeals in Poznań of 18 April 2013 (I ACa 263/13). 27 See e.g. judgment of the Supreme Court in case II CSK 515/11 (n 11); judgments of the Supreme Court of 17 September 2014 (I CSK 555/13), 15 February 2013 (I CSK 313/12) and of 4 March 2016 (I CSK 72/15). 28 Lubasz and Namysłowska (2015), pp. 107, 141; European Commission (2017), p. 907; Świerczyński (2015), p. 142. 29 Judgments of the Supreme Court of 14 January 2016 (I CSK 43/15) and of 17 April 2015 (I CSK 216/14); judgment of the Court of Appeals in Warsaw of 26 January 2016 (I Aca 612/15). 30 Judgment of the Court of Appeals in Warsaw of 17 January 2013 (VI ACa 1069/12). 31 See e.g. judgment of the Supreme Court of 21 April 2011 (III SK 45/10), which rejected a similar finding. 26

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example in cases involving off-premises sales of paramedical products32 or the practice of cold calling, whereby representatives of energy and telecommunication companies maintain an impression that consumers are, in fact, dealing with their current operators.33 Specific risks run by different consumer groups are also considered in targeted inspections34 as well as in educational campaigns. Nevertheless, since the concept of vulnerability is not readily applied in the court practice, it is also rarely relied upon in the decisions of the consumer protection authority.35 Indeed, rather than looking at personal qualities of a targeted consumer group, Polish courts tend to determine the relevant consumer model by looking at the object of the practice and the way in which the practice is put into effect. This is particularly true for misleading advertising cases, in which a formalized, two-step test was developed. Firstly, the courts look at the type of the advertised product or service (which determines the advertisement’s intended addressees) and, secondly, at the medium used for the advertisement (which can limit the scope of its actual recipients). The assessment should be made in this particular order and can lead not only to a stronger protection,36 but also, potentially, to a weaker protection.37 The two-step method is not necessarily followed in the assessment of other types of practices affecting consumer interests, even though, in some cases, a similar contextual approach is adopted. By way of illustration, in a 2014 judgment concerning the sales of tickets to UEFA EURO 2012 football games, the Polish Supreme Court held that a term included in the standard conditions of business, according to which, in case of a discrepancy between English and Polish language versions of the conditions, the English version should prevail, was not unlawful within the meaning of Article 3851 of the Civil Code. This was due to the fact that contested standard terms

32 See e.g. decisions of the President of UOKiK of 7 August 2014 (RPZ 17/2014), 9 March 2016 (RPZ 2/2016), 24 September 2016 (RPZ 6/2016), 3 October 2016 (RPZ 7/2016) and of 23 December 2016 (RPZ 11/2016). 33 Decisions of the President of UOKiK of 13 April 2017 (RGD 2/2017), of 26 March 2018 (DOIK 1/2018) and of 24 July 2018 (RŁO 2/2018). 34 See e.g. reports on the standard conditions of business used by: healthcare establishments (2006), traders concluding reverse mortgage agreements (2013), establishments providing care for people with disabilities, chronically ill or the elderly (2015), operators of children play rooms (2017), https://uokik.gov.pl/raporty2.php. 35 European Commission (2017), pp. 888, 919, noting that Polish courts tend to reject the arguments of the consumer protection authority that an investigated practice was directed at a group of vulnerable consumers; see also: judgment of the Court of Appeals in Warsaw in case VI ACa 1685/14 (n 23). 36 See: judgment of the Supreme Court of 2 October 2007 (II CSK 289/07) concerning the consumers of medicines. 37 The courts accept, for instance, that consumers of telecommunication services are generally more technology-savvy and better acquainted with the specifics of the telecommunications market. This, however, cannot justify the provision of false information in a marketing campaign, see e.g.: judgment of the Supreme Court in case III SK 34/13 (n 7).

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only applied to the online sales channel and therefore were addressed at a group of consumers who were more technology-savvy, active, well-informed, cautious, attentive and used to standard terms being drafted in English.38

2 Pre-contractual Information Requirements 2.1 2.1.1

General Information Obligation Introductory Remarks

Polish law provides for a general information requirement, which, in principle, applies to all business-to-consumer transactions, and a number of specific information obligations, which can also apply beyond the B2C scenario. Unlike many specific duties, the general information requirement was introduced to the Polish legal system comparably recently. The duty is laid down in Articles 8–11 of the Act on consumer rights,39 which implemented Directive 2011/83/EU on consumer rights (CRD) into national law. Specific information duties might be linked either to particular types of contracts, such as consumer credit agreements or contracts concluded at a distance, or to particular types of business activity, such as electronic provision of services. Several examples of such duties are provided further below.40

2.1.2

Scope and Modalities of the Information Duty

In line with Article 5 of the CRD, the Act on consumer rights introduces a list of information particulars, which the traders have to provide to consumers, unless that information is already apparent from the context. This obligation does not apply to several types of contracts excluded from the scope of the Act, particularly because they are already covered by specific legislation (e.g. in the field of financial services or package travel).41 The general information duty, furthermore, does not apply to contracts which involve day-to-day transactions and which are performed immediately at the time of their conclusion, in line with the option envisaged in Article 5 (3) of the CRD. It is also not applicable to off-premises and distance (including online) contracts, for which specific rules are provided in Articles 12–26 of the Act. As regards the time of disclosure, the Act on consumer right requires that information is provided ‘at the latest at the time when consumer expresses his will

38

Judgment of the Supreme Court in case I CSK 555/13 (n 27). Act of 30 May 2014 on consumer rights (n 10). 40 See Sects. 5.2 and 6.1 further below. 41 For a discussion of exemptions from the scope of the Act on consumer rights and their respective rationales see: Piszcz (2015), p. 110. 39

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to be bound by the contract’. Formal aspects of the general information duty are less precise. The Act only stipulates that information should be provided in a clear and comprehensible manner, but remains silent as to the medium of disclosure. Importantly, however, pursuant to Article 7 of the Act on the Polish language,42 the relevant information should be provided in Polish. Since, by way of exception, the general information duty from the Directive was not subject to the principle of full harmonisation, Member States are allowed to extend its scope beyond the list enshrined in Article 5(1) of the CRD. The Polish legislator did not make much use of this option, however. Consequently, the list established in Article 8 of the Act on consumer rights largely reflects the European model and refers to elements such as main characteristics of the goods or services, identity of the trader, price, reminder of the existence of a legal guarantee, existence and conditions of additional after-sales services and guarantees, duration of the contract, or particular features of digital content. The only notable extension concerns the information about the authority at which the trader was registered and the respective registration number (Article 8(2) of the Act). Attention should finally be drawn to the following two issues. Firstly, Article 3(2) of the CRD stipulates that in case of a conflict between the Directive and a provision of another Union act governing specific sectors, the provision of that other Union act shall prevail and shall apply to those specific sectors. The CRD further provides that disclosure duties established therein should complement the information requirements of Directive 2006/123/EC on services in the internal market43 and Directive 2000/31/EC on electronic commerce.44 This means that further requirements may, and indeed do, apply in national law, depending on the specific circumstanced of the case. Secondly, in line with Article 3(6) of the CRD, nothing prevents the traders from providing consumers with further information particulars if they wish to do so, insofar as the abovementioned transparency requirements are observed.45

2.1.3

Sanctions

The Consumer Rights Directive does not provide for a comprehensive set of sanctions for the breach of its information duties. Aside from several targeted sanctions, most of which refer to distance and off-premises contracts, it leaves the adoption of ‘adequate and effective’ measures ensuring the compliance with its provisions to the Member States (Article 24(1) of the CRD). Since the Act on 42

Act of 7 October 1999 on Polish language (Ustawa o języku polskim), Dz.U. 2011 nr 43 poz. 224 (codified version). 43 Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market [2006] OJ L376/36. 44 Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce) [2000] OJ L178/1. 45 Lubasz and Namysłowska (2015), pp. 138–141.

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consumer rights only entered into force in December 2014, and a general information duty had not been envisaged in the previous legislation, evidence of its practical application remains scarce. Therefore, sanctioning regime associated with this duty will also be discussed from a more theoretical perspective.

Private Enforcement The only general sanction provided by the Polish legislator for the breach of information duties established in the Act on consumer rights is of a criminaladministrative nature. Pursuant to the newly introduced Article 139b of the Code of Offences a violation of this kind is subject to a fine.46 There is no comparable sanction belonging to the civil law realm, consisting, for example, in the right to withdraw from the contract.47 Furthermore, there is only one specific sanction applicable both to the general information duty and to information duties established for distance and off-premises contracts. Pursuant to Article 10(2) of the Act on consumer rights if a trader has not obtained the consumer’s express consent to an extra payment in addition to the remuneration agreed upon for the trader’s main contractual obligation, but has inferred it by using default options which the consumer was required to reject, the consumer shall be entitled to reimbursement of this payment.48 The provision thus directly reflects the wording of Article 22(2) of the CRD. In addition to the above, a variety of consequences could be derived from the general framework of civil law.49 First of all, one should observe that if certain fundamental information particulars (essentialia negotii) are not communicated to the consumer, doubts could even be raised if a contractual relationship had at all been established. Besides this rather obvious scenario, failure to provide the required information could likely have an impact on the interpretation of the contract. Pursuant to Article 65 § 2 of the Civil Code, when interpreting the provisions of contracts, the common intention of the parties and the aim of the contract should be examined rather than its literal meaning. One may thus argue that the intention of consumer could not extend to the circumstances of which he or she was not informed. What is more, in line with the principle in dubio contra proferentem,

46

Act of 20 May 1971—Code of Offences (Kodeks wykroczeń), Dz.U. 2015 poz. 1094 (codified version). 47 Such a sanction was, by contrast, introduced in Article 41 of the Act on consumer rights with respect to distance contracts for the provision of financial services, which re-implemented Directive 2002/65/EC of the European Parliament and of the Council of 23 September 2002 concerning the distance marketing of consumer financial services and amending Council Directive 90/619/EEC and Directives 97/7/EC and 98/27/EC [2002] OJ L271/16, as well as in Article 29 of the Act on the protection of the rights of the buyer of a residential unit or a single family home (n 4). 48 An analogous norm for distance and off-premises contracts is enshrined in Article 23 of the Act on consumer rights. 49 Księżak (2015), pp. 155–158.

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the risk of erroneous interpretation of unclear information particulars would likely rest on the person who provided that information, i.e. on the trader.50 The consumer could also seek to invalidate the contract based on the general provisions on error or deceit (Articles 84 and 86 of the Civil Code, respectively). Finally, the consumer could potentially pursue a claim for compensation, even though this avenue does not appear particularly promising in practice.51 The eventual damage could arise either when the consumer did not conclude the contract as a result of the breach of an information duty or in an opposite scenario. In the former case, one could theoretically rely on Article 72 § 2 in conjunction with Article 415 of the Civil Code (culpa in contrahendo in negotiated contracts),52 while in the latter situation a claim could be based on the general tort law provisions. However, since according to Article 6 of the Civil Code the burden of proving a fact lies with the person who draws legal effects from that fact, i.e. in both situations usually on the consumer, proving that that all liability prerequisites have been fulfilled—in particular the causal relationship between the lack of information and the damage caused—appears to be a futile task. Civil law claims related to the breach of information duties established in the Act on consumer rights could further be based on the provisions on the Act on countering unfair market practices pertaining to misleading omissions. Article 6(1) of the Act defines a misleading omission as a market practice, which lacks material information that the average consumer needs to take a transactional decision and as such it either causes or may cause the average consumer to take a transactional decision that he or she would have not taken otherwise. What is more, pursuant to Article 6(2), material information referred to in the previous section shall, in case of doubts, be understood as information that the trader is required to provide to consumers pursuant to specific provisions.53 Civil law remedies which can be sought in this case are defined in Article 12 of the Act. According to this provision consumers whose interests have been jeopardised or violated by an unfair market practice (for example, a misleading omission) may request that (1) such a practice is discontinued; (2) the effects of the practice are removed; (3) a single or multiple statement of appropriate content and form is made; (4) the damage is redressed pursuant to general rules and, in particular, the contract is invalidated, the benefits are mutually returned and the costs associated with the purchase of the product are reimbursed by the trader; (5) an adequate amount of money is adjudicated for a specific social cause related to supporting the Polish culture, national heritage or consumer protection. Claims referred to in subsections (1), (3) and (5) above may also be brought by the Commissioner for Human Rights (Rzecznik Praw Obywatelskich), the Financial Ombudsman (Rzecznik

50

Judgment of the Supreme Court of 8 October 2004 (V CK 670/03). Similarly Kaczmarek-Templin (2014), p. 106. 52 On the concept of culpa in contrahendo in the Polish law see generally: Machnikowski (2008), p. 699; Olejniczak (2008), p. 87; Sobolewski (2008), p. 393. 53 Following Art. 7(5) of the UCPD, which the Act on countering unfair market practices implements. 51

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Finansowy), a national or regional organisation whose statutory objective is to protect consumer interests and by a district or municipal consumer ombudsman. Particularly worthy of note is the contract invalidation sanction referred to in Article 12(4) of the Act, even if the wording of that provision is subject to criticism in the literature.54 Introduction of the new information duties in the Act on consumer rights, together with the abovementioned interpretative rule laid down in Article 6(2) of the Act on countering unfair market practices, could improve the prospects of pursuing claims in the procedure described in the previous paragraph. Up till now, however, the above-mentioned framework has not been particularly robust. Reasons for this could include: low level of consumer awareness, insufficient funding of other entities enjoying legal standing and a comparably strict consumer model serving as a general benchmark. Since none of these deficiencies had been addressed in the new legal framework, public enforcement of the discussed information duties will likely remain of principal importance.

Public Enforcement Public enforcement of consumer law in Poland is based on the Act on competition and consumer protection,55 which gives the President of UOKiK the power to carry out proceedings concerning practices infringing collective consumer interests or consisting in the use of unlawful terms in the standard conditions of business. Article 24(2) of the Act on competition and consumer protection defines a practice infringing collective consumer interests as any activity of an undertaking which is unlawful or contrary to good practice (dobre obyczaje) and detrimental to such interests, in particular: a breach of the obligation to provide consumers with reliable, true and complete information (Article 24(2)(2)), unfair market practices or acts of unfair competition (Article 24(2)(3)),56 and the so-called misselling of financial products

54 It is observed that contract invalidation is mentioned as one of the ways in which damage could be compensated pursuant to general rules, but should rather be perceived as an autonomous sanction. At the same time, however, the Act on countering unfair market practices does not include a general norm, pursuant to which legal acts performed as a result of an unfair market practice are automatically void. The provision could therefore only be invoked in conjunction with Article 58 § 1 of the Civil Code, according to which a legal act which is contrary to the law or which is designed to circumvent the law is invalid unless a specific provision envisages a different effect. Joasia Luzak notes that invalidation of the contract was a novel remedy introduced into Polish law, is not entirely compatible with other forms of avoiding the contract and could be compared to the exercise of the right to withdraw, see: European Commission (2017), p. 901; according to Arkadiusz Michalak, handing over unjustified benefits would be a better remedy for the analysed violation, see: Michalak (2008), pp. 123–124. 55 Act of 16 February 2007 on competition and consumer protection (Ustawa o ochronie konkurencji i konsumentów), Dz.U. 2017 poz. 229 (codified version). 56 Acts on unfair competitions refer to practices applied in business-to-business relationships and are therefore less relevant in this context of the present report.

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(Article 24(2)(4)). Article 23b(1) in conjunction with Article 23a of the same Act also allow the President of UOKiK to instigate proceedings concerning the use of unlawful terms in the standard conditions of business in the procedure of the so-called abstract control. Enforcement measures related to the violations of Article 24(2)(3) and (4) as well as Article 23a will be discussed in the relevant sections further below.57 Since a general information duty is still a relative newcomer in the Polish legal system, very few decisions of the President of UOKiK relate to its infringement. One decision, issued in 2016, involved a practice of a telecommunication company whereby additional services were activated at consumer’s expense in violation of Article 10 of the Act on consumer rights, i.e. of the distinct information duty concerning additional payments.58 Similar measures might be taken with respect to eventual violations of Article 8 in the future. This finding is further supported by a significant number of decisions in which infringements of the information duties found in specific acts were qualified as infringements of collective consumer interests.59 The relevant decisions were mostly based on Article 24(2) of the Act on competition and consumer protection, i.e. the general unlawfulness criterion, or at times more precisely on the specific norm of Article 24(2)(2). Pursuant to Article 106 of the Act on competition and consumer protection, the President of UOKiK may impose a fine of up to 10% of the trader’s turnover in the preceding year on a trader who includes unlawful terms in the standard conditions of business or infringes collective consumer interests. Until recently, the usual amounts of fines lied at the lower end of this spectrum. Recent decisions, however, show a considerable increase in the level of sanctions applied.60 Questions, which arise as to the compliance of such sanctions with the principle of proportionality, will have to be addressed by the reviewing courts. The President of UOKiK may also impose, in addition to a fine or when issuing a commitment decision instead of a fine, a specific type of remedy referred to as public compensation (rekompensata publiczna), i.e. set out requirements that the company must follow to remedy the consequences of the infringement to consumers. The use of public compensation, including in the form of direct payments, has seen a steady

57

See Sects. 3.2, 3.3, 4.3 and 5.1 further below. Decision of the President of UOKiK of 27 December 2016 (DDK 20/2016). 59 In particular in the Act of 12 May 2011 on consumer credit (Ustawa o kredycie konsumenckim), Dz.U. 2016 poz. 1528 (codified version) as well as in the previously applicable Act of 2 March 2000 on the protection of certain consumer rights and on the liability for damage caused by a dangerous product (Ustawa o ochronie niektórych praw konsumentów oraz o odpowiedzialności za szkodę wyrządzoną przez produkt niebezpieczny), Dz.U. 2012 poz. 1225 (codified text), in which a number of information duties in off-premises and distance contracts were defined. See e.g. decisions of the President of UOKiK of 23 December 2014 (DDK 5/2014), 17 August 2016 (DDK 18/2016), 26 August 2016 (DDK 19/2016) and of 3 November 2016 (RBG 8/2016). 60 See e.g. decision of the President of UOKiK of 20 December 2016 (RPZ 10/2016), in which a fine of almost 2 million PLN (approx. 460,000 EUR) was imposed; see also: Namysłowska (2017), pp. 194–195. 58

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rise in the recent months.61 Nevertheless, the instrument can by no means be considered as a substitute for the private enforcement. After all, the President of UOKiK may only take action in the public interest, the decision both as to the institution of the proceedings and the application of particular remedies is left entirely to him and the role of consumers and consumer organisations in the proceedings is very limited.62

2.2 2.2.1

Specific Food Information Requirements Applicable Law

Food labelling in Poland is of little interest to the national legislature, acting of its own initiative, as it is subject to a range of directly applicable EU Regulations, especially Regulation No 1169/201163 and Regulation No 609/2013,64 as well as EU Directives which had to be transposed into national law. Main provisions applicable to the food sector and going beyond the measures taken by the EU are included in the Act on food and nutrition safety.65 However, only few of them refer to food labelling. The Act is further complemented by several executive regulations of the Minister of Health, including regulations on the composition and labelling of food supplements as well as on natural mineral waters, spring waters and table waters. The executive regulations mentioned above implement Directives 2002/46/EC66 and 2009/54/EC,67 respectively.

61 UOKiK, Sprawozdanie z działalności UOKiK za 2015 r., www.uokik.gov.pl/download.php? plik¼18516, 15. 62 Namysłowska and Jabłonowska (2018), p. 448. 63 Regulation (EU) no 1169/2011 of the European Parliament and of the Council of 25 October 2011 on the provision of food information to consumers, amending Regulations (EC) No 1924/2006 and (EC) No 1925/2006 of the European Parliament and of the Council, and repealing Commission Directive 87/250/EEC, Council Directive 90/496/EEC, Commission Directive 1999/10/EC, Directive 2000/13/EC of the European Parliament and of the Council, Commission Directives 2002/67/ EC and 2008/5/EC and Commission Regulation (EC) No 608/2004 [2011] OJ L304/18. 64 Regulation (EU) No 609/2013 of the European Parliament and of the Council of 12 June 2013 on food intended for infants and young children, food for special medical purposes, and total diet replacement for weight control and repealing Council Directive 92/52/EEC, Commission Directives 96/8/EC, 1999/21/EC, 2006/125/EC and 2006/141/EC, Directive 2009/39/EC of the European Parliament and of the Council and Commission Regulations (EC) No 41/2009 and (EC) No 953/2009 [2013] OJ L181/35. 65 Act of 25 August 2006 on food and nutrition safety (Ustawa o bezpieczeństwie żywności i żywienia), Dz.U. 2017 poz. 149 (codified version). 66 Directive 2002/46/EC of the European Parliament and of the Council of 10 June 2002 on the approximation of the laws of the Member States relating to food supplements [2002] OJ L183/51. 67 Directive 2009/54/EC of the European Parliament and of the Council of 18 June 2009 on the exploitation and marketing of natural mineral waters [2009] OJ L164/45.

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The Act on food and nutrition safety lays down rules for all foodstuffs or for their specific categories. As regards the former, Article 48(2) of the Act establishes the rule, according to which all foodstuffs placed on the Polish market must be labelled in Polish. Furthermore, the labelling of foodstuffs commonly consumed cannot contain the term “dietary” or otherwise suggest that it is a food for special nutritional purposes.68 With respect to the latter, Article 45(4) of the Act states that non-infant formulas cannot be labelled, presented, advertised, promoted and marketed as sufficient to meet the nutritional needs of the properly developing infants during the first months of life, until adequate nutrition is provided. Further provisions related to the labelling of specific product categories—namely food supplements and mineral, spring and table waters—are contained in the executive regulations, which implement the above-mentioned Directives into Polish law. All other types of foodstuffs, such as genetically modified food, ecological food, infant formula and follow-on formula, processed cereal-based food and baby food, food for special medical purposes, total diet replacement products for weight control and their labelling are precisely regulated in the directly applicable EU law. Requirements related to the presentation of food information are, in turn, mainly established in Regulation No 1169/2011 on the provision of food information to consumers. Pursuant to this act, mandatory food information shall appear directly on the package or on the label attached to it. The information should be marked in a conspicuous place in such a way to be easily visible, clearly legible and, where appropriate, indelible. The Regulation also refers to several highly specific aspects of food labelling, such as the required font size. The Polish legislator did not introduce any further requirements in the areas covered by the discussed Regulations.

2.2.2

Manipulative Techniques

Despite broad and precise legal framework on food labelling, traders in Poland sometimes resort to manipulative techniques, aimed to increase the sale of their products. This is particularly noticeable in case of food supplements, to which advertisers try to assign medicinal properties that are reserved for medical products. Meanwhile food supplements are actually foodstuffs, the purpose of which is to supplement the normal diet and which are concentrated sources of nutrients or other substances with a nutritional or physiological effect.69 Some advertisers are,

68

Article 45(3) of the Act on food and nutrition safety. Reference to the category of food for special nutritional purposes shows a clear inspiration by EU law since the same term was also used in Directive 2009/39/EC of the European Parliament and of the Council of 6 May 2009 on foodstuffs intended for particular nutritional uses [2009] OJ L124/21. The Directive was, nevertheless, repealed in July 2016 by Regulation 609/2013, which replaced the category of food for special nutritional purposes with five different product groups. Polish food law thus requires several terminological adjustments in order to maintain coherence with the applicable EU framework. 69 Article 2(a) of Directive 2002/46/EC.

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nevertheless, trying to mislead consumers especially by using statements and claims that may cause confusion, such as “cures the cough” or “supports immunity”. Certain traders are also using the so called “umbrella branding” technique, whereby different products are placed on the market under one name and in standardized packages. Umbrella branding is used not only for products belonging to one category, but it can also be applied to different types of products. In 2017, the Supreme Audit Office (Najwyższa Izba Kontroli) published a report on the safety of food supplements market in Poland,70 indicating that the majority of Poles do not know what food supplements are and almost half of them assign medicinal properties to such products. Considering the low level of consumer awareness with respect to the properties of food supplements, the report concluded that the umbrella branding technique applied to medical products and food supplements could lead to considerable consumer confusion.

2.2.3

Sanctions

The Act on food and nutrition safety provides for two types of sanctions—criminal and administrative ones. Criminal sanctions, in the form of a fine or the limitation or deprivation of liberty, can be imposed when a food business operator does not comply with the food labelling rules laid down in Regulations No 1829/200371 and 1830/200372 and 258/97.73 Violation of other food labelling requirements can furthermore lead to the imposition of an administrative fine of up to thirty times the average salary in the preceding year, pursuant to Article 103 of the Act. Sanctions mentioned above are imposed independently from other sanctions, applicable to different consumer law infringements (e.g. misleading practices), and are applied irrespective of the effect of the practice on consumers’ behaviour. Penal sanctions are administered by the courts according to the general rules of procedure set out in the Code of Procedure for Offences.74 By contrast, administrative sanctions are imposed by Voivodeship Sanitary Inspectors, taking into account the level of harmfulness, the degree of culpability, the scope of infringement, previous conduct and the scale of production.

70

https://www.nik.gov.pl/plik/id,13031,vp,15443.pdf. Regulation (EC) No 1829/2003 of the European Parliament and of the Council of 22 September 2003 on genetically modified food and feed [2003] OJ L268/1. 72 Regulation (EC) No 1830/2003 of the European Parliament and of the Council of 22 September 2003 concerning the traceability and labelling of genetically modified organisms and the traceability of food and feed products produced from genetically modified organisms and amending Directive 2001/18/EC [2003] OJ L268/24. 73 Regulation (EC) No 258/97 of the European Parliament and of the Council of 27 January 1997 concerning novel foods and novel food ingredients [1997] OJ L43/1. 74 Act of 24 August 2001—Code of Procedure for Offences (Kodeks postępowania w sprawach o wykroczenia), Dz.U. 2016 poz. 1713 (codified version). 71

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To exemplify, one of the most recent sanctions imposed by the sanitary inspector based on the aforementioned provisions referred to a practice whereby, on the website of the food business operator, a food supplement was placed next to medical products without marking it as food supplement, which constituted a violation of the executive regulation on the composition and labelling of food supplements. What is more, a health claim placed on the package, which informed consumers about the effect of fibre on the digestive system, without mentioning which dose is necessary to produce that effect, was found to infringe Regulation 1924/2006 on nutrition and health claims made on foods.75 As a result, a fine of 10,000 PLN (approx. 2300 EUR) was imposed.76

3 Misleading Commercial Practices 3.1

Introductory Remarks

Polish unfair commercial practices law is largely based on the EU framework, particularly the UCPD. As mentioned above, the Directive was implemented in the Act on countering unfair market practices. The Act is based on a general clause prohibiting unfair market practices that are contrary to the principle of good practice and which materially distort or may distort the economic behaviour of an average consumer with regard to the product. The consumer benchmark applied throughout the act is closely aligned with the applicable EU law and refers, in principle, to a consumer who is adequately informed, attentive and careful.77 Blacklisted practices are prohibited in all circumstances, irrespective of their real or potential effect on the average consumer. The notion of good practice, used in the general clause, prima facie differs from the standard of professional diligence adopted in the UCPD. This category was nevertheless preferred due to the long-standing tradition of the Polish marketing law and is interpreted in accordance with the EU acquis.78 The general clause is followed by specific provisions on misleading practices (actions and omissions) and aggressive practices, along with two lists of practices which are considered unfair in all circumstances. Unlike the UCPD, blacklisted practices are enshrined in the main part of the Act (Articles 7 and 9), and not in the attached Annex. The adoption of two distinct lists, encompassing 23 misleading practices and 8 aggressive practices

75 Regulation (EC) No 1924/2006 of the European Parliament and of the Council of 20 December 2006 on nutrition and health claims made on foods [2006] OJ L404/9. 76 See: judgment of the Supreme Administrative Court of 5 April 2017 (II OSK 2203/15). 77 On the discussion of the application of the vulnerable consumer category see Sect. 1.3 above. 78 See: judgments of the Supreme Court of 8 May 2014 (III SK 45/13), 27 August 2014 (III SK 80/13), 9 April 2015 (III SK 47/14) and of 16 April 2015 (III SK 24/14); European Commission (2017), p. 883.

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respectively, is not only an interesting national peculiarity, but, more importantly, is considered to obscure the unique nature of the blacklisted practices compared to other provisions of the Act.79 Attention should finally be drawn to the specific allocation of the burden of proof. Article 13 of the Act explicitly states that in case of misleading practices the burden of proof rests on the trader. A contrario, a similar rule cannot be applied in respect of other types of unfair, including aggressive, practices.

3.2

Misleading Actions

Article 5(1) of the Act defines a misleading action as a market practice, which, in any way, causes or may cause an average consumer to take a transactional decision, which he or she would not have taken otherwise. A misleading action may, among others, consist in the distribution of false information or in the distribution of true information in a potentially misleading way. Presentation of the practice—and, therefore, also the provision of the pre-contractual information—is included in the unfairness test (Article 5(4)).80 Since, as indicated before, private enforcement based on the Act on countering unfair market practices is not particularly effective, it is again the consumer protection authority that plays the principal role in the enforcement of the discussed provision. By way of a reminder, pursuant to Article 24(2)(3) of the Act of competition and consumer protection, unfair market practices can be qualified as practices infringing collective consumer interests. Article 5 of the Act on countering unfair market practices is, indeed, frequently relied upon by the President of UOKiK. A significant number of these proceedings relate to the marketing of financial and telecommunication services. Transparency of the assessed advertisements, for example size of the font and the broadcasting time, were regularly considered in past decisions. By way of illustration, in one of the recent decisions the President of UOKiK found that—taking into account the font size, length of communication and broadcast duration—an advertisement of a combined offer of electronic equipment and telecommunication services violated Article 24(1) and Article 24(2)(3) of the Act on competition and consumer protection in conjunction with Article 5(1) and Article 5 (3)(5) of the Act on countering unfair market practices.81 According to the consumer protection authority, the contested TV advertisement suggested that it was possible to obtain a package of telecommunication services together with a set of electronic equipment for a monthly fee of 61 PLN (approx. 14 EUR) over the period of

79

See generally: Namysłowska (2014), p. 255. An analogous rule applies to misleading omissions—see Article 6(5) of the Act on countering unfair market practices. 81 Decision of the President of UOKiK of 30 December 2016 (RBG 10/2016). 80

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24 months, while in fact it was not so and the notice of other conditions of the offer was not prominent enough. A similar reasoning was adopted in a 2012 decision,82 upheld by the Court of Competition and Consumer Protection,83 as regards a multimedia campaign (TV, radio, internet and billboards) of a consumer credit. Another recent decision dealt with a campaign carried out by a bank, in which the form of presenting the mandatory information particulars (size of the font and broadcasting time of TV advertisements, size of the font in leaflets and in online advertisements) was considered to fall short of the requirements laid down in the Act on consumer credit.84

3.3

Misleading Omissions

Due to the fact that misleading omissions were already, to some extent, considered above, the following section will serve as a summary of and a supplement to the previous discussion.85 To recapitulate, pursuant to Article 6(1) of the Act on countering unfair market practices, a market practice shall be regarded as a misleading omission if it lacks material information that the average consumer needs to take a transactional decision and as such it either causes or may cause the average consumer to take a transactional decision that he or she would not have taken otherwise. A misleading omission can, in particular, be found where a trader was legally obliged to provide a given piece of information, but failed to do so. Article 6 (4) of the Act also contains additional stipulations as to which information should be considered material in the case of an invitation to purchase, and therefore establishes an indirect information duty, which could potentially overlap with the Act on consumer rights. Unlike this latter Act, however, a breach of the indirect duty depends on its actual or potential effect on the behaviour of an average consumer. In any case, according to a recent study, Polish stakeholders do not consider this overlap to be problematic.86 Article 6 of the Act on countering unfair market practices would appear to be a promising legal avenue for consumers as well as other entities enjoying legal standing if a trader failed to provide the necessary information particulars. Nevertheless, for reasons discussed above, claims of this nature are not very common. As regards public enforcement, the provision is being relied upon by the President of UOKiK with respect to practices whereby a trader fails to disclose his commercial

82

Decision of the President of UOKiK of 28 December 2012 (RPZ 46/2012). Judgment of the Court of Competition and Consumer Protection of 2 February 2015 (XVII AmA 60/13). 84 Decision of the President of UOKiK of 30 June 2017 (RKR 4/2017). 85 See Sect. 2.1.3 above. 86 European Commission (2017), p. 897. 83

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intent to consumers.87 Other than that, enforcement activities of the Polish consumer protection authority in the analysed context are generally limited to the breaches of information duties established in specific legal acts and, as such, are typically based on Articles 24(2) and 24(2)(2) of the Act on competition and consumer protection.88

3.4

Specific Rules on Advertising

Besides the Act on countering unfair market practices, which has a horizontal application, further rules on advertising are laid down in several specific acts. These refer either to particular types of media (for example radio and television89), or to particular product categories (for example medicines90 or financial services91). Many of them also derive from EU law. Interesting developments can further be found in the area of private regulation. In fact, one of the most prominent examples of private regulation in Poland is a system established to promote high ethical standards in advertising. The main role in this framework is played by the Union of Associations Advertising Council (Związek Stowarzyszeń Rada Reklamy).92 Through its complaint handling mechanism the Council counteracts advertisements, which are misleading, violate the core social values or distort fair competition. More detailed codes of conduct have also been developed for particular types of products, particularly in the financial sector.93 Similar initiatives are also promoted at the EU level, as demonstrated by the recent reform of the Audiovisual Media Services Directive.94

87 It is, nevertheless, cited in cases in which traders failed to disclose his commercial intent to consumers, see e.g. decisions of the President of UOKiK in cases RPZ 17/2014, RPZ 2/2016, RPZ 6/2016 and RPZ 11/2016 (n 31). 88 See, however, the decision of the President of UOKiK in case RGD 2/2017 (n 33) in which Article 6 was relied upon with respect to a trader’s violation of a duty to inform about the consumer’s right to withdraw from an off-premises contract. See also Miąsik (2014), p. 766, who notes that Article 24(2)(2) can only be applied to infringements of particular information duties established in the statutory law. 89 Articles 16–17a of the Act of 29 December 1992 on radio and television (Ustawa o radiofonii i telewizji), Dz.U. 2016 poz. 639 (codified version). 90 Articles 52–64 of the Act of 6 September 2001—Pharmaceutical law (Prawo farmaceutyczne), Dz.U. 2016 poz. 2142 (codified version). 91 See the discussion on consumer credit and consumer mortgage credit in Sect. 5 further below. 92 www.radareklamy.pl/english. 93 See Sect. 5.3 further below. 94 Directive 2018/1808 of the European Parliament and of the Council of 14 November 2018 amending Directive 2010/13/EU on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services (Audiovisual Media Services Directive) in view of changing market realities [2018] OJ L303/69.

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4 Unfair Contract Terms: Bargaining Power 4.1

Introductory Remarks

Polish law provides for a number of specific norms, which apply whenever standard conditions of business are used by traders in their contractual relations with consumers. They depart from the rules applicable, on one hand, to business-to-business and consumer-to-consumer transactions and, on the other hand, to terms, which have been negotiated individually. The relevant norms are laid down in Article 3851 and the following of the Civil Code, which implemented Directive 93/13/EEC on unfair terms in consumer contracts95 (UCTD) into the Polish legal system. Provisions of the Civil Code are directly applicable to the so-called individual control of standard contract terms, conducted by the common courts. The President of UOKiK may, in turn, carry out the so-called abstract control of the standard conditions of business. The system of abstract control in Poland has recently undergone an important reform.

4.2

Individual Control

Pursuant to Article 3851 of the Civil Code provisions of business-to-consumer contracts which have not been agreed individually are not binding on the consumers if their rights and obligations are set forth in a way that is contrary to good practice, thereby grossly violating their interests. The burden of proof that a term has been individually negotiated rests on the person who relies on it, i.e. typically on the trader.96 The principle of good practice prima facie differs from the UCTD good faith requirement, but has been interpreted in line with the EU law.97 Core contract terms, i.e. provisions setting forth the main performances of the parties including price or remuneration, are excluded from the unfairness test as long as they are worded clearly.98 The clarity requirement refers to the substance of the analysed standard terms and aims to prevent their ambiguity. The criterion is fulfilled when, for an average, typical consumer, there is only one possible interpretation of the term at issue.99 However, traders in Poland are generally not obliged to bring core contract terms to the consumer’s attention in such a way that an average consumer

95 Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts [1993] OJ L95/29. 96 Judgment of the Supreme Court in case II CSK 515/11 (n 11). 97 European Commission (2017), p. 903. 98 Article 3851 § 1 of the Civil Code in fine. 99 Judgment of the Supreme Court in case I CSK 72/15 (n 27).

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would be aware of them. As seen from the above, the consumer model known from the marketing law has increasingly been applied to the assessment of unfair standard terms as well.100 There seems to be no established practice related to the protection of vulnerable consumers in this context, though. Paradoxically, in the above-cited judgment of the Supreme Court in the UEFA case, a specific consumer group (digital consumers) was distinguished in order to justify a lower level of protection.101 The interpretation of standard conditions of business depends on several factors. Firstly, general rules on interpretation, which were discussed above in respect of pre-contractual information, are also applicable to such terms. Article 385 § 2 of the Civil Code further particularises these norms with regard to non-individually negotiated terms in B2C relationships. It explicitly states that the wording of a standard contract term should be clear and comprehensible and that ambiguous provisions are interpreted to the consumer’s benefit. Unlike the clarity requirement, comprehensibility of the standard conditions of business refers both to their substance and to their form.102 The provision also clarifies that the contra proferentem rule set forth in the preceding sentence does not apply in the abstract control procedure. Finally, Article 3853 of the Civil Code contains a grey list of clauses, which, in case of doubt, should be considered unlawful. Most of them follow the indicative list provided for in the Annex to the UCTD and refer to the substance of the contractual relationship. Subsection 4 is, however, somewhat different and refers to “clauses which the consumer did not have the opportunity to become familiar with before the contract was concluded”. This suggests, contrary to the literal meaning of Article 3851(1) and a large body of case law,103 that unlawfulness of a standard contract term does not need to stem from the way in which consumer’s rights and obligations are set forth, but can also pertain to the presentation of the term. In a similar vein, it has been suggested in the literature, and recently affirmed by the Supreme Court, that the lack of transparency could, in itself, render a standard contract term unlawful.104

4.3

Abstract Control

The mechanism of abstract control, carried out in the public interest, is established in the Act on competition and consumer protection. The rules governing this procedure were changed substantially as part of a 2016 reform. In the previous system, abstract control was primarily performed by a special district court in Warsaw—Court of

100

See Sect. 1.3 above. Judgment of the Supreme Court in case I CSK 555/13 (n 27). 102 Judgments of the Supreme Court in cases I CSK 313/12 and I CSK 72/15 (n 27). 103 Judgments of the Supreme Court of 13 July 2005 (I CK 832/04), 3 February 2006 (I CK 297/05) and of 15 January 2016 (I CSK 125/15); see also: European Commission (2017), p. 903. 104 European Commission (2017), p. 905; judgment of the Supreme Court in case I CSK 313/12 (n 27). 101

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Competition and Consumer Protection (SOKiK), whose rulings were published in a dedicated register. The use of such clauses could subsequently be classified as an infringement of collective consumer interests in the administrative proceedings carried out by the President of UOKiK. The relevant proceedings sought to establish whether standard contract terms used by investigated traders, who were not necessarily parties to the earlier proceedings before SOKiK, were identical or similar to the clauses contained in the register. The extended legal effect of the court rulings, provided for in this system, led to considerable divergences in the court practice and was subject to criticism in the scholarship.105 As a result, even though the Court of Justice recently established that the system did not violate EU law,106 a significant reform thereof was undertaken. As of 17 April 2016 abstract review is regulated in a separate section of the Act on competition and consumer protection and is, first and foremost, conducted by the President of UOKiK. The newly introduced Article 23a of the Act provides that the use in standard agreements with consumers of unlawful terms (niedozwolone postanowienia umowne), referred to in Article 3851(1) of the Civil Code, is prohibited. The President of UOKiK is thus responsible for the substantive assessment of the term at hand; however, not in the context of a specific relationship between the two contracting parties, but rather with a view to hypothetical relations between the investigated trader and potential consumers. It does not matter whether a specific agreement was negotiated between the parties or whether the standard conditions of business were even used for the conclusion of any specific agreement. Abstract control is rather an ex ante evaluation and refers to the standard terms themselves and not to a specific contract. What remains of importance is that the investigated trader offered to conclude contracts with consumers based on the standard conditions of business under assessment.107 If an infringement of Article 23a of the Act on competition and consumer protection is found, the President of UOKiK may declare a standard contract term to be unlawful, prohibit its further use, oblige the trader to exercise commitments or impose a fine. Proceedings carried out by the consumer protection authority are a specific type of administrative proceedings set out in the Act on competition and consumer protection and only in exceptional situations governed by the Code of Administrative Procedure108 and the Code of Civil Procedure.109 Decisions of the consumer protection authority can be appealed to SOKiK, which analyses the case on the merits.110 Appeals from SOKiK rulings are, in turn, heard by the Court of Appeals in Warsaw. 105

See e.g.: Ereciński (2016), p. 745; see also: resolution of the Supreme Court of 20 November 2015 (III CZP 17/15). 106 Judgment of the Court of Justice of 21 December 2016 in case C-119/15 Biuro podróży Partner, ECLI:EU:C:2016:987. 107 Decision of the President of UOKiK of 5 June 2017 (RBG 3/2017). 108 Act of 14 June 1960—Code of Administrative Procedure (Kodeks postępowania administracyjnego), Dz.U. 2017 poz. 1257 (codified version). 109 Act of 17 November 1964—Code of Civil Procedure (Kodeks postępowania cywilnego), Dz.U. 2016 poz. 1822 (codified version). 110 Article 47928 of the Code of Civil Procedure.

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Following the reform, the powers and responsibility of the President of UOKiK have significantly increased. Since the new system has only been applicable for approximately 1 year, assessment of its practical application would, however, be premature. One may only remark that in the only decision available as of August 2017, the President of UOKiK found a number of standard terms used by an educational establishment to be unlawful and accepted the trader’s commitments to introduce amendments.111 Similarly to its earlier decision-making practice, the authority first looked at the criterion of the public interest. It then went on to establish whether the remaining criteria set out in Article 3851(1) of the Civil Code were fulfilled. In doing so, particular attention was paid to the lack of contractual balance between the parties, yet transparency and precision were also considered as part of the principle of good practice.

5 Sector-Specific Rules: The Financial Consumer 5.1

Introductory Remarks

Polish law provides for a number of specific rules related to consumer information in the field of finance.112 Most of them implement the applicable EU law. By way of illustration, the Act on consumer rights contains a separate chapter on contracts for financial services concluded at a distance, which transposes Directive 2002/65/EC into Polish law. There are also several specific acts related to different types of financial services such as consumer credit (Act on consumer credit implementing Directive 2008/48/EC,113 Act on mortgage credit114 implementing Directive 2014/ 17/EU115), insurance (Act on insurance mediation116 implementing Directive 2002/ 92/EC,117 currently under review to align it with the new Directive 2016/97118) or

111

Decision of the President of UOKiK in case RBG 3/2017 (n 107). See generally: Tereszkiewicz (2015). 113 Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC [2008] OJ L133/66. 114 Act of 23 March 2017 on mortgage credit and the supervision of mortgage credit brokers and agents (Ustawa o kredycie hipotecznym oraz o nadzorze nad pośrednikami kredytu hipotecznego i agentami), Dz.U. 2017 poz. 819 (codified version). 115 Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010 [2014] OJ L60/34. 116 Act of 22 May 2003 on insurance mediation (Ustawa o pośrednictwie ubezpieczeniowym), Dz.U. 2016 poz. 2077 (codified version). 117 Directive 2002/92/EC of the European Parliament and of the Council of 9 December 2002 on insurance mediation [2003] OJ L9/3. 118 Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution (recast), OJ L26/19. 112

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payment services (Act on payment services119 implementing Directive 2007/64/ EC,120 currently under review to align it with the new Directive 2015/2366121). Due to significant overlaps with the European framework, the present section will hereinafter mainly focus on one area, namely the protection of consumers in the credit market. This appears particularly illustrative given, on one hand, a considerable amount of data related to the application of the Act on consumer credit and, on the other hand, a very recent adoption of the Act on mortgage credit, which provides a sample of the current legislative developments. An interesting piece of legislation, which, by contrast, has not been prompted by the EU law, is the aforementioned provision in the Act on competition and consumer protection on the so-called misselling of financial products. In the 2016 reform, subsection 4 was added to Article 24(2) of the Act, which provides that proposing financial services to consumers which do not match their needs, as determined on the basis of the information available to the undertaking about the characteristics of those consumers, or proposing the purchase of services in a manner unsuitable for the nature of those services can be qualified as an infringement of collective consumer interests and be subject to administrative sanctions. Although, so far, the provisions has not been applied in practice, it shows that the legislator is keeping an eye on the financial market and tries to remedy its observed deficiencies.

5.2

Act on Consumer Credit

Polish law on consumer credit dates back to 2001, when the first Act on consumer credit, implementing Directive 87/102/EEC,122 was adopted. Following the replacement of the aforementioned Directive with Directive 2008/48/EC, an analogous adjustment was made to the national law, leading to the adoption of the currently applicable Act of 2011. The Directive is based on the principle of targeted full

119

Act of 19 August 2011 on payment services (Ustawa o usługach płatniczych), Dz.U. 2016 poz. 1572 (codified version). 120 Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and repealing Directive 97/5/EC [2007] OJ L319/1. 121 Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC [2015] OJ L337/35. 122 Council Directive 87/102/EEC of 22 December 1986 for the approximation of the laws, regulations and administrative provisions of the Member States concerning consumer credit [1987] OJ L42/48.

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harmonisation, which prevents Member States from maintaining or introducing national provisions other than those laid down in the Directive. However, where no such harmonised provisions exist, Member States remain free to maintain or introduce national legislation. The Act of 2011 on consumer credit establishes the principles and procedures for the conclusion of consumer credit agreements, defines obligations of creditors and credit intermediaries with respect to pre-contractual information as well as other obligations of consumers, creditors and credit intermediaries connected to the consumer credit agreement and the consequences of creditors’ non-compliance. For purposes of the Act, credit agreements are defined as agreements whereby a creditor, acting as part of his business or professional activity, grants or promises to grant credit to a consumer, a total amount of which does not exceed 255,550 PLN or an equivalent amount in a foreign currency. The above-mentioned threshold does not apply to credit agreements, not secured by a mortgage, the purpose of which is to finance renovation of a house or of a residential unit. Several specific types of credit agreements are excluded from the scope of the Act, for example leasing agreements, unless the consumer is obliged to purchase the object of the lease, or the so-called reverse mortgage agreements. The Act on consumer credit includes a number of rules related to the pre-contractual stage. For example, Article 7 defines information which should be provided in the advertisement of consumer credit and Article 13 provides a list of information particulars, which have to be communicated to consumers, on a durable medium, in good time before the agreement is concluded. Creditors and credit intermediaries are free to provide additional pre-contractual information, as recognised in Article 16. Furthermore, prior to the conclusion of the contract, creditors and credit intermediaries are obliged to provide explanations related to the content of the pre-contractual information and the proposed credit agreement in a way, which allows the consumer to take a decision related to that agreement. Several important provisions also pertain to the credit agreement itself. The contract should, in principle, be concluded in writing and be drafted in a clear and comprehensible manner. The Act also specifies a set of elements, which should be included in particular types of consumer credit agreements (Article 30 and the following) as well as information to be provided following their conclusion (change of the interest rate, statement of account, timetable for repayment, significant overrun, etc.). It also lays down sanctions for the breach of selected obligations. Most importantly, pursuant to Article 45 of the Act, omission of several most important information particulars from the contract creates a right on the part of the consumer to repay the credit without interests or costs. Furthermore, failure to provide any of the information particulars set out in Article 30 leads to an extension of the consumer’s right to withdraw (Article 53(2)). Finally, it is worth noting that, as long as the public interest criterion is fulfilled, provisions of the Act on consumer credit can also be enforced by the President of UOKiK. Indeed, a number of decisions adopted by the consumer protection authority refer to infringements of

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marketing and disclosure rules established in this Act.123 The relevant decisions are based either on Article 24(2) of the Act on competition and consumer protection, i.e. the general unlawfulness criterion, or on the specific norms of Article 24(2) (2) and (3).

5.3

Act on Mortgage Credit

The most recent piece of legislation dealing with the information of consumers in the financial market is the Act of 2017 on mortgage credit. Its subject matter is to a certain degree similar to that of the Act on consumer credit. Indeed, the Act is similarly limited to business-to-consumer agreements and contains numerous provisions on advertising, pre-contractual information, form and content of the contract, certain contractual rights and obligations of both parties (including the consumer’s right to withdraw) as well as targeted sanctions. Its stipulations are, however, even more extensive compared to the previously discussed act. What is more, in order to maintain consistency between both acts, the Act on mortgage credit also introduced a number of amendments to the Act on consumer credit. As a result, obligations of the creditors in both types of contracts were broadened significantly. The provisions of the Act relating to the marketing of credit agreements have met with particularly strong stakeholder reactions.124 New, detailed rules have been criticised as making advertisement of consumer credit virtually impossible and potentially leading to a situation where the advertisement of specific financial services is replaced with general image campaigns. It remains to be seen if this rather gloomy forecast will turn out to be true. On a more optimistic note, one can observe that positive, bottomup measures are also being taken to ensure compliance with the new rules. The most prominent example of these efforts is Code of conduct for consumer credit advertisement drafted by the key financial stakeholders.125

123

See e.g. decisions of the President of UOKiK of 9 March 2016 (DDK 3/2016, DDK 4/2016, DDK 5/2016, DDK 6/2016 and DDK 7/2016), 19 May 2016 (RBG 4/2016), 28 June 2016 (RKT 03/2016), 30 June 2016 (RKR 2/2016), 8 August 2016 (RKT 5/2016), 26 August 2016 (DDK 19/2016), 7 September 2016 (RKT 06/2016), 17 October 2016 (RPZ 9/2016), 21 October 2016 (RKR 5/2016), 2 November 2016 (RBG 8/2016), 21 November 2016 (RKR 9/2016) and of 5 December 2016 (RKT 7/2016). 124 See in particular: position papers of the Polish Bank Association (Związek Banków Polskich), Polish Employers (Pracodawcy RP), Konfederacja Lewiatan (Lewiatan Confederation), Association of Loan Companies (Związek Firm Pożyczkowych) and the Conference of Financial Companies in Poland (Konferencja Przedsiębiorstw Finansowych w Polsce) http://legislacja.rcl.gov.pl/projekt/ 12286052/katalog/12355934#12355934. 125 Konferencja Przedsiębiorstw Finansowych w Polsce, Provident, Związek Firm Pożyczkowych, Związek Banków Polskich, ‘Dobre praktyki w zakresie standardów reklamowania kredytu konsumenckiego’ (2016), https://zbp.pl/public/repozytorium/dla_konsumentow/rekomendacje/ Dobre_Praktyki_Reklamy_Kredytu_Konsumenckiego.pdf.

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6 Sector-Specific Rules: The Digital Consumer 6.1

Scope and Modalities of the Information Duty

As indicated above, Polish law provides for specific information requirements applicable to distance contracts between consumers and traders. As in most of the discussed areas, also in this field a strong influence of the EU law is observed. The relevant duties are set forth in the chapter 3 of the Act on consumer rights, which implemented Directive 2011/83/EU into the Polish legal system. Several more general information duties are also laid down, among others, in the Act on the electronic provision of services126 transposing Directive 2000/31/EC. Information particulars, which have to be communicated to consumers in case of distance contracts, are defined in Article 12 of the Act on consumer rights. The list is significantly longer compared to the general information duty established in the same Act. This difference is usually explained by the lack of direct contact of the contracting parties, which further exacerbates the information asymmetry between them.127 Specific constraints of the means of distance communication have, nevertheless, also been considered. Pursuant to Article 19 of the Act, if the contract is concluded through a means of distance communication which allows limited space or time to display the information, the trader shall provide, prior to the conclusion of a contract, at least the pre-contractual information regarding the main characteristics of the goods or services, the identity of the trader, the total price, the right to withdraw, the duration of the contract and, if the contract is of indeterminate duration, the conditions for terminating the contract. Particular modalities of the pre-contractual disclosure in case of distance, and especially online, contracts are also more specific compared to the general duty. Basic requirements related to time and transparency of disclosure are analogous: in principle, the disclosure should be made at the latest at the time when consumer expresses his will to be bound by the contract and in a clear and comprehensible manner. However, Articles 17 and 18 particularise these norms in respect of online contracts. The first provision specifies that if a distance contract to be concluded by electronic means places the consumer under an obligation to pay, the trader shall make the consumer aware of certain information directly before the consumer places his order.128 The trader is also required to ensure that the consumer, when placing his order, explicitly acknowledges that the order implies an obligation to pay. What is more, if placing an order entails activating a button or a similar function, that button

Act of 18 lipca 2002 on the electronic provision of services (Ustawa o świadczeniu usług drogą elektroniczną), Dz.U. 2017 poz. 1219 (codified version); see also: Lubasz (2011), pp. 106–133. 127 Wojtaszek-Mik (2014), p. 24. 128 The relevant information refers to: the main characteristics of the goods or services and the means of communication with the trader, the total price, the duration, including the minimum duration, of the contract and, if the contract is of indeterminate duration, the conditions for terminating the contract. 126

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or function should be labelled in an easily legible manner with the words ‘order with obligation to pay’ or a corresponding unambiguous formulation. Finally, Article 18, which applies specifically to trading websites, stipulates that information about delivery restriction and accepted means of payment should be communicated at the latest at the beginning of the ordering process. This could indicate a future tendency to impose certain information duties not only on the final sellers or service providers, but also on the operators of online platforms. The role of platform operators as information providers, which could be particularly important in the context of collaborative economy where the underlying relationships are not readily qualified as B2C contracts, is an issue that began to attract the attention of several Polish scholars.129 As regards the relevant medium, Article 14(2) of the Act provides that information should be communicated in a way appropriate to the means of distance communication used, in an intelligible language and be legible. Following the conclusion of the contract, the consumer should also be provided with its confirmation on a durable medium, which allows him or her to become acquainted with the key terms of the contract at a later stage.

6.2

Sanctions

Observations made with respect to potential sanctions applicable to infringements of the general information duty can also generally be transposed to the specific regime of distance contracts.130 Two important differences compared to the general information duty should, nevertheless, be noted. Firstly, Article 22 of the Act on consumer rights states that information provided in case of distance contracts forms an integral part of the contract and should not be altered unless the contracting parties expressly agree otherwise. Incorporation of the pre-contractual information into the contract is bound to have an impact on its interpretation. What is more, according to some authors, this makes mandatory information disclosed at the pre-contractual stage somewhat similar to the standard conditions of business and could potentially trigger the applicability of Article 3851 and the following of the Civil Code.131 Secondly, pursuant to Article 24 of the Act on consumer rights, the burden of proof that the information duties in distance contracts were complied with rests on the trader, which significantly improves the consumer’s procedural situation. Finally, a number of additional specific sanctions for the breach of information duties in case of distance, and especially online, contracts are provided. Most

129

See, in particular: Research group on the Law of Digital Services (2016), p. 164. See Sect. 2.1.2 above. As regards public enforcement see also: decisions of the President of UOKiK of 31 March 2016 (RKT 02/2016) and of 28 December 2018 (RWA 7/2016). 131 Lubasz (2015), p. 222; Czech (2017), p. 332. 130

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importantly, pursuant to Article 17(4) of the Act, if the trader fails to ensure that the consumer is aware that the order implies an obligation to pay or fails to adequately label the button or a similar function used for this purpose, the consumer shall not be bound by the contract or order. Furthermore, similarly to the Act on consumer credit, failure to provide the consumer with the information on the right to withdraw, leads to an extension of the withdrawal period.132 A breach of the same duty also releases the consumer from liability for diminished value of the goods occurring within the withdrawal period.133

6.3

Personal Data, Cookies and Spam

Polish law also contains a number of provisions related to the information about and the consent to the processing of personal data, placing of cookies or receiving commercial communications. These rules are not considered to be a part of the consumer acquis in the narrow sense of the word, as they are applicable to data subjects or service recipients more generally.134 Most provisions in the analysed domains also originated at the EU level. The rules on commercial communications, including unsolicited commercial communications (spam), implementing Directives 2000/31/EC on electronic commerce and 2002/58/EC on privacy and electronic communications as amended,135 are laid down in the Act on electronic provision of services and the Telecommunication Law,136 respectively. Article 9 the Act on electronic provision of services stipulates that commercial communication shall be clearly identifiable as such and defines specific information particulars to be provided. Article 10 of the same Act introduces a general prohibition of sending unsolicited commercial communications by electronic mail.137 Commercial communication is not considered unsolicited if the service recipient agreed to receive it, in particular made his e-mail address available for this purpose. Pursuant to Article 4(1) of the Act, the consent cannot

132

Article 29 of the Act on consumer rights. Article 34(4) of the Act on consumer rights. 134 Lubasz (2011), p. 64. 135 Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications) [2002] L201/37. 136 Act of 16 July 2004—Telecommunication Law (Prawo telekomunikacyjne), Dz.U. 2016 poz. 1489 (codified version). 137 The Polish legislator chose an opt-in solution in this respect, permitted under Article 7 of Directive 2000/31/EC; see also: Malarewicz (2009), pp. 222–223. 133

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be presumed or implied and can be revoked at any time. A similar rule can be found in Article 174 of the Telecommunication Law.138 Sending unsolicited commercial communications can lead to a variety of sanctions. Firstly, Article 10(3) of the Act on electronic provision of services classifies this practice as an act of unfair competition, which opens the possibility of pursuing claims in business-to-business scenarios. Persistent unsolicited communications can also fall under Article 9(3) of the Act on countering unfair market practices and therefore constitute a blacklisted aggressive practice. Besides private enforcement, sending unsolicited communications can also be enforced in the public law procedure based on Articles 24(2) and Article 24(2)(3) of the Act on competition and consumer protection. Furthermore, Article 172 of Telecommunication Law stipulates that the use of automated calling systems for purposes of direct marketing is only allowed in respect of subscribers who have given their prior consent and should not create any costs for consumers. Article 173 of same Act implements the rules on cookies laid down in Article 5(3) of Directive 2002/58/EC as amended by Directive 2009/136/EC.139 In particular, Article 173(1) stipulates that the storing of information or the gaining of access to information already stored in subscriber’s or end-user’s terminal equipment is allowed on condition that, firstly, the person concerned is informed, directly before and in a clear, easy and comprehensible manner, about the purpose of such activities and about the possibility to determine their conditions by means of appropriate software or service settings and, secondly, has given his or her consent. Moreover, the storing of information in terminal equipment or the gaining of access to such information should not change the settings of the equipment or the software installed upon it. Article 173(2) further provides, in line with recital 66 of Directive 2009/136/EC, that consent to the activities mentioned above can be expressed by using an appropriate software or service setup. This means that protection of end-users and subscribers in the analysed context essentially relies on the provision of information. Generally speaking, it is possible to adapt cookie settings of the browser and continue using the service of interest, but to do so positive action on the part of the person concerned is required. At the same time, ubiquitous pop-up windows can be criticised as not effective and even counter-productive as end-users and subscribers can interpret them as implying that positive steps need to be taken every time when a website is visited. This, in turn, could appear to them as too burdensome and, in effect, prevent them from taking any action. It is worth

138

Article 174 of the Telecommunication Law provides that the consent of a subscriber cannot be presumed or implied, can be expressed by electronic means provided that it is recorded and confirmed by the subscriber and can be revoked easily, at any time, free of charge. 139 Directive 2009/136/EC of the European Parliament and of the Council of 25 November 2009 amending Directive 2002/22/EC on universal service and users’ rights relating to electronic communications networks and services, Directive 2002/58/EC concerning the processing of personal data and the protection of privacy in the electronic communications sector and Regulation (EC) No 2006/2004 on cooperation between national authorities responsible for the enforcement of consumer protection laws [2009] OJ L337/11.

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noting that Directive 2002/58/EC is currently undergoing review with a view to its replacement with a directly applicable EU Regulation, and improving the cookie solution is one of the heavily discussed topics.140 As regards the consent to the processing of personal data, the issue is currently dealt with primarily under directly applicable Regulation No 2016/679.141 For this reason it will not be addressed in more detail either.

7 The Information Model Under Pressure and the Problem of Disinformation Questions of information overload and the risk of disinformation have not received much attention in the Polish consumer law literature. Admittedly, their existence has been acknowledged,142 but has not yet led to any extensive studies or discussions about the available alternatives. Legal scholarship in Poland has also remained fairly oblivious about the insights from behavioural economics, which, by contrast, are extensively discussed in the foreign academia, particularly with respect to unfair commercial practices.143 This might be due to the fact that Polish courts are generally reluctant to accept empirical evidence as to consumers’ behaviour, noting that the consumer benchmark is a normative model and is reconstructed in abstracto based on the judge’s experience.144 It remains to be seen if the case is going to be different for another major topic, which begins to attract scholarly attention across the globe, namely the apparent growth of the information asymmetry between consumers and traders arising from the deployment of advanced technological tools by the latter.145 Indeed, in the age of ubiquitous personalisation enabled by big data and learning algorithms, it becomes increasingly clear that digital consumers cannot generally be treated as better 140

Proposal for a regulation of the European Parliament and of the Council concerning the respect for private life and the protection of personal data in electronic communications and repealing Directive 2002/58/EC (Regulation on Privacy and Electronic Communications), COM(2017) 10 final. 141 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) [2016] OJ L119/1. 142 Lubasz and Namysłowska (2015), p. 137; Pachuca-Smulska (2013), p. 45; Świerczyński (2015), p. 144; Czech (2017), p. 266. 143 See e.g.: Howells (2005), p. 349; Sibony and Helleringer (2015), p. 209; Grundmann (2016), p. 223. 144 European Commission (2017), p. 887; judgment of the Supreme Court in case III SK 34/13 (n 7), judgment of the Court of Appeals in Warsaw in case VI ACa 1685/14 (n 23); see, however, judgment of the Supreme Court in case III SK 45/10 (n 31), in which the court agreed that such evidence should not have been rejected. 145 Jabłonowska et al. (2018), p. 11.

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informed and less subject to manipulation than their analogue counterparts (if such a distinction can, at all, still be drawn). Further doubts are also being raised about the usefulness of classical disclosure duties. In line with a global trend, in 2018 the Ministry of Digital Affairs in Poland set up an expert group to explore the possible legal and ethical implications of on-going developments in artificial intelligence.146 All in all, however, national discussion about the novel challenges to consumer protection brought about the expansion of algorithmic techniques in various sectors of the economy is still in its infancy. On a more general note, Polish legislator has so far not expressed a particularly strong interest in addressing the question of consumer information in its own capacity, largely leaving this domain to the EU level. Such an approach finds support in the fact that the relevant EU directives are increasingly following the principle of full harmonisation and the new rules on data protection, e-privacy or food labelling tend to be passed in the form of directly applicable regulations. As a result, the Polish legislator, on the one hand, tends not to extend the information requirements laid down in EU law or to provide similar rules of its own initiative.147 On the other hand, no serious discussion has also taken place as to the need to prevent the information overload. Due to the open-ended nature of key legal norms discussed throughout this article, a stimulus to deal with the problem of information overkill could potentially come from the area of law enforcement. While it does not seem plausible that de lege lata disinformation resulting from the trader’s compliance with mandatory rules could be regarded as unlawful, excessive information provided voluntarily by the trader could be qualified, for instance, as an unfair market practice based on the general clause of the Act on countering unfair market practices or an aggressive practice analogous to spam. It could further be considered as a practice infringing collective consumer interests subject to public law proceedings. So far, however, the President of UOKiK, who appears to be best placed to bring the question of information overload up for debate, has refrained from exploring the available avenues, possibly due to the apparent lack of consumer complaints related to that issue.

8 Other Relevant Topics The present report has shown that the Polish law related to consumer information is largely based on applicable EU legislation. Since, however, the purpose of this questionnaire is to collect genuinely national insights, we will refrain from assessing

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https://www.gov.pl/cyfryzacja/na-efni-o-sztucznej-inteligencji-oraz-rownosci-spolecznej. European Commission (2017), p. 918. Attention should, nevertheless, be drawn to the Act on the protection of the rights of the buyer of a residential unit or a single family home (n 4), in which additional information requirements and other protective stipulations can be found. 147

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the quality of this law. It suffices to say that information is indeed regulated at each stage of the contracting process, with particularly strong emphasis on the pre-contractual phase (advertisement, information to be provided before a specific contract is concluded, transparency requirements and ex ante control of standard contract terms). It is also worth noting that the European consumer acquis was recently subject to the so-called Regulatory Fitness and Performance Programme, during which several issues related to consumer information were highlighted.148 Therefore, an evolution of the EU approach in this domain cannot be ruled out. At the same time, however, another fairly recent act, Directive 2014/17/EU on mortgage credit, shows that reliance on the so-called information paradigm remains strong. As mentioned above, implementation of this Directive into Polish law has met with criticism of multiple stakeholders. Indeed, excessively detailed rules on advertising might turn out to be counterproductive if they lead to the replacement of product-specific communications with general image campaigns. Objections can also be raised against the constantly updated catalogues of information to be provided in the context of particular contractual relationships. One should, however, acknowledge the value of a limited set of information particulars disclosed in the appropriate time and form as well as the role that information recorded on a durable medium plays post factum. More discussion is therefore clearly needed on the role and function of the information requirements imposed during particular stages of a legal relationship. The approach taken by the Consumer Rights Directive in respect of digital contracts could be seen as a good starting point. It goes without saying that, in order to be effective, information paradigm needs to go hand in hand with adequate consumer education. In this respect Polish consumers are clearly catching up, even though important progress is still needed. In a 2009 study, 75% of respondents agreed with the statement that Poles, in general, do not know their consumer rights.149 In 2015, 55% of respondents admitted to have heard about the adoption of the Act on consumer rights, but only 40% knew where they could seek legal assistance.150 Interestingly, consumers in Poland performed relatively well in the Consumer Conditions Scoreboard from the same year.151 This could be the result of numerous initiatives undertaken over the years by the public authorities and by non-governmental organisations.152 Targeted campaigns addressed at different consumer groups, an increasing use of online tools, such as topic-specific websites and official social media profiles of consumer protection 148

http://ec.europa.eu/newsroom/just/item-detail.cfm?item_id¼59332. UOKiK, Znajomość praw konsumenckich oraz analiza barier utrudniających konsumentom bezpieczne i satysfakcjonujące uczestnictwo w rynku – raport z badań (2009). 150 www.pssb.pl/pssb/news/details,1,,169,konsument-coraz-bardziej-swiadomy-swoich-praw.html. 151 European Commission, Consumer Conditions Scoreboard, 11th edn, 17–20, www.ec.europa.eu/ consumers/consumer_evidence/consumer_scoreboards/11_edition/docs/ccs2015scoreboard_en. pdf. 152 See e.g. www.federacja-konsumentow.org.pl/59,kampanie.html; www.konsumenci.org/pomockonsumencka,dla-seniorow,2,26.html; https://finanse.uokik.gov.pl/; www.prawakonsumenta. uokik.gov.pl; www.uokik.gov.pl/education_campaigns.php. 149

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stakeholders, along with professional hotlines co-financed by the consumer protection authority, are certainly worthy of note and respect. Finally, an important aspect of the consumer information framework relates to its enforcement. Due to procedural autonomy, which the EU Member States generally enjoy, this element is also the best illustration of existing national particularities. As mentioned in our previous report, consumer law enforcement in Poland relies heavily on the public law proceedings carried out by the President of UOKiK.153 This procedure does not seem to be the best match for certain information requirements. Indeed, consumer protection authority might be able to take effective measures against large-scale advertising campaigns. The authority may also monitor compliance with the pre-contractual information requirements listed in specific legal acts. This action is, however, bound to be selective and, as mentioned before, does not guarantee compensation for individual consumers. Therefore, in addition to the possible adjustments to the substantive legal framework as well as further efforts in the field of consumer education, procedural adjustments along with an increased funding of consumer organisations and consumer ombudsmen are absolutely vital. Acknowledgement The research of Agnieszka Jabłonowska resulting in this publication was partially financed by the National Science Centre (Narodowe Centrum Nauki) in Poland on the basis of decision no. DEC-2015/19/N/HS5/ 01557.

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business’ use of artificial intelligence. Final report of the ARTSY project. http://cadmus.eui.eu/ handle/1814/57484. Accessed 28 Sept 2018 Kaczmarek-Templin B (2014) Komentarz do art. 12. In: Kaczmarek-Templin B, Stec P, Szostek D (eds) Ustawa o prawach konsumenta. Kodeks cywilny (wyciag). Komentarz. C.H. Beck, Warsaw, pp 93–106 Kohutek K (2016) Konsument – czyli kto? Glosa 4:87–94 Księżak P (2015) Skutki prawne naruszenia obowiązków informacyjnych przedsiębiorcy zamierzającego zawrzeć umowę z konsumentem. In: Karczewska D, Namysłowska M, Skoczny T (eds) Ustawa o prawach konsumenta. C.H. Beck, Warsaw, pp 152–161 Łętowska E (2002) Prawo umów konsumenckich. C.H. Beck, Warsaw Lubasz D (2011) Komentarz do art. 2. Komentarz do art. 5. Komentarz do art. 6. In: Lubasz D, Namysłowska M (eds) Świadczenie usług drogą elektroniczną oraz dostęp warunkowy. Komentarz do ustaw. LexisNexis, Warsaw, pp 36–68, 106–133 Lubasz D (2015) Komentarz do art. 22. In: Namysłowska M, Lubasz D (eds) Ustawa o prawach konsumenta. Komentarz. Wolters Kluwer, Warsaw, pp 221–225 Lubasz D, Namysłowska M (2015) Komentarz do art. 8. Komentarz do art. 12. In: Namysłowska M, Lubasz D (eds) Ustawa o prawach konsumenta. Komentarz. Wolters Kluwer, Warsaw, pp 101–122, 133–171 Machnikowski P (2008) Odpowiedzialność przedkontraktowa – jej podstawy, przesłanki i funkcje. In: Pazdan M, Popiołek W, Rott-Pietrzyk E, Szpunar M (eds) Europeizacja prawa prywatnego. Tom I. Wolters Kluwer, Warsaw, pp 699–720 Malarewicz A (2009) Konsument a reklama. Studium cywilnoprawne. Wolters Kluwer, Warsaw Miąsik D (2014) Komentarz do art. 24. In: Skoczny T (ed) Ustawa o ochronie konkurencji i konsumentów. Komentarz. C.H. Beck, Warsaw, pp 747–780 Michalak A (2008) Przeciwdziałanie nieuczciwym praktykom rynkowym. Komentarz. C.H. Beck, Warsaw Namysłowska M (2014) Czarna lista nieuczciwych praktyk handlowych a granice prawa zwalczania nieuczciwej konkurencji w Unii Europejskiej. Analiza prawnoporównawcza. Wolters Kluwer, Warsaw Namysłowska M (2017) Verbraucherrecht: Erga-Omnes-Wirkung von missbräuchlichen AGB in einem öffentlichen Register. Europäische Zeitschrift für Wirtschaftsrecht 5:191–195 Namysłowska M, Jabłonowska A (2018) Enforcement and effectiveness of consumer law in Poland. In: Micklitz H-W, Saumier G (eds) Enforcement and effectiveness of consumer law, Ius Comparatum – Global studies in comparative law. Springer, Berlin, pp 433–455 Olejniczak A (2008) Problematyka culpa in contrahendo na tle europejskiego prawa umów. In: Pazdan M, Popiołek W, Rott-Pietrzyk E, Szpunar M (eds) Europeizacja prawa prywatnego. Tom II. Wolters Kluwer, Warsaw, pp 87–105 Pachuca-Smulska B (2013) Prawo do informacji i edukacji podstawą ochrony interesów konsumenta. In: Królikowska-Olczak M, Pachuca-Smulska B (eds) Ochrona konsumenta w prawie polskim i Unii Europejskiej. C.H. Beck, Warsaw, pp 38–62 Pajor T (2014) Komentarz do art. 221. In: Pyziak-Szafnicka M, Księżak P (eds) Kodeks cywilny. Komentarz. Część ogólna. Wolters Kluwer, Warsaw, pp 250–266 Piszcz A (2015) Wyłączenia z zakresu stosowania ustawy o prawach konsumenta (ze szczególnym uwzględnieniem wyłączenia umów o usługi zdrowotne). In: Karczewska D, Namysłowska M, Skoczny T (eds) Ustawa o prawach konsumenta. C.H. Beck, Warsaw, pp 110–122 Piszcz A, Namysłowska M (eds) (2016) Ustawa o zmianie ustawy o ochronie konkurencji i konsumentów z 5.8.2015 r. Komentarz. C.H. Beck, Warsaw Research group on the Law of Digital Services (2016) Discussion draft of a directive on online intermediary platforms. J Eur Consum Mark Law 4:164–169 Rządkowski M (2016) Pojęcie konsumenta a umowy mieszanego użytku w prawie polskim. Monitor Prawniczy 17:929–931

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Information Obligations and Disinformation of Consumers: Czech Law Report Markéta Selucká, Iva Šťavíková Řezníčková, and Pavel Loutocký

Abstract The text is focused primarily on the concept of informed consumers in the Czech law. In the beginning it describes general characteristics of the consumer information model, then it analyses pre-contractual information obligation and the demands focused on the transparency. As the position of the consumer is weaker than the position of entrepreneur, misleading commercial practices and unfair contract terms are examined as well. The text is then focused on sector specific rules, such as on the area of financial services and on the aspects of digital consumer including contracting, using cookies and reasonable consumer expectations. Throughout the text, some problematic aspects of Czech regulation or inappropriate implementation of European legislation are mentioned as well. The text then concludes (and it is trying to point out throughout the whole text), that the consumer could be overloaded by provided information. The aim of the chapter is to introduce national specifics within abovementioned areas and to analyse relevant questions of consumer protection connected with the topic of the informed consumer.

M. Selucká Masaryk University, Faculty of Law, Department of Civil Law, Brno, Czech Republic e-mail: [email protected] I. Š. Řezníčková Czech National Bank, Financial Market Supervision, Consumer Credit Supervision Division, Prague, Czech Republic P. Loutocký (*) Masaryk University, Faculty of Law, Institute of Law and Technology, Brno, Czech Republic e-mail: [email protected] © Springer Nature Switzerland AG 2019 G. Straetmans (ed.), Information Obligations and Disinformation of Consumers, Ius Comparatum – Global Studies in Comparative Law 33, https://doi.org/10.1007/978-3-030-18054-6_9

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1 General Characteristics of the Consumer Information Model Czech private law is based on the idea of a reasonable, informed consumer who is able to assess the consequences of his/her actions (see UCPD Directive),1 i.e. the basic presumption on which the concept of “consumer” is based being that the consumer is a person who has enough information to be able to make a responsible decision on whether or not to conclude the contract (the consumer knows “what is going on”). As the Czech Republic is an EU Member State, the consumer protection legislation is largely the result of the transposition of consumer protection directives and the interpretation of the concept of “consumer” is consistent with the settled case-law of the Court of Justice of the European Union (CJEU) [Cape Snc v Idealservice Srl (C-541/99) and Idealservice MN RE Sas v OMAI Srl (C-542/99); Johann Gruber v. Bay Wa AG (C-464/01); Patrice Di Pinto (C-361/89)]. However, special protection is given to so-called “particularly vulnerable consumers”, in accordance with Article 5 (3) of the UCPD Directive. The special protection has been implemented in Czech law in the Act no. 634/1992 Sb., Consumer Protection Act, as amended (further referred to as the “Consumer Protection Act”) (see Section 4 (2) of the Consumer Protection Act).2 Besides the concept of “average consumer”, it also deals with the protection of the so-called vulnerable consumers, i.e. persons who are, due to their age, mental or physical weakness or credulity, more easily influenced by business practices aimed at them. The Supreme Administrative Court of the Czech Republic, in its judgment file no. 4 As 98/ of 17 January 2014, developed the directive more in relation to the consumer who is making his/her choice under the influence of illness in order to improve his/her health and came to the following conclusion: “The average consumer who is adequately informed, attentive and reasonable, which is generally a benchmark when assessing advertising, is not so critical that he/she would be completely immune to advertising. If the target group is the sick, consideration should be given to their lower critical thinking and greater tendency to believe the advertising that promises cure for their illness (Article 5 (3) of Directive 2005/29/EC of the European Parliament and of the Council concerning unfair business-to1 Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (‘Unfair Commercial Practices Directive’). 2 A business practice that can substantially impair the economic behaviour of a certain clearly identifiable group of consumers who, due to their mental or physical weakness, age or credulity, are particularly vulnerable by such practice or product or service, in a way that the entrepreneur may reasonably expect, is considered from the viewpoint of the average member of that group; this does not affect the normal and legitimate advertising practices of exaggerated statements or such statements that are not meant literally.

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consumer commercial practices in the internal market and amending the Council Directive 84/450/ EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council, and Regulation 2006/2004 of the European Parliament and the Council (EC) (Directive on unfair business practices).” The Supreme Administrative Court further ruled that “a group of people suffering from a particular disease is particularly vulnerable as a target group for advertising concerning a product promising cure or eliminating the symptoms of the disease. An average consumer suffering from a certain disease is undoubtedly more prone to believe a certain claim about curing his/her disease than an average healthy consumer. This argument, too, supports the opinion that advertisement in question should be judged more strictly.”

2 Pre-contractual Information Requirements 2.1

General Information Obligation

The general pre-contractual information obligation follows, in particular, Article 5 of the Consumer Rights Directive3 which was transformed into the Act No. 89/2012 Sb., Civil Code, as amended (further referred to as the “Civil Code”).4 The consumer must receive information well in advance, i.e. so that he/she could make an informed decision, and even if the information required by law is not known from the negotiation process. The information he/she must receive concerns, for example, the identity of the entrepreneur, the goods, the price, the delivery costs, the information on the rights from defective performance, the guarantee, the duration of the obligation, and the terms of termination. However, the information obligation does not apply to contracts concerning things of everyday life, provided that there should be an immediate performance after the conclusion of the contract, and then contracts for the delivery of digital content if it is delivered on a physical medium. However, the rule of law appears to be imperfect since it does not contain any explicit sanction (unlike the breach of pre-contractual information obligation in the case of contracts concluded out of the premises and distance contracts). Nevertheless, it generally applies in Czech private law that if a breach of a legal obligation results in a damage (both the material and non-material one) then the person who breached the

3 Directive 2011/83/EU of the European Parliament and of the Council on consumer rights which amends the Council Directive 93/13/EEC and the Directive 1999/44/EEC of the European Parliament and of the Council and which repeals the Council Directive 85/577/EEC and the Directive 97/7/EEC of the European Parliament and the Council. 4 If the conduct of the parties aims at concluding the contract and these facts are not apparent from the context, the entrepreneur shall inform the consumer in good time before the contract is concluded or before the consumer makes a binding offer.

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obligation (wrongdoer) is liable for the breach. This applies, of course, even in the event of a breach of the obligation to provide pre-contractual information to the consumer. Czech private law also knows the institute of culpa in contrahendo (Section 1728–1729 of the Civil Code), but it is primarily a general institute applied generally to pre-contractual negotiations between potential contractors. Nevertheless, one of the Supreme Court resolutions established that “the defendants had a legitimate reason to refuse to conclude the contract because the contractual terms offered by the plaintiff contradicted their initial wording; the Court also inferred that there was no causal link between the actions of the defendants and the damage incurred by taking into consideration the actions of the appellant and the defendants during the entire contractual process.” (the resolution of the Supreme Court of the Czech Republic of 28 March 2013, file no. 25 Cdo 2863/2012). The provision concerning the general pre-contractual information obligation in B2C relationships appears to be specific to the general institute of culpa in contrahendo, or it could make the appearance of the constituent elements this institute stricter and more specific, but we take the view that priority will be given to liability for damage caused by breach of the legal obligation defined in Section 1811 of the Civil Code prior to the application of the general institute of culpa in contrahendo. In the case of contracts negotiated in a distance manner, the penalty for breach of the pre-contractual information obligation is such that, if the consumer was obliged to pay any additional costs or fees and was not informed of them in the pre-contractual negotiation, he is not then obliged to pay them (see Section 1821 of the Civil Code). Furthermore, if the consumer was not informed of his/her right to withdraw from the contract without any sanction within 14 days since the conclusion of the contract, this period is extended to one year and 14 days, unless that information was provided subsequently.

2.2

Presentation of Information Includes Transparency Requirements

Czech private law also includes an obligation for the entrepreneurs to provide consumers with information of a certain quality, in order to fulfil the meaning and purpose, i.e. so the decision should be made by an informed consumer “knows what is going on”. Section 1811 (1) of the Civil Code explicitly states that “all communications to the consumer must be made clearly and comprehensibly by the entrepreneur in the language in which the contract is concluded.” For example, the Constitutional Court of the Czech Republic explicitly states that “The content of the contract is to be legible to the average consumer, clearly and logically arranged. For example, contractual arrangements must be of sufficient font size, they may not be in a significantly smaller size than the surrounding text, and they may not be

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placed in sections that give the impression of an insignificant character.”5 The High Court in Prague also ruled that the language of the contract must be understandable to the ordinary consumer: “The Court of Appeal notices - which is immediately apparent from an analysis of the contract - that the contract is, due to the legal constructions of the individual covenants (for consumer contracts totally inappropriate), completely incomprehensible to a person without a legal education and a certain economic overview. Surely, it is not the consequence of clumsiness in the drafting of the text of the contract (i.e. the model text); the opposite is true. Obviously, the text of the contract is deliberately designed so that by its complex constructions it prevents a person who does not have legal education and a certain economic overview from understanding the true meaning of the contract covenant.” (the ruling of the High Court in Prague, file No. 76 Cm 876/2010). Czech case law also corresponds to the CJEU’s case law when the obligation of an entrepreneur to provide information in a clear and understandable language is not construed formalistically but teleologically (the consumer has received information and therefore “he knows what is going on”), which is fully in compliance with the effective consumer protection in the EU. For example, CJEU states in its decision of 30 April 2014, Kásler Árpád, Káslerné Rábai Hajnalka v OTP Jelzálogbank Zrt. (C-26/13) that: “Article 4 (2) of Directive 93/13/EEC must be interpreted in the sense that if the clause at issue is such a clause as in the original proceedings, the requirement that the clause be drafted in a clear and comprehensible language must be understood in such a way that it establishes that the clause in question should be comprehensible to the consumer from a grammatical point of view, but also that the contract should transparently mention the specific functioning of the foreign exchange mechanism to which the clause in question refers to as well as the relationship between that mechanism and the mechanism laid down by other credit clauses, so that the consumer should able, on the basis of clear and comprehensible criteria, to assess the economic implications resulting for him/her.” The basic sanction provided by Czech private law in the case of information being communicated contrary to the requirement of clarity and comprehensibility is that such covenants are not taken into account, i.e. that it is a seemingly legal act (Section 1812 (2) of the Civil Code).

2.3

Specific Food Information Requirements for Consumers

All foods marketed both in the Czech Republic and the EU must meet the general labelling requirements of Regulation (EU) 1169/2011 on the provision of food information to the consumers. The requirements are specified in Article 9 of the Regulation and they are as follows:

The decision of the Constitutional Court of the Czech Republic of 11 November 2013, file no. I. ÚS 3512/11.

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(A) the name of the food; (B) the list of ingredients; (C) any substance or additional substance listed in Annex II or derived from a substance or product listed in Annex II causing allergies or intolerances that has been used in the manufacture or preparation of the food and that is still present in the finished product, albeit in an altered form; (D) the quantity of certain ingredients or groups of ingredients; (E) the net quantity of the food; (F) the date of minimum durability or the date of usability; (G) special storage conditions or conditions of use; (H) the name or business name and address of the food business operator referred to in Article 8 (1); (I) the country of origin or place of origin in the cases specified in Article 26; (J) instructions for use in the case of a food which would be difficult to use without such instructions; (K) for beverages containing more than 1.2% by volume the actual alcoholic strength by volume; (L) nutrition data. Other mandatory data is supplemented by the Act no. 110/1997 Sb., on Food and Tobacco Products and on the Amendment and Supplementation of Certain Related Acts, as amended, in particular in Sections 6–9b.

3 Misleading Commercial Practices The legal regulation of Unfair Commercial Practices (the UCPD Directive) is not part of the Civil Code but it was transposed to the Consumer Protection Act by Act no. 36/2008 Sb. The European Commission sent the Czech Republic formal notice and criticised the transposition of several provisions of the UCPD Directive.6 In order to make a proper transposition of the UCPD Directive, the legislator adopted the Act no. 378/2015 Sb.7 De lege lata the Consumer Protection Act comply with the UCPD Directive since then. The enforcement of the UCPD Directive is carried out by public bodies: Czech Trade Inspection Authority, Czech National Bank, Czech Energy Authority etc. These public bodies can initiate administrative proceedings on the basis of the consumer’s requirement or from their own initiative under the condition that they have enough relevant information.

6 7

To see more Loos and van Boom (2017), p. 241. Amendment on Consumer Protection (2015).

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Section 5 and Section 5a of the Consumer Protection Act explicitly distinguishes between misleading actions and misleading omissions. The assessment of the misleading character of a commercial practice is influenced by the way in which pre-contractual information was provided to the consumers. The consumer is protected against Aggressive Business Practices and Misleading Business Practices/Misleading omissions which are Unfair Business Practices. The consumer is protected against entrepreneurs’ practices which can materially distort the economic behaviour of the consumers; more precisely the practise of the entrepreneur can significantly impair or is likely to significantly impair consumer’s freedom of choice. It is prohibited using a commercial practice to appreciably impair consumer’s ability to make an informed decision, thereby causing the consumer to take a transactional decision that he/she would not have made otherwise. Competent court or ADR body must evaluate if the entrepreneur did not use in pre-contractual phase Unfair Business Practices, which is one element among others on which the competent court/ADR body may base its assessment of the unfairness of contractual terms under Article 4(1) of the Directive 93/13/EEC.8 The black-list, which is Annex 1 (Misleading Business Practices) and Annex 2 (Aggressive Business Practices) of the Consumer Protection Act serves as a benchmark for assessing the misleading character of commercial practices. If the term is on the black list it is not necessary to determine whether such practice fulfils requirements of general clause in the meaning of Section 4 of the Consumer Protection Act.9 It is considerate a great tool for controlling public bodies. According to the information from Czech Trade Inspection Authority most main trade chains stopped using the practice, which is on this black list.10 The average consumer (not even vulnerable consumer) is a relevant reference point in the Consumer Protection Act, but this Act recognizes the average member of the group as a reference point when the commercial practice is directed to a particular group (Section 4). The commercial practice has to be assessed from the perspective of the average member of that group, who is vulnerable because of age, physical or mental infirmity or credulity. The term average consumer is used as a benchmark for assessing commercial practice in regard to advertising in the case law of the Supreme Administrative Court. This court declared that average consumer is a person who is reasonably well informed and reasonably observant and circumspect.11 The Supreme Court also used Euro-conforming interpretation of the term “consumer” and assessed commercial practice in connection to “average consumer”. The Supreme Court declared that the average consumer is a person who is

8

Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts. The decision of the Supreme Administrative Court of the Czech Republic of 23 October 2014, file no. 7 As 110/2014-52. The decision of the Court of Justice of the European Union CHS Tour Services (C-435/11). 10 To see more Loos and van Boom (2017), p. 242. 11 The decision of the Supreme Court of the Czech Republic of 31 August 2011, file no. 8 As 83/2010. 9

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reasonably well informed and reasonably observant and circumspect taking into account social, cultural and linguistic factors. Reasonably observant and circumspect consumer in the case law of the Supreme Court means that the consumer is not inattentive or careless.12 We are not aware of a specific rule for providing the information to the consumers through specific media, e.g. comparison websites.

4 Unfair Contract Terms: Bargaining Power The Directive 93/13 was transposed into the Civil Code and entered into force on 1 January 2014. The general clause has been transposed into the Section 1813 of the Civil Code. The Czech Republic employed so-called derogation clause set forth in the Directive 93/13 and provided consumers with a higher degree of protection (Article 8). Section 1813 of the Civil Code: Stipulations which establish, contrary to the requirement of proportionality, a significant imbalance in the rights or duties of the parties to the detriment of the consumer are presumed to be prohibited. This does not apply to stipulations on a subject of performance or price if they are provided to the consumer clearly and understandably.

Interpreting the linguistic meaning of Section 1813 of the Civil Code, we may come to a conclusion that the protection from all unfair contract terms, regardless of how they were negotiated, is granted to the consumers. Nevertheless, the explanatory report to the Civil Code stated that the consumers shall not be given protection based on these provisions if a particular term was negotiated individually.13 If the legislator intended to provide the consumers with protection only against such contract terms that were not individually negotiated, he should have expressed it clearly in the particular legal norm so that it would be clear and obvious.14 The commentary to the Civil Code argues that the entrepreneur could not avoid the application of the unfairness test stating that the term was individually negotiated. Derogation clause (Section 1813 of the Civil Code) applies to all contract terms regardless how the term was negotiated.15 De lege lata unfair terms shall not be taken into account unless they are challenged by the consumer (Section 1815 of the Civil Code). In the terminology of the

The decision of the Supreme Court of the Czech Republic of 1 August 2008, file no. 32 Cdo 3895/ 2007, the decision of the Supreme Court of the Czech Republic of 23 October 2008, file no. 32 Cdo 4661/2007, or the decision of the Supreme Court of the Czech Republic of 28 October 2011, file no. 23 Cdo 4384/2008. 13 To see more on the Explanatory report to the Civil Code (2015), p. 449. 14 Please compare with the decision of the European Court of Justice the Commission vs the Netherlands (C-144/99). 15 To see more on that in the commentary to the Civil Code: Hulmák (2014), pp. 503–504. 12

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Civil Code, it is understood as an ‘apparent legal act’ under Section 551 et seq. of the Civil Code, which shall not be taken into account and shall be considered as meaningless. We consider anchoring of this legal consequence to be compliant with the Directive 93/13. The Civil Code includes general protection of weaker party, party with lesser bargaining power in Section 1753 of the Civil Code. It protects weaker party (consumer, tenant. . .) against the provisions of the standard commercial terms which the weaker party could not have reasonably expected. This term is ineffective, unless expressly accepted by that party. The asymmetry in the bargaining power of the consumers was also declared in the case law of the Constitutional Court.16 The court stipulated the importance of consumer protection, which justifies the intervening in the party’s autonomy in order to get a balance between the consumer and the entrepreneur, primarily in the pre-contractual phase. Less bargaining power of the consumers is specifically reflected in the Article 6 of the Directive 93/13, which was transposed by Section 1813 and Section 1815 of the Civil Code. The provision in Section 1813 of the Civil Code set forth a rebuttable presumption that all terms which, contrary to the principle of proportionality, establish an excessive disharmony between the rights and obligations of the parties to the consumer’s disadvantage, are forbidden. It seems that Section 1813 of the Civil Code allows to proof contrary. Pelikánová argues that theoretically, it is possible that a contract term which shows all the features of disproportionality is not banned, but she concludes that such interpretation would contradict the purpose and goal of the concept of the consumer protection as it is understood by EU law; such conclusions would also be in contradiction to the decisions of the CJEU.17 Article 4 (2) of the Directive 93/13 has been transposed into Section 1814 of the Civil Code. This provision does not comply with EU law, as the Directive does not mention “subject matter”, but rather “main subject matter of the contract”; it also does not refer only to “price”, but rather to “price and remuneration”. In connection with this legal construct, it seems to be problematic to use the vague notions of clarity and intelligibility. There are not any guidelines on how to interpret the meaning of this transparency principle. As for the interpretation, the use of the concept of “subject matter of the contract” or “main subject matter of the contract” is disputable, which happened in the Czech Republic for example in connection with the case concerning bank fees for loan contracts.18 In this matter, the Supreme Court declared that this requirement (the duty to fulfil the transparency principle) arises 16 The decision of the Constitutional Court of the Czech Republic of 10 April 2014, file no. III. ÚS 3725/13. 17 Pelikánová (2011), pp. 15–23. 18 For more, see: Hruda (2012), pp. 57–62. The decision of the Constitutional Court of the Czech Republic of 10 April 2014, file no. III. ÚS 3725/13, the decision of the financial arbitrator of 13 December 2013, file no. 10425/2013, litigation no. 181/SU/2013, Financial Arbiter (2013). http://www.finarbitr.cz/galerie/tinymce/rozhodnuti/181_SU_2013_nalez.pdf. Accessed 25 September 2018.

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from the general clause which stipulates the necessity of legal action.19 The Supreme Court declared, without applying the transparency test, that competent court is not allowed to assess an unfair character of banking fee, because it is a part of the price. We can see that the legal term “core contract terms” is interpreted widely in the Czech Republic (as it was shown by previously mentioned decision of the Supreme Court), which does not match with the CJEU case law.20 We can also say that in practice “core contract terms” in the meaning of Section 1814 of the Civil Code are excluded from the unfairness test even without consistent application of the transparency test.

4.1

Transparency of (Core) Contract Terms

The Civil Code anchored the duty to all entrepreneurs to communicate with the consumer clearly and understandably in the language in which the contract is concluded (Section 1811 of the Civil Code), but there is no special private sanction for breaching this duty. In this regard the Section 1812 of the Civil Code anchored interpretive rule, which says if content of the contract can be interpreted in different ways, the competent body must use interpretation most favourable to the consumer. The Civil Code anchored special private sanction (Section 1821 of the Civil Code) regarding the distance contracts and contracts negotiated away from the business premises. If an entrepreneur has not provided the consumer with the information on other taxes and fees borne by the consumer under Section 1811(2)(c) or the costs under Section 1811(2) (e) or Section 1820(1)(g), the consumer is not obliged to pay these taxes, fees or costs to the entrepreneur.

The entrepreneur bears the burden of proof that he provided the abovementioned information. In segment of consumer credit, the legislator adopted strict private sanction for breaching information duty (see more in Sect. 5). There is no benchmark or other guidelines how to interpret transparency principle. The obligation to inform the consumer about the economic or other consequences of a term is not a general requirement in the Civil Code but it is only anchored in specific Act no. 257/2016 Sb., Consumer Credit Act (further referred to as the “Consumer Credit Act”) in Section 94. Czech courts must follow CJEU

19 Section 37 of the Act No. 40/1964 Sb., Civil Code. The same requirement is in the Civil Code. “The legal action must be done in a free way, seriously, definitely and intelligibly; otherwise, it shall be invalid.” See also the decision of the Supreme Court of the Czech Republic of 23 April 2014, file no. Cpjn 203/2013. 20 The decision of Court of Justice of the European Union Bogdan Matei a Iona Ofelia Matei v. SC Volksbank România SA (C-143/13). The decision of Court of Justice of the European Union Árpád Kásler, Hajnalka Káslerné Rábai v. OTP Jelzálogbank Zrt (C-26/13).

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jurisprudence, which says that the terms must be grammatically clear and intelligible to the consumer, but also that the economic reasons for using that term and its relationship with other contractual terms should be clear and intelligible to the consumer. We do not have relevant information if and how competent courts will decide on this issue or how courts or other competent bodies dealt with individually negotiated terms and standard terms pursuant to the transparency principle. Legal doctrine of transparency principle and the case law in this matter is not develop much in the Czech Republic. Term “vulnerable consumer” is not recognized in the legal order of the Czech Republic and this subject does not have special or higher level of protection in general not even in terms of transparency. This situation is harshly criticised by NGO in Czech Republic (e.g. Czech Consumer Association—dTest).

5 Sector Specific Rules: The Financial Consumer 5.1

Special Sanction for Breaching Information Duty in Credit Agreement in Meaning of Directive 2008/48 and Directive 2014/1721

Regarding credit agreement, the legislator adopted strict private sanction for breaching information duty. The entrepreneur can require only repo rate (0.05%) instead of the borrowing rate contracted in consumer credit agreement and the consumer does not have to bear any cost in case if one of following option is fulfilled: (i) consumer credit agreement contains an incorrect statement of the annual percentage rate of charge, (ii) consumer credit agreement does not conclude information about the borrowing rate, (iii) consumer credit agreement does not conclude information about the total amount which has to be paid by consumer, (iv) one of the abovementioned information was not provided in written form, (v) consumer did not receive a copy of the consumer credit agreement, which content all abovementioned information, in written form or on another durable medium.

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Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC and Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010 Text with EEA relevance.

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Withdrawal Right

The consumer does not have withdrawal right regarding credit agreements relating to the residential immovable property; instead of this right the legislator transposed into the national law the reflection period (Section 111 of the Consumer Credit Act) in length of 14 days. The consumer may accept the offer (proposal of the contract) at any time during the reflection period.22 The practice shows us that this rule does not help much. A contrario to this rule the consumer can accept the proposal of the contract just immediately the proposal was done. The legislator did not transpose the provision that the consumer cannot accept the offer (proposal of the contract) for a period not exceeding the first 10 days of the reflection period (Article 14 (6) of the Directive 2014/17). We are persuaded that this provision could protect the consumers more effectively. The consumer has a period of 14 days in which it is possible to withdraw from the credit agreement without giving any reason (Section 118 of the Consumer Credit Act). The consumer can withdraw from a life insurance contract or a supplementary pension insurance contract, if this contract was concluded solely through the means of distance communication (Section 1841 of the Civil Code), within 30 days from the date on which he was informed by the entrepreneur that a distance contract had been concluded. If the entrepreneur provides a consumer with deceptive information, the consumer has the right to withdraw from the financial contract, which was concluded solely through the means of distance communication, within 3 months from the date on which the consumer became aware or should and could have become aware thereof. The consumer may exercise the right of withdrawal within 14 days from the conclusion of the financial service contract which was concluded solely through the means of distance communication. The entrepreneur is entitled to the payment of the price for the service, the price may not be disproportionate to the scope of the service provided. “However, the entrepreneur shall not become entitled to the payment of the price if he began to perform before the end of the time limit for withdrawal under Section 1846 without the consumer’s consent. . .”23 This provision does not comply fully with the EU law (the Directive 2002/65/EC).24 The Directive 2002/65/EC in Article 7 (2) does not use the term “consent” but the term “consumer’s prior request”.25 We must distinguish between the terms “consumer’s consent” and

22

Recital 23, Article 14 (6), the Directive 2014/17/EU on Credit Agreements for Consumers. Section 1849. Civil Code. 24 Directive 2002/65/EC of the European Parliament and of the Council of 23 September 2002 concerning the distance marketing of consumer financial services and amending Council Directive 90/619/EEC and Directives 97/7/EC and 98/27/EC. 25 Please compare the transposition. Recital 50, Article 7 (3), Article 8 (3), 2011/83/EU Directive which regulates distance contracts and obligations arising from contracts negotiated away from business into the Section 1834. Civil Code. “If a consumer withdraws from a contract for the 23

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“consumer’s prior request”. If we speak about consumer’s prior request the initiator of the action is the consumer but in the situation that the consumer is giving consent, the entrepreneur is the initiator of the action. We do not have relevant data how this provision is interpreted by the courts. Some scholars criticised extensive disclosure of the information.26 Kotásek points out that the consumer is in such case inundated with the information and he is unable to concentrate on the provided information.27 Domurath discusses the topic—dangerous of information overload—in the context of (in)ability to understand the meaning of provided information.28 The extensive disclosure of the information leads to the situation that the consumer is overloaded and he/she is not able to make an informed decision, but we are not aware of such discussion in the Czech Republic amongst legislators. The Consumer Credit Act strictly regulates the specific information that must be provided to the consumer. This Act regulates what information must be provided to the consumer in the pre-contractual phase regarding the credit agreement and credit agreements for consumers relating to residential immovable property. As a positive element, we can assess the duty of the entrepreneur to provide required pre-contractual Standard European Consumer Credit Information on a form set out in Annex 2 of this Act. In regard to the credit agreements relating to residential immovable property the entrepreneur has a duty to provide pre-contractual information on an ESIP form, which is Annex 4 of this Act. Former Act no. 145/2010 Sb., Consumer Credit Act, was not so strict, providing pre-contractual information on a form was an option, not a duty, which was to the detriment of the consumers. Providing pre-contractual information on a form is more visible, transparent and readable to the consumer. Above described legislation improved consumer protection in the Czech Republic.29

6 Sector Specific Rules: The Digital Consumer The legal regulation of distant sales to the consumers is incorporated in the Civil Code (particularly in Sections 1820–1840) as the part of Czech private law. These provisions are placed right after the general regulation of the provisions on the obligations of contracts with the consumers (Sections 1810–1819 of the Civil

provision of services and the entrepreneur, at an express request of the consumer, began to perform before the end of the time limit for withdrawal from contract, the consumer shall pay to the entrepreneur a part of the agreed price proportional to the performance provided until the time of withdrawal from contract.” 26 Ondřej and Selucká (2013), p. 32; Domurath (2013). 27 Kotásek (2010), pp. 31–34. 28 Domurath (2015). 29 We are dealing with the question of extensive disclosure of the information to the consumer also further in this text.

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Code) and they draw on the previous general provisions establishing specific requirements for distant sales. The provisions on distant sales do not focus only on online sales (concluding the contract by electronic means), but they generally cover the obligations on distant contracting including telephone calls or contracting outside the business premises of an entrepreneur, and they also specify the content of such obligations. The definition of electronic means is not incorporated in the Civil Code, but it is possible to be inspired by the Act on Certain Information Society Services30; particularly Section 2 (c) which establishes that the electronic means include an electronic communications network or electronic mail and automated calling and communication systems. The main basis for the provisions on distant sales was Directive 2011/83/EU on Consumer Rights; however, some of the areas were also implemented in the Consumer Protection Act31 as the public law regulation. The further described provisions are cogent; however, it is possible to incorporate into the contract the terms that are more favourable for the consumer.32 In contrast to the offline transactions, there is a different set of obligations for the entrepreneur to inform the consumer of the specifics of distant sales if the entrepreneur is using any means of distant communication.33 Such information obligation has to be fulfilled in advance before the conclusion of the contract or before the consumer makes a binding offer; the main purpose is to offer the consumer decent information about the whole contract (such information is specified under Section 1811 (1) and 1820 (2)).34 The information provided to the consumer can be divided into 4 main categories: payment information, information on how the contract is binding (such as the minimum time for which the consumer is bound by the contract—the minimum consumption), information on withdrawal from the contract (options of withdrawal, terms of withdrawal, how the consumer should proceed—the entrepreneur has to provide the form35 on withdrawal from the contract) and dispute resolution and assistance (supervision).36 The Civil Code, however, does not establish the form of such information (it does not have to be only in written form), but the entrepreneur has to prove that he has fulfilled such information obligations. Breach of information obligations can have different consequences. The entrepreneur could have the obligation to cover the damage if the arrangement with the 30

Act No. 480/2004 Sb., Certain Information Society Services, as amended. Act No. 634/1992 Sb., Consumer Protection Act, as amended. 32 Section 1812. Civil Code. 33 Section 1820. Civil Code. 34 “If the means of distance communication does not allow the consumer to be provided with all the information, he shall receive at least the information under Section 1811(2), (a), (b), (c) and (g) and the information under Section 1820 (1) (b), (c) and (h). The entrepreneur shall provide the consumer with the other information in textual form no later than by the time of the performance.” Section 1824 (2). Civil Code. 35 Requirements of that form are set forth in the Government Regulation No. 364/2013, Sb. 36 To see more on that in the commentary to the Civil Code: Hulmák (2014), pp. 503–504. 31

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consumer is excessive (it has no binding effect on them). If an entrepreneur does not provide the consumer with the information on other taxes and extra fees (including delivery or return of the good), the consumer is not obliged to pay these taxes, fees or costs to the entrepreneur (Section 1821), or the consumer is obliged to pay only a proportional part of such costs if the obligations from the contract have already been partly fulfilled (Section 1820 (1) (h)). It is however necessary to remind the general information obligation (applicable also on online sales)—the entrepreneur has to provide contact details, labelling, price and delivery costs well in advance before concluding the contract (Section 1811). All the information provided by the entrepreneur to the consumer has to be given clearly and understandably in the language in which the contract is concluded (Section 1811 (1)). The pre-contractual information provided by the entrepreneur is binding and the contractual parties can change it only after a mutual agreement and in favour of the consumer.37 The information must be clear and understandable to an average consumer and it has to be really provided to the consumer (it is not enough if it is provided through the hyperlink leading to another web page). Such information in the case of online transactions specifies (except the previously mentioned) the accessibility of the contract to the consumer, the languages in which the contract can be concluded, the individual technical steps leading to the conclusion of the contract, the possibility to correct mistakes made during the data entering, and the codes of conduct that are binding on the entrepreneur.38 The contract itself (after it is concluded) also has to contain such information and the change is possible again only after a mutual agreement. If the entrepreneur wants to change the contract (different from the pre-contractual information) such a change, which must be within the legal limits, must be communicated to the consumer in advance (and the changes must be explicitly highlighted or expressed). In the case of distant contracts, the entrepreneur has the obligation to confirm the receipt of the order immediately,39 if the consumer submitted that through one of the means of distant communication.40 The purpose is mainly to provide consumers with assurance that their expression of will reached the entrepreneur and to provide the evidence that such expression has expected legal consequences (in practice it is often created automatically). The order means any expression of the will of the consumer from which the will of the consumer to conclude the contract is evident. Such assurance should decently identify the order and also that the order was received by the entrepreneur; the order should be confirmed by the electronic means; however, it does not have to be the same means which was used by the consumer to place the order.41

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Section 1822. Civil Code. Section 1826. Civil Code. 39 Section 1827 (1). Civil Code. 40 “This does not apply when a contract is concluded exclusively by exchange of electronic mail or equivalent individual communication.” Section 1827 (1). Civil Code. 41 The failure of the entrepreneur to do so will not, however, affect the validity of the contract. 38

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The concluded contract has to be offered to the consumer in written form.42 The same applies also to the text of the standard commercial terms.43 The purpose of this provision is to protect the consumer and provide him/her with evidence (the consumer thus has the copy of the contract). The burden of proving that the contract was really offered to the consumer lies on the entrepreneur. The concluded contract can be unilaterally changed by the entrepreneur only in the cases listed under the Section 1752.44 “If a contract concerns the provision of services, the entrepreneur starts performing his duty within the time limit for withdrawal from the contract only at the express request of the consumer made in textual form.”45 If such a contract is being fulfilled without the consent, the consumer is not obliged to provide any compensation. “If a contract is negotiated over the phone, the entrepreneur shall, at the beginning of the call, provide the consumer with basic information about himself and with the purpose of the call.”46 It is not then important whether the contract was finally concluded by the phone or not. As partially mentioned above, the possibility to withdraw from the contract without penalty and without giving reasons is another part of the consumer protection in distant sales if this is done within the statutory period.47 The explicit statement of the consumer is sufficient for withdrawing from the contract; to make the withdrawal from the contract only in written form cannot be negotiated by the parties.48 The Civil Code does not use the term “written form” consistently and sometimes it uses the term “textual form.” This could seem confusing. In our opinion, these are similar terms (using a logical interpretation), although the wording is unfortunate. This supports also the statement that “the textual form is observed if the information is provided in such a way that it can be kept and displayed repeatedly.” Section 1819. Civil Code. 43 Section 1827 (2). Civil Code. 44 “If, in the ordinary course of business, a party concludes contracts with a number of persons and such contracts oblige the parties to provide a long-term recurrent performance of the same kind with reference to standard commercial terms, and the nature of the obligation already indicates in the course of the contract negotiations that subsequent changes thereto will be reasonably necessary, the parties may stipulate that a party may amend the standard commercial terms to an appropriate extent. The stipulation is valid if at least the manner in which the change is to be notified to the other party is stipulated in advance, and if the party becomes entitled to refuse the changes and, as a result, terminate the obligation with a notice period sufficient to procure similar performances from another supplier; however, a stipulation which links the termination to a special duty encumbering the terminating party is disregarded.” 45 Section 1823. Civil Code. 46 Section 1825. Civil Code. 47 Such possibility thus does not apply e.g. to the situation when the consumer purchased the goods physically in the store. 48 However, it is not possible for the consumer to withdraw from the contract in the cases listed in Section 1837 (such as customized goods, accommodation, transport, repair or maintenance work, digital content, etc.) or if the scope of the contract itself falls outside the legal regulation of distant sales described under Section 1840 (such as health care, gambling, social services, etc.). 42

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The consumer has the right to withdraw from the contract within fourteen days. Such information can be offered to the consumer also through the withdrawal form (established in Section 1820 (1) (f)).49 The time limit generally starts on the date of the conclusion of the contract, and in the case of “a) a contract of sale, from the date of the takeover of goods, b) a contract concerning several kinds of goods or the supply of several parts, from the date on which the last supply of goods is taken over, or c) a contract concerning a regular recurrent supply of goods, from the date on which the first supply of the goods is taken over.”50 A longer period for withdrawal from the contract is offered as the possibility to the consumer51 if the consumer was not informed about the possibility to withdraw from the contract within fourteen days (without giving a reason). In such a case the period for withdrawal from the contract is prolonged to one year and fourteen days (or the new fourteen-day period starts at the moment the entrepreneur informs the consumer). The mutual obligations (and rights) are cancelled by withdrawal from the contract. The parties are required to return the consideration.52 “If a consumer withdraws from a contract, he shall, without undue delay and no later than fourteen days after the withdrawal, dispatch or hand over to the entrepreneur the goods received from him.”53 Goods should be returned to the entrepreneur (his/her headquarters or premises), and also to a third person if this option has been agreed. The consumer is not obliged to return the packaging, but the condition of the goods must conform to the necessary handling with respect to their nature and characteristics, otherwise the consumer is obliged to pay compensation. In the case of provision of services the consumer is not obliged to return the service, as with regards to its nature it is not possible; the consumer has to pay a proportionate part of the price.54 As a result of the withdrawal, some costs related to handing over and accepting the returned goods may incur to the parties. The consumer pays packing of the goods, postage and other costs in connection with delivering the goods to the entrepreneur, but only if the consumer was informed about that (otherwise it is paid by the entrepreneur).55 Additionally, it is possible to request only the factual costs following the strict interpretation mentioned by CJEU, e.g. in the case C-511/08. It is specifically established for the distant sales to inform the consumer about the costs of returning

49 “If an entrepreneur allows a consumer to withdraw by completing and dispatching a standard withdrawal form on a website, he shall provide the consumer with a confirmation of its receipt in textual form without undue delay.” Section 1830. Civil Code. 50 Section 1829 (1). Civil Code. 51 Section 1829 (2). Civil Code. 52 Some aspects are, however, not cancelled such as a contractual penalty, dispute settlement or interests on arrears. 53 Section 1831. Civil Code. 54 Section 1834. Civil Code. 55 Section 1820 (1) (g). Civil Code.

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goods if the goods cannot be returned by usual postal service due to their special characteristics. If the consumer fulfilled the duty to return the goods or services, so the entrepreneur must return the payment. It does not include only the price of the goods, but all the financial resources that the entrepreneur received from the consumer on the basis of the agreement; so it includes taxes, shipping, delivery, packaging and other similar costs. In addition, the entrepreneur is obliged to return such payment in the same way (e.g. cash, bank transfer) he/she received it (if not agreed otherwise).56 “. . .the entrepreneur is obliged to return the funds received from him only after the consumer has handed over the goods to the entrepreneur or proved to him that the goods were dispatched to him.”57 The consumer has to pay the reduction in the value of the goods he/she was handling the goods in another way than they were supposed to be handled with regards to their nature and characteristics.58 Such compensation is provided in the amount of the difference of the returned value of the goods and their usual value. This is then a certain statutory balance assisting the consumer to return the goods, but not allowing him/her to misuse such right and not to unduly destroy the goods. If the consumer withdraws from the contract, he/she does not have to bear any costs in the case of provision of services where the entrepreneur has provided the consumer with no prescribed information (the information described in Section 1820 (1) d) and (f)), or if the entrepreneur began to perform before the end of the time limit for withdrawal without the consumer having expressly requested him/her to do so. The consumer also does not bear any costs in the case of the supply of digital content if it was not supplied on a tangible medium and the entrepreneur supplied it before the end of the time limit for withdrawal without the consumer having expressly asked him/her to do so.59 The third case when the consumer does not have to bear any of the above described costs is if he/she has not received the approval of the concluded contract from the entrepreneur on a durable basis. The contracts from which the consumer cannot withdraw are described under Section 1837 (the contracts concerning customized goods, accommodation, transport, repair or maintenance work, digital content, etc.). If the entrepreneur has supplied a product to the consumer without the consumer’s order and if the consumer assumed the possession thereof, he is considered to be the possessor in good faith. The consumer is not obliged to return anything back to the entrepreneur at his/her own expense, or even to inform him.60 “In case of doubt, an entrepreneur must prove that he provided a consumer with the information which he is required to provide under this Subdivision.”61 This

56

Sections 1832 and 1834—increased costs to deliver the goods, etc. Section 1834 (4). Civil Code. 58 Section 1833. Civil Code. 59 See more on that in Section 1836. Civil Code. 60 Section 1838. Civil Code. 61 Section 1839. Civil Code. 57

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basically means that the burden of proof lies primarily on the entrepreneur’s side and it does not include only pre-contractual information, but also, for example, provision of a copy of the contract and its exact wording. Although in some cases the contract would be concluded with the consumer (then Section 1820 et seq. of the Civil Code should apply), Section 1840 lists the contracts that are excluded from such legal regime. The reason for this exclusion is either that it is self-regulated in specific sectors or the application of the described legal regime on these types of contracts is not appropriate. These are for example the contracts on social services, health care, betting, intangible things, carriage of persons, foods, and beverages, using automatic vending machines, etc.62

7 Reasonable Consumer Expectations “A provision of the standard commercial terms which the other party could not have reasonably expected is ineffective unless expressly accepted by that party; any stipulation to the contrary is disregarded. Whether or not a provision is of such a nature is assessed with regards to its content as well as to the manner in which it is expressed.”63 The explanatory note to the Civil Code then explains that such provision was inspired by Article 2.1.20 of the UNIDROIT Principles of International Commercial Contracts. We can thus consider as surprising arrangements (the arrangements which are contrary to those reasonably expected) such business terms that the other party could not reasonably expect (there is a surprising factor). The surprising arrangements may therefore only be those arrangements where there is a clear difference between the expectations of the other party (not necessarily only the consumer) and the content of the commercial terms (strangeness). Examining whether an arrangement is surprising therefore requires, firstly, determining whether the content of the commercial terms is unusual (objective criterion) and secondly, whether the content is unusual and surprising in a specific case (subjective criterion). The surprise factor will be assessed with regards to the usual content of a certain type of contract, to the scheme of the contract, but also to the way of expression (e.g. almost unreadable text, chaotic text, etc.). The subject of discussion may be to what extent it is relevant when a surprising arrangement differs from usual legal rules. It is obvious that the apparent inadequacy, severe and unwarranted deflection from the usual arrangement in similar cases is considered surprising (e.g. significant restrictions on the rights from defects or rights to compensation, unlimited discretion, etc.). The legislation, however, does not offer strict limits and allows the courts ad hoc interpretations. The Supreme Court decided that it cannot be considered a mistake if the acting person had the

62 63

Section 1840. Civil Code. Section 1753. Civil Code.

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opportunity to avoid such a mistake due to his/her own care while recognising decisive factors for the realization of a legal act. It cannot be accepted that the person would have the option to achieve the invalidity of the mistake in a situation when he/she has neglected the objectively existing possibility to ascertain the true state of legal conditions and without any reason, such a person was mistakenly affected in the judgment by some untrue impressions or indications.64 The Supreme Court also ruled that the person (educated and experienced) could and should have assessed the terms (which she signed on the same side of the contract), and besides the text itself was not found to be extremely surprising and contrary to law.65 The Constitutional Court then decided about the situation where the terms were written using smaller (but still readable) letters and found it as confusing and not clearly presented to the consumer.66 Similar argumentation can be applied also to the advertisement and the information presented to the consumer.67 Although such decisions were issued on the basis of the previous (older) Civil Code the conclusions are fully applicable to the current legal regulations. Most legal orders require that the storing of information, or the gaining of access to information already stored in the equipment of a subscriber or user is only allowed on condition that the subscriber or user concerned has given his/her consent, having been provided with clear and comprehensive information about the purposes of the processing.

The decision of the Supreme Court of the Czech Republic of 26 February 2009, file no. 33 Odo 1560/2006. 65 The decision of the Supreme Court of the Czech Republic of 29 June 2010, file no. 23 Cdo 1201/ 2009. 66 As it was already mentioned the Constitutional Court was dealing with the font size as well and it stated that “The content of the contract is to be legible to the average consumer, clearly and logically arranged. For example, contractual arrangements must be of sufficient font size, they may not be in a significantly smaller size than the surrounding text, and they may not be placed in sections that give the impression of an insignificant character.” The decision of the Constitutional Court of the Czech Republic of 11 November 2013, file no. I. ÚS 3512/11. 67 It is however always necessary to analyse the source of the information. For example, it is stricter when the information was presented to the consumer using television broadcasting (the consumer has less time to read and absorb the information)—the text has to be presented for sufficient time in readable size, colours (etc.). When the information is presented to the consumer using e.g. leaflet, then some information presented to the consumer can be smaller and e.g. in the footnote. The situation is thus decided on the ad hoc basis. The decision of the of the Supreme Administrative Court of 25 August 2011, file no. 7 As 12/2011 – 65, the decision of the Municipal Court in Prague, of 25 June 2012, file no. 7 Ca 42/2009 – 51-53. 64

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8 Cookies Cookies are regulated on the EU level by ePrivacy Directive.68 On such a basis it is necessary for the operators of the websites to have the consent of the user of the website to be able to store cookies in the user’s computer (or another device). The ePrivacy Directive thus requires an opt-in regime to use the cookies—the user of the website has to actively agree with using the cookies before the cookies are stored in the device of the user—if the user of the website does not agree with using the cookies, the cookies cannot be stored at the computer of the user.69 The Czech legal order transposed ePrivacy Directive to the Electronic Communications Act.70 However, such transposition was made incorrectly. The Electronic Communications Act allows to store the cookies in the user’s device in the opt-out regime (thus not following the opt-in regime which is demanded by the ePrivacy Directive) because it does not need the consent of the user before uploading the cookies to the user’s computer. This Act only requires that the operator of the website informs the user about the scope and purpose of data processing which were collected by using cookies and to offer the user the possibility to refuse such processing (so called opt-out regime which does not follow the need of ePrivacy Directive).71 Furthermore, we would like to mention that ePrivacy Regulation (replacing ePrivacy Directive), will probably uniformly require the opt-in regime in all EU Member States thus above described unsatisfactory situation in Czech law should be fixed.

9 The Information Model Under Pressure and the Problem of Disinformation We are not aware of such a discussion in the Czech Republic, but the Civil Code rather strictly regulates the specific information that must be provided to the consumer. The Civil Code regulates what information must be provided to the consumer in the pre-contractual phase (described above). Such information must be clear and understandable (Sections 1811 and 1820). Such information must also be included in the contract itself, unless the parties agree otherwise and also the content itself is subject to specific requirements, as described above (Section 1824 et seq.). The information overload is generally reflected by the legal regulation in the Civil Code. “All of an entrepreneur’s communications with a consumer must be made 68 Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications). 69 This does not, however, apply to the session cookies which are deleted immediately after closing the page. 70 Act No. 127/2005 Sb., Electronic Communications Act, as amended. 71 Section 89 (3). Electronic Communications Act.

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clearly and understandably in the language in which the contract is concluded.”72 A more general set of information can also be found in the Consumer Protection Act (described hereinafter). As mentioned above, it is not allowed to provide the consumer with the information in a chaotic way; all the information has to be presented in one place (no distant linking) and the text itself has to be normally readable.73 It is however not explicitly prohibited by the Czech law to provide additional (voluntary) information74 by the entrepreneur if it fulfils the main condition, which is that necessary information (the information which has to be provided on the basis of legal regulation) have to be stated in clear, true and correct way. That additional information thus cannot confuse the consumer in revealing the information which has to be offered to the consumer on the basis of law. Generally, in this context, we are speaking about the average consumer, which could be deduced from the definition of the consumer incorporated in the Civil Code75 or in the Consumer Protection Act.76 Czech courts are then following the definition of the average consumer in the same sense as it was interpreted by CJEU, e.g. in C-210/96 of 16 July 1998.77 Therefore we use the principle that the average consumer has enough information, however, such information is provided is such a way that the consumer is not deceived or confused. The general principles of public law not to confuse consumers are incorporated in the Consumer Protection Act. It is stated there that the information has to be clear, true, correct, and only substantial information (in the sense of the legal regulation) may be provided to the consumer.78 On the basis of such information, the consumer has to be able to make an informed decision.79 Other general principles not to confuse the consumer are incorporated in the provisions of the Consumer Protection Act regulating the fair selling of products and services, unfair trade practices,

72

Section 1811. Civil Code. In the Consumer Protection Act, there are however no specific conditions on distant sales (as it is in the Civil Code). In Section 9 and 10 there is however general information duty on how to inform the consumer, which is rather same as it is stated in the Civil Code—the information about goods or services has to be clear, it has to describe characteristics of the goods etc. In Section 11a it states that “When selling products or providing services by electronic means through websites, the entrepreneur is obliged to clearly inform the consumer in advance of any restrictions on the delivery of products or the provision of the service, and what payment methods are accepted.” 74 Such as information proving quality of offered services which promotes the trust in the entrepreneur. 75 “A consumer is any individual who, outside his trade, business or profession, enters into a contract or has other dealings with an entrepreneur.” Section 419. Civil Code. 76 “A consumer is any natural person who is not acting in the course of the business or as part of a separate exercise of the profession”. Section 2 (1) (a). Consumer Protection Act. 77 The decision of the Supreme Court of the Czech Republic of 24 April 2013, file no. 23 Cdo 3845/ 2012. 78 Information Obligations, Section 9 et seq., Consumer Protection Act. 79 Section 2 (1) (s), (t). Consumer Protection Act. 73

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deceptive acting, misleading omissions, aggressive commercial practices, consumer non-discrimination, etc.80 The fact is that Czech expert literature says that the range of information obligations starts to have a negative impact as well; in the context of information overload and time-consumption the consumer often tends to skip the information and mechanically agrees to the terms without reading it to the end.81 Modern technologies support such a trend in the information society even more which deepens the information asymmetry between the consumers and entrepreneurs. Even though the regulation in the area of e-commerce is regulating providing the information to the consumers, it is not anyhow focused on the problem of information asymmetry while using modern technologies.

10

Conclusion

In general, we can say that Czech private law is based, in the case of consumer protection, on the requirement and presumption of an informed consumer, the idea being that the decision to conclude or not to conclude a consumer contract is made by the consumer who knows the terms of the contract, and in such way that he/she has understood them (“he/she knows what he/she is doing” and with this he/she is making their informed decision). The consumer thus has the right to obtain all relevant information (pre-contractual information obligation) during the contracting process that is necessary for his/her informed decision to conclude or not to conclude the contract. Apart from the fact that the consumer must receive a certain amount of information, he/she must be provided with information of certain quality, i.e. it must be clear and comprehensible, and as it is clear from the context of Czech case law, clarity and comprehensibility must be appropriate to the average consumer, or especially to the vulnerable consumer, i.e. the point is not the grammatical comprehensibility of the language but understanding the content of the contract so that the consumer could really “knows what he/she is doing”. Czech legal order (the Consumer Protection Act) protects consumer against Aggressive Business Practices and Misleading Business Practices/Misleading omissions. Black list (Annex 1 and Annex 2 of the Consumer Protection Act) is used as a benchmark for evaluation of the Unfair Business Practices. The legislator adopted public sanction for breaching these provisions. The Civil Code anchored the protection against unfair terms. Unfair terms shall not be taken into account unless they are challenged by the consumer (Section 1815 of the Civil Code). In the Civil Code’s terminology, it is understood as an ‘apparent legal act’ under the Section 551 et seq. of the Civil Code, which shall not be taken into account and shall be considered as meaningless. Some problematic aspects

80 81

Section 3 et seq. Consumer Protection Act. Ondřej and Selucká (2013), p. 32.

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relate to Section 1814 of the Civil Code (Article 4 (2) Directive 93/13), which does not comply with EU law, as the Directive does not mention ‘subject matter’, but rather ‘main subject matter of the contract’; it also does not refer only to ‘price’, but rather to ‘price and remuneration’. We can see that the legal term “core contract terms” is interpreted widely in the Czech Republic, which does not match with the CJEU case law.82 We can also say that in practice the core contract terms in the meaning of Section 1814 of the Civil Code are excluded from the unfairness test even without consistent application of the transparency test. We can conclude that the Czech Republic adopted effective, proportional and dissuasive sanctions. We can define important goals: to exercise effective supervision by relevant authority and set up consumer friendly ADR or judicial proceedings for enforcing consumer’s rights. Regarding the financial services special combination of private and public sanctions were adopted (Recital 47, Article 23 Directive 2008/48/EC; Recital 76, Article 38 Directive 2014/17; Article 11 Directive 2002/65/EC). Specific regulation of distant sales then puts additional requirements on the entrepreneur and on the information provided to the consumer. It builds on the general provisions on providing the information and offers specific requirements on the distant sales. The main idea of such provided information is again to decently inform the consumer to offer him sufficient knowledge of contractual process and related obligations (including e.g. the termination of the contract or specific exceptions). The whole contractual process (and offered information) thus cannot be anyhow surprising for the consumer (there is however only general legal rule in the Section 1753 of the Civil Code on that and each case has to be decided ad hoc). The use of the cookies is regulated on the basis of EU Directive, however the transposition into the Czech legal order was done incorrectly, thus in the regime of opt-out of the user (the consent of the user is not needed before uploading the cookies—the EU regime oppositely requires opt-in regime). With providing the information to the consumer the basic rule is not to misinform him, however we are implying that mainly from the general meaning of the consumer protection provisions and from the interpretation of the above-mentioned court decisions.

References Act No. 127/2005 Sb., Electronic Communications Act, as amended Act No. 40/1964 Sb., Civil Code, as amended Act No. 480/2004 Sb., Certain Information Society Services, as amended Act No. 634/1992 Sb., Consumer Protection Act, as amended Act No. 89/2012 Sb., Civil Code, as amended

82

The decision of Court of Justice of the European Union Bogdan Matei a Iona Ofelia Matei v. SC Volksbank România SA (C-143/13). The decision of Court of Justice of the European Union Árpád Kásler, Hajnalka Káslerné Rábai v. OTP Jelzálogbank Zrt (C-26/13).

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Amendment on Consumer Protection (2015) In: Parliamentary Press 445/0, Part 1/16. Available via House of Commons. Czech Republic. http://www.psp.cz/sqw/text/tiskt.sqw?O¼7&CT¼445& CT1¼0. Accessed 25 Sept 2018 Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts Directive 2002/65/EC of the European Parliament and of the Council of 23 September 2002 concerning the distance marketing of consumer financial services and amending Council Directive 90/619/EEC and Directives 97/7/EC and 98/27/EC Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (‘Unfair Commercial Practices Directive’) Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European Parliament and of the Council Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010 Domurath I (2013) In: Micklitz HW, Benöhr I (eds) EU consumer law and human rights. Oxford University Press, Oxford Domurath I (2015) Consumer debt and social exclusion in Europe. Ashgate, Markets and the law, Farnham; Burlington Government Regulation No. 364/2013 Sb., on forms for contracts in which temporary accommodation and other recreational services are negotiated Hruda O (2012) Poplatky za vedení úvěrového účtu - mají mít i české banky důvod k obavám? [Fees for a loan account – should the Czech banks start worrying?] Právní rádce 2012 (2) Hulmák M (2014) Občanský zákoník: komentář. V. Závazkové právo: obecná část (§1721-2054) [Civil Code: Commentary. V. Contractual Obligations Law: General Part (Section 1721 to 2054)]. C. H. Beck, Prague Kotásek J (2010) Reklama na spotřebitelské úvěry v novém zákoně o spotřebitelských úvěrech. Větší (dez) orientace spotřebitele? [Consumer credit advertising in the new consumer credit act. Larger (dis)orientation of the consumer?]. Jurisprudence XIX(7) Loos MBM, van Boom WH (2017) Study for the Fitness Check of EU consumer and marketing law. In: Final report 3 - Country reporting: country report The Netherlands. European Commission. Available via Digital Academic Repository - UBA - University of Amsterdam. https:// pure.uva.nl/ws/files/13303675/FitnessCheckstudylot1part3countryreports.pdf. Accessed 25 Sept 2018 Ondřej J, Selucká M (2013) In: Ondřej J (ed) Spotřebitelské smlouvy a ochrana spotřebitele: ekonomické, právní a sociální aspekty [Consumer contracts and consumer protection: economical, legal and social aspects], 1st edn. C.H. Beck, Prague Pelikánová I (2011) Odpovědnost za škodu – trendy a otázky, malý náhled do nového občanského zákoníku [Liability for damage - trends and issues, little insight into the New Civil Code]. Bulletin advokacie 2011 (3) The decision of Court of Justice of the European Union Árpád Kásler, Hajnalka Káslerné Rábai v. OTP Jelzálogbank Zrt (C-26/13) The decision of Court of Justice of the European Union Bogdan Matei a Iona Ofelia Matei v. SC Volksbank România SA (C-143/13) The decision of the Constitutional Court of the Czech Republic of 10 April 2014, file no. III. ÚS 3725/13

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The decision of the Constitutional Court of the Czech Republic of 11 November 2013, file no. I. ÚS 3512/11 The decision of the Court of Justice of the European Union CHS Tour Services (C-435/11) The decision of the European Court of Justice the Commission vs the Netherlands (C-144/99) The decision of the financial arbitrator of 13 December 2013, file no. 10425/2013 The decision of the Municipal Court in Prague, of 25 June 2012, file no. 7 Ca 42/2009 – 51-53 The decision of the of the Supreme Administrative Court of 25 August 2011, file no. 7 As 12/2011 – 65 The decision of the Supreme Administrative Court of the Czech Republic of 23 October 2014, file no. 7 As 110/2014-52 The decision of the Supreme Court of the Czech Republic of 1 August 2008, file no. 32 Cdo 3895/ 2007 The decision of the Supreme Court of the Czech Republic of 23 April 2014, file no. Cpjn 203/2013 The decision of the Supreme Court of the Czech Republic of 23 October 2008, file no. 32 Cdo 4661/ 2007 The decision of the Supreme Court of the Czech Republic of 24 April 2013, file no. 23 Cdo 3845/ 2012 The decision of the Supreme Court of the Czech Republic of 26 February 2009, file no. 33 Odo 1560/2006 The decision of the Supreme Court of the Czech Republic of 28 October 2011, file no. 23 Cdo 4384/ 2008 The decision of the Supreme Court of the Czech Republic of 29 June 2010, file no. 23 Cdo 1201/ 2009 The decision of the Supreme Court of the Czech Republic of 31 August 2011, file no. 8 As 83/2010 The Explanatory report to the Civil Code (2015) Available via Ministry of Justice of the Czech Republic. http://obcanskyzakonik.justice.cz/images/pdf/Duvodova-zprava-NOZkonsolidovana-verze.pdf. Accessed 25 Sept 2018 The litigation no. 181/SU/2013, Financial Arbiter (2013). http://www.finarbitr.cz/galerie/tinymce/ rozhodnuti/181_SU_2013_nalez.pdf. Accessed 25 Sept 2018

Information Obligations and Disinformation of Consumers: Irish Law Report Cliona Kelly

Abstract Ireland’s consumer protection framework is heavily influenced by both the European Union and the United Kingdom, but also contains certain unique features which are domestic in origin. This chapter demonstrates how a complex layering of laws interact to counteract the information deficit faced by consumers on a daily basis, be that when buying a loaf of bread in the supermarket or taking out a mortgage with a financial service provider. Often common law doctrines which are not obviously designed with consumer information rights in mind—such as the rules on misrepresentation or passing off—can be utilised to provide protection in individual cases, and can have a moderate impact on the overall consumer experience. However, much of the protection in this area comes from the monitoring and enforcement techniques of actors such as the Competition and Consumer Protection Commission, the Commission for Communications Regulation and the Central Bank and Financial Services Authority of Ireland. There is also an increasing appreciation of the limits of the information provision model and of the possibility of developing alternative models of consumer protection, for example in the design of consumer financial products and the incorporation of suitability tests for financial consumers.

1 General Characteristics of the Consumer Information Model 1.1

Economic Orientation of Consumer Models

The Irish national consumer model is heavily influenced by the European economic model, with Irish consumer law being described as “a hybrid of domestic and

C. Kelly (*) Sutherland School of Law, University College Dublin, Dublin, Ireland e-mail: [email protected] © Springer Nature Switzerland AG 2019 G. Straetmans (ed.), Information Obligations and Disinformation of Consumers, Ius Comparatum – Global Studies in Comparative Law 33, https://doi.org/10.1007/978-3-030-18054-6_10

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European law”.1 Up until quite recently, the Irish government took a minimalist approach to the transposition of European contract and consumer directives, with implementation primarily occurring by means of ministerial regulation rather than primary legislation. This meant there was little or no parliamentary debate on consumer issues, and little further thought given to how the particular interests of the “Irish”—as opposed to European—consumer could be best met.2 It also resulted in a rather incoherent regulatory regime, with overlapping rights in different statutory provisions and weak enforcement mechanisms.3 Unlike other jurisdictions, Ireland still lacks a strong consumer lobby and until recently had a poorly developed consumer culture,4 although individual issues affecting Irish consumers (such as issues concerning gift vouchers, ticket touting or refuse and water charges) would be considered of political importance and would receive more attention. Important pieces of consumer protection legislation were enacted in Ireland in the 1970s, in particular the Consumer Information Act 1978 (which protected consumers from false and misleading information, and established the Office of the Director of Consumer Affairs) and the Sale of Goods and Supply of Services Act 1980 (which inter alia gave consumers a right to a repair or replacement where goods were faulty, placed restrictions on notices claiming to limit consumers’ rights, and provided for default consumer rights when receiving services). In the next few decades, most consumer initiatives emanated from the European Union; however the twenty-first century saw a reawakening of an awareness of the importance of a national agenda for consumer rights. The Central Bank and Financial Services Authority of Ireland Acts 2003 and 2004 introduced consumer protection measures in the area of financial services, after banking scandals affecting consumers in the 1990s. This created the Central Bank and Financial Services Authority of Ireland, which aimed inter alia to “help consumers make informed financial decisions in a safe and fair market”.5 A 2005 Report highlighted considerable gaps in consumer protection in Ireland,6 resulting in measures such as the establishment of the National Consumer Agency in 2007.7 This body, which replaced the office of the Director of Consumer Affairs, was given a broad remit not only to enforce statutory provisions but to encourage compliance with statutory provisions by using a range of measures, involving negotiations, cooperation, undertakings and education. It is also tasked with increasing consumer awareness of their legal rights and assisting consumers in making

1

Donnelly and White (2014), p. 2. Donnelly and White (2006), pp. 29–30. 3 See the criticism in Kelly (2013). 4 Donnelly and White (2014), p. 27, referring to the OECD Report Regulatory Reform in Ireland (2001). 5 Report of the Governor of the Central Bank The Irish Banking Crisis: Regulatory and Financial Stability Policy: 2003 – 2008 (2010), p. 43, cited in Donnelly and White (2014), p. 30. 6 Consumer Strategy Group, Make Consumers Count: A New Direction for Consumers (2005). 7 Under the Consumer Protection Act 2007. 2

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economic decisions. A merger with the Competition Authority in 2010, to form the Competition and Consumer Protection Commission,8 in part reflects a downsizing of statutory bodies in Ireland, but it also reflects a desire to have the one body protecting the legal and economic interests of consumers. The Commission focuses not just on prosecutions as a means of enforcement, but has a range of enforcement techniques available to it, including softer techniques such as education and awareness, undertakings and compliance notices. The Commission takes a “risk based” approach to enforcement of consumer rules, focusing on breaches which are likely to cause either widespread or serious consumer detriment. It distinguishes between the misinformed but well intentioned trader (for whom education and information might suffice to rectify the situation), and the well informed and perhaps not so well intentioned trader (for whom more severe penalties are more appropriate), as well as those in between. The Commission also has an important function to play in increasing awareness of consumers’ rights and in the provision of information to consumers—for example, in relation to explaining financial services and in providing price comparisons. There have also been improvements in terms of the transposition of European measures and the clarity of statutory provisions. Recent European directives which provide for maximum harmonisation of the law have required the State to entirely revise law falling with the scope of the directive so it is equivalent to the European standards.9 Thus for example the Unfair Commercial Practices Directive10 was implemented by means of the Consumer Protection Act 2007 after a thorough review of the law. The Sales Law Review Group, an expert group established by the Minister for Enterprise, Trade and Employment in November 2008, was established in part to “examine the provisions of the proposed EU Directive on consumer contractual rights in the light of existing Irish consumer law and assess its implications for Irish consumer rights and law”.11 This was followed up by an ambitious 2015 proposal for a Consumer Rights Bill, which would have consolidated and updated the law on consumer sales, the supply of digital content, supply of services, unfair terms and gift vouchers. To a large extent this proposal was modelled on the UK Consumer Rights Act 2015, reflecting the relatively similar markets and legal history of the two jurisdictions.12 However, the progress of this proposal has been delayed pending developments at the European level.13

8

Under the Competition and Consumer Protection Act 2014. Of course it has been pointed out that maximum harmonisation “despite its labelling cannot offer a completely harmonized sphere”: Miller (2011), p. 83. 10 Directive 2005/29/EC. 11 Sales Law Review Group Terms of Reference. This is a reference to the original 2008 proposal for a Consumer Rights Directive. 12 For analysis see Kelly (2018a). 13 See Written Answer by the Minister for Minister for Jobs, Enterprise and Innovation (Ms Mitchell-O’Connor), 15th December 2016. 9

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The Consumer Concept

The standard of the “average consumer”, primarily based on the European standard of a consumer who is reasonably well informed, reasonably observant and circumspect, is used in different guises as a benchmark for the provision of contractual information. In some contexts—such as unfair commercial practices—the phrase “average consumer” is expressly used, whereas in other contexts the use of an objective standard or reference to the “reasonable person” results in a similar form of analysis. The idea of an average or typical consumer has been used by the courts as a benchmark even in cases where it is not specifically referred to in legislation— such as in relation to the transparency requirement for unfair terms,14 or in cases of passing off where it is argued that the “average consumer” would be mislead or confused.15 The Irish courts are not always consistent in the approach taken to this average consumer. In the Aldi decision, the Court of Appeal avoided an overly paternalistic approach to the average consumer, stating that “[t]he notional consumer has common sense” and that “shoppers have to be given some credit for intelligence and appreciation of common marketing practice”.16 However, the McCambridge case17 the Supreme Court seem to depart from the stricter European standard in favour of perhaps a more realistic view of a consumer, stating that “even ordinary reasonable prudent consumers do not, in fact, frequently carry out a detailed examination of the product [bread] at the time when they take the bread from the supermarket shelf and place it in the supermarket trolley”.18

2 Pre-contractual Information Requirements 2.1 2.1.1

Information Disclosure Duties Common Law Rules on Information Disclosure

At common law, there is no general requirement to disclose information when entering into a contract. An action for misrepresentation, potentially resulting in rescission of the contract, may be available if a contracting party makes a false statement which induces the other to enter into the contract. However, a mere failure to reveal information will not be actionable, meaning for example that in a contract

14

Office of Fair Trading v Abbey National Plc [2008] EWHC 875 (UK). McCambridge Ltd v Joseph Brennan Bakeries [2013] 1 ILRM 369. 16 Aldi Stores (Ireland) Limited and Aldi GMBH & Co KG v Dunnes Stores [2017] IECA 116, at paras 104 and 105. 17 McCambridge Ltd v Joseph Brennan Bakeries [2013] 1 ILRM 369. 18 Ibid. 15

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of sale the onus is on the purchaser to actively ask questions. This is subject to certain exceptions,19 in particular where there is a positive statement is made which is misleading because it fails to reveal the full truth of the matter. Such a “half truth” may give rise to an action for misrepresentation, as “[i]t is obvious that to suppress a material fact may give a false impression even though no positive falsehood is spoken or written.”20

2.1.2

Statutory Rules on Information Disclosure

The possibility of a general information obligation and/or writing requirement in the provision of goods or services is provided for in the Sale of Goods and Supply of Services Act 1980. Section 51 provides that a Government Minister may, by order, require that a seller of a specified class of goods or a supplier of a specified class of service shall include such information as is specified in the order. Section 54 also provides that the Minister may make an order requiring that certain consumer contracts be in writing, and if not in writing will not be enforceable.21 However, in the almost 40 years since the enactment of these provisions, no such orders have ever been made. A general duty to provide information may also arise as a result of s.39 of the 1980 Act, which provides that the supplier of a service must use due skill, care and diligence. In a number of cases concerning the provision of holidays, it has been held that this may encompass a duty to provide information which might be necessary to ensure the safety of the consumer.22 Other information requirements are provided for in an ad hoc manner, in certain sectors. For example, the Registration of Potato Growers and Packers Act 1984 places an obligation on potato growers and packers to identify themselves on packages sold by them. The most recent overhaul of information provision requirements was in the EU (Consumer Information, Cancellation and Other Rights) Regulations 2013, which implement the 2011 Consumer Rights Directive.23 These Regulations oblige businesses to provide consumers with certain pre-contractual information when entering

19 For example, where a previous statement was made which is now false (See With v OFlanagan [1936] Ch 575 (UK)), where conduct is viewed as making an implied misrepresentation (See Gill v M’Dowell [1903] 2 IR 463), where there is a contractual or fiduciary duty to disclose, or in a contract of insurance. 20 McCaughey v Irish Bank Resolution Corporation [2013] IESC 17 para.79 (Hardiman J). See also Spencer v Irish Bank Resolution Corporation Limited [2016] IECA 346. 21 Section 4 of the Sale of Goods Act 1893 provides that contracts with a value of over €12.70 shall not be enforceable unless evidence in writing or by payment/part payment or by delivery/part delivery. 22 O’Flynn v Balkan Tours Ltd Unreported, High Court, Dec 1 1995, Unreported, Supreme Court, April 7 1997. See however McKenna Best Travel Ltd [1998] 3 IR 57 on the limits of such a duty. 23 Directive 2011/83/EC of the European Parliament and of the Council of 25 October 2011.

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into contracts. The kind of information which must be provided depends on whether the contract is an “on-premises contract”, an “off- premises contract” or a “distance contract”. As in the Directive, certain kinds of contracts are excluded from the scope of these rules, and the Ireland made use of the option in Article 3(4) to exclude off premises contracts not exceeding €50 from the scope of the Regulations.24 In relation to an on-premises contract, consumers must be told certain information “in a clear and comprehensible manner, if that information is not already apparent from the context”.25 This information is set out in Schedule 1 to the Regulations and reflects the obligations in the Directive. These information requirements do not apply to contracts which involve day-to-day transactions and which are performed immediately at the time of the conclusion of the contract.26 Schedule 2 of the Regulations sets out the information to be provided prior to entering into an off-premises contract (or distance contract—discussed below). Again, this information reflects the obligations in the Directive, with Ireland including the abrogated information requirements in Article 7 (concerning off premises contracts for repairs or maintenance for less than €200).27 In addition, if the consumer has a right to cancel the contract under the Regulations, the trader must provide the consumer with a copy of the model cancellation form set out in Schedule 3.28 Some of the information required in Schedule 2 may be included in this form.29 In the case of an off-premises contract, the information is to be provided is to be provided in “clear and comprehensible manner”.30 It is to be provided on paper or, “if the consumer agrees, on another durable medium”, and is to be “legible and in plain intelligible language”.31 The option in the Directive to include language requirements regarding the contractual information, so as to ensure that such information is easily understood by the consumer, was not taken up.32 Post contract formation, the trader is obliged to provide the consumer with a copy of the signed contract or with confirmation of the contract, on paper or another durable medium.33 There is nothing preventing businesses from voluntarily adding further information, provided that any such information meets all other legal requirements (e.g. is not misleading).

24

Regulation 3(5) and 3(6). Regulation 5(1). Regulation 5(2) provides that this “does not apply to contracts which involve day-to-day transactions and which are performed immediately at the time of the conclusion of the contract”. 26 Regulation 5(2). 27 Regulation 8. 28 Regulation 7(1)(b); Regulation 10(1)(b). 29 Regulation 7(2); Regulation 10(2). 30 Regulation 7(1)(a). 31 Regulation 7(4); Regulation. 32 Article 6(7) of the Directive. 33 Regulation 9. 25

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Sanctions for Failure to Provide (Correct) Mandatory Information

Failure to provide this information is an offence.34 On summary conviction a person found guilty of an offence under the Regulations can be liable for a “class A fine” or a prison term not exceeding 12 months, or both, or on conviction on indictment to a fine not exceeding €60,000 or to imprisonment for a term not exceeding 18 months or to both.35 It would appear that no prosecutions have been brought against traders for failure to comply with these Regulations in the context of an on-premises or off-premises contract. In addition, failure to provide information can give rise to certain remedies for the consumer. In the case of an off premises contract, failure to inform the consumer about their right to cancel the contract extends the period within which the consumer has the right to cancel by 12 months.36 If the trader provides this information within this 12 month period, the cancellation period expires 14 days from the date on which the consumer receives this information.37 A recent example occurred in Ireland when Sky Ireland Limited incurred a penalty of €117,000 after an investigation by the Commission for Communications Regulation found that between September 2015 and September 2018, Sky had failed to provide 79,000 of its customers with a contract on a durable medium, and 41,282 of those customers were not afforded their right to a cooling off period contrary to Regulations 10 and 12 of the 2013 Regulations. Sky was to communicate this information to customers, and inform those customers of their right to a cooling off period of 14 days from receipt of the communication.38

2.1.4

Rules on Presentation of Information

At common law, there is a requirement that any particularly onerous terms are brought to a contracting party’s attention before the contract is concluded.39 This is sometimes referred to as the “red hand” rule, so called after Lord Denning’s comment that an exclusion clause was “so wide and destructive of rights that the court should not hold any man bound by it unless it is drawn to his attention in the most explicit way . . . In order to give sufficient notice, it would need to be printed in

34

See for example Regulation 7(8); Regulation 8(5); Regulation 10(10); Regulation 11(6). Regulation 38(1). 36 Regulation 16(1). 37 Regulation 16(2). 38 Com Reg Information Notice 18/80, 13 September 2018. 39 Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1988] 1 All ER 348. 35

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red ink with a red hand pointing to it – or something equally startling.”40 This clearly envisages not merely that the wording of such a clause be clear, but that the clause itself have a prominent position and not be hidden away amongst a long list of terms and conditions. However it is limited in that it only applies to onerous clauses, and is not a general regulatory provision. There are no general legislative provisions in Ireland that govern the legibility of print in consumer contracts or advertising. Section 53 of the Sale of Goods Act and Supply of Services Act 1980 provides that the Government may issue an order requiring contracts for goods and services (or in relation to any specified class of goods or services), to be printed in a minimum size type. However, no such order has ever been made. Certain specific legislative provisions refer to legibility. For example, section 16 of the Sale of Goods and Supply of Services Act 1980 requires that product guarantees be ‘clearly legible’,41 without specifying how this is to be achieved. Secondary legislation governing the display of price information contains detailed provisions about the visibility and legibility of such information.42 Certain sectors, notably the financial sector, have rules on print size—see for example the Consumer Protection Code, which contains provisions on legibility and the prominence of warnings in advertising, contracts and other documents.43 The Code of Practice for Premium Rate Services issued by the Commission for Communications Regulation also contains provisions dealing with the presentation and legibility of commercial promotions for such services. The absence of any general rules on legibility resulted in the Sales Law Review Group recommending the introduction of regulations relating to print size and other presentational issues in consumer contracts.44 A public campaign had previously suggested the use of a ten-point font size or above, in plain typeface against a contrasting background, but the Group suggested that the specifics be decided after consultation with stakeholders and technical experts on legibility.45 A subsequent Consultation on the Regulation of Small Print in Consumer Contracts issued by the Department of Jobs, Enterprise and Innovation in February 2013 put forward the option of including provisions on the legibility and intelligibility of contract

40 Thornton v Shoe Lane Parking [1971] 2 QB 163. See also Spurling v Bradshaw [1956] 1 WLR 461, 466. Approved in Ireland in McCabe Builders (Dublin) Ltd v Sagamu Developments Ltd [2007] IEHC 391. 41 It can perhaps be contrasted with Regulation 9(2)(b) of the European Communities (Certain Aspects of the Sale of Goods and Associated Guarantees) Regulations 2003, which provides that product guarantees ‘shall set out in plain intelligible language the contents of the guarantee and the essential particulars for making claims under the guarantee”. [Emphasis added]. 42 For example, regulation 6 of the European Communities (Requirements To Indicate Product Prices) Regulation 2002 states that pricing information must be clearly visible and legible to prospective customers. 43 Discussed below. 44 Sales Law Review Group (2011) para.13.50. 45 Ibid., para.13.47.

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terms as part of the general Consumer Rights Bill. It was pointed out that the font size requirement may depend on the target group at which the contract is aimed— thus a contract aimed at older age groups may need to be in a larger font size to be legible.46 The current version of the Bill provides for legibility in the most general of terms, without specifying font size. Head 72 states that a contract terms must be transparent, which means (a) it should be expressed in plain and intelligible language, (b) in the case of a written term, it is legible and presented clearly, and (c) it is readily available to any consumer affected by the term. The Bill also provides for the repeal of s.53 of the Sale of Goods and Supply of Services Act 1980, presumably in light of its non-use. However, as noted earlier, enactment of the Bill has been delayed pending developments at a European level.

2.2 2.2.1

Specific Transparency Requirements: Food Labelling and Beyond General Legal Framework

The Irish legal system’s food labelling requirements mirror the requirements set out by various European Union regulations. In addition to the general rules discussed below regarding, for example, false and misleading advertising, there are many specific information and labelling provisions relating to different types of food and food supplements. The rules on food labelling were recently updated and streamlined by a 2011 European Union Food Information to Consumers Regulation.47 Recital 4 states that it is “a general principle of food law to provide a basis for consumers to make informed choices in relation to food they consume and to prevent any practices that may mislead the consumer”. The Regulation then sets out general principles for food labelling requirements, including a prohibition on misleading information,48 mandatory food information,49 and specific rules for certain food groups. Although many of the rules set out in this Regulation were already in force, other requirements (such as mandatory nutritional declarations) were previously provided on a voluntary basis only.

46

Department of Jobs, Enterprise and Innovation (2013) para.5. Regulation No 1169/2011 on the provision of food information to consumers, amending Regulations (EC) No 1924/2006 and (EC) No 1925/2006 of the European Parliament and of the Council, and repealing Commission Directive 87/250/EEC, Council Directive 90/496/EEC, Commission Directive 1999/10/EC, Directive 2000/13/EC of the European Parliament and of the Council, Commission Directives 2002/67/EC and 2008/5/EC and Commission Regulation (EC) No 608/2004. In Ireland see the European Union (Provision of Food Information to Consumers) Regulations 2014, S.I. 556/2014. 48 See Recital 20; Article 7. 49 Article 9–35. 47

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Article 7 provides that food information should be “accurate, clear and easy to understand”.50 In addition, food information in advertising and the presentation of foods must not be misleading.51 Any information which is given on a voluntary basis must not mislead the consumer, must not be ambiguous or confusing and must, where appropriate, be based on relevant scientific data.52 The Regulation also sets out certain mandatory information requirements.53 Certain types of sales (i.e. distance sales54) and specific types or categories of food have additional mandatory information requirements.55 Other categories of food are exempted from providing certain food information.56 For example, items such as fresh fruit and vegetables, cheese and butter do not need to bear a list of ingredients,57 and certain ingredients, such as food additives used as processing aids, need not be listed.58 However if a food business operator provides any information on a voluntary basis, the requirements set out as to presentation etc. must be followed.

2.2.2

Rules on Presentation of Food Information

This mandatory food information is to be easily accessible59 and appear directly on the package or on an attached label.60 The Regulation sets out specific rules regarding the presentation and legibility of the material: information required by (a), (e) and (k) above should be in the same field of vision61; it should be “easily visible, clearly legible and, where appropriate, indelible”62; and it should “not in any way be hidden, obscured, detracted from or interrupted by any other written or pictorial matter”.63 Any information provided voluntarily must not be displayed to the detriment of the space available for mandatory food information.64 Specific rules

50

Article 7(2). Article 7(1). 52 Article 36(2). 53 Article 4, Article 9. 54 Article 14. 55 Article 10, as set out in Annex III of the Regulation. 56 Article 16, 19, 20. 57 Article 19. 58 Article 20. 59 Article 12(1). 60 Article 12(2). 61 Article 13(5). 62 Article 13(1). 63 Articl3 13(1). 64 Article 37. 51

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set out the size of the font to be used.65 The information should be in English, although it may also be in Irish or other languages.66 Specific presentation rules apply to the allergens information—the name of the potential allergen must be emphasised “through a typeset that clearly distinguishes it from the rest of the list of ingredients, for example by means of the font, style or background colour”.67 Similarly special rules apply to the “nutritional declaration”—the information regarding the energy value and the amounts of certain nutrients should be in the same field of vision, presented together in a clear format,68 and, if space permits, in tabular format with the numbers aligned.69 This information can also be presented by graphical forms or symbols in addition to words or numbers provided certain criteria are met. For example such presentation must be based on sound and scientifically valid consumer research, must not mislead the consumer, must facilitate consumer understanding, must be developed in consultation with a wide range of stakeholder groups, and must be objective and non-discriminatory.70 Traffic Light Labelling Within the United Kingdom, the Food Standards Agency (FSA) has been working on a number of initiatives, including the (voluntary) ‘Multiple Traffic Light’ system, which would show the levels of nutrients as either high, medium or low, and which is particularly useful in relation to foods where research has shown that consumers have difficulty in assessing nutritional quality, and which quite often are eaten either frequently or in large quantities.71 However, despite some discussion of this in the Irish Dáil (Parliament) Debates, and the results of a survey of 17,000 consumers that found that 80% of respondents found traffic light labelling more comprehensible than guideline daily amount labelling,72 no progress has been made in this regard. The Irish food and drink industry views traffic light labelling as an “over-simplistic approach” and does not generally support it.73 Instead, it has focused on funding initiatives aimed at increasing consumer awareness of the Guideline Daily Amount (GDA) food labelling system.74 A consistent logo system was agreed by a significant number of Irish food companies and retailers. This is now used on over 60% of all branded food and drink packages and an even higher volume of supermarket ‘own label’ products.75 65

Article 13(2) and 13(3); Annex IV. Article 15. 67 Article 21(1)(b). 68 Article 34(1). 69 Article 34(2). 70 Article 35. 71 See http://www.eatwell.gov.uk/foodlabels/trafficlights/. 72 Dr Upton Dáil Éireann, Volume 633, 08 March, 2007. 73 Dr Louise Sullivan, 17 June 2008, Joint Committee on European Scrutiny, Available at www. oireachtas.ie. 74 See The Irish Times, Oct 8, 2008. “Campaign on Food Labelling Unveiled”. See also www. gdaguide.ie. 75 Source: www.fdii.ie. 66

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Sanctions for Failure to Comply with Food Information Requirements

A food business operator is guilty of an offence if they supply food which is not accompanied by food information in accordance with the above rules,76 or supply, advertise or present food in a manner which is misleading, inaccurate, unclear or not easy for a consumer to understand, or (subject to some exceptions) claims that the food has particular curative capacities.77 The Food Safety Authority of Ireland has responsibility for investigating breaches of the regulations.78 The Authority advises food businesses of their legal obligations and seeks to encourage compliance. The powers of the Authority include the ability to issue compliance notices which set out the corrective actions to be taken,79 but prosecutions may also be brought.80 In the case of undeclared allergens, or similar potential threat to health, there may be a food alert issued by the Food Safety Authority of Ireland, and potentially a mandatory or voluntary recall. An example of this is the supermarket chain Dunnes Stores’ recall of a batch of packs of cranberries in May 2017, as macadamia nuts are present in the packs but not mentioned on the packaging. Similarly in March 2016, Wholefoods Wholesale Ltd. Recalled certain organic apricot kernels there were no directions for use provided on its label, including a warning that the consumption of apricot kernels should not exceed 1–2 per adult per day.81 The Food Safety Authority of Ireland recently completed an audit on the levels of compliance by food businesses required to provide information on allergens in non-prepacked food.82 This showed high levels of non-compliance with the regulatory rules, including a finding that almost one third (32%) of food businesses did not provide any written allergen information, and of those that did, just 24% provided accurate allergen information.

76

European Union (Provision of Food Information to Consumers) Regulations 2014, S.I. 556/2014. Regulation 4–15. 77 Ibid., Regulation 5. 78 Ibid., Regulations 16, 17. 79 Ibid., Regulation 25. 80 Ibid., Regulation 29. 81 See https://www.fsai.ie/news_centre/food_alerts/recall_rainbow_apricot_kernels.html. 82 See https://www.fsai.ie/news_centre/press_releases/allergens_03052017.html.

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3 Misleading Commercial Practices 3.1

Statutory Protection from Misleading Commercial Practices

Irish consumers have been long protected from misleading actions by traders. The Merchandise Marks Acts 1887–1970 made it an offence to apply a false description to goods or to use another’s trademark (or similar sign) in an attempt to deceive consumers.83 The Consumer Protection Act 1978 extended these protections, for example by widening the definitions of “trade description” and “false trade description”,84 removing certain defences which had been available to traders,85 and expressly protecting consumers from misleading statements in relation to certain matters.86 However, both of these statutes have been repealed with the introduction of the Consumer Protection Act, which implemented the EU Unfair Commercial Practices Directive.87 Section 43(1) of the Consumer Protection Act provides that a commercial practice is misleading if it “includes the provision of false information” in relation to a specific list of matters, and that information “would be likely to cause the average consumer to make a transactional decision that the average consumer would not otherwise make”. Section 43(2) provides that a commercial practice is also misleading “if it would be likely to cause the average consumer to be deceived or misled” in relation to a specific list of matters, and that average consumer would be likely “to make a transactional decision that the average consumer would not otherwise make”. These two provisions cover different situations, in that s.43(1) covers false information, whereas s.43(2) protects against misleading practices. Section 45 provides that a commercial practice may be misleading if a trader represents that they are bound by a code of practice when they are not. Section 46 provides for misleading omissions. A commercial practice is misleading “if the trader omits or conceals material information that the average consumer would need, in the context, to make an informed transactional decision (“material information”) and such practice would be likely to cause the average consumer to make a transactional decision that the average consumer would not otherwise make”. It is also misleading if such information is given in a manner that is “unclear, unintelligible, ambiguous or untimely” or which “fails to identify the commercial intent of the practice (if such intent is not already apparent from the context)” and that is “likely to cause the average consumer to make a transactional decision that the average consumer would not otherwise make”.88 83

Section 2, Merchandise Marks Act 1887. Section 2. 85 Section 3. 86 Sections 6, 7, 8. 87 Directive of the European Parliament and Council concerning unfair business-to-consumer practices in the internal market and amending Directives 84/450/EEC, 98/27/EC. 88 Section 46(2). 84

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Misleading Practices and the Average Consumer

As can be seen from these provisions, the Consumer Protection Act takes as its benchmark the concept of the “average consumer”, which is said to have “the meaning assigned to it in the Directive”.89 Recital 18 to the Directive describes the average consumer as “reasonably well–informed and reasonably observant and circumspect, taking into account social, cultural and linguistic factors”. This reflects the case law of the European Court of Justice, although the directive emphasises that “[n]ational courts and authorities will have to exercise their own faculty of judgement, having regard to the case-law of the Court of Justice, to determine the typical reaction of the average consumer in a given case.” These provisions and the concept of the average consumer were discussed in the recent Irish Court of Appeal decision in in Aldi Stores (Ireland) Ltd v Dunnes Stores.90 Aldi objected to a comparative advertising campaign by the Dunnes chain of supermarkets, in which shelf-edge labels compared the Dunnes prices and Aldi prices for 262 separate products. Aldi claimed this was misleading, particularly in relation to certain products. For example, Dunnes compared the price of their own brand tomato ketchup with Aldi’s even though Aldi’s ketchup has more tomato content, and compared the shops’ own-brand pork sausages when the Aldi product carries the “Bord Bia” quality assurance mark and Dunnes’ product does not. Aldi brought an action based on the European Communities (Misleading and Comparative Advertising) Regulations,91 which provide that a comparative marketing communication is prohibited if: (a) it deceives or is likely to deceive in relation to certain matters the trader to whom it is addressed or whom it reaches, and by is thus likely to affect the trader’s economic behaviour, or injure a competitor.92 (b) it is a misleading commercial practice under any of sections 43 to 46 of the Consumer Protection Act 200793 (c) it does not compare products meeting the same needs or intended for the same purpose,94 (d) it does not objectively compare one or more material, relevant, verifiable, and representative features of those products, which may include price.95

89

Section 1(2). [2017] IECA 116, 6 April 2017. 91 S.I. No. 774 of 2007, implementing Directive 2006/114/EC. 92 See Regulation 4(2)(a) and Regulation 3. This provision was not engaged by the facts of the case. 93 Regulation 4(2)(b). 94 Regulation 4(2)(c). 95 Regulation 4(2)(d). 90

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In the High Court it was held that in the case of 14 out of 15 specified products the comparative marketing was prohibited, stating that there was a requirement under the Regulations to set out all material and relevant features of both products, and that if this was not done it would also be misleading under the Consumer Protection Act.96 However, the Court of Appeal upheld Dunnes’ appeal,97 finding that the High Court had erred in its interpretation of what was required under the Regulations, and in its assumption that it would inevitably be misleading not to provide full details of the compared products. Rather, “a comparison of products meeting the same needs or intended for the same purpose may be compared by reference only to price, always assuming that the comparison is not outlawed as being misleading”.98 If the advertising was to be found to be a misleading commercial practice under the Consumer Protection Act, this would have to be an independent finding of a misleading practice under the Act and not merely based on the fact that the advertisement had failed to set out all the features of the products. In this case, the only reason “why the information was considered inadequate or false was that it did not point out the difference with the compared Aldi product.”99 As to whether such a finding could be independently made, the Court of Appeal further indicated that a decision that a commercial practice is misleading should not be lightly found, in light of the serious consequences for business: These findings of misleading commercial practices are obviously very serious matters for any trader, and possibly even more so for a major supermarket chain. Providing false information, misleading or deceiving consumers and concealing information constitute conduct that only needs to be stated to be understood as a grave indictment of a retailer. Something more than a formulaic declaration of breaches was therefore required.”100

The Court of Appeal found that these issues had not been discussed in sufficient detail by the High Court, and there was not enough clear evidence “to justify such serious conclusions”.101 The Court felt that “these added and more serious infractions are not appropriate in the circumstances of an open and declared intention by one supermarket chain to challenge its rivals in a campaign of comparative advertising. The intention was comparison, not deceit and neither was there any case of

96

Aldi Stores (Ireland) Limited and Aldi GMBH & Co KG v Dunnes Stores [2015] IEHC 495. The High Court decision in relation to certain banners was upheld, on the basis that they did not meet the criteria for comparative advertising and thus constituted trademark infringement: [2017] IECA 116, at paras.111–112. 98 [2017] IECA 116, at para.30. 99 [2017] IECA 116, at para.95. 100 [2017] IECA 116, at para.98. See also para.82. 101 [2017] IECA 116, at para.100. 97

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deliberately seeking to mislead consumers.”102 The reference here to intent is questionable—s43 on misleading practices is a strict liability offence, and can result in a conviction even if an intention to mislead is not proved.103 However, as the CCPC takes a risk based approach, the likelihood of criminal proceedings being brought is increased if the actions of the trader are seen as intentional. The Court of Appeal avoided an overly paternalistic approach to the average consumer, stating that “[t]he notional consumer has common sense”104 and “is well capable of understanding the comparison of prices of own brand tomato ketchup or shower gel or strawberry yoghurt or the other products that were in issue in the case.”105 The Court was equally dismissive of the argument that consumers would be misled by slogans such as “lower price guarantee” and “always better value”: It seems to me that no sensible person could be misled by the use of general slogans that are the commonplace stuff of most advertising. . . . I think that shoppers have to be given some credit for intelligence and appreciation of common marketing practices. A lawyer’s exegesis of the words used is wholly inappropriate and it would correctly be brushed aside as unworldly and unrealistic by any average shopper. In my view, the proposition accepted and adopted by the trial judge in this regard is, with respect, unrealistic and inconsistent with the attitude to be ascribed to a reasonably well-informed and circumspect shopper.106

Some further insight into the concept of the average consumer (or the “reasonable customer”) was provided by the Supreme Court decision in McCambridge Ltd v Joseph Brennan Bakeries.107 This case concerned an action for passing off, which requires that the plaintiff has a “goodwill” or reputation in his business, that consumers are likely to be misled into buying the goods/services of the defendant, and that the plaintiff is therefore likely to suffer damage.108 This action is somewhat similar to s.44 of the Consumer Protection Act, which provides that a commercial practice involving marketing or advertising is misleading if it would be likely to cause the average consumer to confuse a competitor’s product, trade name, trade mark or some other distinguishing feature or mark with that of the trader, and “to make a transactional decision that the average consumer would not otherwise make”. McCambridge Ltd illustrates how the common law approach may still be favoured over the statutory provision in this context, particularly when it is a trader rather than

102

[2017] IECA 116, at para.100. It should be noted that it is questionable whether intent is necessary under the 2007 Act. 103 See National Consumer Agency v Associated Newspapers (Ireland) Ltd Dublin Metropolitan District, Gibbons J., January 25, 2011. This case concerned an incident in February 2011, when the “Irish Mail on Sunday” produced an edition of their newspaper with a “wraparound” cover which had the effect of misleading consumers into believing that the paper being purchased was a “Sunday Tribune” newspaper. The Sunday Tribune had gone into receivership several days earlier. 104 [2017] IECA 116, at paras.27, 104. 105 [2017] IECA 116, at para.91. 106 [2017] IECA 116, at para.105. 107 McCambridge Ltd v Joseph Brennan Bakeries [2013] 1 ILRM 369. 108 See Reckitt and Colman v Borden [1990] RPC 341 (UK).

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a consumer bringing an action,109 and in fact the Act was not mentioned by the Court at all. In this case it was held that Brennan’s Bakeries had passed off their soda bread as that of the rival bakery, McCambridges. There was some evidence that if the consumer actually looked at the packaging and “get up” of the defendant’s soda bread they would not confuse it with that of the plaintiff, but there was potential for confusion if they put in into their shopping trolley without properly looking at it. It was held that this was enough to establish confusion on the part of the consumer. The Court emphasised “the phenomenon of fast moving consumer goods displayed on the supermarket shelf”,110 and stated that “even ordinary reasonable prudent consumers do not, in fact, frequently carry out a detailed examination of the product at the time when they take the bread from the supermarket shelf and place it in the supermarket trolley”.111

3.3

The Protection of Vulnerable Consumers Against Misleading Practices

Section 2(2) of the 2007 Act provides that if a commercial practice or product is directed at a particular group of consumers, the expression “average consumer” shall be read as “the average member of that group”.112 This would seem to imply that if, for example, a practice is targeted at teenagers, the average consumer would be construed as the average teenager. In addition, section 2(2) provides that if the practice or product “would be likely to materially distort the economic behaviour only of a clearly identifiable group of consumers whom the trader could reasonably be expected to foresee as being particularly vulnerable because of their mental or physical infirmity, age or credulity” then the average consumer will be “the average member of that vulnerable group”.

3.4

Remedies

A range of remedies are available if a practice is found to be misleading. Any person, including the Competition and Consumer Protection Commission, a trader or a consumer, may apply to the Circuit Court or High Court for an order prohibiting a

109

This is because although a trader can seek a court order under the Consumer Protection Act (see s.71(2)), only a consumer can claim damages (see s.74). In contrast, damages or an account of profits are available to the plaintiff in an action for passing off. 110 [2013] 1 ILRM 369, at para.43. 111 Ibid. 112 See Recital 18 of the Directive also.

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trader or person from engaging in a misleading practice.113 In addition, consumers are given a right to claim damages,114 although there is no current mechanism for a collective redress action to be brought.115 The Act also makes a range of enforcement measures available to the Competition and Consumer Protection Commission, including the use of compliance notices,116 undertakings,117 fixed payment notices,118 and the possibility of criminal proceedings.119 Details of actions taken, with the names of the trader, may be published in the “Consumer Protection List”.120 A recent example of such actions being taken is in relation to the “clocking” of second hand cars, i.e. providing false or misleading information about the mileage of cars. The Commission recently announced it will be conducting unannounced inspections of car dealers across Ireland, and in February 2017 a Dublin motor trader was sentenced to 3 months in prison for giving a consumer misleading information about the usage and prior history of a car.121 In 2016, another motor trader agreed to compensate a consumer and gave an undertaking that they would not mislead consumers about a vehicle’s history.122 The Commission also ensures that retailers provide the correct price on goods, and in 2016, 27 fixed payment notices (fines) were issued to retailers who failed to do this.123 In 2014, the Commission was concerned that Ryanair’s website was misleading in regards to the selling of travel insurance, and Ryanair changed its website as a result, without any further proceedings being necessary.124

4 Unfair Contract Terms: Bargaining Power and Transparency Irish law has long acknowledged that consumers are in a weaker bargaining position vis-à-vis businesses. Even before European intervention in the sphere on unfair terms, the rules on exclusion clauses in the Sale of Goods and Supply of Services Act 1980 also reflect a concern that consumer rights could be eroded by standard

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Section 71(2). Section 74. There is no right of damages for a breach of s.45, relating to a misrepresentation about being bound to a code of practice. 115 See Kelly (2018b). 116 Section 75. 117 Section 73. 118 Section 85. 119 Sections 76–84. 120 Section 86. 121 See http://www.consumerhelp.ie/index.jsp?p¼100&n¼101&a¼1713. 122 Competition and Consumer Protection Commission, Consumer Protection List 2016. 123 Competition and Consumer Protection Commission, Consumer Protection List 2016. 124 http://www.consumerhelp.ie/index.jsp?p¼121&n¼478&a¼1246. 114

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contract terms if restrictions were not in place. The Irish Supreme Court has also recognised that consumers often enter into “contracts of adhesion” where the consumer “has no standing to ask that a single iota of the draft contract presented to be changed before he signs it. He must lump it or leave it.”125 The Court added that an approach which assumes that the consumer has freedom of choice would be “largely based on legal fictions”.126 However, protection against unfair contract terms was limited to statutory protection against certain exclusion clauses,127 and judicial techniques such as rules on the incorporation128 and interpretation of terms129 and a refusal to recognise exclusion clauses which attempted to exclude liability for fundamental breach.130 Outside this, the principle of freedom of contract prevailed. This situation changed with the implementation of the Unfair Contract Terms Directive.131 Consumers who enter into contracts containing standard terms which have not been individually negotiated are protected by the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995.132 A contract term is unfair if “contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer”133 and any such term is not binding on the consumer.134 In the Irish High Court decision in AIB v Counihan, the importance of clarity and openness in the contract was emphasised: In essence, the requirement of good faith mandates fair and open dealing, with the result that contractual terms must be expressed fully, clearly, and legibly by a seller/supplier, with suitable prominence being given to any disadvantageous terms, and all concealed pitfalls and traps avoided, in effect adherence to what might be described as good standards of commercial practice. A significant issue arising in this regard is whether a seller/supplier, dealing fairly and equitably with a consumer, could reasonably assume that the consumer would have agreed to an impugned term in individual contract negotiations. As for fair and equitable dealing, what this requires in effect is that a seller/supplier should not take advantage of, inter alia, a consumer’s necessity, indigence, inexperience, unfamiliarity with the subject-matter of a contract, or like characteristics or traits, and must take a consumer’s legitimate interests into account.135

125

Mc Cord v ESB [1980] 1 ILRM 153, 161. Ibid. It should be noted that this case concerned contracts entered into with an electricity supplier who at the time had a monopoly on electricity supply in Ireland. 127 The Sale of Goods Act 1893, s.55 as amended by the Sale of Goods and Supply of Services Act 1980; The Sale of Goods and Supply of Services Act 1980, s.40. 128 See for example Noreside Construction Ltd v Irish Asphalt Ltd [2014] IESC 68; Carroll v An Post National Lottery Co [1996] 1 IR 443. 129 Such as the contra proferentem rule—see Andrews v Singer [1934] 1 KB 394 (Eng.)—or the “main purpose” rule—see Glynn v Margotson [1893] AC 351. 130 Clayton Love v B&I Transport (1970) 104 ILTR 157. Discussed below. 131 Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts. 132 SI No.27 of 1995, as amended by the European Communities (Unfair Terms in Consumer Contracts) (Amendment) Regulations 2000 (S.I. No. 307 of 2000). 133 Regulation 3(2). 134 Regulation 6. 135 AIB v Counihan [2016] IEHC 752 Barrett J, 21st December 2016, para.17. 126

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There have been very few cases where the Regulations have been applied in Ireland, and until recently little discussion of the Regulations even in those cases where the Regulations have been applied.136 However, the economic crisis in Ireland, with its particular focus on consumer mortgage contracts, has refocused attention on the Regulations. This is reinforced by the European Court of Justice’s position that “the national court is required to assess of its own motion whether a contractual term falling within the scope of the directive is unfair”,137 a position that was acknowledged by the Irish High Court in AIB v Counihan.138 In Ireland, the Unfair Contract Terms Directive only applies to terms which have not been individually negotiated.139 Regulation 3(4) states A term shall always be regarded as having not been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence its substance, particularly in the context of a pre-formulated standard contract.

The burden of showing that a term has been individually negotiated is on the seller/supplier.140 However, the fact that a specific term or any aspect of a term has been individually negotiated does not exclude the application of the Regulations to the rest of the contract.141 The Consumer Rights Bill 2015 proposed extending the scope of the unfair terms provisions to include contract terms that have been negotiated between the consumer and trader.142 However, even some individually negotiated terms may not be binding, under other statutory provisions. For example, it is not possible to exclude the terms implied by s.12–15 of the Sale of Goods Act 1893 (concerning the seller’s right to sell, the description of the goods and the quality/fitness for purpose of the goods) in a consumer contract,143 and this mandatory rule is not affected by whether or not any

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Re an Application pursuant to Regulation 8(1) of the Unfair Terms in Consumer Contracts 1995 unreported, High Court, December 5, 2001 (hearing and judgment) and December 20, 2001 (order). In the High Court Kearns J declared 15 sample terms and an interim payment schedule invalid under the Regulations. No written reasons for the order were given. For criticism see Kelly (2013). 137 Aziz v Caixa d’Estalvis de Caralunya C-415/11 para.46. 138 AIB v Counihan [2016] IEHC 752: “the Court of Justice’s observations [in Aziz] appear to contemplate a court, even in an adversarial system of justice, acting in an inquisitorial manner.” 139 Reg 3. (1) Subject to the provisions of Schedule 1, these Regulations apply to any term in a contract concluded between a seller of goods or supplier of services and a consumer which has not been individually negotiated. 140 Regulation 3(6). 141 Regulation 3(5). 142 Head 71. 143 Section 55(1) of the Sale of Goods Act 1893, as amended by the Sale of Goods and Supply of Services Act 1980.

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such exclusion was individually negotiated.144 Regulation 10 of the European Communities (Certain Aspects of the Sale of Consumer Goods and Associated Guarantees) Regulations 2003145 provides for a similar rule in relation to the rights contained therein. It is possible to exclude the statutorily implied terms regarding the quality of services,146 but only if it is “fair and reasonable” and if it has been brought to the express attention of the consumer. One of the factors to be taken into account in this assessment is the bargaining power of the parties and whether the customer knew or ought reasonably to have known of the existence and extent of the term.147 However it should be noted that one of the proposals in the scheme for a Consumer Rights Bill 2015 was that any attempt to exclude these provisions should be invalid.148 In addition, the courts take a strict view of exclusion clauses which are too broad, or which attempt to exclude liability for a “fundamental breach”. In Clayton Love v B&I Steam Packet Co149 the Irish Supreme Court stated that it would not be possible to exclude liability for a fundamental breach, even if freely negotiated. However more recent decisions by lower courts150 have expressed doubt on this, particularly in light of UK decisions151 which provide that may be possible to exclude liability for fundamental breach if there is equality of bargaining power and it has clearly been agreed to. Either way, however, it is very unlikely that a very broad exclusion clause would be upheld in the consumer context. Further methods to restrict reliance on unfair standard conditions include rules on how terms are incorporated into a contract and the use of the contra proferentem rule (i.e. the clause is read in favour of the party who did not draft it).152 In certain cases where the unequal footing of the parties has resulted in an unconscionable bargain, then it may be set aside, although these cases tend to involve private parties where one is at a serious disadvantage to another because of poverty or ignorance, rather than a trader/consumer situation.153 A party who

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Even in the commercial context it is not possible to contract out of s.12 of the Sale of Goods Act 1893 (implied term that seller has the right to sell) and any exclusion from s.13, 14 or 15 must be fair and reasonable: see Section 55(1) of the Sale of Goods Act 1893, as amended by the Sale of Goods and Supply of Services Act 1980. 145 SI No 11/2003, implementing Directive 1999/44/EC of the European Parliament and of the Council of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees. 146 Section 39 of the Sale of Goods and Supply of Services Act 1980. 147 Schedule 2 to the Sale of Goods and Supply of Services Act 1980. 148 Head 70. 149 (1970) 104 ILTR 157. 150 See for example Western Meats Ltd v National Ice and Cold Storage [1982] ILRM 101; Fitzpatrick and Harty v Ballsbridge International Bloodstock Sales Unreported, High Court Feb 25, 1983. 151 Photo Production Ltd v Securicor Transport Ltd [1980] 2 WLR 283. 152 See Clark (2013), pp. 221–232, 263. 153 Carroll v Carroll [1999] 4 IR 241; Grealish v Murphy [1946] IR 35.

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asserts that a contract is a transaction is unconscionable bears the burden of proof.154 In one recent case concerning a loan contract, the argument that an interest rate which was “out of kilter” with other rates was not in itself an indication of unconscionability—instead the court would look at factors such as whether there was inadequate consideration, whether there procedural impropriety and whether the defendant had independent legal advice.155

4.1

Exclusion of Core Contract Terms and Transparency

In Ireland, Regulation 4 of the Unfair Contract Terms Regulations provides for the so-called “core term” exemption. It states that a term “shall not of itself be considered to be unfair by relation to the definition of the main subject matter of the contract or to the adequacy of the price and remuneration, as against the goods and services supplied, in so far as these terms are in plain, intelligible language”. There has not been much judicial discussion of this provision in Ireland—in one case where there was at least an argument that a core term was being assessed (an interim payment schedule) there was no discussion of the exemption in Regulation 4, and an order that the term was unfair was obtained on the basis of the parties’ agreement, with no written decisions being given.156 However the UK Supreme Court has given a broad interpretation to the equivalent UK provision. In The Office of Fair Trading v Abbey National Plc157 it held that a contract term which provided for charges on unauthorised overdrafts on personal bank accounts fell within the exemption and therefore could not be assessed under the fairness test. This result was criticised and the wording of the exclusion was thus changed in the UK Consumer Rights Act 2015.158 A similar change has been proposed in the Irish context, in the proposed scheme for a Consumer Rights Bill 2015. Head 74(2) clarifies that any “payment that is incidental or ancillary to the main subject matter of the contract” may be assessed for fairness. However as noted before, this Bill has been delayed, so the matter remains unclear. The interpretation in Abbey National is by no means inevitable in an Irish court, but there remains the risk that it would be followed.159

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Secured Property Loans v Floyd [2011] IEHC 189. Secured Property Loans v Floyd [2011] IEHC 189. 156 Re an Application pursuant to Regulation 8(1) of the Unfair Terms in Consumer Contracts 1995 unreported, High Court, December 5, 2001 (hearing and judgment) and December 20, 2001 (order). For a good summary of the case see Dorgan (2002). For criticism see Kelly (2013). 157 [2009] UKSC 52. 158 Section 64 provides that a term of a consumer contract may not be assessed for fairness to the extent that—(a) it specifies the main subject matter of the contract, or (b)the assessment is of the appropriateness of the price payable under the contract by comparison with the goods, digital content or services supplied under it. 159 See Kelly (2018a). 155

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Regulation 5 provides that any terms which are in writing must be drafted in “plain, intelligible language” and where there is a doubt about a term’s meaning “the interpretation most favourable to the consumer shall prevail”.160 This applies even to the “core” terms—they are exempted from the fairness test only in so far as they are in “plain intelligible language”.161 Where there is doubt as to the meaning of a term—which presumably means it is not plain and intelligible—the “interpretation most favourable to the consumer shall prevail”.162 In addition, a core term which is not transparent may be assessed for fairness. There is no other specific sanction for not complying with the transparency agreement, but it is likely that a lack of transparency would contribute to a finding that a term is unfair. In Kásler163 the CJEU stated that the requirement of transparency could not “be reduced merely to [the contract terms] being formally and grammatically intelligible”164 but “must be understood in a broad sense”.165 In this case, which concerned the exchange rate applicable to repayments of a loan denominated in a foreign currency, the contract should set out transparently the “specific functioning of the mechanism of conversion for the foreign currency . . . so that that consumer is in a position to evaluate, on the basis of clear, intelligible criteria, the economic consequences for him which derive from it”.166 It has also been noted in the UK that this requirement should be based on the perspective of the average or typical consumer, and requires not only that that it be comprehensible, but also that the “typical consumer can understand how the term affects the rights and obligations that he and the seller or supplier have under the contract”.167 This case indicates that the typical consumer would have read additional documentation such as leaflets and brochures, and that this additional documentation would be taken into account by the court in reaching its decision.168 The court however rejected the idea that a lender must be obliged to make extensive disclosure to consumers regarding the meaning of certain terms, so as to ensure informed consent. It has been commented that this would seem to be a reasonable approach for the Irish context,169 but there would appear to be no Irish case law on the issue.

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This version of the contra proferentem rule does not apply where an application is made by the Competition and Consumer Protection Commission or a consumer organisation: Regulation 5(3). 161 Regulation 4. 162 Regulation 5(2). 163 Árpád Kásler, Hajnalka Káslerné Rábai v OTP Jelzálogbank Zrt Case C-26/13 ECLI:EU: C:2014:282. 164 Ibid., para.71. 165 Ibid., para.72. 166 Ibid., para.75. 167 Office of Fair Trading v Abbey National Plc [2008] EWHC 875, at para.103. 168 Office of Fair Trading v Abbey National Plc [2008] EWHC 875. 169 Donnelly and White (2014), pp. 253–254.

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5 Sector Specific Rules: The Financial Consumer The provision of information to consumers is a key component of consumer protection in the area of financial services. Certain protections can be found in general consumer protection directives, discussed above, such as the Unfair Contract Terms Directive and the Unfair Commercial Practices Directive, others are specific to the financial sector—see for example the Directive on the distance marketing of financial services,170 the Payment Services Directive171 and the Payment Accounts Directive.172 Gaps in the legislative schemes have been filled by the Central Bank codes of practice, such as the Consumer Protection Code 2006, as revised in 2012 and 2016. These codes of practice are drawn up by the Central Bank, but they have a statutory basis173 and are binding on financial institutions.

5.1 5.1.1

Implementation of European Union Directives The European Communities (Distance Marketing of Consumer Financial Services) Regulations 2004

The Directive on the distance marketing of financial services is implemented in Ireland by the European Communities (Distance Marketing of Consumer Financial Services) Regulations 2004, as amended.174 Part 2 sets out the requirement to provide certain information to the consumer, both pre- and post- contract formation. Regulation 6(1) states that within a reasonable time before a consumer is bound by a distance contract for the supply of a financial service, the supplier shall give the consumer information set out in Schedule 1. In addition, the supplier should make known to the consumer the commercial purpose of the contract, and give that information in a way that is clear and comprehensible, taking into account the means of communication used.175 Information is said to be given in a clear way only if it is easily, directly and at all times accessible to the consumer, and can be stored by the consumer in a durable medium.176 A supplier is to keep in a durable and tamper-proof form a copy of all information that has been given to a

170

Directive 2002/65. Directive 2007/64. 172 Directive 2014/92/EU of the European Parliament and of the Council of 23 July 2014 on the comparability of fees related to payment accounts, payment account switching and access to payment accounts. 173 Section 117(1) of the Central Bank Act 1989. 174 By the European Communities (Distance Marketing of Consumer Financial Services)(Amendment) Regulations 2005. 175 Regulation 6(2). 176 Regulation 6(3). 171

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consumer.177 In giving that information, the trader must comply with all enactments and rules of law that require good faith in commercial transactions, or provide protection to those who are unable to give their consent, such as minors.178 Regulation 6(4) provides that that “a supplier shall ensure that, as far as reasonably practicable, the information accurately reflects the contractual obligations that would arise under the law presumed to be applicable to the contract assuming it were to be entered into”. It has been pointed out that it is “arguable that the requirements are excessive, leading to information over-load and ultimately not serving to enhance consumer Protection in practice”.179 Failure to comply with these requirements may mean that the distance contract is not enforceable against the consumer.180 This may not apply where a court is satisfied that it is not a deliberate failure, that the consumer is not prejudiced, and enforcement of the contract is just and equitable, subject to any conditions the court sees fit to impose.181 However the burden of proof in showing compliance with the Regulations is on the supplier, and suppliers are prohibited from requiring the consumer to show non-compliance.182 The Regulations are generally enforced by the Central Bank, and consumers may also either initiate proceedings to enforce their rights or may rely on the Regulations as a defence in an action by the seller, either in the courts or before the Financial Services Ombudsman.183

5.1.2

The European Union (Payment Accounts) Regulations 2016

Following a public consultation, the Payment Accounts Directive was transposed into Irish law by the European Union (Payment Accounts) Regulations 2016. Regulation 4(1) provides that “a payment service provider shall, in good time before entering into a framework contract with a consumer, provide the consumer with a [fee information document] containing the EU standardised terminology set out in the payment account services list and . . . the corresponding fee for that service”. Regulation 4(3) reflects Article 4(2) of the Directive, and states that the fee information document shall (a) be on paper or another durable medium, (b) be a short and stand-alone document, (c) be presented and laid out in a way that is clear and easy to read, using characters of a readable size,

177

Regulation 6(5). Regulation 6(2). 179 Donnelly and White., p. 344. 180 Regulation 6(6)(a) (inserted by Reg 2(b) of the 2005 Regulations). 181 Regulation 6(6)(b) (inserted by Reg 2(b) of the 2005 Regulations). 182 Regulation 9(6). 183 Regulations 24(6), Regulation 31. 178

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(d) be no less comprehensible in the event that, having been originally produced in colour, it is printed or photocopied in black and white, (e) be written in English or in another language agreed by the consumer and the payment service provider, (f) be accurate and not misleading, (g) be expressed in euro or, if agreed by the consumer and the payment service provider, in another currency of the European Union, (h) include the title “fee information document” at the top of the first page next to such common symbol as may be adopted by the European Commission pursuant to Article 4 (6) of the Directive (i) include a statement that it includes fees only in respect of services that are listed in the payment account services list and that complete precontractual and contractual information on all services offered by the payment service provider is provided in other documents, and (j) where one or more services are offered as part of a package of services linked to a payment account, disclose the fee for the entire package and specify the services and quantity of services included in the package, and the additional fee for any service that exceeds the quantity covered by the package fee.

Ireland chose to exercise the discretion under Article 4(2) to provide that the fee information document may be issued along with other information required under EU or Irish law, provided it is a standalone document and is not incorporated into another document.184 The service provider should also provide a glossary, explaining terminology used, which should be “drafted in clear, unambiguous and non-technical language” and not be misleading.185 The European Banking Authority was charged with developing standard terms and definitions for payment accounts, and each Member State was to send a list of representative terms used in that jurisdiction. The Irish terms sent were “maintaining the account”, “providing a debit card” “providing a credit card” “overdraft” “Credit transfer” “standing order” “direct debit” and “cash withdrawal”.186 The final draft of the EBA standard terms as well as standardised formats and common symbol of the fee information document (FID) and the Statement of Fees (SoF) was published in May 2017. The Report states that “national specificities are considered in the national translations”, so the Annex (which will

184

Regulation 4(4). Although the Regulation refers to compliance with Regulation 4(3), the Department of Finance’s June 2016 Public Consultation Paper envisages that it is important that the fee information be in a stand alone document and not incorporated. 185 Regulations 4(5), 4(6). 186 EBA Draft Regulatory Technical Standards setting out the Union standardised terminology for the most common services linked to a payment account, under Article 3(4) of Directive 2014/92/EU [Payment Accounts Directive] p. 53.

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form the basis of the Regulation) provides for different English translations for the United Kingdom and Ireland,187 as well as an Irish translation.188 Both the glossary and fee information document should be available to customers and non-customers, in an easily accessible manner on a website where available, at its publicly accessible premises and on a durable medium free of charge and on request.189 Consumers also have a right to a “statement of fees” which is accurate and not misleading, and clear and easy to read, using characters of a readable size.190 A statement of fees should be provided at least once a year, but more frequent statements are permitted and it may be provided together with other information required under EU or Irish law.191 Member States are also to ensure consumers have access to at least one comparative website for comparing fees of payment service providers, again setting out criteria to be followed.192 This comparison website is operated by the Competition and Consumer Protection Commission.193 Ireland chose not to exercise the discretion to require that this comparison website includes additional information such as the number and location of ATMs and branches.194 The Payment Accounts Directive also regulates the process for switching payment accounts, including the provision of information to consumers when switching.195 Member States had discretion to require that additional information be provided to consumers, including, where applicable, the information necessary for the identification of the deposit guarantee scheme within the Union of which the payment service provider is a member.196 The Irish Regulations include this requirement to provide information regarding deposit guarantee schemes.197 The Central Bank of Ireland’s Code of Conduct on the Switching of Current Accounts with Credit Institutions (2010) already covered some of the requirements of the Directive, and a revised version of the Code was published in 2016 to take the Directive into account. The Code sets out procedures to be followed when a 187

Final Report on Draft Regulatory Technical Standards setting out the Union standardised terminology for the most common services linked to a payment account, under Article 3(4) of Directive 2014/92/EU [Payment Accounts Directive] (EBA/RTS/2017/04) Para.31. 188 ANNEX—Union standardised terms and definitions for services linked to a payment account that are common to at least a majority of Member States, under Article 3(4) of Directive 2014/92/ EU. 189 Regulation 4(7). 190 Regulation 5. 191 Regulation. 192 Article 7. 193 Regulation 7(1). See https://www.ccpc.ie/consumers/financial-comparisons/. 194 Department of Finance, Public Consultation Paper on the Payment Accounts Directive, June 2016, p. 6. 195 Article 14(1). 196 Article 14(1). 197 Regulation 12(f).

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consumer wishes to switch from one credit institution to another. Payment service providers must provide customers who wish to switch to it with a “switching pack”,198 which contains at least the following: (a) a description of the switching process, including the relevant deadlines and a description of the steps which the consumer must take to switch their payment account; (b) contact details for making an appointment, if the consumer is required to visit the payment service provider in person to open the payment account; (c) a copy of the payment service provider’s Account Transfer Form which shall include the items set out in provision 3 below; (d) information about the importance of the switching date and why it is preferable that it should be a date where there is least activity on the payment account; (e) contact details to assist with queries in relation to the new payment account and the switching process; (f) where the consumer is opening a new payment account: (i) the name and a description of each payment account offered by the payment service provider. The description of the payment account must contain the key features of the payment account and details of interest rates and fees and charges which may apply to the payment account; and (ii) a list of the documents which the payment service provider will require from the consumer in order to open the payment account.199

The Code contains further information requirements and procedures. For example, when the payment service provider receives an Account Transfer form from the consumer, they “must inform the consumer as to the practical considerations which they should consider if they decide to switch payment accounts, including, whether there are sufficient funds in both the new and old accounts to meet any incoming debts, checking their employer’s payroll details and any other credit sources, changing details on any invoice documentation and direct debit details”200 A payment service provider must be able to demonstrate that it is in compliance with this Code.201 Despite these provisions, however, levels of account switching in Ireland remain low, with the number of switches decreasing for each reporting period since 2014.202

198

Central Bank of Ireland’s Code of Conduct on the Switching of Current Accounts Institutions (2016) provision 1. 199 Central Bank of Ireland’s Code of Conduct on the Switching of Current Accounts Institutions (2016) provision 2. 200 Central Bank of Ireland’s Code of Conduct on the Switching of Current Accounts Institutions (2016) provision 5. 201 Central Bank of Ireland’s Code of Conduct on the Switching of Current Accounts Institutions (2016) Provision 18. 202 Central Bank of Ireland, Consumer Protection Bulletin, 4 November 2016.

with Credit with Credit with Credit with Credit

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The Central Bank Codes of Practice

As well as the Code of Conduct on the switching of current accounts, consumers are protected in the domestic sphere by other Central Bank codes of practice, including the Consumer Protection Code (2012),203 the Code of conduct on mortgage arrears (2013) and the Consumer Protection Code for Licensed Moneylenders (2009). Although codes are usually seen as a soft law mechanism, all the codes issued by the Central Bank have a statutory status,204 and there is a range of sanctions for non-compliance.

5.2.1

The Consumer Protection Code 2012

The Consumer Protection Code applies to financial services providers authorised, registered or licensed by the Central Bank or in another EU or EEA Member State when providing services in Ireland on a branch or cross-border basis. Provision 4 of the Code provides for general information transparency requirements. A regulated entity must ensure that all information it provides to a consumer is clear, accurate, up to date, and written in plain English. Key information must be brought to the attention of the consumer. The method of presentation must not disguise, diminish or obscure important information.205

In addition, the information must be given in a timely manner, having regard for inter alia the time necessary for the consumer to absorb and react to the information provided.206 The font size used must be clearly legible and appropriate to the type of document and information.207 The service provider must provide each consumer with a copy of its terms of business,208 including details such as its legal name, trading name, contact details, a reference to the Code and link to the Central Bank website, a description of its activities, a general statement of charges imposed directly by the business, its policies relating to consumer’s personal data and conflicts of interest, actions which may be taken by the service provider in the event of the consumer’s default and a summary of its complaints procedure. Prior to providing a product, information must be provided about the main features and restrictions of the product,209 as well as the terms and conditions attaching to any The Code was first issued in 2006 and revised in 2012. Addendums were added in July 2015 and July 2016. 204 Section 117 of the Central Bank Act 1989; Section 23 and Section 37 of the Investment Intermediaries Act 1995; Section 8H of the Consumer Credit Act 1995; and Section 61 of the Insurance Act 1989. 205 4.1. 206 4.2. 207 4.4. 208 4.12. 209 4.21 In fact this information must be provided before offering or recommending such product. 203

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such product or service.210 Where a loan is offered for the purpose of consolidating other loans, information must be provided comparing the total interest to be paid under the new loan structure, as compared with the existing facilities.211 Specific information requirements also apply to mortgage offers (for example mortgage interest rates must be published on the business’ website,212 and the mortgage offer document must include certain information213), including Lifetime mortgages and home reversion agreements.214 Specific information requirements also apply when giving an insurance quotation or policy.215 For example, the proposed insurer must explain to the consumer, at the proposal stage, the consequences for failure to make full disclosure of relevant facts, including the possibility that the policy could be cancelled and a claim may not be paid.216 Specific information requirements also pertain to investment products,217 charges218 and remuneration or commission due to a mortgage intermediary.219 Other chapters of the code deal with post-sale information220 provision of information where an account is in arrears,221 and guidelines on advertising.222 A regulated entity “must ensure that: (a) the design, presentation and content of an advertisement is clear, fair, accurate and not misleading; (b) an advertisement does not seek to influence a consumer’s attitude to the advertised product or service or the regulated entity either by ambiguity, exaggeration or omission; and (c) the nature and type of the advertised product or service is clear and not disguised in any way.”223

210

4.22. 4.27. 212 4.28. 213 4.29: This includes: (a) the amount of the mortgage; (b) the interest rate that applies to the mortgage at the date of offer; (c) the term of the mortgage; (d) where there is a possibility that the interest rate set out in the offer document may not be the interest rate applicable when the mortgage is drawn down, this must be clearly highlighted. The offer document must also outline the circumstances that would result in such a change to the interest rate; and (e) the length of time for which the mortgage offer is valid, assuming that all details provided by the personal consumer are correct and do not change. 214 Provisions 4.41–4.45. 215 See provisions 4.30–4.40. 216 4.35. 217 Provisions 4.46–4.53. 218 Provision 4.54–4.56. 219 Provision 4.57–4.61. 220 Chapter 6. 221 Chapter 8. 222 Chapter 9. 223 Provision 9.2. 211

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This is similar to the rules on misleading advertising in the Consumer Protection Act 2007 (which implemented the Unfair Commercial Practices Directive), which also apply to financial services. However, the Code then outlines specific rules which apply to regulated entities, for example the requirement to display certain warnings, including the following (where applicable): Warning: If you do not keep up your repayments you may lose your home.224 Warning: You may have to pay charges if you pay off a fixed-rate loan early.225 Warning: If you do not meet the repayments on your loan, your account will go into arrears. This may affect your credit rating, which may limit your ability to access credit in the future.226

Finally the Code sets out templates for information provision regarding, for example, the key features of Tracker bonds,227 information which is to be communicated to a consumer before entering into a contract for the provision of debt management services,228 and a sample Variable Interest Rate Policy Statement.229 The Variable Rate Policy Statement “must be drafted in a clear, consumer friendly manner and in plain English”. In addition, before the statement is provided to customers or placed on the website, the regulated entity “must first conduct consumer testing on the content to ensure that the content is clear and easily understood”. Warning Statements The Code outlines several warning statements which must be provided. All warning statements must be “prominent i.e. they must be in a box, in bold type and of a font size that is at least equal to the predominant font size used throughout the document or advertisement.”230 Some examples have already been mentioned above, in relation to advertising mortgages and loans. Certain warning statements must also appear in the documentation; for example, if credit is being granted, the service provider must explain the effect of missing any scheduled repayments: Warning: If you do not meet the repayments on your credit agreement, your account will go into arrears. This may affect your credit rating, which may limit your ability to access credit in the future231

224

Provision 9.19. Provision 9.22. 226 Provision 9.23. 227 Appendix A. 228 Appendix D. 229 Appendix F, added by an addendum in July 2016. 230 3.9. 231 4.25. 225

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A warning statement also applies where a consumer is offering to act as guarantor of a debt.232 Advertisements and information brochures for investment products must include a warning that there is a risk that the estimated or anticipated return on the investment product will not be achieved,233 and the following warning statement in a text box: Warning: These figures are estimates only. They are not a reliable guide to the future performance of your investment.234

Tracker bond product brochure and application forms also have mandatory warnings in text boxes, such as the following: Warning: The value of your investment may go down as well as up. You may get back less than you invest.235

Suitability Assessments and Vulnerable Consumers In light of the recent financial crisis in Ireland, regulated entities are now also obliged to conduct a suitability assessment to ensure that the product in question is suitable for that consumer’s needs.236 In particular, a credit institution should not offer credit or a mortgage without ensuring that it is appropriate and the consumer has the capability to pay off the debt. The consumer is then entitled to a written “suitability statement” setting out the reasons why the product or service offered to a consumer is considered to be suitable to that consumer. The following statement in a text box must accompany any such statement: Important Notice – Statement of Suitability [or Advice] This is an important document which sets out the reasons why the product(s) or service (s) [advice] offered or recommended is/are considered suitable, or the most suitable, for your particular needs, objectives and circumstances.237

This aims to help ensure that consumers are protected, and (in theory) would take into account the needs of vulnerable consumers. The code also provides specific protection for vulnerable consumers, stating: Where a regulated entity has identified that a personal consumer is a vulnerable consumer, the regulated entity must ensure that the vulnerable consumer is provided with such reasonable arrangements and/or assistance that may be necessary to facilitate him or her in his or her dealings with the regulated entity.238

4.26: “Warning: As a guarantor of this credit, you will have to pay off the debt amount, the interest and all associated charges up to the level of your guarantee if the borrower(s) do(es) not. Before you sign this guarantee you should get independent legal advice.” 233 Provision 4.46. 234 Provision 4.47. 235 Provision 4.49. 236 Chapter 5. 237 Provision 5.20. 238 Provision 3. 232

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Enforcement and Use of the Codes

The Consumer Protection Codes are enforced by the Central Bank, which monitors advertising, and carries out reviews and themed inspections to ensure and encourage compliance with the Code.239 It takes a “risk and evidence-based approach” in prioritising its work, focusing resources on areas where there is “a significant threat” to consumer protection objectives.240 The Codes are also utilised by the Financial Service Ombudsman, who deals independently with unresolved complaints from consumers about financial service providers.241 A failure to comply with the code may be the basis of a finding against the service provider.242 Most decisions of the FSO remain confidential and unpublished; however some information about how the Ombudsman operates can be gleaned from sample case studies, and from cases which are appealed to the courts. In one decision, the High Court stated that the Code “is a significant feature of the landscape within which the [FSO] operates and it is probably expected by many complainants that they can rely on it”; it would thus be “desirable” that the FSO should refer to it in his decisions.243 A relevant example for our purposes is a case where a failure to give appropriate information regarding the switching of mortgages as required by the Code was held by the Ombudsman to be “improper” conduct under the Code.244 In the High Court, Hogan J upheld the decision of the Ombudsman, stating: [T]he Ombudsman was entitled to conclude that a retail Bank should properly alert its customers- if only in the most general of terms - of the potentially serious adverse consequences of a particular decision, especially where it seems clear [that] those customers were seeking advice and guidance from the Bank’s mortgage advice centre and that these are standards which modem retail Banks might reasonably be expected to uphold.245

The issue of whether non-compliance with the Code can be relied upon in private litigation before the courts is more complex. It has been said that failure to comply the Codes is a “factor that can be relevant in exercising any judicial discretion”246 but that “the cases are not consistent and some further legislative or judicial clarification from the Supreme Court is anticipated”.247

239

See https://www.centralbank.ie/regulation/consumer-protection/compliance-monitoring. Central Bank Consumer Protection Outlook Report 2017 p. 5. 241 See https://www.financialombudsman.ie/. 242 Donnelly and White (2014), p. 382. 243 Carr v Financial Services Ombudsman [2013] IEHC 182 at para.84. 244 Irish Life and Permanent v Financial Services Ombudsman [2012] IEHC 367. 245 [2012] IEHC 367 at para.56. 246 Clark (2013), p. 268 Referring to Zurich Bank v McConnon [2011] IEHC 75 Stepstone Mortgage Funding Ltd v Fitzell [2012] IEHC 142 Irish life and Permanent plc v Duff [2013] IEHC 43. 247 Clark (2013), p. 268. 240

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The Information Provision Model and Financial Services

Problems associated with the information provision model are said to be “exacerbated in the financial services context because more complex financial products will require the provision of very substantial amounts of information, something which is inherently off-putting for consumers and likely to lead to information overload”.248 However, there has been some attempt to deal with this, with a “greater focus on the manner in which information is communicated”.249 This can be seen in the Consumer Protection Code in some of the examples above, in which warnings must be set out in prominent text boxes, or the requirement that the Variable Rate Policy Statement must be tested on consumers to ensure that it is easily understood. In addition, while the Competition and Consumer Protection Commission aims to improve financial literacy, an emphasis on financial literacy has been questioned250 and it has been pointed out that education initiatives will not change “how consumers decide”.251 The Central Bank has thus focused not only on information provision but on the products themselves, emphasising that financial service providers need to be aware of the risks of poor design of financial products: Most financial products can be complex and the terms and conditions can be difficult to fully understand. The matching of the needs of consumers to the most suitable product or service, which consumers understand, is critical for ensuring the right consumer outcomes but can also present significant consumer risks if not done properly. Firms need to be able to demonstrate that their product oversight and governance processes take into account consumers’ ability to understand what it is they are purchasing. Robust product testing and controls before launching new products and ensuring that they are only being sold to consumers for whom they are suitable can help firms mitigate many of the risks for consumers.252

This emphasises the limitations of information provision, in that consumers need to be protected not only by the appropriate provision of information, but also by careful product design and suitability assessments. On 29 June 2017, the Central Bank published a Discussion Paper on the Consumer Protection Code and the Digitalisation of Financial Services. This Paper identifies the advantages of digitised information provision techniques such as the “layering” of information, which ensures that “the most important information for the consumer is “provided upfront, in a form of summary disclosure . . . (then) there is a nesting of information, depending on how important it is to the consumer’s decision.”253 If this is done digitally it can “allow consumers to access and retrieve a 248

Donnelly and White (2014), pp. 332–333. Ibid. p. 333. 250 Donnelly and White (2014), p. 333; Mak (2012). 251 Williams (2007), p. 246. 252 Central Bank Consumer Protection Outlook Report 2017 p. 8. 253 Central Bank Discussion Paper on the Consumer Protection Code and the Digitalisation of Financial Services p. 29, citing www.fca.org.uk/publication/research/review-of-literature-onproductdisclosure.pdf. 249

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range of information more easily and conveniently through the use of tools including pop-ups and hyper-linked text”.254 However, it also noted potential risks of digitisation to consumers, including the obscuring of key information or risk warnings on smaller devices and the risk of poorly designed presentation of information in an online or mobile format.255 The problem of information overload and information asymmetries was also noted, indicating that these problems are not going unnoticed by the regulatory authorities.

6 The Digital Consumer It has long been recognised by the common law that distance contracts present particular challenges regarding information provision. The Sale of Goods Act 1893 implied a condition into contracts of sale that in sales “by description”, goods must correspond with that description, and this was initially mainly aimed at contracts where the buyer would not have had an opportunity to examine the goods in advance, and was thus relying on the seller’s description of the goods.256 The modern challenge is of course presented by online sales, and specific rules have been introduced to regulate this, although it is worth noting that the general rules applicable to contracts, such as the obligation to conform to a given description, still apply.

6.1

Information Requirements for Distance Contracts

The EU (Consumer Information, Cancellation and Other Rights) Regulations 2013 implement the 2011 Consumer Rights Directive, and oblige businesses to provide consumers with certain pre-contractual information when entering into distance contracts. Schedule 2 of the Regulations sets out the information to be provided prior to entering into a distance contract (or an off-premises contract), and the trader must provide the consumer with a copy of the model cancellation form set out in Schedule 3. In the case of a distance contract, the information is to be “in plain and intelligible language” and provided “in a way appropriate to the means of distance communication used”.257 If there is limited space or time available owing to the form of distance communication used, some of the information is to be provided on that

254

Ibid. Ibid. 256 Section 13. 257 Regulation 10(1). 255

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means of communication, and the rest is to be provided “in an appropriate way”.258 If the information is provided in a durable medium it is to be legible.259 Post contract formation, the trader must provide the consumer with confirmation of the concluded contract on a durable medium. This confirmation should be provided within a reasonable time after the conclusion of the contract—or at the latest before delivery of goods or performance of the service—and should contain all the information listed above, unless it has already been provided on a durable medium.260 If a trader has a website where consumers can order goods or services, the website should indicate whether any delivery restrictions apply and what forms of payment are accepted, and this information should be available before the consumer starts the ordering process.261 In addition, when entering into contracts by electronic means, under which the consumer is under an obligation to pay money, the trader is to ensure that the consumer is aware that this is the consequence of placing an order, and that the consumer explicitly acknowledges this.262 If the consumer places an order by activating a button (or similar) this is to be “labelled in an easily legible manner only with the words ‘order with obligation to pay’ or a corresponding unambiguous formulation indicating that the order entails an obligation to pay the trader”.263 Any additional payments, for example, for insurance or car hire, must be expressly opted into—it is not possible to have “pre-ticked” boxes providing for default consent for such additional payments.264 In the case of a dispute, the trader must show they sought the consumer’s express consent to any such payment.265 Particular information must be provided when contacting consumers via telephone, with a view to concluding a contract (in particular the trader’s name and the commercial purpose of the call).266 Ireland has not included the confirmation requirements set out in Article 8(6) of the Directive.267 It would appear that no prosecutions have been brought against traders for failure to comply with these Regulations, or their precursors, in particular the European Communities (Protection of Consumers in Respect of Contracts made by means of Distance Communication) Regulations 2001. This is despite the fact that an empirical study of 80 Irish-based websites carried out by Donnelly and White just over

258

Regulation 10(7). Regulation 10(4). 260 Regulation 12. 261 Regulation 11. 262 Regulation 11. 263 Regulation 11. 264 Regulation 26. 265 Regulation 26(6). 266 Regulation 10(8). 267 Article 8(6) states: Where a distance contract is to be concluded by telephone, Member States may provide that the trader has to confirm the offer to the consumer who is bound only once he has signed the offer or has sent his written consent. Member States may also provide that such confirmations have to be made on a durable medium. 259

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10 years ago in revealed a significant degree of non-compliance with this Regulation by web traders.268 However, in the years since this study the landscape of consumer protection has changed, with the establishment in 2007 of the National Consumer Agency,269 now the Competition and Consumer Protection Commission.270 The Commission focuses not just on prosecutions as a means of enforcement, but has a range of enforcement techniques available to it, including softer techniques such as education and awareness, undertakings and compliance notices. The Commission takes a “risk based” approach to enforcement of consumer rules, focusing on breaches which are likely to cause either widespread or serious consumer detriment. It distinguishes between the misinformed but well intentioned trader (for whom education and information might suffice to rectify the situation), and the well informed and perhaps not so well intentioned trader (for whom more severe penalties are more appropriate), as well as those in between. Thus, although there is no reference to the intentions of the traders in the Regulations, in practice this is taken into account. A good example of a recent enforcement of consumer information rules is when compliance notices were issued to a number of mobile phone and internet service providers, including Vodafone, Eircom, Three, UPC and Meteor, for failing to provide consumers with information regarding their right to cancel contracts entered into online.271 This was part of a review of compliance of the telecommunications sector with the Consumer Information Regulations. Most recently a similar action was taken against Sky (discussed above). In addition, failure to provide information can give rise to certain remedies for the consumer. Failure to inform the consumer about their right to cancel the contract extends the period within which the consumer has the right to cancel by 12 months.272 If the trader provides this information within this 12 month period, the cancellation period expires 14 days from the date on which the consumer receives this information.273 Thus in the case of the mobile phone and internet service providers above, consumers were given an additional period within which they could cancel their contracts.

268

Donnelly and White (2006), p. 27. See the Consumer Protection Act 2007. 270 See the Competition and Consumer Protection Act 2014. 271 See http://www.consumerhelp.ie/index.jsp?p¼100&n¼101&a¼1417. 272 Regulation 16(1). 273 Regulation 16(2). 269

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Information Requirements for Accessing Information on a User’s Computer

Article 5(3) of the ePrivacy Directive274 requires prior informed consent for the storing of information, or for access to information stored on a user’s terminal equipment. Businesses must seek consent from the consumer to use technologies such as (certain) cookies and the consumer must be provided with “provided with clear and comprehensive information in accordance with [the Data Protection] Directive 95/46/EC, inter alia about the purposes of the processing”. This Directive was implemented by means of the European Communities (Electronic Communications Networks and Services) (Privacy and Electronic Communications) Regulations 2011. This provides that “the methods of providing information and giving consent should be as user-friendly as possible”.275 Where it is technically possible and effective, having regard to the relevant provisions of the Data Protection Acts, the user’s consent to the storing of information or to gaining access to information already stored may be given by the use of appropriate browser settings or other technological application by means of which the user can be considered to have given his or her consent.276 The Data Protection Commissioner enforces the data protection element of the Regulations, and has provided useful guidance on their application.277 This guidance states that reliance should not be placed on the default browser settings. It is suggested that there should be a “prominent notice on the homepage informing users about the website’s use of cookies with a link through to a Cookie Statement containing information sufficient to allow users to make informed choices and an option to manage and disable the cookies”. This Cookie Statement should contain “clear and comprehensive information on how cookies are used”, itemised cookie types, including their purpose, and instruction on how to disable the cookies. Where third party cookies are being used, for example for targeted advertising, “it is not sufficient to simply refer the user to third party websites” but full details must be provided. Consent could be obtained explicitly by the use of an “opt in” check box which the user can tick, or by implication, with words such as “By continuing to use this site you consent to the use of cookies in accordance with our cookie policy”— with a link to the “Cookie Statement”, and a positive action on the part of the user, such as pressing a “hide” button on the notification. The following example is given in the guidelines: “By continuing to use this site you consent to the use of cookies in accordance with our cookie policy.” 274

Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector. 275 Regulation 5(4). 276 Regulation 5(4). 277 Available at https://www.dataprotection.ie/docs/Guidance-Note-on-Data-Protection-in-the-Elec tronic-Communications-Sector/1152.htm##6.

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The Commissioner also differentiates between different sorts of cookies, some of which (e.g. “third party” or “tracking” cookies) particularly require compliance with the regulations, while others (e.g. session cookies, or storage of items in an online shopping cart) do not need advance consent, provided the cookie is deleted at the end of the session. Compliance rates were initially lower than our nearest comparator, the UK, and in 2013 the Office of the Data Protection Commissioner contacted some 80 websites, prominent businesses such as Allied Irish Banks, Bank of Ireland, Vodafone, O2, Government departments and Universities,278 asking them to demonstrate the action taken to comply with the revised rules for cookies, and what information is provided to consumers regarding the use of third party cookies in particular.279 No further enforcement measures appear to have been necessary (or at least information is unavailable), but a range of powers is available to the Data Protection Commissioner and failure to comply with the Regulations can result in criminal proceedings. Although currently seemingly ubiquitous, it is questionable whether internet users fully understand what is meant by these notices regarding cookies, or the potential consequences. Luxak has pointed out that “every survey conducted outlines a sad reality that despite the recently changed European provisions on disclosure about cookies, European internet users are still ignorant thereof”.280 In reality, consumers who wish to use a website often simply agree with the proposed use of cookies. Luxak comments that “there seems to exist a privacy paradox, where internet users describe their fear of and unwillingness to share their personal data but then proceed to give it away anyway”.281 European Commissioner Jourova has also recently pointed out that consumers generally fail to understand that when they sign up to a social media platform, “their data is processed to make a profit and not just to make the user experience better”282 and has called on platforms to make this clearer in their terms and conditions. However, again, it is unclear whether this will actually have an impact on the behaviour of consumers.

7 The Information Model Under Pressure There is a growing awareness of the problems associated with the information model and the importance of testing previous assumptions about how consumers digest information. The Economic and Social Research Institute has a new behavioural

278

The full list is available at https://www.dataprotection.ie/docs/List-of-Websites/l/1280.htm. Receipt of a letter did not mean that compliance had not been achieved. 279 The letter issued is available at https://www.dataprotection.ie/docs/Letter-issued/l/1281.htm. 280 Luzak (2014), p. 557. 281 Ibid., 552, referring to Turow et al. (2008). 282 Commissioner Vera Jourova, Twitter September 18 2018 https://twitter.com/VeraJourova/sta tus/1042053383945904129.

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economic unit, which conducts behavioural experiments in its Price Lab. This programme is funded by the Central Bank, the Commission for Communications Regulation, the Commission for Energy Regulation and the Competition and Consumer Protection Commission. In 2016, for example, it tested whether consumers’ decisions in choosing a personal loan were affected by what information was made explicit in an offer.283 The study showed that how the framing of information affected consumers’ choices: consumers chose to pay the loan back over a longer period when the size of the monthly repayments, rather than the overall financial cost, was highlighted. Once consumers had to take into account more than two or three factors at the same time, they struggled to spot good deals and often made mistakes. The study also tested the impact of “nudges”, such as “high cost loan” warnings and tables of examples of loans. The report also discussed the implications of the results for consumer protection, emphasising that product ranges and descriptions should be kept simple and the potential benefits of independent price comparison sites. As noted in other sections, the Central Bank has also emphasised the need for appropriate presentation of information (such as warning signs) and has attempted to solve the problem of consumer information overload in part by using other techniques such as appropriate product design, testing of products and consumer suitability tests. Recent legislative developments have limited reference to general obligations to ensure consumer information is “legible” or “intelligible” (or similar) but there is little evidence of more in depth moves to deal with the problems of information provision. This is in part explicable by a desire not to set out inflexible standards (for example, as to font size) which may not be appropriate in a technologically changing consumer landscape—hence Head 72 of the Consumer Rights Bill contained a general obligation that contract terms must be expressed in plain and intelligible language, and be legible and presented clearly, without prescribing further detail.

8 Conclusion Any discussion of Irish consumer law and regulation illustrates the significant impact of European Union Law as well as the shared legal history with the United Kingdom. The institutional framework does however have a distinct Irish flavour and has been designed or adapted for the Irish market and Irish consumer. This can be for example with the enforcement techniques and regulatory approaches of authorities such as the Competition and Consumer Protection Commission or Com Reg, and the use of Codes of Practice by the Central Bank. Two developments are likely to have a significant impact on the Irish regulatory environment in the coming years. First, there is likely to be an increase in the number

283

The Economic and Social Research Institute (2016).

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of European-wide enforcement actions, or enforcement actions spanning multiple member States. The revised Consumer Protection Cooperation (CPC) Regulation aims to improve cross-border mechanisms for enforcement by public bodies.284 Although not yet in force, it is clear that there is a renewed emphasis on cross border enforcement, particularly in light of widepread infringements such as the Volkswagen scandal.285 In 2018, for example, the CPC-network conducted an investigation into AirBnB under the coordination of the Norwegian Consumer Authority, putting pressure on Airbnb to comply with the information requirements of various EU Directives, for example regarding the way its pricing mechanism is displayed on its website.286 In addition, the Commission’s “New Deal for Consumers”287 includes a proposal for a Directive on representative actions for the protection of the collective interests of consumers,288 including the possibility of cross-border actions by designated entities seeking a remedy on behalf of consumers. There is currently no system in place in Ireland for collective actions by or on behalf of consumers, although there are isolated instances of schemes in place—for example the Central Bank established its own ad hoc voluntary redress scheme to provide redress to consumers who were missold credit card insurance.289 If the Directive is passed it will thus represent a significant departure for Ireland, particularly if designated entities such a consumer organisations based in other Member States have standing to bring an action in Ireland. Second, it is clear that Brexit is likely to have a major impact on Ireland’s political, regulatory, legal, trading and economic environment. Ireland and the UK have a shared legal history, with a significant amount of Irish legislation either having originated in Westminster (see for example the Sale of Goods Act 1893) or being highly influenced by Westminster legislation (see for example the Irish Consumer Rights Bill which is based on the Consumer Rights Act 2015). However, there is a distinct possibility that there will be regulatory divergence in the future, with Ireland continuing to implement European provisions while the UK follows its own path (whatever direction that may take). In Ireland there is also “a marked

284

Regulation (EU) 2017/2394 of the European Parliament and of the Council of 12 December 2017 on cooperation between national authorities responsible for the enforcement of consumer protection laws and repealing Regulation (EC) No. 2006/2004. This will apply from January 2020 and sets out the conditions under which national consumer enforcement authorities are to cooperate and coordinate actions with each other and with the Commission, to address cross-border infringements of consumer law. 285 McAleer (2016) and BEUC (2017). 286 See http://europa.eu/rapid/press-release_IP-18-4453_en.htm. 287 Commission Communication, A New Deal for Consumers (COM(2018) 183 final). 288 Proposal for a Directive of the European Parliament and of the Council on representative actions for the protection of the collective interests of consumers, and repealing Directive 2009/22/EC (COM(2018) 184 final; 2018/0089 (COD)). 289 See Reddan (2015).

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tendency to turn to cases from England” even when interpreting provisions originating in the EU,290 but in future it will most likely not be possible to place reliance on English decisions in this manner, posing a new challenge for the legal profession in Ireland.

References BEUC (2017) European collective redress – what is the EU waiting for? (July 2017), section 3.2. https://www.beuc.eu/publications/beuc-x-2017-086_ama_european_collective_redress.pdf Clark R (2013) Contract law in Ireland, 7th edn. Round Hall Thomson Reuters Consumer Strategy Group (2005) Make consumers count: a new direction for consumers Department of Finance’s June 2016 Public Consultation Paper. http://www.finance.gov.ie/sites/ default/files/20160628%20PAD%20consultation%20with%20Minister%27s%20decisions% 20on%20discretions.pdf Department of Jobs, Enterprise and Innovation (2013) Consultation on the Regulation of Small Print in Consumer Contracts Donnelly M, White F (2006) Regulation and consumer protection: a study of the online market. Dublin Univ Law J 13(1):27 Donnelly M, White F (2014) Consumer law rights and regulation. Round Hall Dorgan P (2002) Safe as Houses? Law Society of Ireland Gazette, January 2002, 12 Kelly C (2013) The impact of Europe on Irish contract law. In: Devenney J, Kenny M (eds) The transformation of European Private Law. Cambridge University Press Kelly C (2018a) Consumer reform in Ireland and the United Kingdom: regulatory divergence before, after and without Brexit. Common Law World Rev 47(1):53 Kelly C (2018b) The ‘New Deal for Consumers’ and consumer collective redress. Commer Law Pract 25(8):171 Luzak JA (2014) Privacy notice for dummies? Towards European guidelines on how to give “clear and comprehensive information” on the cookies’ use in order to protect the internet users’ right to online privacy. J Consum Policy 37(4):547 Mak V (2012) The myth of the empowered consumer: lessons for financial literacy studies. J Eur Consum Mark Law 1:254 McAleer M (2016) VW emissions scandal leads to calls for class action lawsuits. The Irish Times, 15 September 2016 Miller L (2011) The emergence of EU contract law: exploring Europeanization. Oxford University Press, p 83 Reddan F (2015) Up to €30m to be paid over mis-selling of card protection. The Irish Times, 14 April 2015 Sales Law Review Group (2011) Report on the legislation governing the sale of goods and supply of services The Economic and Social Research Institute (May 2016) PRICE Lab: An Investigation of Consumers’ Capabilities with Complex Products. Available at https://www.esri.ie/pubs/ BKMNEXT306.pdf Turow J, Hennessy M, Bleakley A (2008) Consumers’ understanding of privacy rules in the marketplace. J Consum Aff 42:411–424 Williams T (2007) Empowerment of whom and for what? Financial Literacy Education and the new regulation of consumer financial services. Law Policy 27:226

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Kelly (2018a), p. 53.

Information Obligations and Disinformation of Consumers: Finnish Law Report Salla Hyvönen

Abstract Finnish consumer law is caught in the crossfire between EU requirements and the historical foundation of Nordic co-operation in consumer matters. On one hand, Finland has established a high level of protection according to the Nordic consumer law tradition, and on the other hand, it is compelled to harmonise its consumer law with the laws of the European Union. Before the impact of EU law, and especially directives of maximum harmonisation, it was taken as a given that the consumer is not rational. Due to this conception, a consumer was not considered to seek an optimal result in the market but rather a more pragmatic result. This conception still lives on the level of individual consumer protection but has gradually changed on the collective level. Nonetheless, the collective level in Finland never reached a harsh position either. The Consumer Ombudsman’s primary tool is still the practice of negotiating with businesses instead of imposing monetary sanctions. Finnish consumer law is not as concentrated on pre-contractual information as EU law is. This means that instead of focusing on the duty to disclose information, the mandatory rules of individual consumer protection protect the consumer also after the purchase. In Finnish legal literature, solely concentrating on the duty to disclose information has been seen as protecting the better-off, educated consumers rather than other weaker consumer groups. Nonetheless, the Finnish courts comply with EU legislation such as the EU benchmark for an ‘average consumer’ derived from the Unfair Commercial Practices Directive. In financial services, the legal environment is highly regulated. One of the key obligations of any financial service provider is to inform the investor if the investment might lead to non-existing profit or may involve a risk of losing the capital paid. Obligations of the expert providing the information are monitored through EU law standards but also through Nordic legal doctrines such as the pedagogical duty of an expert and methodological liability.

S. Hyvönen (*) University of Helsinki, Faculty of Law, Private Law, Helsinki, Finland e-mail: salla.hyvonen@helsinki.fi © Springer Nature Switzerland AG 2019 G. Straetmans (ed.), Information Obligations and Disinformation of Consumers, Ius Comparatum – Global Studies in Comparative Law 33, https://doi.org/10.1007/978-3-030-18054-6_11

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1 General Characteristics of the Consumer Information Model Consumer law in Finland is characterised by the strong influence of the European Union as a fundamental legislative authority, and the strong influence of the Consumer Ombudsman in general supervision and section-specific supervision by organisations such as the Financial Supervisory Authority and the Finnish Safety and Chemicals Agency. It is possible to state, however, that traces of the homo economicus model used in other parts of Europe can be seen in the mindset of Finnish consumer law. Nonetheless, in Finnish legal literature and in national consumer law it is commonly acknowledged that consumers are the less rational and the substantially weaker party with regard to businesses.1 The need for consumer protection is based on the perception that commercial actors are characterised by the pursuit of maximum profit and that they possess greater negotiating power due to their economic and informational upper hand.2 Compared to consumers, businesses possess greater knowledge of the market and the product being sold and they are able to set the terms and conditions of the transaction, especially with regard to standard terms.3 It had already been acknowledged in the 1977 Government Proposal on the Consumer Protection Act4 that there had been an increase in the number of consumer goods and services, as well as the selection of goods. The lifecycle of products in general was now shorter. This resulted in increased efforts of the seller (businesses) to influence the buyer’s (consumer’s) decision-making. Furthermore, the opportunities for consumers to familiarise themselves with the qualities of a product had decreased. The variety of product and service selection and the centralisation of business practices had begun to limit the sellers’ expertise on a specific product. The change in the positions of the seller and the buyer has limited the emphasis of personal relationships between the parties.5 Consumer protection has traditionally been divided into two dimensions: the collective and the individual. Collective protection includes for example the control and supervision of marketing and the regulation of standard contract terms, whereas individual measures concentrate on already concluded contracts with the consumer leading to a possible consumer claim by an individual consumer towards a company.6 The objective of this article is to analyse substantive consumer law from a comparative law view. Considering this objective, the structure of the analysis does not follow in detail the traditional concepts and systematics of Finnish consumer law.

1

Peltonen and Määttä (2015), p. 86. See Ämmälä (2006), p. 4; Peltonen and Määttä (2015), p. 1. 3 Peltonen and Määttä (2015), p. 1. 4 Consumer Protection Act (Kuluttajansuojalaki 20.1.1978/38). 5 Government Proposal HE 8/1977, 5. 6 Viitanen and Wilhelmsson (2004), Kuluttajansuojalainsäädäntö. 2

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The Consumer Ombudsman is the general authority for ensuring compliance with regard to the obligation to provide information to consumers. The supervision of consumer law can be divided into preventive methods, such as mandatory provisions regarding consumer rights as well as the control of terms and conditions in advance, and remedial consumer law, which consists of the adjustment and interpretation of a contract7 as well as liability claims, or injunction orders by the Market Court, which can be reinforced by the threat of a fine.8 The injunction order procedure is one of the most important collective measures in Finnish consumer law.9 Consumer protection measures in Finland have mostly been preventive10 and, in its most basic form, have concentrated on negotiating with businesses. One of the primary duties of the Consumer Ombudsman is to persuade businesses to discontinue voluntarily activities, which do not comply with consumer legislation.11 Consumer law in Finland is widely based on general clauses, which are horizontally applicable to a variety of products and services. As the Consumer Ombudsman emphasises negotiation as the main tool to persuade businesses to comply with consumer law, this method of surveillance has been described as being relatively close to an instrument of soft law.12 The aim of the negotiating measure is to make the business in question change its contracting practices with the consumers. Usually more than one omission is required for a negotiation to be launched by the Consumer Ombudsman. This manner of voluntary persuasion and negotiation has been claimed to be successful in most cases.13 Sometimes the Consumer Ombudsman only notifies the business of the unwelcome practice. The Consumer Ombudsman can also suggest legislative changes.14 The origin of the Finnish consumer model is national, but due to the EU’s active role in the development of consumer law, consumer law has become increasingly more European. In the case of EU minimum harmonisation directives, Finland as a Member State of the EU, is able to go beyond the degree of protection granted to consumers under EU law and impose stricter national consumer rules.15 Finnish

7

According to Section 3 of Chapter 4 of the Consumer Protection Act, if a contract has been drafted in advance without the consumer having been able to influence its contents and if uncertainty arises as to the significance of the term, the term shall be interpreted in favour of the consumer. 8 Ämmälä (2006), p. 4. 9 Viitanen and Wilhelmsson (2004), Kuluttajansuojalainsäädäntö. 10 Viitanen and Wilhelmsson (2004), Kuluttajaviranomaiset ja riidanratkaisuelimet. 11 Government Proposal HE 8/1977, 2. 12 Peltonen (2014), p. 2. 13 Committee report by the Ministry of Justice (Sopimattomat kaupalliset menettelyt. Kuluttajansuojalain markkinointia koskevien säännösten uudistaminen) 2007:11, 13. 14 Section 2 of the Act on the Finnish Competition and Consumer Authority (laki Kilpailu- ja kuluttajavirastosta 661/2012) and Peltonen and Määttä (2015), pp. 167–168. 15 See Ämmälä (2006), p. 2; Sorsa (2010), p. 213.

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consumer law is usually regarded as imposing stricter rules than the general EU level requires.16 If the subject matter is regulated by a maximum harmonisation directive, such as the Unfair Commercial Practices Directive,17 national provisions falling within the scope of the directive and exceeding its provisions are not allowed. It has been suggested that some fields of consumer law, such as consumer matters regarding the sale of building elements and construction contracts as well as housing transactions, are more national than others.18 The Unfair Commercial Practices Directive can be seen as promoting the efficiency of the EU internal market at the expense of consumer protection.19 In certain areas of law, consumer-like protection also includes smaller businesses. A concrete example is the protection provided by the Insurance Contracts Act, which not only protects the consumer but also a legal person who in terms of the nature and scope of its business, can be compared to a consumer as a party to the contract signed with the insurer.20 Nonetheless, the unfairness of a term is evaluated differently in the case of a consumer and a small business. A consumer’s protection is more specific and includes the protection provided for in the national Consumer Protection Act.21 In the case of a small business, unfairness is evaluated on the basis of general contract law.22 Although the legislative basis is different, the outcomes might be similar.23

1.1

Benchmarking and Specific Types of Consumers

A general benchmark for the Finnish national consumer legislation is the weaker, less rational consumer. The objective of consumer protection legislation in Finland is an appropriate and a fair distribution of rights and liability.24 The Finnish (and the Nordic) average consumer is not similar to the EU consumer image.25 For example

16

Ämmälä (2006), p. 1. Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (‘Unfair Commercial Practices Directive’). 18 Ämmälä (2006), p. 1. 19 See Viitanen and Wilhelmsson (2004), Markkinoinnin sääntely. 20 Section 3 of Chapter 1 of the Insurance Contracts Act (Vakuutussopimuslaki 28.6.1994/543). 21 Sections 1–2 of Chapter 4 of the Consumer Protection Act or the EU directives on consumer protection. 22 Section 36 of the Contracts Act. 23 Hoppu and Hemmo (2006), pp. 116–117. 24 Peltonen (2014), p. 2. 25 Nonetheless, when the UCPD is applicable, the EU benchmark is as well, taking into account social, cultural and linguistic factors. See Supreme Court decision KKO 2017:83. 17

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the duty to disclose information has not played a similar role in Nordic consumer law as it has in EU consumer law. Consumer protection after the conclusion of a consumer contract, for example by adjusting an individual term, has been regarded as being equally as important as a company’s duty to disclose information prior to the purchase. Concentrating solely on duty to disclose has been seen as protecting the better-off, educated consumer rather than other weaker consumer groups.26 Underage consumers are considered to be more vulnerable than others, which can be seen in provisions regarding inappropriate marketing27 as well as court praxis. Age is also considered to be a factor in selling unit-linked insurance products to people with reduced understanding caused by age or illness.28 In addition to vulnerable consumer groups, certain contracts groups have been subjected to more intensive regulation. These have formed contract-specific consumer groups such as consumer debtors, policy holders, bank account holders, timeshare buyers, digital consumers, consumers approached through distant selling and consumers buying travel package services or apartments (shares of stocks in a housing company). There is also limited regulation regarding unfair terms in business contracts, which could be construed as a form of protection for consumer-like small businesses and policy holders equal to consumers.29 All the aforesaid consumer types enjoy the same level of consumer protection provided by the national Consumer Protection Act as well as contract-specific protection. Advertisements by businesses have been evaluated in Finland through a psychological or a behavioural economics view with an attempt to recognise a benchmark for a so-called average consumer. The behavioural economics view can be seen in practice in the decisions made by the Market Court. The Market Court for example, has stated consistently that when marketing a main product in addition to a giveaway, the value of the giveaway should not be used to distract a consumer from the price of the main product. Reporting prices to consumers in an inconsistent way (lay-out or different and misleading currencies) may be considered to be inappropriate or otherwise unfair conduct in marketing consumer goods.30 The Consumer Ombudsman has issued guidelines on marketing, thereby attempting to prevent inconsistencies with the Consumer Protection Act. Most of the guidelines have concerned issues such as the manner in which prices are advertised to consumers or statements on the environmental effects of a product.31 The EU consumer model has strong similarities with the Finnish model but there are some distinct features, which deviate from the Finnish consumer model. For example, the consumer protected by the Unfair Commercial Practice Directive is presumed to be an average consumer who is reasonably well-informed and

26

Viitanen and Wilhelmsson (2004), Aktiivinen vai passiivinen kuluttaja? Section 2 of Chapter 2 of the Consumer Protection Act. 28 Government Proposal HE 63/2009, 10 and 17. 29 See Ämmälä (2006), pp. 2–3. 30 Peltonen and Määttä (2015), p. 88 and Market Court decision MAO 445/09. 31 Viitanen and Wilhelmsson (2004), Kuluttajaviranomaiset ja riidanratkaisuelimet. 27

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reasonably observant and circumspect, taking into account social, cultural and linguistic factors. The exact contents of the EU consumer benchmark have been left to the Court of Justice of the European Union as is provided in Recital 18 of the Directive. Moreover, the general influence of EU consumer law has increased the use of standardised consumer information forms.

1.2

Pre-contractual Information Provided to Consumers

In EU law, pre-contractual information is often seen as one of the more important consumer protection instruments. Consumer contracts related to the distance marketing of financial services and timeshares rely especially heavily on information as an instrument to enhance the status of the consumer as a contracting party.32 It is debatable, however, whether or not increasing the amount information, especially regarding more complex contract arrangements, is the means to an end in achieving a balanced relationship in business-to-consumer contracts. The Finnish system of consumer law does not rely solely on delivering pre-contractual information. It is possible that in a situation in which information has been provided but the terms have clearly been unfair, an individual term can be adjusted.33 This system is separate from collective measures. A general obligation for businesses to provide consumers with pre-contractual information exists regarding all consumer contract types.34 Pre-contractual information should be given before the conclusion of a consumer contract and also during the contractual relationship.35 Pre-contractual information must be clear, easy to understand36 and readily accessible (on time) with regard to the limitations of the media and other measures used by the business. All ‘relevant information’ as well as all information regarding health or safety should be given to the consumer.37 In general, businesses are able to include additional information when fulfilling their pre-contractual information obligation. In traditional national consumer law, there are no formal requirements about which medium should be used to provide pre-contractual information. EU law, however, imposes some obligations regarding information forms such as the

32

See Sorsa (2010), pp. 213–214. See below Sect. 2. 34 Consumer Protection Act: Section 8 of Chapter 2/products marketed for a fixed purchase price; Section 5 of Chapter 6a (and 11a/ESIS form)/financial services; Sections 8–12, 25 and 46–47 of Chapter 7/consumer credits and marketing; Sections 4–9, 23 (currency credits) and 24 of Chapter 7 a/consumer credits related to residential ownership. 35 Ämmälä (2006), p. 80. 36 Easy to understand can be regarded as a synonym of the term comprehensible, which is mostly used in EU directives, as well as a stricter demand for comprehensibility. 37 As an example see Section 7 of Chapter 2 of the Consumer Protection Act. 33

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ESIS38 form for consumer credit agreements related to residential immovable property. There are some specific rules for information that is provided to consumers through electronic media in Chapter 26 of the Information Society Code.39

1.3

Lack of Pre-contractual Information and Possible Sanctions

A failure to provide pre-contractual information to the consumer is considered to be a defect of a product/service. This can serve as grounds for a claim regarding contractual damages, price reduction or cancellation of the contract. The non-mandatory norms of general commercial law are a benchmark for reasonable consumer expectations.40 Pre-contractual information has to be provided before the conclusion of the contract as well as during the contractual relationship.41 Certain provisions regarding regulation of marketing may be interpreted as an indirect part of the pre-contractual obligations of a business to the consumer.42 As a rule, all marketing that does not convey the information necessary in respect of the health or economic security of consumers should be deemed unfair. As a rule, all information during the lifecycle of a contract needs to be clear, easy to understand and readily accessible (on time) with regard to the limitations of the medium used to provide pre-contractual and other information, as well as other measures used by the business.43 When negotiating contracts, the liability of a business has been approached from three different perspectives in Finnish legal literature and court praxis. These approaches are tortious liability, contractual liability and culpa in contrahendo liability. Misleading information, which is given in negotiations and leads to an insurance contract, may result in legal liability. If this information is not suitable for a policy holder and incurs economic loss, liability is mostly construed as a form of tortious liability.44 Contractual liability is used when an actual contract is made and its terms and conditions are not what for example a policy holder expected.45 Culpa in contrahendo is used when negotiations do not lead to a valid contract. The

38

European Standardised Information Sheet. Information Society Code (Tietoyhteiskuntakaari 7.11.2014/917). 40 As a general rule, terms, which deviate from the non-mandatory legal rules of general commercial law, may be regarded as unreasonable in a case-specific analysis. Government Proposal HE 8/1977, 34. 41 Ämmälä (2006), p. 80. 42 Ämmälä (2006), p. 94 regarding Chapter 2 of the Consumer Protection Act. See section 1.5 (Misleading commercial practices). 43 See Section 7 of Chapter 2 of the Consumer Protection Act. 44 See Niemi (2015), pp. 73–74 and Supreme Court decision KKO 1990:26. 45 See Niemi (2015), p. 74 and Supreme Court decision KKO 1992:86. 39

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aforesaid situations usually arise if the negotiations end abruptly or the contract concluded is invalid.46 There is court praxis on culpa in contrahendo in general contract law but mostly regarding business-to-business contracts47 and not consumer expectations. A consumer claim for culpa in contrahendo liability was dealt with by the Consumer Disputes Board but it was not successful.48 According to Finnish legal literature, consumer expectations with regard to defects are based on a general level of expectations and not for example a consumer’s personal expectations. However, the price is considered when evaluating a defect.49 The de facto realisation of individual consumer rights has been enforced by the cost-free system of consumer advice by consumer authorities as well as the costfree system of alternative dispute resolution, the Consumer Disputes Board.50 The Consumer Disputes Board is only authorised to give recommendations, which cannot be enforced by coercive measures similar to conventional court orders. Nonetheless, recommendations of the Board are followed by businesses in approximately 80% of all cases.51 If a consumer group wishes to claim for compensation as a collective, the Consumer Ombudsman has been authorised to file a collective complaint52 with the Consumer Disputes Board, as well as a class action on behalf of a consumer group. The option to file collective claims was not possible in the original 1977 Consumer Protection Act, partially due to Finnish procedural law. In its suggested form in the 1970s, collective claims would have left the supervision of consumer rights in the hands of active individuals. This form of supervision was regarded as insufficient.53 Up until the present, the Consumer Ombudsman has filed no class actions54 and only one collective complaint with the Consumer Disputes Board, which was unsuccessful.55 46 Niemi (2015), p. 75. According to Klami-Wetterstein, culpa in contrahendo is also theoretically possible in situations in which a contract has been concluded. Klami-Wetterstein (2007), p. 494. 47 Supreme Court decisions KKO 2009:45 and KKO 1984-II-181. 48 Consumer Disputes Board decision KRL 4450/33/11. In this case, a consumer claimed to have received information on a car from a dealer by telephone and through an advertisement, which proved to be misleading. In the end, no contract was concluded. The consumer claimed for economic losses regarding travel costs incurred. The Consumer Disputes Board did not recommend for the business to pay the damages claimed, because of a lack of evidence on the alleged misleading information given. 49 Government Proposal HE 360/1992, 56 and Ämmälä (2006), p. 163. 50 Viitanen and Wilhelmsson (2004), Kuluttajaviranomaiset ja riidanratkaisuelimet. 51 Consumer Disputes Board (2013), About the Consumer Disputes Board, http://www. kuluttajariita.fi/en/index.html accessed 20 May 2017. 52 Section 14 of the Act on the Finnish Competition and Consumer Authority. 53 Government Proposal HE 8/1977 p. 34. 54 Viitanen and Wilhelmsson (2004), Ryhmäkanne. 55 The Finnish Competition and Consumer Authority (2012), Class complaint against Peab Oy dismissed by the Consumer Complaint Board, https://www.kkv.fi/en/current-issues/press-releases/ finnish-consumer-agency/2012/19.4.2012-class-complaint-against-peab-oy-dismissed-by-the-con sumer-complaint-board/.

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415

Food Information Requirements

Food labelling requirements are supervised by the Finnish Food Safety Authority and regional authorities. Food information requirements are significantly more stringent than other consumer information requirements. This is also the case when providing information on alcohol, medicine and tobacco products. The Finnish Consumer Safety Act,56 which is essential in maintaining the health and safety of consumers, applies to safety issues regarding consumer goods and services and prevents damages to consumer regarding consumer health and property. Food labelling requirements are also regulated by the Consumer Protection Act and the Food Act.57 According to the Food Act, in food packaging, presentation and advertising, the information given must be ‘truthful and sufficient’.58 Truthfulness and sufficiency are interpreted in view of the general objectives of the Act (food safety, quality, conformity with EU law, etc.). The information given about food must not be misleading and, as a rule, food should not be presented as having properties related to prevention, treatment or curing of human diseases or refer to such information. Provisions on prohibiting misleading information are laid down in the Food Regulation59 and further provisions on information given in food packaging, presentation and advertising, or other ways of marketing, can be issued by the Ministry of Agriculture and Forestry (decree). The Ministry of Social Affairs and Health can issue further provisions in relation the EU law on the content and distribution of information concerning feeding of infants and young children (decree). According to a decision by the Council of Ethics in Advertising60 businesses should be particularly careful when marketing food products to children. An advertisement promoting a multivitamin nutritional supplement was advertised on a website known for its popularity amongst young consumers. The method used in advertising created an image of the supplement as a substitute for food. The Council found the advertisement misleading and issued a warning to the company.

Nowadays, EU law affects food labelling in a precise manner. According to the Food Regulation, misleading practices in the labelling, advertising and presentation of food or feed are prohibited. This includes the shape, appearance or packaging of the product, the packaging materials used, the manner in which they are arranged and the setting in which they are displayed, and the information, which is made available about them through whatever media.

56

Kuluttajaturvallisuuslaki 22.7.2011/920. Elintarvikelaki 13.1.2006/23. 58 Section 9. 59 Article 16 of Regulation (EC) No 178/2002 of the European Parliament and of the Council of 28 January 2002 laying down the general principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures in matters of food safety is directly applicable in Finland. 60 Decision by the Council of Ethics in Advertising MEN 20/2007. 57

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The EU Regulation on Nutrition and Health Claims61 is applied regarding nutrition claims62 and health claims63 made in the labelling, presentation and advertising of foods. The Commission has a subject-specific register on nutrition and health claims that are permitted.64 As a rule, a health claim should be substantiated with scientific data.65

1.5

Misleading Commercial Practices

There is a general provision in the Consumer Protection Act prohibiting misleading commercial practices and omissions. According to this provision, no conduct that is inappropriate or otherwise unfair from the point of view of the consumer is allowed in marketing.66 The benchmark used to assess the misleading character of commercial practices is a so-called ‘average consumer’—a term, which is similar to the Directive on Unfair Consumer Practices. The average consumer of the Directive is reasonably well-informed and reasonably observant and circumspect, taking into account social, cultural and linguistic factors. Where a commercial practice is specifically aimed at a particular group of consumers, such as children, the impact of the commercial practice is assessed from the perspective of the average member of that group.67 The term ‘marketing’ is a broad concept in analysing unfair commercial practices. Marketing includes advertising or any other direct or indirect action promoting the sale of consumer products or services.68 Marketing is essentially a subjective way of communicating information regarding products to consumers whereas the ratio legis of consumer legislation is to ensure that companies provide objective information 61 Regulation (EC) no 1924/2006 of the European Parliament and of the Council of 20 December 2006 on Nutrition and Health Claims Made on Foods. 62 A ‘nutrition claim’ means any claim, which states, suggests or implies that a food has particular beneficial nutritional properties due to the energy (calorific value) it provides or the nutrients or other substances it contains. Article 2(4). 63 A ‘health claim’ means any claim that states, suggests or implies that a relationship exists between a food category, a food or one of its constituents and health. Article 2(5). 64 European Commission (2016), EU Register of Nutrition and Health Claims Made on Foods, http://ec.europa.eu/food/safety/labelling_nutrition/claims/register/public/?event¼register.home. 65 Article 13(2). See Paloranta (2008), p. 95. 66 Section 1 of Chapter 2 of the Consumer Protection Act. There are also sector-specific provisions on misleading commercial practices for example in Chapter 26 of the Information Society Code regarding supply and use of electronic commerce services; Chapter 5 of the Alcohol Act (Alkoholilaki 8.12.1994/1143); Chapter 9 of the Tobacco Act (Tupakkalaki 29.6.2016/549); Sections 91–92 of the Medicine Act (Lääkelaki 10.4.1987/395) and Section 4 of the Act on Real Estate and Letting Agencies (Laki kiinteistönvälitysliikkeistä ja vuokrahuoneiston välitysliikkeistä 15.12.2000/1075). 67 Recital (18) of the Unfair Commercial Practices Directive. 68 Määttä (2006), p. 2; Viitanen and Wilhelmsson (2004), Markkinoinnin sääntely.

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about the products to consumers.69 The assessment of the misleading character of a commercial practice is influenced by the way in which pre-contractual information is provided to consumers. The limitations of the media used are taken into consideration when assessing the clearness, comprehensibility and accessibility of the information.70 A business may also be enjoined from continuing conduct contrary to the Consumer Protection Act, such as neglecting their general information obligation.71 This injunction can be reinforced by the threat of a fine unless a fine for a specific reason is deemed unnecessary. An injunction order may also be directed against an employee of the business omitting to provide obligatory information or a person acting on its behalf if there is a special reason for doing so. Although an injunction order is given, it does not result in direct compensation to consumers.72 When issuing an injunction, the Market Court may oblige the business on which the injunction order has been imposed, to rectify the marketing operation within a set period, if this is deemed necessary because of the evident harm caused to the consumers.73 This form of rectification was mainly used in the 1980s in cases regarding product safety.74 It has been suggested in Finnish legal literature that the aforementioned rectification measure has not played a significant role due to the short lifecycle of marketing campaigns.75 Since 1987 when the Product Safety Act was issued, product safety matters have been under stricter control, excluded from so-called general consumer law supervision and under a governmental agency specialised in these issues.76 In the Supreme Court decision KKO 2005:86 organisers advertised events without informing of the price of a ticket or the price of a telephone call to the ticket sales agent. The Consumer Ombudsman demanded that the price of the ticket and the price of the telephone call should be stated in the marketing material in a manner, which was clear and easy to understand. The ticket sales agent claimed that it was not responsible for the advertisement produced by the organisers. In some of the advertisements the price of the tickets was given in unclear small print and it was not verbally expressed in television commercials. After calling the agency, the consumer was presumably made aware of the price of the telephone call. The lower court (the Market Court) imposed a conditional fine of €60,000 as an injunction order on the ticket sales agency, prohibiting the company from continuing such marketing without informing the consumer of the price of a ticket to an event or the price of a telephone call to the ticket sales agency in a manner, which was clear and easy to understand. The ticket sales agency appealed to the Supreme Court on the basis of it not being the right defendant in

69

See Viitanen and Wilhelmsson (2004), Markkinoinnin sääntely. Section 7 of Chapter 2 of the Consumer Protection Act. 71 Section 16 of Chapter 2 of the Consumer Protection Act. 72 Peltonen and Määttä (2015), p. 175. 73 Section 19 of Chapter 2 of the Consumer Protection Act. 74 Peltonen and Määttä (2015), p. 171. 75 Viitanen and Wilhelmsson (2004), Kuluttajaviranomaiset ja riidanratkaisuelimet. 76 Product safety matters are supervised by the Finnish Safety and Chemicals Agency. 70

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the case and that the injunction order should be directed towards the organisers performing the marketing, and not the ticket sales agent. The Supreme Court stated that it was evident that the manner of marketing had not been clear or easy to understand.77 It also stated that on the basis of the legislative history,78 court praxis and the ratio legis of the Consumer Protection Act the ticket sales agent was equally as responsible as the event organiser for the unfair commercial practice in question.79 In its decision, KKO 2017:83 the Supreme Court confirmed the use of the UCPD benchmark of an ‘average consumer’ and that the EU benchmark differs from the results of behavioural economics and Finnish legal praxis. The Supreme Court acknowledged that the EU benchmark should be applied although it is not in line with the traditional concept of a consumer in Finland and although, in reality, the consumer seems to be more or less irrational. Nonetheless, the EU benchmark does not mean that a marketing advertisement is allowed to be misleading.

2 Unfair Contract Terms and Bargaining Power Consumers are not seen as having bargaining power when negotiating on pre-drafted standard terms with businesses.80 The Consumer Protection Act includes mandatory regulation, and a contract term, which weakens the protection provided therein, cannot be enforced against the consumer.81 There are two kinds of repercussions in cases of an unfair contract term. The first results in a general injunction of a contract term,82 whereas the second, the more extended one, includes all contract terms and results in so-called adjustment of the contract.83 The injunction procedure does not allow an individual consumer to claim compensation from a business if the Market Court deems a contract term unfair.84 With regard to standard terms in consumer contracts, it is commonly acknowledged in legal literature that consumers are in a weaker bargaining position than businesses. In the Consumer Protection Act there are specific provisions regarding the adjustment of unfair contract terms, which have been drafted without the consumer having been able to influence the contents thereof. The provisions regarding the adjustment of an individual consumer contract term applies to all terms used in a consumer contract—individually negotiated or standardised.85 In the 1970s, when consumer law was implemented in its original form, interest groups

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Supreme Court decision KKO 2005:86, paragraph 4. Government Proposal HE 8/1977, 29. 79 Supreme Court decision KKO 2005:86, paragraph 10. 80 Hemmo and Hoppu (2006), Vakiosopimukset and Ämmälä (2006), p. 48. 81 Such term is null and void. Ämmälä (2006), p. 42. 82 Regulation of contract terms, Chapter 3 of the Consumer Protection Act. 83 Adjustment and interpretation of a contract, Chapter 4 of the Consumer Protection Act. 84 Ämmälä (2006), p. 48. 85 Ämmälä (2006), p. 48. 78

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advocating the interests of businesses were promoting for the limitation of the unfairness test to standard terms only.86 The adjustment of the contract goes beyond the level of protection provided in the Unfair Terms Directive87 as it emphasises the adjustment of a contract and not the nullity of a certain contract term.88 Provisions for the adjustment of a consumer contract term already existed before the Unfair Terms Directive. This legislative technique is said to promote a solution in which the contract remains in force despite the unfair term. In the preliminary works of the legislative change preparing the consumer legislation to comply with the Unfair Terms Directive, the Directive was regarded as resulting in increased cancellation of consumer contracts.89 This would have not ensured the already established national level of protection for consumers. Individually negotiated terms may be assessed after the conclusion of a contract using provisions regarding the adjustment and interpretation of a contract. If a term is unreasonable (unfair) from the point of view of the consumer, or if an unreasonable result would ensue from its application, the term may be adjusted, or it may be disregarded.90 Payment terms, such as the price of a consumer product or service, are considered to be contract terms when evaluating the unfairness of a contract. In the assessment of unfairness, due note must be taken of the contract as a whole, of the positions of the parties, of the circumstances under which the contract was concluded and of the change in circumstances, as well as other relevant points. Should a dispute arise as to whether a term has been drafted in advance or not, the burden of proof is incumbent on the business.91 There are certain limitations in general contract law, which limit the use of standard terms, even in business-to-business contracts such as: individual terms override used standard terms; standard terms can only be changed through mutual agreement between the parties in question; and standard terms are interpreted to the detriment of the drafter (in dubio contra stipulatorem).92 There is also a doctrine of unusual and onerous standard terms, which obliges the drafter of the standard terms

86

Government Proposal HE 8/1977, 34. Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts. 88 Peltonen and Määttä (2015), p. 240; Ämmälä (2006), p. 53. 89 Government Proposal HE 218/94, 8. 90 Section 1 of Chapter 4 of the Consumer Protection Act. Section 2 of Chapter 4 of the Consumer Protection Act also provides that if a contract term has been drafted in advance without the consumer having been able to influence its contents, a change of circumstances shall not be taken note of, to the detriment of the consumer in any later assessment of the unfairness of the term. Furthermore, if the adjustment or disregard of a term relates to a contract term, which, contrary to the requirement of good faith (good practice), will cause a significant imbalance in the parties’ rights and obligations to the detriment of the consumer, the contract shall in other respects, remain in force unchanged if it can be retained in force as such. 91 Section 4 of Chapter 4 of the Consumer Protection Act. 92 Hemmo and Hoppu (2006), Vakioehtojen ominaisuudet and Ämmälä (2006), p. 68. 87

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to specifically highlight the terms in order for them to become a part of the contract entity.93 Core contract terms, such as the price of a consumer product, are not excluded from the unfairness test. Furthermore, if the unfairness test of the Consumer Protection Act is not applicable, it is possible to apply the unfairness test provided in Section 36 of the Contracts Act,94 which is applicable to both consumer and business contracts.

3 The Financial Consumer Since the 1990s, the general act regulating consumer contracts, the Consumer Protection Act, has also applied to financial services.95 Nonetheless, the finance sector is covered by a multitude of special enactments, as well as recommendations by the Financial Supervisory Authority. The requirements imposed on businesses in the field of financial services are more detailed and extensive than other fields of consumer protection. EU law has transposed new ways of presenting financial information to consumers such as the so-called ‘Key Information Document’ regarding investment products.96 However, this model form will not limit the actual amount information given to the non-professional investor although it might result in the clarity and reliability of the information given to non-professional investors.97 In legal literature, financial services are regarded as being intangible expert services similarly to accounting and legal services.98 The possible defects in these services are assessed not through the final result, but through the prudence of performance during the contractual relationship. When evaluating performance, due form of reasoning and verification of background details are essential. In Nordic legal literature, this evaluation technique has been referred to as methodological liability (metodansvar).99 With regard to the burden of proof, the plaintiff is responsible for proving the facts, which support the action (defect). Nonetheless, if a defect has been proved to

93

Hemmo and Hoppu (2006), Yllättävät ja ankarat ehdot. Laki varallisuusoikeudellisista oikeustoimista 13.6.1929/228. 95 Ämmälä (2006), p. 8. There are also specific provisions regarding distance selling of financial services and instruments in Chapter 6a of the Consumer Protection Act. 96 Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on Key Information Documents for Packaged Retail and Insurance-Based Investment Products (PRIIPs). 97 See Luukkonen (2016), pp. 168 and 170–171. 98 Hoppu (2011), p. 1372. 99 Norros (2008), p. 639. 94

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exist in intangible expert services, it is the expert/defendant’s responsibility to prove that there has been no negligence, despite the defect.100 As a rule, regarding intangible expert services such as financial services, the service supplier should not only implement the given assignment but also separately agree on any subject-matter limitations, which in general are considered in the same context, such as consequences regarding taxation. Therefore, in expert services, attention should be paid not only to the fact that the information given is truthful and sufficient but also to the comprehensibility of its contents. In Nordic legal literature, this obligation has been described as the ‘pedagogical duty’ of an expert.101 Different information requirements are of substantial significance when reviewing different types of financial services (banking, insurance and investment services). The contents of the information obligation vary, depending on the applicable enactment. The pedagogical duty of an expert is visible in the Supreme Court decision KKO 2015:93. The case involved an investor who had invested €500 000 in a bond issued by an international finance company. The bond had been marketed in an event organised by Company B as ‘capital-guaranteed’. It was not mentioned in the marketing brochure that the investment product in question included a so-called issuer risk related to the possible insolvency of the issuer. The bond had also been marketed as safe and risk-free in a PowerPoint presentation during a special marketing event directed to investors. Nonetheless, the brochure clearly stated that an investor should not buy the bond if not having carefully read the prospectus meeting the formal standards of the Market Securities Act. The prospectus was 217 pages long and approved by public authorities. It also included information on the issuer risk. The investor had not read the prospectus. After the investor had bought the bond, the issuer of the bond became insolvent and the investor lost a portion of the capital, although the bond was supposed to be capital-guaranteed. The investor claimed for damages (the invested capital) on the basis of a defect in the marketing of the investment product. The Supreme Court deemed the marketing to have been false or misleading and awarded damages to A.102 In its decision, the Supreme Court referred to the legislative history of the Market Securities Act,103 which underlined that the correctness, coverage and method of presentation of disclosed information should be evaluated from the point of view of the investor.

The underlying objective of investor protection is to provide the investment service consumer with essential and sufficient information to make an informed

100

Norros (2008), pp. 638–640. See Norros (2008), p. 638. On the other hand, an expert is not responsible for the subjective understanding of a weaker party but of an objectively sufficient clarification of the correlation between action and result. Norros (2009), p. 355. 102 False and misleading practices are forbidden according to Section 2 of Chapter 1 of the Market Securities Act (Arvopaperimarkkinalaki 14.12.2012/746). The preceding Market Securities Act (Arvopaperimarkkinalaki 495/1989) applied to the case at hand due to its temporal scope. The Act included a similar rule in Section 2 of Chapter 2. 103 The prerequisites are more severe for the marketer when the marketing is directed at the general public than for example in marketing events directed to professional investors or other experts. Government Proposal HE 157/1988, 25 regarding the Market Securities Act (Arvopaperimarkkinalaki 495/1989). 101

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decision. Simultaneously, nonetheless, the risk of an investment gone wrong should be carried by the investors themselves. Investors are offered a wide range of information but in the end, do they make use of the provided information and are they able to utilise this information to their benefit? One significant feature connected to consuming investment services is information overload. It is not beneficial for either party to conclude a transaction without the buyer being aware of its content. After providing information to investors, they presumably examine the information with sufficient care and evaluate different options before deciding on the investment product. Unfortunately, this is often not the case. If the level of knowledge to evaluate investment risks is low even amongst professionals, it is most likely low amongst non-professional investors as well.104

3.1

Insurance

The weaker parties in insurance contracts have been protected in Finland through a sector-specific enactment since 1933.105 Weaker parties in an insurance contract, such as a policy holder, insured or a beneficiary, are protected by the mandatory provisions of the Insurance Contracts Act.106 The information obligation regarding insurance products in general107 includes any information the policy holders may need to assess personal insurance requirements and select a suitable form of insurance.108 These can include details of the insurer’s insurance products, insurance premiums and insurance terms and conditions. Neither the specific content of the information obligation, nor the media, which should be used to deliver it, are defined in advance. The provision is based on the fact that the insurer, out of the two contracting parties, is more aware of the different insurance products as well as the terms and conditions and the insurance premiums.109 When fulfilling the information obligation, the insurer is obliged to point out all ‘major exclusions’ in the cover provided.110 The term ‘major exclusions’ is not defined in an exhaustive manner. Open notions leaving room for interpretation are, in general, quite popular in Finnish consumer protection, as the situations in which a 104

Luukkonen (2016), pp. 119 and 132–133. Vakuutussopimuslaki (repealed) 132/1933, see Viitanen and Wilhelmsson (2004), Kuluttajaoikeuden synty. 106 Decree of the Ministry of Justice on the information obligation regarding life insurances: Oikeusministeriön asetus henkivakuutuksesta annettavista tiedoista 177/2011. 107 Section 5 of the Insurance Contracts Act. Section 1 excludes reinsurance from the scope of the Act. 108 Nevertheless, according to Section 5 of the Insurance Contracts Act an exception can be made on the general information obligation if the policy holder does not want any information or it turns out that the disclosure of such information would pose an excessive convenience. 109 Hoppu and Hemmo (2006), p. 37. 110 Section 5 of the Insurance Contracts Act. 105

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consumer may need protection are dynamic whereas the legislator is quite slow in implementing changes regarding the consumer market.111 Moreover, if it is a question of a unit-linked insurance product, attention needs to be paid to the circumstances that are important in the selection of any investments that may be linked to the insurance, taking particular account of the applicant’s previous investment experience and investment targets. No information need be given if the applicant does not want any information or if it turns out that the disclosure of such information would pose ‘excessive inconvenience’.112 More detailed descriptions have been issued by the Financial Supervisory Authority on the information obligation regarding costs and profits in long-term saving contracts and insurance.113 So-called unit-linked insurance products can lead to a non-existing profit or may involve the risk of losing the capital paid.114 It is an essential obligation of the insurer to inform the policy holder of such risks.115 There is also a subjective element to the insurer’s information obligation. In marketing unit-linked insurance products, the insurer must take into consideration factors such as the policy holder’s previous investment experience, age, or a possible medical condition, which might lead to a lower level of comprehension of significant features of investment-type insurance policies.116

3.2

Investment Services

Investment services are regulated by the Investment Services Act117 and Securities Markets Act.118 The Securities Markets Act outlines the information obligation of investment service intermediaries. The Financial Supervisory Authority observes and directs all businesses providing investment services. According to the Securities Markets Act, in all trade marketing of investment services, providing false or misleading information is prohibited in the marketing and exchange of securities or other financial instruments in business, as well as upon fulfilling the information obligation. Any false or misleading information must be corrected without delay.119

111

See Määttä (2006), pp. 1–2. Section 5 of the Insurance Contracts Act. 113 Financial Supervisory Authority regulation: Pitkäaikaissäästämissopimusten ja vakuutusten kulujen ja tuottojen ilmoittaminen, Dnro 4/101/2011. 114 Norio-Timonen (2011), pp. 67–68. 115 Government Proposal HE 63/2009, 17. See also Norio-Timonen (2011), pp. 69–70. 116 Government Proposal HE 63/2009, 10 and 17. 117 Sijoituspalvelulaki 14.12.2012/747. 118 Arvopaperimarkkinalaki 14.12.2012/746. 119 Section 3 of Chapter 1 of the Securities Markets Act. Providing false or misleading information has also been prohibited in Section 2 of Chapter 10 of the Investment Services Act. 112

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All investment services buyers are classified as either professional or non-professional investors120 or eligible counterparts. Compared to the other investor groups, non-professional investors enjoy the highest level of protection.121 The classification is fundamental when defining the content of the investment service provider’s information obligation. The information obligation regarding investment services must be fulfilled in good time before the conclusion of a contract or before the service has been rendered.122 Also, two types of prospectus, which are pre-monitored by the Financial Supervisory Authority, are used: the national and the EU prospectus. These vary in value limits. The new Key Information Document for investors has been introduced by an EU regulation and it is said to improve the protection of non-professional (retail) investors in the field of financial services. In addition to the regulation provided in the aforementioned acts, the general guidelines of the Financial Supervisory Authority play a significant role. These guidelines are not legally binding but deviating from them may be seen as contrary to so-called ‘good practice in the securities markets’. Deviating from good practice is a direct violation of the Securities Markets Act.123 When providing investment services in general, it is prohibited to use unfair contract terms or contract terms, which go against good practice.124 The Financial Supervisory issued four warnings and penalty payments to four banks providing investment services to consumers for not complying with the Investment Services Act and the guidelines issued thereunder by the Financial Supervisory Authority. The inspection in which the level of negligence was investigated was directed towards the duty of the investment service provider to acquire sufficient information on the client and to ensure the suitability of the investment product being sold to the consumer before offering advice regarding investment services. One of the banks also neglected to recognise and avoid conflict of interest situations. The amount of penalty payments varied between €20,000 and €1 million, depending on the level of negligence of the investment service provider with regard to the quality, extent and duration of the misconduct and the financial status of the investment service provider. The inspection focused mainly on non-professional (retail) investors over the age of 70 to whom unit funds or structured investment products were sold. According to the Investment Services Act and the regulations given by the Financial Supervisory Authority125 on the general guidelines in providing investment advice, an investment service provider must acquire information needed for the evaluation of understanding relevant details regarding the client. This information includes the client’s

120

Non-professional investors are referred to as retail investors in the Directive 2014/65/EU of the European Parliament and of the Council of 15 may 2014 on Markets in Financial Instruments and Amending Directive 2002/92/EC and Directive 2011/61/EU. 121 Hemmo and Hoppu (2006), Sijoituspalvelusopimukset. 122 Section 5 of Chapter 10 of Investment Services Act. 123 Section 2 of Chapter 1 of the Securities Markets Act. 124 Section 3 of Chapter 10 of the Investment Services Act. 125 Regulation 59 of the general guidelines by the Financial Supervisory Authority, Määräykset ja ohjeet 16/2013: Finanssipalvelujen tarjoamisessa noudatettavat menettelytavat.

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investment objectives and financial situation in proportion to the investment risk as well as the client’s knowledge and experience in the investment field relevant to the client’s portfolio and the potential risks. These requirements are described in detail in the Financial Supervisory Authority regulations. In cases in which the investment service provider does not acquire this subjective information about the client, that provider is not allowed to recommend investment services to the client.126 In the most serious case, the bank had not acquired relevant background details such as regular income, profession, education, other financial engagements, investment experience or objectives. Furthermore, the bank neglected to record the acquired information.127 With regard to conflict of interest, the bank recommended reinvesting and allocating investment products within the bank’s own interest group in a significant number of cases.128

4 The Digital Consumer Questions regarding the digital consumer are covered by the general provisions regarding consumers as well as special provisions regarding door-to-door selling and distance selling in the Consumer Protection Act.129 The consent to use personal data is also briefly addressed below as well. In Finland, questions regarding consent to use personal data are traditionally addressed in the field of communication law rather than in the field of consumer law. From a Finnish perspective, the question of consent to use personal data is almost entirely EU-based after the implementation of the GDPR.130 The GDPR has tightened the obligations of controllers and processors of personal data as well as introduced a new form of liability in case of breach of the Regulation.131 The GDPR applies to the processing of personal data of consumers in the EU and the monitoring of their behaviour as far as their behaviour takes place within the EU.132 A consumer’s consent for the use of personal data must be freely given, specific, informed and an unambiguous indication of the consumer’s wishes.133

126

Regulation 65 of the general guidelines by the Financial Supervisory Authority, Määräykset ja ohjeet 16/2013: Finanssipalvelujen tarjoamisessa noudatettavat menettelytavat. 127 Decision by the Financial Supervisory Authority FIVA/22/02.04/2016, 5. 128 Decision by the Financial Supervisory Authority FIVA/22/02.04/2016, 15–16. 129 Chapter 6 of the Consumer Protection Act. Nonetheless, the scope of the provision does not include consumer goods under €30 (Section 3 of Chapter 6 of the Act). Provisions regarding distance selling of financial services and instruments are in Chapter 6a of the Consumer Protection Act. 130 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) applies from 25 May 2018 onward. 131 Wennäkoski (2016), p. 68. 132 See in detail Article 3 of the General Data Protection Regulation. 133 See in detail Article 4(11) of the General Data Protection Regulation.

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When it comes to distance selling, it is defined as the offering of consumer goods or services for sale to the consumer by the way of a distance offering, arranged by the business, so that the conclusion of the contract and the preceding marketing effort are carried out exclusively through one or more means of distance communication. Means of distance communication are telephones, the postal service, televisions, information networks or other devices that can be used to conclude contracts without the parties being simultaneously present.134 Online consumer sale and protection of the digital consumer are therefore included in the provisions regarding distance selling. Businesses are also obliged to provide a model withdrawal form that the consumer can use to withdraw the contract.135 This applies to all distance selling. If a consumer has the right of withdrawal in a consumer contract, which has been concluded through door-to-door or distance selling, the specific content of the information sheet to be given to the consumer is defined by a government decree.136 In distance selling, all pre-contractual information should be given in paper form or, if a consumer agrees, through another durable medium.137 As a partial result of EU harmonisation, the information obligation regarding online sales to consumers is more detailed than conventional distance selling. It has been acknowledged in Finnish legal literature that the digital market environment requires new and enhanced options for consumer protection.138 The information obligation regarding online sales covers details on what is the compatibility of the digitally sold content with devices and other programmes.139 Furthermore, although the period for the right to withdraw from a contract does not change, there are differences in the starting dates when counting the 14-day withdrawal period. In contracts on digital content, the withdrawal period starts from the conclusion of a contract.140 As a rule, a digital service should be delivered only after the 14-day withdrawal period. A consumer may, nonetheless, waive the right to withdraw from the contract to receive the digital content before the 14-day withdrawal period.141

134

Section 7 of Chapter 6 of the Consumer Protection Act. Section 9 of Chapter 6 of the Consumer Protection Act and Government Proposal HE 157/2013, 16. 136 Decree of the Ministry of Justice on the Model Withdrawal Form and Instructions on the Right of Withdrawal under Chapter 6 of the Consumer Protection Act: Oikeusministeriön asetus kuluttajansuojalain 6 luvussa tarkoitetuista peruuttamislomakkeesta ja peruuttamisohjeista 110/2014. 137 Section 11 of Chapter 6 of the Consumer Protection Act and Article 7 of the Directive 2011/83/ EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European Parliament and of the Council. 138 See for example Viitanen and Wilhelmsson (2004), Kuluttajaoikeuden synty. 139 Government Proposal HE 157/2013, 16. 140 Section 14 of Chapter 6 of the Consumer Protection Act. 141 Section 15 of Chapter 6 of the Consumer Protection Act. 135

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Recent legislative changes regarding digital consumers have been said to improve the level of consumer protection.142 At the same time, when information obligation towards the consumer was extended, some significant consumer rights were also narrowed, such as the right to return consumer products without the cost of return delivery in distance selling.143

References Books Ämmälä T (2006) Suomen kuluttajaoikeus. Talentum, Helsinki. E-Book Hemmo M, Hoppu K (2006) Sopimusoikeus. Talentum Media Oy, Helsinki. E-Book Hoppu E, Hemmo M (2006) Vakuutusoikeus. Talentum Media, Helsinki. E-Book Klami-Wetterstein P (2007) Letter of intent och ansvarsgrundadet tillit. Tidskrift utgiven av Juridiska Föreningen i Finland (JFT):493–513 Niemi M-L (2015) Luotto-oikeus. Luottotyypit, perintäprosessit ja takaisinsaanti. Talentum, Helsinki. E-Book Norio-Timonen J (2011) Vakuutuksenantajan tiedonantovelvollisuus sijoitussidonnaisten vakuutusten myynnissä. In: Sisula-Tulokas L, Luukkonen I, Sirén E et al (eds) Vakuutus- ja rahoitusneuvonta 40 vuotta. Vakuutus- ja rahoitusneuvonta, Helsinki, p 67 Norros O (2009) Vahingonkorvaus arvopaperimarkkinoilla. WSOYpro, Helsinki Paloranta P (2008) Markkinointioikeus käytännössä. Talentum, Helsinki Peltonen A, Määttä K (2015) Kuluttajansuojaoikeus. Alma Talent Oy, Helsinki. E-Book Viitanen K, Wilhelmsson T (2004) Kuluttajaoikeus. In: Villa S, Airaksinen M, Bärlund J et al (eds) Yritysoikeus. Alma Talent Oy, Helsinki. E-Book Wennäkoski A (2016) Tietosuojaoikeudellinen vahingonkorvaus murroksessa. In: Korpisaari P (ed) Viestinnän muuttuva sääntely. Viestintäoikeuden vuosikirja 2016. Helsingin yliopiston oikeustieteellisiä julkaisuja, Helsinki. E-Book, pp 68–93

Journal Articles Hoppu K (2011) Palvelutalouden juridiset haasteet. Lakimies:1363–1375 Luukkonen M (2016) Tutustu, ymmärrä ja päätä – Sijoittajan selonottovelvollisuus oikeus- ja käyttäytymistaloustieteellisestä näkökulmasta. Oikeustiede–Jurisprudentia:117–183 Norros O (2008) Vahingonkorvaus asiantuntijapalveluissa. Lakimies:637–643 Sorsa K (2010) Proactive law approach and consumer protection – comparing UK and Finnish consumer authorities systems. Juridiska Föreningen i Finland. 2:211–231

142 143

Governmental Proposal HE 157/2013, 22. Governmental Proposal HE 157/2013, 22.

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Online Documents Määttä K (Edilex 2006) Ajankohtaista oikeuskäytäntöä kuluttajansuojasta. Accessed 24 May 2017 Peltonen A (Finnish Competition and Consumer Authority, 2014) Kuluttajaoikeus – kansallista vai kansainvälistä. Kuluttajansuojalain 2 ja 3 lukujen sääntely ja ratkaisukäytäntö. https://www.kkv. fi/globalassets/kkv-suomi/julkaisut/artikkelit/peltonen_anja_kuluttajaoikeus__-kansallista_vai_ kansainvalista.pdf. Accessed 28 Sept 2018

Organisation Sites Consumer Disputes Board (2013) About the consumer disputes board, https://www.kuluttajariita.fi/ en/index/kuluttajariitalautakunta.html. Accessed 5 Sept 2018 European Commission (2016) EU register of nutrition and health claims made on foods, http://ec. europa.eu/food/safety/labelling_nutrition/claims/register/public/?event¼register.home. Accessed 2 May 2017 Finnish Competition and Consumer Authority (2012) Class complaint against Peab Oy dismissed by the Consumer Complaint Board, https://www.kkv.fi/en/current-issues/press-releases/finnishconsumer-agency/2012/19.4.2012-class-complaint-against-peab-oy-dismissed-by-the-con sumer-complaint-board/. Accessed 12 May 2017

Part III

National Report: Euro-Asian Region

L’information et la désinformation des consommateurs : Rapport turc Başak Baysal

Abstract Turkish consumer law is one of the most important areas for harmonization of Turkish private law with European law. The guidelines of several EU Directives to create a more informed and conscious consumer have been transferred into Turkish law during the harmonization process of Turkish consumer law with European law. The principle of protecting the weak party is the underlying reason for consumer protection. Nevertheless, the issues with consumer protection have been rarely regulated in Turkey since the harmonization of Turkish consumer law with European law. Turkish consumer law provides the obligation of precontractual and contractual information for many consumer contracts. However, proper application of these provisions in practice remains a challenge. To speak of an informed consumer, formally fulfilling the obligation to inform by the professional is barely sufficient. To achieve the goal of materially informing the consumers and protect them, necessary information must be simple and accessible to the consumers. The overinforming done in practice serves only the opposite purpose.

Abstrait Le droit de la consommation turc est l’une des domaines importants pour l’harmonisation du droit privé turc avec le droit européen. Les lignes directrices de plusieurs directives pour créer un consommateur plus éclairé et plus conscient, ont été transposées en droit turc pendant les travaux de l’harmonisation du droit de la consommation turc au droit européen. Cette transposition a été faite principalement dans la loi sur la protection de consommateur [LPCturque] et aussi dans les règlements liés pour l’application de ladite Loi. Le principe de la protection de la partie faible est le motif principal de la protection du consommateur. Néanmoins, en Turquie, les problèmes s’agissant sur la protection des consommateurs sont rarement les régulations puisque la législation turque sur le droit de la consommation a été entièrement harmonisée avec le droit européen. La nouvelle LPCturque prévoit l’obligation d’information précontractuelle et contractuelle pour beaucoup de contrats de consommation. L’obligation d’information est prévue alors en deux B. Baysal (*) Istanbul University, Istanbul, Turkey © Springer Nature Switzerland AG 2019 G. Straetmans (ed.), Information Obligations and Disinformation of Consumers, Ius Comparatum – Global Studies in Comparative Law 33, https://doi.org/10.1007/978-3-030-18054-6_12

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étapes: L’obligation d’information précontractuelle et contractuelle. Le problème est l’application desdites dispositions en pratique. Pour parler d’un consommateur éclairé, remplir formellement l’obligation d’information par le professionnel n’est pas toujours suffisant. L’important est atteindre au but d’informer matériellement le consommateur; les informations nécessaires doivent être simple et accessible au consommateur pour le protéger réellement. La surinformation faite en pratique ne sert qu’au contraire.

1 Caractéristiques générales du modèle d’information du consommateur 1.1

Le droit de la consommation turc harmonisé avec le droit européen

Le droit de la consommation turc est l’une des domaines essentiels pour l’harmonisation du droit privé turc avec le droit européen1. Un consommateur « de plus en plus éclairé » est l’une des étapes importantes dans le processus de l’harmonisation avec droit de la consommation européen. Les lignes directrices de plusieurs directives pour créer un consommateur plus éclairé et plus conscient, ont été transposées en droit turc pendant les travaux de l’harmonisation du droit de la consommation turc au droit européen. Cette transposition a été faite principalement dans la loi sur la protection de consommateur [LPCturque] et aussi dans les règlements liés pour l’application de ladite Loi. LPCturque est la principale régulation pour la protection du consommateur ; néanmoins pendant la réforme turque du droit privé, plusieurs dispositions pour la protection de la partie faible ont été introduit dans le nouveau Code des obligations [COT] et Code de commerce turc [CCT]2. Par exemple, la protection générale contre les clauses abusives (COT art. 20-25 ; CCT art.55)3 ; la contrat de vente à l’acompte (COT art. 253-263) ; la

1 Sur l’harmonisation du droit turc de la consommation avec le droit européen v. Atamer, Yeşim M., “Die autonome Umsetzung der Verbrauchsgüterkaufrichtlinie 1999/44/EG in der Türkei – Zugleich ein Beitrag zum Stand des Verbraucherschutzes in der Türkei”, Zeitschrift für europäisches Privatrecht (ZEuP) 2005, pp. 566 ss.; Atamer, Yeşim M, Tüketici Kredisi Hukukunda Reform Projeleri ve Avrupa Birliği Hukuku ile Uyumu, Banka ve Tüketici Hukuku Sorunları Sempozyumu, Istanbul, 2010, pp. 241–273. Micklitz, Hans W./ Atamer Yeşim M., “Implementation of the EU Consumer Protection Directives in Turkey”, 27 Penn State International Law Review (2009), pp. 551–607. 2 Le Code des obligations turc (COT), est entré en vigueur le 1er juillet 2012 en même temps que Le Code du commerce turc (CCT), voir Journal officiel no. 27846 du 14.2.2011. 3 V. Atamer, Yeşim M.; “Yeni Türk Borçlar Kanunu Hükümleri Uyarınca Genel İşlem Koşullarının Denetlenmesi – TKHK m. 6 ve TTK m. 55, f.1, (f) ile Karşılaştırmalı Olarak” Türk Hukukunda Genel İşlem Şartları Sempozyumu, Banka ve Ticaret Hukuku Enstitüsü Yayını, Ankara 2012, pp. 9–73.

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protection contre la publicité trompeuse (COT art. 57) sont des institutions réglées par le COT et le CCT aussi. Toutes ces régulations citées au-dessus sont largement inspirées par les directives européennes. Alors la transposition a été faite dans la loi sur la protection de consommateur et mais aussi dans les règlements liés et aussi dans les codes principaux. L’année 1995 est le début de la transposition des directives européens principales en droit de la consommation4; néanmoins la première loi sur la protection de consommateur a été faite rapidement et c’était une loi insuffisante pour résoudre les problèmes contractuels entre les consommateurs et les professionnels5. En 2003, cette loi a été reformée par la loi numéro 48226 ; cette réforme était une étape importante pour l’harmonisation du droit turc avec le droit européen. Néanmoins, avec le temps, la nécessité des règles du marché a fait sentir le besoin d’une loi plus complète7. La nouvelle Loi sur la protection du consommateur est entrée en vigueur le 28 mai 20148; l'article 86 de la LPCturque prévoit l'abrogation de l'ancienne loi; les deux motivations principales pour la promulgation de la nouvelle loi étaient l’harmonisation du droit turc avec le droit européen et les nécessités économiques. Un marché transparent et compétitif a besoin d’abord un consommateur éclairé qui peut choisir parmi les produits les plus commodes à sa demande. Le devoir de l’information devient alors très important pour parler d’un consommateur éclairé qui peut faire son choix librement. La nouvelle loi contient plusieurs dispositions pour ce modèle de consommateur ; néanmoins la pratique turque suit lentement les nouvelles tendances en droit de la consommation.

1.2

Le consommateur naïf ou le consommateur moyen: le grand dilemme du droit turc de la consommation

En droit turc il faut distinguer le modèle du consommateur prévu dans les textes législatifs et le modèle pris en considération dans les décisions juridiques. Les juges du tribunal de consommateur ont la tendance de protéger au maximum le consommateur. Le principe de la protection de la partie faible est le motif principal de cette protection. A la première vue cette tendance n’a qu’à être apprécié par la

4

La loi du 23.2.1995, No: 4077; JO [RG] 8.3.1995/22221. Serozan, Rona (1996), Tüketiciyi Koruma Yasasının Sözleşme Hukuku Alanındaki Düzenlemesinin Eleştirisi, Yasa Hukuk Dergisi, Yasa Hukuk İçtihat Ve Mevzuat Dergisi, Tome 15 No: 173/4, 1996, pp. 577–598. 6 La loi du 6.3.2003, No : 4822, RG 14.3.2002/25048. Serozan, Rona (2003), Tüketicinin Koruma Kanunu Değişikliğinin Artıları ve Eksileri, İÜHFM, Tome 61, No: 1-2, 2003, 339–356. 7 Baysal, Başak, “Tüketici Kredisi”, [Consumer credits], in: Yeni Tüketici Hukuku Konferansı [Conference on the new Consumer Law], Murat M. Inceoglu (ed.), Istanbul 2015, pp. 273–325. 8 JO [RG], 28.11.2013, No: 28835. 5

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doctrine, néanmoins cette tendance a eu la conséquence de partir d’un modèle de consommateur irrationnel, qui peut être manipulé par tous les moyens surtout par les publicités ; pourtant la tendance actuelle est tout à fait au contraire9. Il ne faut pas oublier qu’aujourd’hui le droit de la consommation est l’une des domaines de droit qui a la force de déterminer l’orientation du droit des obligations10. Pour cela le choix du modele du consommateur pour l’application des dispositions protectrices a une importance singulière pour les principes du droit privé. Le critère du consommateur moyen prévu dans la législation national (LPCturque art. 62) doit être aussi pris en compte par les juges. En résumé, la législation turque actuelle part d’un modèle du consommateur qui prend ses décisions « économiquement » ; la jurisprudence part d’un modèle de consommateur naïf, irrationnel, sans éducation, cela n’est ni conforme à la réalité économique ni à la tendance actuelle du droit de la consommation11. Le consommateur moyen est le point de départ pour la législation national turque. La nouvelle LPCturque12 prévoit explicitement du critère du consommateur moyen à la différence de l’ancienne LPCturque. Par exemple selon l’article 62 alinéa 1 de la nouvelle Loi, une pratique commerciale est déloyale si: elle est contraire aux exigences de la diligence professionnelle, et elle altère ou est susceptible d'altérer de manière substantielle le comportement économique, par rapport au produit, du consommateur moyen qu'elle touche ou auquel elle s'adresse, ou du membre moyen du groupe lorsqu'une pratique commerciale est ciblée vers un groupe particulier de consommateurs. La définition de la directive 2005/29/CE est retenue (art. 5 de la Directive 2005/29/CE; v. aussi le règlement sur la publicité commerciale et pratique commerciale déloyale turc13). Nous pouvons facilement constater que la législation prend en considération l’influence de la publicité sur le comportement économique du consommateur moyen. En fait ce critère est important pour toutes les obligations d’informations précontractuelle ou contractuelle. Pour constater si l’obligation d’information a été remplie, à notre avis il faut partir d’un consommateur moyen pas d’un consommateur ignorant ou naïf. Si le point de départ est le consommateur ignorant le professionnel ne peut jamais arriver en pratique remplir son obligation d’information. L’important est informer objectivement les consommateurs pour qu’ils puissent faire un choix juste et rationnel14.

9 Vigneron-Maggio-Aprile, Sandra, L'information des consommateurs en droit européen et en droit suisse de la consommation, Zürih, 2006, p. 501. 10 Micklitz, Hans-W., “The future of consumer law – plea for a movable system” (2013) 2 Journal of European Consumer and Market Law, pp. 5–11, p. 5. 11 İnal, Emrehan/Baysal, Başak, Reklam Hukuku ve Uygulaması, [Advertising Law] İstanbul, 2008, p. 27. 12 . JO [RG], 28.11.2013, No: 28835. 13 JO [RG], 29232, 10.01.2015. 14 Atamer, Yeşim M. / Sanlı, Kerem C., “Kredi Kartı Faizleri ve Yıllık Ücretleri Örneğinde Fiyat Denetimi ve Sınırları” [Price Control and Its Limits – The Example of Credit Card Interest Rates and Annual Fees], Banka ve Ticaret Hukuku Dergisi, Vol. XXVI/4, 2010, pp. 17–60 (p. 28 ss.).

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2 Exigences d’information précontractuelle 2.1

L’obligation d’information précontractuelle et contractuelle en droit turc de la consommation

Le but de l’obligation d’information précontractuelle est la conclusion du contrat avec un consommateur bien éclairé ; l’obligation d’information précontractuelle permet au consommateur de penser une dernière fois avant la conclusion du contrat et de comparer les produits15. La nouvelle LPCturque prévoit l’obligation d’information précontractuelle et contractuelle pour beaucoup de contrats de consommation, pourtant il n’existe pas une obligation d’information générale. Les contrats pour lesquels une telle obligation est prévue en droit turc sont: le contrat de crédit, le contrat de prêt immobilier, le contrat de vente sur plan (contrat de réservation), le contrat à distance, le contrat à distance de services financiers, le contrat hors établissement, contrat de vacances à temps partagé et à long terme, contrat de voyages à forfait. L’obligation d’information est prévue alors en deux étapes : L’obligation d’information précontractuelle et contractuelle. Même si une obligation générale d’information explicite n’est pas prévue, l’art. 4 alinéa 1 de la LPCturque peut être interprété aussi comme la source d’une telle obligation16. Selon cet article, les contrats pour lesquels LPCturque prévoit la forme écrite et les informations nécessaires doivent être rédigés d’une façon simple, claire, compréhensible et lisible, le caractère doit être au minimum douze ; un exemplaire du contrat doit être remis au consommateur sur un support papier ou sur un autre support durable. S’il existe un manquement à l’une ou plusieurs des conditions obligatoires dans le contrat, cela n’affecte pas la validité du contrat, néanmoins celui qui prépare le contrat doit les remplir immédiatement. La sanction générale est prévue dans l’article 4 alinéa 1 de la LPCturque, cet article énonce que s’il y a un manquement à l’une ou plusieurs des conditions obligatoires, cela n’affecte pas la validité du contrat, néanmoins celui qui prépare le contrat doit les remplir immédiatement. Alors, s’il existe un manquement aux informations contractuelles qui doivent être obligatoirement fournies aux consommateurs la sanction est simple, celui qui prépare le contrat doit remplir son obligation immédiatement. Néanmoins si ce manquement peut constituer parfois une condition abusive. Si le manquement aux clauses obligatoires est fait pour tromper le consommateur, la sanction des conditions abusives pourrait être appliquée, la sanction est la nullité absolue. Le manquement aux informations précontractuelles pourrait causer aux dommages intérêts si cela constitue un culpa in contrahendo. Pourtant les conditions de la culpa in contrahendo doivent être remplis. Les informations précontractuelles peuvent jouer aussi un rôle dans l’étape de la formation du contrat. Selon l’article 2 du Code des obligations turc, pour la

15 16

V. L’exposé des motif de la nouvelle LPCturque. Baysal (2015), p. 299.

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conclusion du contrat les parties doivent se mettre d’accord sur tous les points essentiels du contrat. Si une information précontractuelle est réputée comme un point essentiel, son manquement peut impliquer même à la non-formation du contrat.

2.2

L’obligation d’information pour les denrées alimentaires

La Turquie continue d’harmoniser sa législation avec le droit européen sur le sujet. Le premier règlement Turc du 29 décembre 2011 sur l’étiquetage des denrées alimentaires17 a transposé principalement la Directive 2000/13/CE du Parlement européen et du Conseil du 20 mars 2000 relative au rapprochement des législations des États membres concernant l'étiquetage et la présentation des denrées alimentaires ainsi que la publicité faite à leur égard et la Directive 2008/5/CE de la Commission du 30 janvier 2008 relative à l'indication sur l'étiquetage de certaines denrées alimentaires d'autres mentions obligatoires que celles prévues dans la directive 2000/13/CE du Parlement européen et du Conseil. La législation européenne sur le sujet a été aussi pris en compte entièrement pendant la préparation du règlement Turc du 29 décembre 2011, cela a été mentionnés clairement dans l’art. 3 du règlement. Ces directives sont : Directive 79/112/CEE du Conseil, du 18 décembre 1978, relative au rapprochement des législations des États membres concernant l'étiquetage et la présentation des denrées alimentaires destinées au consommateur final ainsi que la publicité faite à leur égard; Directive 2002/67/CE de la Commission du 18 juillet 2002 relative à l'étiquetage des denrées alimentaires contenant de la quinine, et des denrées alimentaires contenant de la caféine (Texte présentant de l'intérêt pour l'EEE); Règlement (CE) N. 608/2004 de la Commission du 31 mars 2004 concernant l'étiquetage des aliments et ingrédients alimentaires avec adjonction de phytostérols, esters de phytostérol, phytostanols et/ou esters de phytostanol; Directive du conseil du 24 septembre 1990 relative à l'étiquetage nutritionnel des denrées alimentaires; Directive de la commission du 15 avril 1987 relative à la mention du titre alcoométrique volumique dans l'étiquetage des boissons alcoolisées destinées au consommateur final (87/250/CEE); Règlement (CE) no 1924/2006 du Parlement européen et du Conseil du 20 décembre 2006 concernant les allégations nutritionnelles et de santé portant sur les denrées alimentaires. L’article 8 du règlement Turc du 29 décembre 2011 énonce les mentions obligatoires; par exemple la dénomination du produit ; la liste ingrédients ; la quantité nette du produit ; la date de durabilité minimale ou, dans le cas de denrées alimentaires très périssables microbiologiquement, la date limite de consommation; les conditions particulières de conservation et d'utilisation; le nom ou la raison sociale et l'adresse du fabricant ou du conditionneur, ou du distributeur ; le lieu d'origine ou de provenance ; un mode d'emploi au cas où son omission ne permettrait pas de faire un usage approprié de la denrée alimentaire; pour les boissons titrant plus

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de 1,2 % d'alcool en volume, la mention du titre alcoométrique volumique acquis ; information sur des substances ou produits ayant un effet allergène. Selon l’article 6 du règlement Turc du 29 décembre 2011 ces informations ne peuvent pas être trompeuses et doivent être justes, claires et facilement compréhensibles par les consommateurs. Selon l’article 14 du règlement Turc du 29 décembre 2011, les étiquettes des denrées alimentaires obligatoires devraient être claires, compréhensibles et d’une manière ineffaçable et remarquable avec un contraste significatif entre le texte et le fond. L’article 7 du règlement Turc du 29 décembre 2011 prévoit les sanctions et les responsables. L’exploitant du secteur alimentaire responsable des informations sur les denrées alimentaires est l’exploitant sous le nom ou la raison sociale duquel la denrée alimentaire est commercialisée ou, si le produit a été importé, l’importateur est responsable de l’étiquetage; l’exploitant du secteur alimentaire responsable des informations sur les denrées alimentaires veille à la présence et à l’exactitude des informations sur les denrées alimentaires ; les exploitants du secteur alimentaire, veillent à ce que les informations relatives aux denrées alimentaires non préemballées destinées au consommateur final ou destinées à être livrées aux collectivités soient transmises à l’exploitant du secteur alimentaire recevant ces denrées pour que, si nécessaire, les informations obligatoires sur les denrées alimentaires soient fournies au consommateur final. Dans les cas ci-après, les exploitants du secteur alimentaire, veillent à ce que les mentions obligatoires apparaissent sur le préemballage ou sur une étiquette attachée à celui-ci, ou sur les documents commerciaux se rapportant aux denrées alimentaires, s’il peut être garanti que ces documents soit accompagnent la denrée alimentaire à laquelle ils se rapportent, soit ont été envoyés avant la livraison ou en même temps que celle-ci, lorsque: a) les denrées alimentaires préemballées sont destinées au consommateur final, mais commercialisées à un stade antérieur à la vente à celui-ci et lorsque ce stade n’est pas la vente à une collectivité, b) les denrées alimentaires préemballées sont destinées à être livrées aux collectivités pour y être préparées, transformées, fractionnées ou découpées. Les exploitants du secteur alimentaire qui fournissent à d’autres exploitants des denrées alimentaires qui ne sont pas destinées au consommateur final ni aux collectivités veillent à fournir à ces autres exploitants du secteur alimentaire suffisamment d’informations leur permettant, le cas échéant, de respecter les obligations qui leur incombent. En janvier 2017 un nouveau règlement est entré en vigueur18. Avec ce règlement, la transposition des Règlement (UE) No 1169/2011 du Parlement Européen et du Conseil du 25 octobre 2011 concernant l’information des consommateurs sur les denrées alimentaires, a été alors remplie en droit turc. L’article 50 du nouveau règlement énonce clairement Règlement (UE) No 1169/2011 du Parlement Européen

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et du Conseil du 25 octobre 2011 concernant l’information des consommateurs sur les denrées alimentaires comme la base des nouvelles dispositions. Les entrepreneurs des denrées alimentaires ont encore une période d’adaptation pour le nouveau règlement. L’article 5 du nouveau règlement est particulièrement important pour l’obligation d’information, cet article établi les principes régissant les informations obligatoires sur les denrées alimentaires. Les informations obligatoires sont, informations sur l’identité et la composition, les propriétés ou autres caractéristiques de la denrée; informations sur la protection de la santé des consommateurs et un usage sûr de la denrée; informations sur les caractéristiques nutritionnelles permettant aux consommateurs, y compris ceux qui doivent suivre un régime alimentaire spécial, de choisir en toute connaissance de cause. Au moment d’envisager d’imposer des informations obligatoires sur les denrées alimentaires et afin de permettre aux consommateurs de prendre leurs décisions en toute connaissance de cause, il convient de prendre en considération le fait que la majorité des consommateurs jugent largement nécessaires certaines informations auxquelles ils attachent une valeur importante, ou de tenir compte de tout bénéfice généralement admis par les consommateurs. L’article 8 du nouveau règlement prévoit les responsables comme dans l’article 7 de l’ancien règlement. Selon l’article 8, l’exploitant du secteur alimentaire responsable des informations sur les denrées alimentaires est l’exploitant sous le nom ou la raison sociale duquel la denrée alimentaire est commercialisée ou, ou, si le produit a été importé, l’importateur est responsable de l’étiquetage; l’exploitant du secteur alimentaire responsable des informations sur les denrées alimentaires veille à la présence et à l’exactitude des informations sur les denrées alimentaires conformément à la législation applicable concernant l’information sur les denrées alimentaires et les exigences des dispositions nationales pertinente; les exploitants du secteur alimentaire, dans les entreprises placées sous leur contrôle, ne modifient pas les informations accompagnant une denrée alimentaire si une telle modification est de nature à induire en erreur le consommateur final ou à réduire de quelque autre manière le niveau de protection de celui-ci ou la possibilité pour le consommateur final de décider en toute connaissance de cause ; les exploitants du secteur alimentaire sont responsables de toute modification qu’ils apportent aux informations sur les denrées alimentaires accompagnant une denrée alimentaire; les exploitants du secteur alimentaire, dans les entreprises placées sous leur contrôle, veillent à ce que les informations relatives aux denrées alimentaires non préemballées destinées au consommateur final ou destinées à être livrées aux collectivités soient transmises à l’exploitant du secteur alimentaire recevant ces denrées pour que, si nécessaire, les informations obligatoires sur les denrées alimentaires soient fournies au consommateur final; les exploitants du secteur alimentaire qui fournissent à d’autres exploitants des denrées alimentaires qui ne sont pas destinées au consommateur final ni aux collectivités veillent à fournir à ces autres exploitants du secteur alimentaire suffisamment d’informations leur permettant, le cas échéant, de respecter les obligations qui leur incombent.

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3 Pratiques commerciales trompeuses 3.1

Généralités

La nouvelle LPCturque a transposé la directive 2005/29/CE du Parlement Européen et du Conseil du 11 mai 2005 -Directive sur les pratiques commerciales déloyales- et Directive 2006/114/CE du Parlement Européen et du Conseil du 12 décembre 2006 en matière de publicité trompeuse et de publicité comparative. L’harmonisation du droit turc avec le droit communautaire sur le sujet a été faite entièrement avec l’article 61 et 62 de la LPCturque et avec le règlement lié à la loi. Selon l’article 62 alinéa 1 de la nouvelle Loi, une pratique commerciale est déloyale si: elle est contraire aux exigences de la diligence professionnelle, et elle altère ou est susceptible d'altérer de manière substantielle le comportement économique, par rapport au produit, du consommateur moyen qu'elle touche ou auquel elle s'adresse, ou du membre moyen du groupe lorsqu'une pratique commerciale est ciblée vers un groupe particulier de consommateurs. On peut facilement voir que cette définition est celle de la directive 2005/29/CE (art. 5 de la Directive 2005/29/CE). Pour le fardeau de la preuve l’alinéa 1 de l’article prévoit que le professionnel doit prouver que sa pratique n’est pas déloyale. Si la pratique déloyale a été fait par voie de la publicité l’article 61 de la Loi sera appliqué.

3.2

La publicité trompeuse et la publicité comparative

Selon l’article 61 alinéa 3 de la LPCturque la publicité trompeuse est illicite. Pourtant il faut distinguer la publicité trompeuse et comparative puisqu’en droit turc seulement la première est illicite (LPCturque art. 61 alinéa 3) ; la publicité comparative qui identifie des biens ou des services offerts par un concurrent est licite en droit turc (LPCturque art. 61 alinéa 5). En droit turc, la publicité comparative peut être fait si, elle n’est pas trompeuse, elle n’entraine pas à la concurrence déloyale et si elle compare des biens ou services ayant la même qualité et ayant le même objectif ou répondant aux mêmes besoins. Une publicité qui peut altérer de manière substantielle le comportement économique avec une information fausse ou trompeuse ou incomplète est illicite; le degré de tromperie doit être important (LPC art. 62 alinéa 3). Néanmoins pour qualifier une publicité comme trompeuse il faut prendre en considération le consommateur moyen19. Alors, le comité de publicité qui a la force d’ordonner des amendes aux entreprises pour les publicités et la jurisprudence partent souvent de l’idée de consommateur naïf comme on vient de souligner ci-dessus. En pratique, on confond la publicité trompeuse et comparative ; cela n’est pas idéal pour une concurrence transparente dans le marché. La publicité comparative 19

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peut être fait même explicitement (v. Directive 2006/114/CE). La loi n’est pas claire sur ce point pourtant le règlement lié20 l’énonce dans son article 8 alinéa 2. Pourtant l’entrée en vigueur de cet article a été suspendue d'abord et a été abrogé récemment. Cela nous montre que le législateur a pensé d'abord qu’il faut une période d’adaptation pour la publicité comparative explicite et n'a pas osé ensuitr. A notre avis, cette attitude du législateur reflète la confusion entre la publicité trompeuse et comparative. La publicité comparative qui a le but de tromper le consommateur est d’ailleurs illicite ; pourtant la publicité comparative juste et surtout explicite donne au consommateur la possibilité de comparer les produits avec les informations nécessaires. Alors, il faut encourager la publicité comparative explicite au lieu de l’empêcher ou de la présenter comme illicite. La nouvelle LPCturque est le fruit de l’harmonisation du droit turc de la consommation avec le droit communautaire. Néanmoins, comme on vient de souligner ci-dessus la modification de la législation seule ne suffit jamais, le changement d’esprit sur la matière doit l’accompagner. Le droit de la publicité est un domaine assez intéressant pour nous montrer cela.

4 Conditions contractuelles abusives La nouvelle LPCturque (art.5) comme l’ancien (art. 6) a réglementé la protection des consommateurs contre les clauses générales abusives. Il n’existe pas des changements fondamentaux sur le sujet ; la matière a été déjà harmonisé avec le droit européen (Directive 93/13/CEE du Conseil du 5 avril 1993 concernant les clauses abusives dans les contrats conclus avec les consommateurs). Avant d’examiner les dispositions sur le sujet, il faut souligner qu’il existe aussi des dispositions dans le Code des obligations turc (art.20-25) et dans le Code du commerce turc (art. 55) applicables aux conditions générales. Néanmoins, s’il s’agit d’un contrat de consommation la LPCturque sera appliqué. Pour la protection du consommateur contre les clauses abusives il existe aussi un règlement lié détaillé21. Selon l’art. 5 alinéa 1 de la LPCturque, une clause d'un contrat n'ayant pas fait l'objet d'une négociation individuelle est considérée comme abusive lorsque, en dépit de l'exigence de bonne foi, elle crée au détriment du consommateur un déséquilibre entre les droits et obligations des parties découlant du contrat. L’article 5 de la LPCturque est la traduction quasi totale de l’article 3 de directive 93/13/CEE. Pourtant il existe une légère différence qui mérite d’être souligné. Selon l’article 3 de la directive 93/13/CEE, le déséquilibre doit être significatif. Mais il n’existe aucun empêchement d’interpréter l’article 5 de la LPCturque en vue de la directive cela est même nécessaire et plus conforme au but du législateur. Ce n’est pas n’importe quel

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déséquilibre qui va permettre de considérer une clause comme abusive; il faut un déséquilibre important et significatif (cf. l’art. 55 du Code du commerce turc). Selon l’article 5 alinéas 2 de la LPCturque la sanction pour les clauses abusives est la nullité absolue ; pourtant cela n’affecte pas en principe la validité totale du contrat et aussi celui qui prépare le contrat ne peut pas prétendre qu’il conclurait pas le contrat sans ces clause. Selon l’article 5 alinéa 3 de la LPCturque si une clause contractuelle a été rédigée préalablement et dans le cadre d’un contrat d’adhésion et de ce fait le consommateur n'a pas pu avoir d'influence sur son contenu, est considéré comme n'ayant pas fait l'objet d'une négociation individuelle avec le consommateur. Si celui qui prépare le contrat prétend qu'une clause standardisée a fait l'objet d'une négociation individuelle, la charge de la preuve lui incombe. Le fait que certains éléments d'une clause ou qu'une clause isolée aient fait l'objet d'une négociation individuelle n'exclut pas l'application du présent article au reste d'un contrat si l'appréciation globale permet de conclure qu'il s'agit malgré tout d'un contrat d'adhésion. Le droit turc est en conformité avec la directive 93/13/CEE aussi pour l’interprétation d’un contrat d’adhésion ; les contrats doivent être rédigés en termes clairs et compréhensibles; que le consommateur doit avoir effectivement l'occasion de prendre connaissance de toutes les clauses, et que, en cas de doute, doit prévaloir l'interprétation la plus favorable au consommateur. Et aussi pour apprécier le caractère abusif d’une clause contractuelle, il faut tenir en compte la nature des biens ou services qui font l'objet du contrat et en se référant, au moment de la conclusion du contrat, à toutes les circonstances qui entourent sa conclusion, de même qu'à toutes les autres clauses du contrat, ou d'un autre contrat dont il dépend. Comme dans la Directive, en droit turc aussi (art. 5 alinéa 7), l'appréciation du caractère abusif des clauses ne porte ni sur la définition de l'objet principal du contrat ni sur l'adéquation entre le prix et la rémunération, d'une part, et les services ou les biens à fournir en contrepartie, d'autre part, pour autant que ces clauses soient rédigées de façon claire et compréhensible.

5 Le consommateur financier Comme dans les domaines cités au-dessus, le droit de la consommation au sujet de des services financiers a été harmonisé avec le droit européen. Le crédit à la consommation a été réglé dans plusieurs articles dans la nouvelle LPCturque (art. 22-31) et les contrats à distance sur les services financiers a été réglée en un article spécifique (art. 49). Pour les contrats de crédit aux consommateurs le législateur turc a transposé principalement la Directive 2008/48/CE du Parlement Européen et du Conseil du 23 avril 2008 concernant les contrats de crédit aux consommateurs et abrogeant la directive 87/102/CEE du Conseil. Le devoir d’information du professionnel a pour but d’empêcher une asymétrie d’information entre les parties d’un contrat de consommation et ainsi l’inégalité

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structurelle sera empêché22. La nouvelle LPCturque pour atteindre à ce but, a élargie le champ d’application du devoir d’information (précontractuelle et contractuelle) et le droit de rétraction. Une des nouveautés la plus important est le devoir d’information du préteur (art. 23). Ainsi le consommateur peut savoir le coût exact de son crédit23. Le droit de rétraction est complémentaire à ce point-là puisque le devoir d’information contractuelle n’est pas effectif si le consommateur éclairé n’a pas le choix de ne pas continuer au contrat de crédit (art. 24). L’obligation d’information du préteur existe en deux étapes24: précontractuelle et contractuelle. Selon l’article 23 de la LPCturque, le préteur et, le cas échéant l’intermédiaire de crédit doivent fournir au consommateur la forme d’information précontractuelle qui contient les conditions du crédit proposé avant un délai raisonnable de la conclusion du contrat. Les informations principales que le préteur doit fournir dans cette forme sont suivants: Le type de crédit; le montant total du crédit et les conditions de prélèvement; la durée du contrat de crédit; le taux du débiteur, les conditions applicables à ce taux; le taux annuel effectif global; le montant total dû par le consommateur, à l'aide d'un exemple représentatif qui mentionne toutes les hypothèses utilisées pour calculer ce taux; le taux d'intérêt applicable en cas de retard de paiement; les conditions du droit de rétractation. En résumé le consommateur doit être mis dans un état de savoir nettement qu’est-ce qu’il va payer et avec combien de différence. Dans la nouvelle LPCturque, il existe un article très important et surprenant sur le sujet. Selon l’art. 25, si le préteur manque à son obligation d’information contractuelle sur les taux et le taux annuel effectif global; le montant total dû par le consommateur, le crédit peut être utilisé par le consommateur jusqu’à la fin du contrat sans aucun taux. Cette sanction est clairement est une amende civile (Gratiskredit)25; l’origine de cet article est la Loi fédérale Suisse sur le crédit à la consommation (LCC m. 15 )26.

6 Le consommateur digital En Turquie, le nombre du consommateur digital augmente régulièrement. Selon le rapport publié par TÜSİAD (Association des industries et des entreprises de Turquie)27 en 2017, surtout les jeunes utilisent l’internet pourtant seulement %

22

V. L’exposé des motifs p. 8, http://www.tbmm.gov.tr/sirasayi/donem24/yil01/ss490.pdf. Vigneron-Maggio-Aprile (2006), pp. 124–125. 24 İnal, Emrehan, “Mesafeli Sözleşmelerde Tüketicinin Korunması ve Buna İlişkin Güncel Gelişmeler”, Uluslararası Tüketici Hukuku Sempozyumu, Metinler Kitabı, İstanbul, 2013, pp. 117–131, (p. 127). 25 Giger (2006), Hans, Der Konsumkredit, Berner Kommentar, Bd. VI/2/1/1, N. 528. 26 V. L’exposé des motifs p. 25, http://www.tbmm.gov.tr/sirasayi/donem24/yil01/ss490.pdf. 27 http://www.eticaretraporu.org/. 23

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34,1 de ces utilisateurs sont des consommateurs digitaux28. Ce taux est bien plus bas quand on compare avec le consommateur digital européen ce qui est %66. En droit de la consommation la protection du consommateur digital a été introduit par déjà par l’ancienne LPCturque surtout pour les contrats à distances. La protection du consommateur a été faite par le mécanisme de l’obligation d’information du fournisseur et le droit de rétraction qui est son complémentaire. L’ancienne LPCturque article 9/A prévoyait déjà un droit de rétraction pour les consommateurs qui fait un contrat à distance29. La nouvelle LPCturque 48 alinéa 4 aussi prévoit le droit de rétraction du consommateur ; avec ce droit on donne au consommateur une période de repenser son contrat (cooling off period)30. Pourtant il existe une différence importante entre la nouvelle et l’ancienne LPCturque au sujet de la durée du droit de rétraction ; dans la nouvelle loi cette durée a été prolongé du sept jours au quatorze jours en faveur du consommateur (ainsi pour les contrats à distances de services financiers, art. 49 de la LPCturque). La nouvelle LPCturque prévoit l’obligation d’information précontractuelle et contractuelle pour le consommateur digital. Cette obligation d’information a été règlementé en détail dans le règlement lié sur les contrats à distance. La loi sur le commerce électronique du 23.10.2014 prévoit aussi beaucoup de dispositions protectrices du consommateur digital31. Dans cette loi, beaucoup de dispositions sont impératives s’il s’agit d’un contrat de consommation, au sujet de l’obligation d’information du fournisseur (art. 3,4 alinéas 3).

7 Un consommateur trop éclairé : La surinformation est la non-information En Turquie, les problèmes s’agissant sur la protection des consommateurs sont rarement les régulations puisque la législation turque sur le droit de la consommation a été entièrement harmonisée avec le droit européen. Le problème est l’application desdites dispositions en pratique. Pour parler d’un consommateur éclairé, remplir formellement l’obligation d’information par le professionnel n’est pas toujours suffisant. L’important est atteindre au but d’informer matériellement le consommateur qui peut arriver à faire son choix librement avec une conscience claire32. Cela est la seule façon d’empêcher l’asymétrie d’information entre le consommateur et le professionnel. Il faut regarder s’il s’agit d’un consommateur qui peut faire son choix libre parmi les produits et services en les comparant avec les informations nécessaires33. Cela dit en pratique turque, le consommateur est souvent 28

http://www.tuik.gov.tr/PreHaberBultenleri.do?id¼21779. İnal, pp. 127 ss. 30 Voir l’exposé de motif de l’article p. 63, http://www2.tbmm.gov.tr/d24/1/1-0787.pdf. 31 Elektronik Ticaretin Düzenlenmesi Hakkında Kanun, RG 5/11/2014, No: 29166. 32 Vigneron-Maggio-Aprile, (2006) p. 449 ff. 33 Vigneron-Maggio-Aprile, (2006) p. 481. 29

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dans une position contraire. Le professionnel aux premières vues remplissant son obligation d’information peut facilement prétendre qu’il a fait ce que la loi énonce en donnant aux consommateurs tous les informations obligatoires. Pourtant le consommateur n’est souvent pas mis dans une position pour les lire ni les comprendre. On peut dire que c’est son obligation d’examiner et de comparer les informations. Prenons l’exemple d’un consommateur qui veut conclure un contrat de crédit. Le préteur, les banques souvent remplissent leurs obligations d’informations précontractuelles en mettant toutes les informations nécessaires sur leurs sites d’internet. Déjà la liste est bien longue, aucun consommateur les lit en détail, il préfèrera de payer son attention plutôt aux informations essentielles ce qui est le taux du débiteur, les conditions applicables à ce taux; le taux annuel effectif global; le montant total dû par le consommateur. Alors les informations nécessaires doivent être simple et accessible au consommateur pour le protéger réellement. La surinformation faite en pratique ne sert qu’au contraire.

References Atamer YM (2005) Die autonome Umsetzung der Verbrauchsgüterkaufrichtlinie 1999/44/EG in der Türkei – Zugleich ein Beitrag zum Stand des Verbraucherschutzes in der Türkei. Zeitschrift für europäisches Privatrecht (ZEuP):566 ss Atamer YM (2010) Tüketici Kredisi Hukukunda Reform Projeleri ve Avrupa Birliği Hukuku ile Uyumu. In: Banka ve Tüketici Hukuku Sorunları Sempozyumu, On İki Levha, Istanbul, pp 241–273 Atamer YM (2012) “Yeni Türk Borçlar Kanunu Hükümleri Uyarınca Genel İşlem Koşullarının Denetlenmesi – TKHK m. 6 ve TTK m. 55, f.1, (f) ile Karşılaştırmalı Olarak” In: Türk Hukukunda Genel İşlem Şartları Sempozyumu, Banka ve Ticaret Hukuku Enstitüsü Yayını, Ankara, pp 9–73 Atamer YM, Sanlı KC (2010) “Kredi Kartı Faizleri ve Yıllık Ücretleri Örneğinde Fiyat Denetimi ve Sınırları” [Price control and its limits – the example of credit card interest rates and annual fees]. Banka ve Ticaret Hukuku Dergisi XXVI(4):17–60 Baysal B (2015) “Tüketici Kredisi”, [Consumer credits]. In: Inceoglu MM (ed) Yeni Tüketici Hukuku Konferansı [Conference on the new Consumer Law], Istanbul, pp 273–325 Giger H (2006) Der Konsumkredit, Berner Kommentar, Bd. VI/2/1/1 İnal E (2013) “Mesafeli Sözleşmelerde Tüketicinin Korunması ve Buna İlişkin Güncel Gelişmeler”. In: Uluslararası Tüketici Hukuku Sempozyumu, Metinler Kitabı, İstanbul, pp 117–131 İnal E, Baysal B (2008) Reklam Hukuku ve Uygulaması, [Advertising Law] İstanbul, p 27 Micklitz H-W (2013) The future of consumer law – plea for a movable system. J Eur Consumer Mark Law 2013(2):5–11 Micklitz HW, Atamer YM (2009) Implementation of the EU Consumer Protection Directives in Turkey. Penn State Int Law Rev 27:551–607 Serozan R (1996) Tüketiciyi Koruma Yasasının Sözleşme Hukuku Alanındaki Düzenlemesinin Eleştirisi, Yasa Hukuk Dergisi. Yasa Hukuk İçtihat Ve Mevzuat Dergisi 15(173/4):577–598 Serozan R (2003) Tüketicinin Koruma Kanunu Değişikliğinin Artıları ve Eksileri. İÜHFM 61 (1–2):339–356 Vigneron-Maggio-Aprile S (2006) L’information des consommateurs en droit européen et en droit suisse de la consommation, Zürih, 2006

Part IV

National Reports: Asia

L’information et la désinformation des consommateurs : Rapport japonais Masamichi Nozawa

Abstract Like other countries, in Japan, there are different types of consumers depending on the area concerned. Case law and legislation take them into account in order to shape the disclosure requirements and to specify how this information should be provided to consumers. This chapter will focus on pre-contractual information obligations, deceptive marketing practices and unfair terms in Japan.

Abstrait Comme les autres pays, au Japon, il existe différentes typologies de consommateurs selon le domaine concerné. La jurisprudence et la législation les prend, donc, en compte afin de modeler les obligations d’information et de préciser comment cette information devrait être fournie aux consommateurs. Dans cette chapitre, on va examiner principalement les obligations précontractuelles d’information, les pratiques commerciales trompeuses et les clauses abusives au Japon.

1 Introduction Au Japon, le modèle d’information du consommateur repose sur les paramètres du marché économique et son «homo economicus». On suppose donc un “consommateur moyen, normalement informé, raisonnablement attentif et avisé qui est présumé comprendre l’information divulguée par le marché et en bénéficier” et c'est ce type de consommateur que protège notre législation nationale. Cependant, la notion de consommateur n’est pas définie précisément par la loi et on ne comprend pas bien quel consommateur constitue le point de repère de notre législation. Par exemple, la loi relative au contrat de consommation, qui est la principale loi protégeant le consommateur au Japon, dispose dans son article

M. Nozawa (*) Université Rikkyo, Law School, Tokyo, Japan e-mail: [email protected] © Springer Nature Switzerland AG 2019 G. Straetmans (ed.), Information Obligations and Disinformation of Consumers, Ius Comparatum – Global Studies in Comparative Law 33, https://doi.org/10.1007/978-3-030-18054-6_13

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2 alinéas 1er que le consommateur est un individu qui n'a pas de fonction dans une entreprise. Par contre, dans le même article, à l'alinéa 2, on définit le professionnel comme étant un individu qui contracte pour les besoins d'une entreprise. Ces définitions du consommateur et du professionnel ne permettent cependant pas de préciser l’image du consommateur. Or, en réalité, il existe différentes typologies de consommateurs selon le domaine concerné et la jurisprudence les prend, d'ailleurs, en compte afin de modeler les obligations d’information et de préciser comment cette information devrait être fournie aux consommateurs. Par exemple, la jurisprudence a une tendance à protéger mieux les consommateurs agés que les autres. Cependant, ces typologies ne sont pas reprises au sein de la législation. Selon l’article 1er de la loi relative au contrat de consommation, le but de cette loi est de la protection du consommateur en raison d'une double asymétrie : l'asymétrie de la qualité et de la quantité de l’information qui existe entre les professionnels et les consommateurs, et l’asymétrie du pouvoir de négociation entre eux. Par exemple, quant à la quantité de l’information, le vendeur professionnel de l’imeuble a beaucoup d’informations sur l’objet de la vente, alors que l’acheteur, le consommateur n’en a pas. Et il est normal que le professionnel a le pouvoir de négociation contre le consommateur profane. Finalement, dans notre législation, le modèle d’information du consommateur repose sur les paramètres du marché économique, comme je vous l'ai indiqué tout au début. Dans ce chapitre, je voudrais présenter, tout d’abord, les obligations précontractuelles d’information au Japon (2). Ensuite, j’examinerais les pratiques commerciales trompeuses (3) et les clauses abusives (4). A la fin, avant le problème à envisager au Japon comme la conclusion (6), je voudrais expliquer les protections des consommateurs dans les domaines spécifiques (5).

2 Obligations précontractuelles d’information 2.1

Obligations d’information générales

Dans la loi précitée relative au contrat de consommation, il existe une obligation générale imposée aux entreprises de fournir des informations précontractuelles aux consommateurs. Lors de rédaction de cette loi, en 2001, on a consulté beaucoup de lois étrangères sur la protection du consommateur, y compris le Code de la consommation en France. Dans ce Code de la consommation, l'article L.111-1 dispose que hhAvant que le consommateur ne soit lié par un contrat de vente ou de fourniture de services, le professionnel communique au consommateur, de manière lisible et compréhensible, les informations suivantes : 1 Les caractéristiques essentielles du bien ou du service . . .ii.

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Conformément à cet article, la loi japonaise relative au contrat de consommation dispose que le professionnel est tenu de faire des efforts pour donner l'information nécessaire sur le contenu du contrat avant la conclusion du contrat de consommation (art.3 alinéa 1). Plus precisément, le professionnel doit donner des informations sur le contenu du contrat au consommateur dès le moment où il invite ce dernier à le conclure. Comme vous le voyez, cet article se contente d'imposer une obligation au professionnel sans énoncer une sanction spécifique dans le cas où le professionnel transgresserait cette règle. En effet, lors de la rédaction de cette loi, beaucoup d'associations de professionnels se sont opposées à ce que l'on insère une telle sanction. Cependant, en se fondant sur cet article, le consommateur, en cas d'information insuffisante peut exercer contre le professionnel une action en responsabilité délictuelle afin d'obtenir réparation du préjudice qu'il a subi. À la différence du droit allemand, la jurisprudence japonaise n'admet pas la théorie de la culpa in contrahendo et l’action en responsabilité ne peut donc avoir qu'une nature extracontractuelle. En effet, avant la conclusion de contrat, il n’y a pas de relation contractuelle entre le professionnel et le consommateur. Celui-ci ne peut donc exercer qu'une action en responsabilité délictuelle contre le professionnel. Dans un arrêt du 22 avril 2011, la cour suprême japonaise affirmait que le consommateur peuvait demander au professionnel le dommage intêrét subi par l’inéxplication de celui-ci, selon l’action en responsabilité délictuelle, non pas l’action en responsabilité contractuelle. Dans cet arrêt, une organisation de crédit a sollicité des investissements, bien qu’elle fût en difficulté et qu’elle le cachât. Les investisseurs, les consommateurs, ont donc subi un dommage par l’information insuffisante avant la conclusion de contrat de l’investissement. Cependant, si le professionnel donne de fausses informations sur un élément essentiel du contrat de consommation, le consommateur peut également demander la nullité relative de ce contrat. Lorsque le juge admet cette nullité, le contrat de consommation est anéanti rétroactivement, c'est-à-dire dès la conclusion de ce contrat. Il reste à savoir ce qu'est un élément essentiel du contrat de consommation. Selon l’article 4, alinéa 5, les “éléments essentiels” ou les informations importantes qui doivent être fournies au consommateur sont les suivants : la qualité de la chose et du service que fournit le professionnel, le prix et les conditions de ce contrat. Quelle est la relation entre l’obligation précontractuelle d’information, la liberté contractuelle et le pouvoir de négociation des consommateurs dans notre système juridique? Tout d’abord, la liberté contractuelle est un principe fondamental de notre système juridique. Ce sont les nouveaux articles 521 et 522 du Code civil japonais, issus de la réforme du droit des obligations en 2017, qui posent ce principe de la liberté contractuelle. Mais pour mettre en application ce principe fondamental, il faut que le professionnel donne au consommateur les informations qui lui sont nécessaires. En effet, le pouvoir de négociation des consommateurs étant

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normalement inférieur à celui des professionnels, il faut que le consommateur soit suffisamment informé pour pouvoir conclure le contrat de manière avisée. Dans notre système juridique, la règle relative à la présentation de l’information répond à des exigences de transparence. C’est ainsi que l’article 3, alinéa 1er, de la loi relative au contrat de consommation dispose que le contenu du contrat de consommation doit être clair, sans ambiguïté, compréhensible, intelligible pour le consommateur et lorsqu'une clause de ce contrat n’est pas suffisamment claire ou intelligible pour le consommateur, le juge l’interprète alors d'une manière avantageuse pour le consommateur. En revanche, la loi ne prévoit pas de sanction lorsqu’une entreprise omet de fournir une information obligatoire aux consommateurs. Dans ce cas, le juge accorde seulement des dommages-intérêts en réparation du préjudice subi par le consommateur en se fondant sur la responsabilité délictuelle, ainsi que je vous l'ai expliqué tout à l’heure. Ou bien, en invoquant le dol (art.96 C.civ.jap.) ou l'erreur (art.95 C.civ.jap.), le consommateur peut également demander la nullité relative du contrat.

2.2

Obligation d’informer les consommateurs sur les denrées alimentaires

Depuis 2013, une loi sur l'étiquetage des denrées alimentaires est en vigueur au Japon. Avant 2013, les dispositions relatives à l'étiquetage des denrées alimentaires étaient dispersées dans plusieurs textes législatifs. Le législateur les a donc réunies dans une seule loi et a, en même temps, renforcé la protection des consommateurs. Selon cette loi, l’entreprise doit faire figurer, sur l'étiquetage des denrées alimentaires, le nom du produit, les substances qui provoquent des allergies alimentaires, la méthode de stockage, la date d'expiration, les matières premières et additifs, la quantité de nutriments et de calories, l’origine et la liste des ingrédients (art.4 alinéa 1er). Dans le cas où une entreprise omet de fournir ces mentions obligatoires, le Premier ministre peut ordonner à l'entreprise le retrait des produits ou même décider, pour une durée déterminée que l'entreprise devra suspendre tout ou partie de ses activités, afin de prévenir les dommages physiques que pourraient subir les consommateurs. Bien que notre système juridique ne réglemente pas les techniques manipulatrices et persuasives de commercialisation qui peuvent être utilisées pour vendre des denrées alimentaires, une ordonnance du Cabinet Office exige, toutefois, que les informations sur les denrées alimentaires soient apposées d’une façon bien visible et clairement lisible. Cette ordonnance contient notamment des règles concernant la taille des caractères des mentions obligatoires et les modalités d’impression. C’est-à-dire que, selon cette ordonnance, il faut que la taille des caractères des

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mentions soit en principe plus de 8 points. Dans le cas où la zone d'affichage de l'emballage soit moins de 150cm2, il est possible que la taille des caractères est de 5,5 points.

3 Pratiques commerciales trompeuses Au Japon, il n’y a pas de règles spécifiques relatives aux pratiques trompeuses qui visent la protection de groupes de consommateurs particulièrement vulnérables. Cependant, tous les consommateurs sont protégés contre ces pratiques commerciales trompeuses par la loi contre les primes injustifiables et les présentations trompeuses. Cette loi a été rédigée en 1962. À cette époque-là, le contrôle de la bonne application de cette loi relevait de la Commission du commerce équitable, comme c'était également le cas s'agissant de la loi de la prévention contre la concurrence déloyale. En 2009, cela a changé et le gouvernement, pour protéger les consommateurs, a fondé l’Agence de consommation qui est désormais compétente s'agissant de l'application de la loi contre les primes injustifiables et les présentations trompeuses. Cette loi interdit deux types de pratiques commerciales, mentionnés ci-dessous, à l'égard de tous les consommateurs : - L’une consiste à faire croire que le produit vendu a des effets ou des qualités nettement supérieurs à la réalité (article 4 alinéa 1er). Par exemple, le vendeur a affiché que son produit était le meilleur dans le monde entier sans évidence. - L’autre consiste à faire croire que le produit vendu est plus avantageux que ceux des autres entreprises (article 4 alinéa 2). Par exemple, le vendeur a affiché que ses produits étaient solde, bien que le prix ne fût pas inférieur au prix ordinaire. Lorsque l’entreprise ne respecte pas ces articles, l’Agence de consommation peut lui ordonner de supprimer sa publicité ou de cesser la pratique commerciale en cause (article 6). De plus, les associations de consommateurs agréées par l’Agence de consommation peuvent demander au tribunal de faire cesser la publicité illégitime (article 10 réformé en 2009). En outre, la loi de la prévention contre la concurrence déloyale précitée interdit également les pratiques commerciales trompeuses. Cependant, le but de cette loi est la protection des entreprises contre la concurrence déloyale et non la protection des consommateurs. La loi contre les primes injustifiables et les présentations trompeuses ne s’applique qu’à l’information précontractuelle qui seule exerce une influence sur le choix volontaire et rationnel des consommateurs. L’évaluation de la nature trompeuse d’une pratique commerciale dépend donc des modalités de fourniture de cette information aux consommateurs. En revanche, il n’existe pas de règles spécifiques d’information relatives aux médias. Au Japon, bien que la publicité comparative ne soit pas interdite, elle n'est pas utilisée, car elle n'est pas conforme à la morale des Japonais.

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4 Les clauses contractuelles abusives – pouvoir de négociation 4.1

Pouvoir de négociation

L’interdiction des clauses abusives repose sur l’idée selon laquelle le consommateur se trouve dans une situation d’infériorité à l’égard du professionnel en ce qui concerne tant le pouvoir de négociation que le niveau d’information, situation qui le conduit à adhérer aux conditions rédigées préalablement par le professionnel sans pouvoir exercer une influence sur le contenu de celles-ci. C’est ainsi que l’interdiction des clauses contractuelles abusives vise notamment les contrats d’adhésion. Au Japon, la réglementation des clauses abusives figurant dans la loi relative au contrat de consommation est inspirée par la directive européenne en la matière et par le Code français de la consommation (art. L.212-1). Cette loi comprend une liste de clauses abusives et si les parties font figurer dans leur contrat une clause qui est comprise dans cette liste, cette clause sera nulle. En outre, l'article 10 de cette loi dispose qu'en général, une clause qui restreint les droits du consommateur est nulle selon cet article soi-même. Ce faisant, la loi relative au contrat de consommation est plus rigoureuse que le Code français de la consommation. Cette réglementation s'applique à tous les contrats, peu important qu'il s'agisse de contrat d'adhésion ou de contrats individuellement négociés. Le droit japonais considère, en effet, que le pouvoir de négociation des consommateurs étant normalement inférieur à celui des entreprises, de telles clauses sont abusives même si elles ont été individuellement négociées. Cependant, dans le nouveau Code civil, après la réforme du droit des obligations en 2017, on trouve désormais également un article, selon lequel les clauses d'un contrat d’adhésion qui sont contraire au principe de bonne foi sont réputées non écrites. Ce texte ne concerne que les contrats d'adhésion et son application peut donc être écartée s'il est prouvé que le contrat a été individuellement négocié, la charge de la preuve incombant alors au professionnel. Pour cela, le professionnel peut présenter à l'appréciation du tribunal d'autres contrats conclus avec d’autres consommateurs et si les clauses ne sont pas les mêmes, c’est alors la preuve que le contenu du contrat litigieux a bien été négocié individuellement. La liste des clauses abusives figurant au sein de la loi relative au contrat de consommation comprend, les clauses suivantes : les clauses exonérant le professionnel de sa responsabilité, les clauses refusant au consommateur le droit de résilier le contrat et les clauses prévoyant à l'avance le montant des dommagesintérêts devant être éventuellement payés par les consommateurs. Les clauses qui définissent l’objet principal du contrat ne sont donc pas, en principe, considérées comme abusives. Toutefois, les clauses contraires au principe de bonne foi étant nulles, de manière générale, il est possible qu’une clause définissant l’objet principal du contrat soit considérée comme contrevenant à ce principe et, de ce fait, considérée comme abusive.

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Transparence des conditions contractuelles qui définissent l’objet principal du contrat

L’article 3, alinéa 1er, de la loi relative au contrat de consommation dispose que “le contenu du contrat de consommation doit être clair et compréhensible pour le consommateur”. La loi impose donc des exigences telles que « les conditions contractuelles doivent être claires et compréhensibles ». Ces exigences se rapportent non seulement à l’exactitude formelle ou grammaticale des termes, mais aussi à l’obligation d’informer le consommateur sur les conséquences, économiques ou autres, d’une clause. En effet, cet article exige non seulement que les clauses du contrat soient claires et compréhensibles, mais aussi, plus généralement, que “le contenu du contrat” le soit, ce qui comprend nécessairement les conséquences économiques de ce contrat. Cette obligation d’information s’impose aux professionnels pour tous les consommateurs, et elle n'implique donc pas que le consommateur le plus vulnérable reçoive un niveau plus élevé de protection. Cependant, cette obligation du professionnel n’est qu’une obligation de moyens dépourvue de sanction spécifique. En outre, au Japon, ainsi que je vous l'ai mentionné plus haut, la liste des clauses abusive est limitée et la loi n'a pas conféré un caractère abusif aux clauses qui définissent l’objet principal du contrat. Or, l’information précontractuelle pourrait avoir une influence sur l’interprétation de la teneur précise d’une clause contractuelle. Lorsque le contenu du contrat n’est pas clair, le juge l’interprète et décide précisément quels sont les droits et les devoirs des parties. Lors de cette interprétation, le juge apprécie l'information que le professionnel a donnée au consommateur et, si elle est insuffisante, le juge interprétera la condition ou le contenu du contrat en faveur du consommateur. Normalement, cette interprétation se fait de la même manière pour le contrat d’adhésion et pour le contrat négocié individuellement. Cependant, s'agissant des clauses standardisées, les juges ont tendance à les interpréter de manière désavantageuse pour les professionnels si ces clauses ne sont pas claires. En effet, à la différence avec les clauses négociées individuellement, les clauses standardisées ont été rédigées par le seul professionnel, lequel est alors en position de prévoir des clauses favorables pour lui. Le juge interprète donc les clauses standardisées, qui ne sont ni claires ni compréhensibles, en faveur du consommateur.

5 Règles sectorielles spécifiques 5.1

Le consommateur financier

Le contenu des contrats ayant pour objet des instruments financiers ou des services financiers est très difficile à comprendre pour le consommateur alors que, pourtant, c'est lui qui assume le risque de l’investissement. Deux lois spéciales ont donc été édictées dans le domaine des services financiers afin de protéger le consommateur.

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L’une est la loi relative aux opérations sur instruments financiers édictée en 1948. Selon cette loi, il faut, par avance, enregistrer les opérateurs financiers, dont le nombre est très limité et qui sont bien contrôlés par le Cabinet Office (art.29). Cette loi impose aux opérateurs financiers de donner des conseils en investissement (art.41 alinéa 2). Elle va donc au-delà de l’obligation d’information en faisant peser sur le professionnel un véritable devoir de conseil, ce qui est lié à la complexité des mécanismes d'investissement et aux risques importants encourus par le consommateur. L’autre est de la loi relative à la vente d’instruments financiers édictée en 2000. Le but de cette loi est de réglementer l’obligation précontractuelle d’information pesant sur les vendeurs d’instruments financiers. Dans cette loi, les instruments financiers sont définis de manière large et comprennent les instruments bancaires, d’assurance de trust et d’investissement (art.2). Selon l’article 3 alinéa 1er de cette loi, le vendeur des instruments financiers doit informer son client, le consommateur, des risques de perte de capital. Cette information doit être donnée avant la conclusion du contrat de vente et être délivrée de telle manière qu'elle puisse être comprise par le client (art.3 alinéa 2). De plus, selon l’article 4 de cette loi, le vendeur ne doit pas énoncer au client des affirmations péremptoires sur des questions qui ne sont qu'incertaines avant la conclusion de vente. Lorsque le vendeur viole les articles précités, il doit réparer le dommage subi par le client (art.5). En outre, cette loi pose un principe de compatibilité ou de proportionnalité (art.8). Ce principe signifie que le vendeur ne doit pas effectuer de sollicitation du client qui ne serait pas appropriée aux connaissances, à l'expérience et à la situation patrimoniale de ce dernier. Cependant, si le vendeur transgresse ce principe, il n’y a pas de sanction spécifiquement prévue par la loi, à ceci près que le professionnel doit alors réparer le dommage du consommateur sur le fondement du droit commun de la responsabilité. Au Japon, on ne considère pas que les informations obligatoirement communiquées aux consommateurs dans ce domaine soient trop vastes. En effet, les lois qui protègent le consommateur ne s’appliquent pas aux consommateurs ayant des connaissances spécialisées et l'expérience des ventes d'instruments financiers. Elles ne concernent que les consommateurs profanes en matière financière.

5.2

Le consommateur numérique

Le droit japonais de la consommation est en retard par rapport au développement des ventes aux consommateurs en ligne ou à distance. Au Japon, les transactions entre professionnels et consommateurs réalisées au moyen d’internet ont augmenté brusquement. Par exemple, en 1998, le montant total de ce type de transaction était de 64,5 milliards de yens. En 2014, il était de 12,8 billions de yens, soit 200 fois plus qu'en 1998. Or, en dépit du fait que les consommateurs courent des risques plus importants, dans la mesure où ils ne voient le produit que par le biais d'un écran et où ils ne

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connaissent pas directement leur contractant, le législateur japonais n'a pas encore pris en compte ce changement économique de la société. Dans la loi sur les transactions commerciales spécifiées, l’article 11 dispose que, lorsque des marchandises vendues par correspondance font l'objet d'une publicité, le vendeur doit faire connaître, dans cette publicité, les caractéristiques des biens, leur prix, le jour de délivrance et les modalités d’annulation de la vente. En outre selon l’article 12, la publicité ne doit pas présenter de différence importante par rapport à la réalité. De plus, il est interdit au vendeur d'adresser au consommateur une publicité par courrier électronique sans avoir préalablement recueilli l'assentiment de ce dernier (art.14-3). Il faut noter ici que si, dans la théorie économique, on discute parfois de la pertinence de l’information donnée aux consommateurs par rapport au besoin de protection de ceux-ci, une telle discussion n'apparaît pas au sein des travaux législatifs. Enfin, s'agissant du stockage des données personnelles, ou de l’accès aux données personnelles déjà stockées, la protection des individus est assurée par la loi sur la protection des renseignements personnels. Selon cette loi, l’utilisation des options par défaut n’est pas autorisée. En outre, le professionnel qui exploite des renseignements personnels, ou des données personnelles, doit préalablement indiquer aux consommateurs le but de l'utilisation de ces renseignements (art.15 alinéa 1er). Et ce professionnel, s’il veut changer la finalité de cette utilisation, ne doit pas dépasser la sphère qui était raisonnablement reconnue aux fins d'utilisation avant le changement (art.15 alinéa 2). Cependant, cette protection des individus n'est pas complète, car lors de l’acquisition des renseignements personnels, le consentement du consommateur n’est pas obligatoire et, en réalité, les consommateurs n’ont pas d’autre choix que d’accepter l’utilisation des données personnelles. Par ailleurs, sur le modèle traditionnel d’information sous pression et sur le problème de la désinformation, pour le moment, le législateur ne prend pas en compte les résultats récents d’études critiquant les modèles d’information obligatoire. En effet, on n’a pas constaté de problème de désinformation des consommateurs en raison d’une surcharge informationnelle et il n’y a donc pas de législation spécifique pour lutter contre ce problème.

6 Conclusion – Problème à envisager On considère au Japon que l’éducation des consommateurs est très importante. Depuis 2010, le ministère de l’Éducation a pris diverses initiatives pour la promotion de l'éducation des consommateurs. Par exemple, en 2012, la loi sur la promotion de l'éducation des consommateurs a été rédigée et l’installation d'un Conseil régional de la promotion de l'éducation des consommateurs était une obligation mise à la charge des villes et des villages.

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Cependant, il est difficile, en réalité, d'assurer l’éducation des consommateurs, par exemple au sein des lycées et des collèges. En effet, il y a déjà beaucoup de sujets qui doivent être enseignés au sein des établissements scolaires et on a pas assez de temps pour assurer en plus une éducation des consommateurs. C’est un problème actuel de notre pays.

Information Obligations and Disinformation of Consumers: Chinese Law Report Shaolan Yang

Abstract Consumer protection gradually obtains public attention as consumer market in China upgrades in recent years. New amendments and legislations on information disclosure are adopted by regulators in many sectors to protect consumers from information asymmetry. This chapter will examine present Chinese laws on information disclosure in details and analyze how these rules are interpreted by courts in cases. The scope and standard of information disclosure varies under different laws, especially in food, insurance, and e-commerce sectors. This chapter intends to clarify the gaps between the legislative purpose and judicial practice and reflect on the limitations of information disclosure in the context of information overload. The practices of abusing standard terms in consumer contracts and manipulating misleading information in advertising and competition, as well as relevant civil remedies and administrative penalties are also discussed. In particular, this chapter presents some debated issues in consumer protection arena such as court’s attitudes towards professional fake commodities buyers and punitive damages.

1 General Introduction of Consumer Protection The first Chinese specialized legislation for consumer protection was the Law of People’s Republic of China on Protection of Consumer Rights and Interests (Consumer Protection Law) adopted in 1993, which outlined the basic framework for consumer rights and business operator’s obligations.1 It was amended in 2013 to

I thank Davide Bertolini and Ernest Southworth for their useful comments on a previous version of this chapter. Errors are my own. In Chinese consumer related legislations, the legal subjects are classified as “consumers” and “business operators”. Article 3 of Consumer Protection Law stipulates “business operators” as

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S. Yang (*) Department of Economics and Management, Ningbo University of Technology, Ningbo, China e-mail: [email protected] © Springer Nature Switzerland AG 2019 G. Straetmans (ed.), Information Obligations and Disinformation of Consumers, Ius Comparatum – Global Studies in Comparative Law 33, https://doi.org/10.1007/978-3-030-18054-6_14

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incorporate rules related to e-commerce transactions and public interest litigation. In addition to Consumer Protection Law, many other laws also set rules on consumer protection, such as Advertising Law of the People’s Republic of China (Advertising Law), Law of the People’s Republic of China against Unfair Competition (AntiUnfair Competition Law), Product Quality Law of the People’s Republic of China (Product Quality Law) Food Safety Law of the People’s Republic of China (Food Safety Law) and E-commerce Law of the People’s Republic of China (E-commerce Law).2 The information regulation methods for consumer protection in China are mainly mandatory pre-contractual information disclosure, and ex post civil remedies and administrative enforcement mechanism. The assumption of the weaker position of consumer in negotiations compared with business operator resulting from information asymmetry is impeded in Consumer Protection Law, and business operator is obligated to take an enlarged scope of information duties compared with supplementary duties to inform under Contract Law. In the event that business operator violates information duties, State Administration of Market Regulation at all levels responsible for market supervision, may impose penalties to correct business operator’s misleading practice. Consumers may also seek withdrawal of contract through litigation in courts or complaint to China Consumer Association. Consumer Protection Law allows punitive damage for fraudulent practice, but Consumer Protection Law does not provide consumers with the cause of action for information right, so consumers have to resort to Contract Law for fraud or unfair standard terms provisions in case for disputes, which in fact draws the consumer back to an equal position with business operator under Contract Law.

1.1

Consumer Definition

The definition of consumer in Consumer Protection Law makes the purpose of purchase to meet consumption needs of daily life as the key factor to distinguish consumer from business operator, as is provided in Article 2 of Consumer Protection Law. In most cases the purpose of purchase is obvious and self-evident by the buyer’s subsequent actions, but this consumer definition faces many criticisms in determining specific group of consumers. Firstly, it is criticized for its vague scope on whether legal persons could be regarded as consumers. Legal persons may have consumption needs for their daily operations, but they are believed to be not as weak as natural persons in market

providing commodities or services to consumers. The concept of “business operators” is also used in Anti-Unfair Competition Law and is defined as a natural person, a legal person, or a non-legal person organization that engages in the production or distribution of commodities or the provision of services. 2 E-Commerce Law came into effect on January 1, 2019.

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transaction and they are advised to be excluded from consumer protection (Li et al. 2013). The most debated and challenged issue of this definition is how to define the legal status of some buyers who purposefully and repeatedly purchase substandard commodities, but never use them or even open the packages. Instead, those buyers, by claiming the substandard commodities not meeting national quality or safety standards, intend to return the commodities and obtain punitive damages for extra compensations. They are generally referred as “professional fake commodities buyers”, or “consumer activists” (Kristie 2014). In view of the above critics, there are discussions to replace the “purpose” standard with the “business” criteria in consumer definition to stress on consumer’s weak positions as non-professional, non-profit, and dependent on business operators (Zhou et al. 2018). Before the 2013 amendment of Consumer Protection Law, suggestions were proposed to clarify the scope of consumers, but finally legislators excluded legal persons from consumer protection and they didn’t reach consensus on professional fake commodities buyers and made no change to the definition.

1.2

Benchmark of Average Consumer

With the legislation on consumer definition, courts still need to select an abstract image of average consumer as a benchmark to determine the consumer’s ability to internalize information. But its meaning in different courts is conflicting and discretionary, the Supreme People’s Court (SPC) then issued an interpretation on how to determine the average consumer in unfair competition cases concerning public misunderstanding or misleading publicity.3 The court should utilize as the basis such factors as daily life experiences, the general attention of the relevant public, the facts causing misunderstanding and the actual circumstances of the subject of the publicity to make judgments. In summary, the average consumer standard contains two aspects: the scope of average consumer and the due attention paid by the average consumer (Yang 2017). Scope of Average Consumer Courts will need to define the scope and extracts an abstract average consumer who is a potential buyer of certain product and has relevant knowledge with minimum level of common understanding (Ma 2017). Consumer’s Due Attention The second aspect is the due attention an average consumer should pay to in the context of the transaction. The study of consumer psychology also provides two factors to evaluate due attention: motivation and ability. The most important motivation is economic risk. Higher price of the product,

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Article 8 of Several Issues Concerning the Applicable Laws in the Trial of Unfair Competition Civil Cases Interpretation (最高人民法院关于审理不正当竞争民事案件应用法律若干问题的 解释) (Unfair Competition Interpretation) by Supreme People’s Court, Fa Shi [2007] No. 2.

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such as for houses or cars, always involves more attention, so a court exerts higher degree of due attention requirement to the average consumer (Yao 2014).

2 Pre-contractual Information Requirements Contract Law sets up information duties as ancillary obligations in the process of contract formation and performance. The exact scope of information is flexible and could only be determined by the contents of the contract and uberrima fides doctrine. Furthermore, Consumer Protection Law sets detailed list of information for business operators to disclose, and requires business operators to note consumers of the standard terms in consumer contracts. Besides, Product Quality Law, E-Commerce Law, and Food Safety Law all lay down lists of mandatory information disclosure. Advertising Law even makes special requirements on the content and manner of advertising statements, and exerts administrative scrutiny over the contents of medicine advertisements.

2.1

Scope of Information Disclosure

Consumer Protection Law obligates business operators to disclose their identity information of trade names and logos,4 and product’s information such as the product’s price, quality, functions, usage and validity information,5 as well as any known defective information.6 Besides, business operators have to give specific explanations upon consumer’s inquiries regarding the quality and function of the product. Meanwhile, Consumer Protection Law sets a separate information right for consumers, and its scope is broader than business operator’s information duties, including product’s specifications, grade, main ingredients, manufacturing date, shelf life, inspection certificate, user manual, after-sale services of goods or the contents, specifications and fees and charges of services.7 This legislative inconsistency influenced court’s opinions on whether certain product information should be disclosed. For instance, in Liu Xuejuan v. LG Company and Suning Center8 case (Liu Xuejuan case), a cosmetic trader printed a “must use” date on the package without specifying the starting date, but the consumer required information for the exact

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Article 21 of Consumer Protection Law. Article 20 of Consumer Protection Law. 6 Article 19 of Consumer Protection Law. 7 Article 8 of Consumer Protection Law. 8 Liu Xuejuan v. LG Company and Suning Center (刘雪娟诉乐金公司、苏宁中心消费者权益纠 纷案), the SPC Gazette, 2005 (6). 5

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expire date after the cosmetic was open for use. The cosmetic trader defensed that they had disclosed the information on validity and argued the consumer’s claim was beyond the scope of information duties set in Consumer Protection Law. The court finally ruled in favor of the consumer and forced the seller to disclose such information based on consumer’s information right and stricter validity requirement under Product Quality Law. Court’s criteria for scope of information disclosed is believed to consider factors such as information importance, disclosure possibility, expect rationality, and trust relationship (Shang 2016). But it should merely include vital information to consumer’s interests and exclude general public information (Pan 2018).

2.2

Modality of Information Disclosure

The Consumer Protection Law does not set rules for how the information should be disclosed. In practice, except for contracts, business operators may give product’s information through signs on packages, text messages, brochures or websites, or even notices in invoices (Wan Fang 2017). The information disclosed through the above means generally constitutes standard terms, so rules on validity of standard terms will apply.9 A case in point is the Guiding case of Liu Chaojie v. China Mobile Telecommunication Group Xuzhou Branch (Liu Chaojie case).10 China Mobile did not inform Liu Chaojie of the durability of pre-paid phone charges in service contract concluded, but China Mobile argued that the durability restriction was disclosed in the invoice and the brochure to the consumer. It was rejected by the court as not an effective disclosure.

2.3

Sanctions

Violation of information duties in Consumer Protection Law incurs both civil liability and administrative penalty. Consumers could demand business operators to disclose the omitted information, but consumer’s further request to publish the information on the marks of future products was rejected as the court held that it was beyond consumer’s legitimate claim.11 It shows civil remedy for consumer’s

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Article 26 of Consumer Protection Law. Liu Chaojie v. China Mobile Telecommunication Group Xuzhou Branch. (刘超捷诉中国移动通 讯集团江苏有限公司徐州分公司电信服务合同纠纷案) Xuzhou City Intermediate People’s Court (2011) XuShangZhongZi No. 391. It was collected in the SPC Gazette 2013 (10). Later it was referred as a Guiding Case 2016 No. 64 by Supreme People’s Court. 11 Liu Chaojie Case. 10

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information right is still restricted to consumer vis-à-vis business operator as private and personal under the doctrine of contract law (Qian 2011). Besides, consumers could withdraw from the contract concluded within 7 days since the conclusion of the contract if the violation of information disclosure involves product quality12; for distance or online sales, consumers could withdraw from the contract within 7 days without cause.13 Consumers could also seek punitive damage for three times the purchase price if the violation of information duties constitutes fraud.14 Administrative penalty also applies if the violation constitutes misleading practice.15

2.4 2.4.1

Specific Food Information Requirements Legislations on Food Labelling

Chinese food labeling requirements are mainly prescribed in Food Safety Law and Regulation on the Implementation of the Food Safety Law, and two mandatory national standards.16 The labels for pre-packed food contain product’s basic information, components and additives, seller’s information, and other detailed information.17 The labels for staple and supplementary food exclusively for infants and other particular groups of people need to indicate the main nutrient ingredients and their contents.18 The labels and instructions for food and food additives could not contain false contents, or statements of disease prevention or treatment functions. The words used in labels and instructions have to be clear and prominent, and information such as the date of manufacture and shelf life must be labeled prominently and easily

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Article 24 of Consumer Protection Law. Article 25 of Consumer Protection Law. 14 Article 55 of Consumer Protection Law. 15 Article 56 of Consumer Protection Law. 16 National Food Safety Standard: General Standard for the Labeling of Packaged Foods (食品安 全国家标准:预包装食品标签通则) (GB7718-2011); National Food Safety Standard General Rules for Nutrition Labeling of Prepackaged Foods (食品安全国家标准:预包装食品营养标签 通则) (GB28050-2011). 17 Detailed information includes: (1) the name, specifications, net content, and date of production; (2) a table of ingredients or components; (3) the name, address, and contact methods of the producer; (4) the shelf life; (5) the product standard code; (6) the storage requirements; (7) the common names of the used food additives in the national standards; (8) the serial number of the production permit, and (9) other information as required by laws, regulations, and food safety standards. 18 Article 67 of Food Safety Law. 13

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identified.19 Imported food and additives shall have labels and instructions in Chinese.20 For GMO foodstuffs, conspicuous indications are required to be marked on labels.21

2.4.2

Manipulative Techniques

The national labeling standards list several prohibited manipulative techniques in labeling. For example, the introduction on pre-packaged food labels may not contain literal or graphical description that is false, exaggerating, misleading, or deceptive, and may not mislead consumers by means of font size or color difference.22 If one or more valuable and specific ingredients is particularly emphasized on the labels or instructions, its volume must be indicated.23 Other manipulative practices include using similar names or packages with others, showing pictures of not existing ingredients on package, or presenting certain functions the food does not have. The Yancheng Aokang v. Dongtai AIC24 case illustrated how business operator stressed the value of certain ingredient with quite few amount in ingredient list to mislead consumers. Similarly, in a recent Guiding Case of Cheng Hao v. Shandong E Jiao (Shandong E Jiao case),25 a pre-packed food named E Jiao Cake contained an ingredient of E Jiao, which is a raw material for Chinese medicine and has special medical value, and the name of “E Jiao” appeared for several times in a conspicuous manner on its package, but its net volume amount was not disclosed. So the court ruled it was a defective food labeling. 19

Article 71 of Food Safety Law. Article 40 of Implementation Regulations for the Food Safety Law of the People’s Republic of China (中华人民共和国食品安全法实施条例) by State Council (2016). Further details on the English characters and Chinese characters are provided in Article 3.8.2 of National Food Safety Standard: General Standard for the Labeling of Packaged Foods. 21 Article 69 of Food Safety Law. 22 Article 3.4 of National Food Safety Standard: General Standard for the Labeling of Packaged Foods. 23 Article 4.1.4.1 of National Food Safety Standard: General Standard for the Labeling of Packaged Foods. 24 Yancheng Aokang Food Co., Ltd. v. Dongtai Administration for Industry and Commerce (盐城市 奥康食品有限公司东台分公司诉盐城市东台工商行政管理局工商行政处罚案), Jiangsu Province Yancheng City Intermediate People’s Court, (2013) YanXingZhonZi No. 0032. It was collected in the SPC Gazette 2014 (6), later it was referred as a Guiding Case 2016 No. 60. The label on a blended oil stressed prominently that it contained “olive” by showing olive graph, typeface, and literal statements and adding a special hangtag of olive source to increase its value, but it didn’t indicate the actual amount of olive in the ingredient list. The court ruled that the seller’s practice emphasized the features of olive in the oil to appeal consumers but failed to indicate its actual volume. 25 Cheng Hao v. Jiangning Store of Nanjing Auchan Supermarket Co., Ltd. Shandong Dong’e E Jiao Health Products Co., Ltd. (程浩与南京欧尚超市有限公司江宁店、山东东阿阿胶保健品 有限公司产品责任纠纷案) Jiangsu Province Nanjing City Intermediate People’s Court, (2017) Su01MinZhong No. 933. The case is selected and published in the SPC Gazette 2018 (9). 20

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Sanctions

Consumers could claim for ten times the purchase price under Food Safety Law if the food does not comply with food safety standards, yet this rule is not applicable if the labels and instructions on the food are defective but do not affect food safety or mislead consumers.26 The key issue for courts to award punitive damages is whether the defective labels mislead consumers or affect food safety. In practice, few cases could prove violation of mandatory food labeling standards affects food safety. One of the affirmative awards is Beijing Xibei v. Liu Zhiyang case.27 The information on the food package said it did not contain any addictive, while an addictive was showed in the list of ingredients. The court awarded the consumer punitive damages on the grounds that its labels violated statutory food labeling standard, thus violating food safety standard. By contrast, in Shandong E Jiao case, the court admitted the label was defective, but rejected defective label constituted automatically violation of food safety without further evidence. However, both courts paid few attentions to how consumers internalized the defective or conflicting information and whether such information may mislead consumers. Besides, administrative authorities could order food operators to correct defective labels and instructions. Otherwise, they can impose monetary penalty on business operators. The maximum amount of penalty is ten times the price of the foodstuff if there are no labels on package.

3 Misleading Commercial Practices 3.1

Legislations on Misleading Commercial Practices

China’s legislations on misleading commercial practice are mainly Anti-Unfair Competition Law and Advertising Law. Anti-Unfair Competition Law lists several misleading practices: (1) to make consumers confused about the relation of the product with other relevant products (Article 6); (2) to mislead consumers by false or misleading commercial publicity (Article 8); and (3) to harm competitor’s reputation (Article 11). The SPC later laid out specifically on what constitutes commercial publicity, including (1) making publicity or comparison by incomplete or one-sided information; (2) using inconclusive views of science as conclusive facts

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Article 148 of Food Safety Law. Beijig Xibei Buluo Food & Beverage Management Co., Ltd. v. Liu Zhiyang (北京西贝部落餐饮 管理有限公司等与刘志阳买卖合同案) case. The court awarded punitive damages for consumers because Xibei claimed no food additive was added to the mooncake, but certain type of addictive was listed in its ingredient list. So the court ruled it effected food safety and awarded punitive damage. Beijing City Second Intermediate People’s Court, (2018) Jing02MinZhong No. 5990. 27

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in the publicity of the product; or (3) using ambiguous language in the publicity of the product.28 Similarly, Advertising Law prohibits deceiving or misleading consumers by false or misleading information which may be of any product information such as product’s performance, function, quality, sales status, users’ comments or honors (Article 28). Particularly, Advertising Law prohibits certain expressions in advertisement. For example, the “highest level” or “best” words are not allowed to describe products (Article 9); or expressions for disease treatment are restricted only for medical, pharmaceutical or medical machinery advertisements (Article 17). Also special products such as drugs, home-used medical machinery, or health food are not allowed to appear in comparison advertisements (Article 18).

3.2

Assessment of Misleading Commercial Practices

In determining whether a conduct constitutes misleading commercial publicity, courts consider two aspects: the average consumer and the substantial effect. The Average Consumer Firstly, courts need to set up a normative average consumer. As advertisements are delivered to possible purchasers in market, thus due attention required by the average consumer is set at the minimum level of common understanding. For special products targeting only certain group of consumers, such as children or patients, the sensibility of that group consumers will be considered. Substantial Impact Secondly, courts evaluate whether the average consumer is misled. In the case of Fuqing Damin v. Fuzhou Nanhaian,29 the SPC held a rule that false promotional information itself is sufficient as misleading publicity; differently, true but incomplete or inaccurate information involves additional test for whether it results in consumer’s misunderstanding of the characters or features of the product. Article 28 of Advertising Law specifies additional test of “substantial effect on purchasing behavior” to determine whether it is misleading. So commercial puffing is subject to strict scrutiny if it contains false information. For instance, an advertising statement that “the washing powder could meet all needs of washing everyday” was taken as a misleading advertisement about its usage and property (Cheng 2018). In courts, it is usually the judges who make decisions on whether the information is misleading or not, but survey evidence is seldom used. Survey result is perceived as being less probative than other evidence (Xie and Chen 2013). Sometimes even

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Article 8 of Unfair Competition Interpretation. Fujian Province Fuqing Damin Biological Engineering Co., Ltd. v. Fuzhou South Coast Biological Engineering Co., Ltd. (福建省福清大闽生物工程有限公司与福州南海岸生物工程有限公 司不正当竞争纠纷上诉案) Supreme People’s Court (2000) ZhiZhongZi No. 8. 29

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opinions of first instance courts and appeal courts are quite opposite regarding how they value the same survey evidence.30

3.3 3.3.1

Sanctions Administrative Penalty

The enforcement of false advertisements and misleading commercial practice is taken by Market Supervision and Management Bureau31 in China. Any violation of Article 8 of Anti-Unfair Competition Law will cause administrative penalty ranging from 200 thousand RMB to 2 million RMB. It is the same amount of penalty for violation of regulation on false advertisements under Advertising Law.

3.3.2

Civil Remedy

Advertising Law allows consumers to seek compensations from the advertiser32 for misleading or deceptive advertisements. If those advertisements cause harm to consumer’s life or health, the advertising agency, advertising publisher and advertising spokesperson bear joint and several liabilities with the advertiser. But claims based on Advertising Law are seldom raised due to small amount of compensation awarded. Instead, consumers prefer to claim for punitive damages under Consumer Protection Law. Alternatively, consumers could also seek remedies under cause of action for breaching contract obligations. Noticeably, Anti-Unfair Competition Law allows business operators, not consumers, to lodge civil actions against their competitors for misleading commercial practice.

30 Shanghai Pepsi-cola Beverage Co., Ltd. v. Zhejiang Lanye Brewery Co., Ltd. (上海百事可乐饮 料有限公司诉浙江蓝野酒业有限公司) Zhejiang Province People’s Highest Court, (2007) ZheMinSanZhong No. 74. In this case, Shanghai Pepsi—cola submitted a questionnaire survey on consumer’s diffusion of Pepsi’s use of “blue storm” in its package and market promotion with Lanye’s registered trademark of “blue storm”. Of the 77 valid questionnaire results, 21 believed the blue storm used in Pepsi’s package was similar with Lanye’s register trademark, but 70 believed there was no confusion of the two products. The first instance court ruled in favor of Pepsi for no confusion of products, while the intermediate court held in favor of Lanye for certain percentage of consumers were confused about the source of relevant products. 31 There is no independent administrative authority responsible for competition law enforcement and such duties are allocated to several government authorities. 32 Advertisers refer to natural persons, legal persons or other organizations that design, produce or publish advertisements themselves or entrust others to do so to promote their goods or services. (Article 2 of Advertising Law).

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Punitive Damages

Article 55 of Consumer Protection Law provides a remedy for consumers to claim for three times the purchase price of goods if business operators commit fraud in providing the goods.33 But for larger value goods like houses, three times the house price is not applied.34 While for vehicles, in an earlier Guiding Case referred by the SPC, the punitive damage equals to the amount of the whole vehicle price applying the 1993 Consumer Protection Law.35 In a recent similar case, the court ruled punitive damages not based on the price of the whole vehicle, instead, the amount was three times the cost of auto parts secretly added to the vehicle.36 In addition, Food Safety Law allows punitive damages for ten times the amount of the price paid for the substandard food products. Punitive damage is rarely allowed in China except for consumer protection purpose. It is originally designed to encourage consumers to actively protect their interests through litigation, yet it is often exploited by professional buyers who are actually aware of the good’s label defects before making purchase, and then seek to return the goods and claim for punitive damages. Initially, Chinese courts were supportive to such claims after the amendment of Consumer Protection Law in 2013. In an earlier Guiding Case referred by the SPC,37 the court supported consumer’s claim for ten times the price paid for sausages, and rejected the business operator’s argument that the buyer intentionally purchased expired commodities for compensation thus disqualifying himself as the consumer protected under Consumer Protection Law. Later, the SPC’s judicial interpretation made it clear that the above defense argument on consumer’s purchase purpose of 33 Article 49 of 1993 version of Consumer Protection Law allowed punitive damage only for the amount of the purchase price. It was amended to three times the purchase price in 2013. 34 For houses, Article 9 of Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Hearing of Cases Regarding Disputes over Contracts of House Transaction (最高人民法院关于审理商品房买卖合同纠纷案件适用法律若干问题的 解释) Fa Shi [2003] No. 7, provides consumer could claim punitive damage for no more than the amount of payment for the house if the seller conceals deliberately vital information to consumers. 35 Zhang Li v. Beijing Heli Huatong Auto Service Co., Ltd. (张莉诉北京合力华通汽车服务有限 公司买卖合同纠纷案) Beijing No. 2 Intermediate People’s Court, (2008) ErZhongMinZhongZi No. 00453, Guiding Case 2013 No. 17 by Supreme People’s Court (2013). An automobile dealer promised to sell a new automobile that had never been used or repaired to a consumer, but the consumer found after the purchase that the automobile was once used and repaired. The court ruled the dealer committed fraud as the dealer failed to prove that he notified the consumer of this fact. 36 Liang Donglan v. Taixing Senjiu Auto Sales Service Co., Ltd. (梁冬兰诉泰兴市森久汽车销售 服务有限公司) Jiangsu Providence Taizhou City Intermediate Court, (2017) Su12MinZhong No. 164. In this case, the car dealer added three electronic auto parts to a vehicle without authority for a higher sale price and did not disclose it to the buyer; so the buyer believed the whole vehicle was originally assembled by the manufacturer. The court held the dealer made false publicity and awarded punitive damages for three times the cost of the three privately added parts to the vehicle. 37 Sun Yinshan v. Jiangning Store of Nanjing Auchan Supermarket Co., Ltd. (孙银山诉南京欧尚超 市有限公司江宁店买卖合同纠纷案) Nanjing City Jiangning District People’s Court, (2012) JiangNingKaiMinChuZi No. 646, Guiding Case No. 23 by Supreme People’s Court (2014).

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substandard food for compensation will not be upheld by the court.38 Since then consumer litigations raised by professional buyers for punitive damages increased substantially in numbers and most of their claims have been supported by courts.39 However, recently some professional buyers tend to exploit punitive damage to make profits or extort money, so courts gradually impose heavier burden of proof on them. In a series of retrial cases on false publicity in 2015,40 Chongqing Highest People’s court stated that the buyer was not a qualified consumer as the buyer admitted he bought hair care creams for litigations against the producer and made it as a living. Furthermore, the court ruled the consumer didn’t present sufficient evidence to prove that an average consumer with normal knowledge may be misled by the labels on the hair care creams. The court opinion of requiring evidence on the causation of misleading information and consumer’s purchase decision, together with SPC’s recent statement to restrict professional fake buyer’s exploitation,41 will have a significant influence on the abuse of punitive damage instrument under Consumer Protection Law.

4 Unfair Contract Terms: Bargaining Power 4.1

Legislations on Standard Contract Terms

The legislations on standard terms were firstly proposed in Consumer Protection Law in 1993 and later were incorporated into Contract Law in 1999. Standard terms are defined by Contract Law as clauses that are prepared in advance for general and repeated use purpose by one party, which are not negotiated with the other party when the contract is concluded.42 On whether the standard terms are admitted to the

38 Article 3 of Provisions of the Supreme People’s Court on Certain Issues Concerning the Application of Laws in Handling of Cases Involving Disputes over Foods/Drugs (最高人民法院 关于审理食品药品纠纷案件适用法律若干问题的规定) (2014). 39 According to the Report on Consumer Protection Litigation in 2016 (2016年消费者维权诉讼数 据报告) issued by the online legal service provider of Wusong Counsel, of all more than 7000 consumer litigations in 2016, 80% of the claims raised by professional buyers were granted. 40 Liu Chunsheng v. Shanghai Zhanghua Health Care Cosmetic Co., Ltd. (上海章华保健化妆品有 限公司与刘春生、沃尔玛深国投百货有限公司重庆南坪分店产品销售者责任纠纷案) Chongqing Highest People’s Court, (2015) YuGaoFaMinTiZi No. 00133. In this case, Liu repeatedly purchased a series of hair care creams in bulk produced by Shanghai Zhanghua and raised 415 cases against the hair care cream producer and several sellers. Because he was awarded punitive damage in earlier similar cases on the legal basis of fraud publicity as the first instance court ruled the package of the cream contained false publicity words of “nutrient essence of natural sikin” and “healthy to dye hair”. 41 Supreme People’s Court, Reply of the General Office of the Supreme People’s Court to Proposal No.5990 (最高人民法院办公厅对十二届全国人大五次会议第5990号建议的答复意见) submitted to the Fifth Session of the 12th National People’s Congress (2017). 42 Article 39 of Contract Law.

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contract, both formality and content of the standard terms are considered. In terms of formality, Article 39 of Contract Law sets a conspicuousness requirement, which mandates standard term supplying party the duty to note the other party of liability restriction or exemption terms in a reasonable way. The SPC further illustrated the reasonable way as “special characters, symbols, fonts and other signs sufficient to arouse the other party’s attention to the content of the standard clauses regarding liability exemptions or restrictions in favor of the party providing the standard clauses”.43 As to content control for standard terms, Article 39 adopts the general contract principle of fairness test, and Article 40 of Contract Law prescribes three types of terms as void if the party supplying the standard terms (1) exempts itself from its own liabilities; (2) increases the liabilities of the other party; or (3) deprives the other party’s material rights. And where the standard terms are inconsistent with non-standard terms, the latter shall prevail in terms of content, as the non-standard terms are regarded as the agreements after negotiation. Apart from the above provisions in Contract Law, Consumer Protection Law fleshes out the conspicuousness requirement in 2013 and reinforced business operator’s pre-contractual information obligations. Unlike the duty to note in Contract Law that are limited to liability exemption or restriction terms, its scope is enlarged to all terms that are vital to the interest of consumers, which includes quality, quantity, prices or fees of commodities or services, duration and manner of performance, safety precautions and risk warnings, after-sales service, and civil liability, as provided in Article 26 of Consumer Protection Law. It goes on to state that the duty to note has to be performed in a conspicuous manner either by public notices, declarations, on-site posters, or other means. Court’s verdicts in consumer disputes further furnished that standard terms about durability of pre-paid phone charge,44 and the definition of acceptance in electronic contract formation45 were vital to consumers, thus subject to presenting in a conspicuous manner, otherwise, they were invalid. Bedsides, the SPC also illustrated

43

Article 6 of Interpretation II of the Supreme People’s Court of Several Issues concerning the Application of the Contract Law of the People’s Republic of China by Supreme People’s Court (最 高人民法院关于适用hh中华人民共和国合同法ii若干问题的解释(二)) Fa Shi [2009] No. 5. 44 Liu Chaojie case. In this case, China Mobile did not inform Liu Chaojie of the durability of pre-paid phone charges in the contracting process, and later declared that the pre-paid charges were void due to expiration and then the mobile service was suspended. 45 Beijing Century Joyo Information Technology Co., Ltd. v. Chen Wei (北京世纪卓越信息技术有 限公司与陈玮买卖合同纠纷案) Beijing City No. 3 Intermediate People’s Court (2014) SanZhongMinZhongZi No. 09383. In this case, the court held that the definition of acceptance in contract formation with consumer listed in Conditions of Use on Amazon’s website constituted standard terms, but it was not presented in a conspicuous manner, as it was listed in the bottom of homepage through a hyperlink, and it was exhibited in normal font and dark color on order confirmation webpage.

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that jurisdiction agreements in consumer standard contracts would be held as invalid if they are not highlighted in a reasonable method.46

4.2

Consumer’s Bargaining Power

The assumption of consumer’s weak bargaining power is taken as granted compared with business operator’s power in Chinese market, especially in monopoly sectors such as telecommunication, insurance, or transportation services. Those sectors, by providing few service provider options, give less incentives for consumers to read carefully of the standard terms, and reduce consumer’s sensitivity for service price, all contributing to the imbalance of bargaining power between consumers and business operators (Wang 2018a). It is the same as in the case of e-commerce transactions, the intangibility of service provided through internet and inconvenient distance communication with sellers make consumers fully depend on words description and pictures to get information and loss bargaining power in negotiations (He 2016). The protection of weak consumers also justifies the judicial control of standard terms in consumer contracts in order to achieve substantial justice. As Contract Law is applicable to all types of contracts, and no explicit restriction on the application of standard term rules is provided, courts began to use the standard term rules in business contracts concluded between legal persons. Instead of the automatic assumption of weak party protection in consumer contracts, courts consider the possibility to abuse the freedom of contract in business contracts in determining whether pre-formulated contract constitutes standard contract before applying standard term rules to evaluate its validity (Wang 2014a). So how the contract is negotiated is the focus of the judicial control of business contract terms, as is showed in the recent case Cangzhou Botou v. Industrial Bank, ruled by the SPC,47 which held that equal bargaining powers between two business parties denied part of the contract terms in pre-formulated format as standard terms. Yet the SPC didn’t discuss any positive evidence about the negotiation process but concentrated on the possibility to negotiate for both parties.

46

Article 31 of Interpretations of the Supreme People’s Court on Application of the Civil Procedural Law of the People’s Republic of China by Supreme People’s Court (最高人民法院关于适用hh中 华人民共和国民事诉讼法ii的解释) Fa Shi [2015] No. 5. 47 Cangzhou Botou Gurantee Ltd. v. Industrial Bank Ltd., Cangzhou Branch, (沧州渤投担保股份 有限公司与兴业银行股份有限公司沧州分行合同纠纷案) Supreme People’s Court (2017) ZuiGaoFaMinShen No. 4646.

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Core Contract Terms

The judicial control of the validity of liability exemption or restriction terms in Contract Law does not differentiate core terms from incidental terms and is applied when contracts meet the requirement of pre-formulated format. While in standard consumer contracts for general products, standard terms on liability exemption don’t concern the core performance of contract (Xie 2013). But a vital exception to it is the liability exemption terms in insurance contracts, which in essence belong to the core terms of insurance policy, but the same approach is used by courts without considering the core role of liability terms in insurance contracts. Court judgments also reflect this tendency. Of 112 verdicts regarding standard terms in insurance contracts selected from China Judgments Online from January to July 2017, only 8 verdicts hold standard terms valid (Wang 2014b). There are views to classify standard terms into core terms and incidental terms and to restrict the application of standard term rules to incidental terms so as to avoid potential interference to transactions and market competition, because the fairness of core terms could be realized by market and competition (Ma 2014). But considering the market conditions for consumer-related sectors in China, there are suggestions to enlarge the application of this rule to protect consumer interest, especially in insurance service sector, as incomplete market competition resulted in the same or similar insurance products among different insurers (Ma 2013). The same is true as in telecommunication sector as there is no administrative scrutiny to control standard service terms (Wang 2018a).

4.4

Transparency of Standard Terms

The duty to note consumers of standard terms in a conspicuous and reasonable manner in Contract Law is set to arouse the other party’s attention to the content of the standard terms. In practice, when courts try to determine whether standard term providers note consumers in a reasonable way, they could consider the following factors: (1) whether the document with standard terms looks like a contract instead of a receipt; (2) standard term provider either reminds consumers respectively or sends notice to general public by brochures or announcements; (3) whether the words of standard terms are clear and understandable to ordinary readers; (4) the time of the notice is before or during the formation of contracts; and (5) if the notice could arouse the opposing party’s attention effectively (Wang 1999, Wu and Hao 2001). It is also suggested that unexpected terms or liability exemption terms involve higher duty degree, and vulnerable consumers deserve higher degree of notice (Supreme People’s Court 2013). Except the duty to make standard terms noticeable to consumers, furthermore, the duty to explain the meaning of the standard terms to consumers is also a transparent requirement. The scope of the duty to explain upon request is limited to liability

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exemption terms as in Article 39 of Contract Law, but it is extended to all vital terms in consumer contracts provided in Article 26 of Consumer Protection Law. The most extensive and heaviest duty to explain is prescribed in Article 17 of Insurance Law of the People’s Republic of China (Insurance Law), which obligates an insurer to explicitly explain in writing or verbally the content of liability exemption terms to policyholder. The SPC further interpreted that an insurer has to explain the concept, contents, and legal consequences of liability exemption terms to the extent that ordinary people could understand.48 However, there is no consensus on the standard to prove whether the duty to note and explain is performed duly to make ordinary people understand, as the cognition ability of abstract “ordinary people”, like “average consumer”, is difficult to be personalized in specific cases,49 so judges have to resort to personal experience to make discretion (Ma 2016). In order to avoid discretionary application of the rule of ordinary people standard, the SPC admitted policyholder’s signatures on prepared documents or statements claiming that the insurer has explained the meaning of standard terms and policyholder fully understands, as evidence of insurer’s duly performance of the duty to explain.50 But this evidence is not determinative and is challengeable. In the case of Duan Tianguo v. People’s Insurance Company of China Nanjing Branch collected by the SPC Gazette,51 the evidence of written statement with policyholder’s signature presented by the insurer was denied for it did not contain the exact explanation of the disputed policy exclusion term. Breach of the duty to note and explain will cause the standard terms excluded from contract terms, regardless of they are core terms or incidental terms. So the SPC’s evidence rule is used extensively by courts to deny the validity of certain standard terms, especially in insurance contracts. By contrast, the content control of contract terms based on the general principle of fairness test is seldom used. In fact, the legislative goal for the duty to explain to the extent of substantive comprehension is beyond the transparency requirement in format, but judicial evidence rule focusing on written documents to prove the performance of this duty restrains courts to procedural scrutiny. These conflicting goals and mingled practice make the insurance standard terms the most debated issue in literature and practice.

48 Article 11 of Interpretations of Supreme People’s Court on Several Issues Pertaining to Application of the Insurance Law of the People’s Republic of China (II) (Insurance Law Interpretation II) by Supreme People’s Court, (最高人民法院关于适用hh中华人民共和国保险法ii若干问题的解释 (二)) Fa Shi [2013] No. 13. 49 People’s Insurance Company of China, Jiaocheng Branch v. Ling Lan (人保蕉城支公司与林岚 等机动车交通事故责任案) by Ningde City Intermediate People’s Court, (2014)NingMinZhongZi No. 1252. The case involved a policy which excluded insurer’s liability that was not covered by national essential medial care, and the court adopted an ordinary people’s perspective to assess whether it was understandable with insurer’s explicit explanation, but did not give details of how the ordinary people was selected. 50 Article 13 of Insurance Law Interpretation II. 51 Duan Tianguo v. People’s Insurance Company of China, Nanjing Branch (段天国诉中国人民 财产保险股份有限公司南京市分公司保险合同纠纷案), the SPC Gazette 2011 (3).

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5 Financial Consumers 5.1

General Introduction

Financial consumers came into general public’s attention in China since 2008, when few financial regulations contained consumer protection rules. The first financial consumer protection administrative authority of Financial Consumer Rights and Interests Protection Bureau was set up by China Insurance Regulatory Commission in 2011. It was until 2013 when financial consumer was included into the amended Consumer Protection Law. Article 28 deals with financial service provider’s information obligation and sets out the scope of information disclosed. In 2015, State Council issued Guiding Opinions on Strengthening the Protection of Rights and Interests of Financial Consumers (Guiding Opinions) and set principles to protect financial consumer’s information right, freedom of choice and fair trade right.52 Currently China Banking Regulatory Commission,53 China Insurance Regulatory Commission,54 and People’s Bank of China55 all set sector-specific regulations on financial consumer protection.

5.2

Financial Information Disclosure

Financial information is very sophisticated and not easy to understand for average consumers. So except for general information disclosure obligations prescribed under Consumer Protection Law, specific financial information disclosure are mandated in Guiding Opinions in light of the characteristics of financial products and services.56 Meanwhile, the Guiding Opinions sets higher transparency requirements and directs financial institutions to use simple and easy-to-understand language to timely disclose all-round true and accurate information with adequate risk

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Guiding Opinions on Strengthening the Protection of Rights and Interests of Financial Consumers (国务院办公厅关于加强金融消费者权益保护工作的指导意见) by General Office of the State Council, Guo Ban Fa [2015] No. 81. 53 Promulgation of the Guidelines on Protection of Banking Consumer Rights and Interests (中国银 监会关于印发银行业消费者权益保护工作指引) by China Banking Regulatory Commission, Yin Jian Fa [2013] No. 38. 54 Opinions on Strengthening the Protection of Insurance Consumer Rights and Interests (中国保 监会关于加强保险消费者权益保护工作的意见) by China Insurance Regulatory Commission, Bao Jian Fa [2014] No. 89. 55 Issuing the Implementing Measures for the Protection of Financial Consumers’ rights and interests (中国人民银行金融消费者权益保护实施办法) by People’s Bank of China, Yin Fa [2016] No. 314. 56 Article 14 of Guiding Opinions makes the following information to be disclosed: (1) financial consumers’ rights and obligations; (2) financial institutions’ rights, obligations and legal liability; (3) expenses and liquidated damages; (4) relevant security mechanism; and (5) dispute settlements.

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warnings.57 People’s Bank of China also requires financial institutions to disclose information in a consumer friendly and easy-understanding way. For important information such as interest rates, expenses, returns and risks that are related to the vital interests of financial consumers, it also mandates financial institutions to provide appropriate methods for financial consumers to confirm if they receive complete information, and those documents will be kept for no less than 3 years.58 However, the mandatory disclosure is designed by financial specialists in a way suitable for administrative authority’s supervision and enforcement purpose, but it is not understandable for consumer to conclude a contract (He 2011). A questionnaire survey showed only 18.4% of financial consumers could fully understand their own rights and duties after reading the terms and conditions of the financial service contracts (Sun 2017). Consequently, suggestions are proposed to simplify presentation methods by singling out key information and set an assessment scheme on the effectiveness of information disclosure (Wen 2015). Others advise to select key feature information of similar financial products and to exhibit them in a comparable format provided, and to leave other information with less restrictive regulations (Yan 2015). For the protection of internet financial consumers, the internet platform is suggested to take the major information disclosure liability to collect and examine the risks for financial consumers (Yang 2015).

5.3

Sanctions

It is unclear whether the punitive damage rule could be applied to financial sectors, so financial consumers have to turn to tort law or contract law to seek redress of civil damage. Besides, as information disclosure is a statutory obligation for financial institutions, breach of this obligation also incurs administrative penalties. Previously, courts followed the rule of letting the buyer beware and presumed a financial institution duly performed its information disclosure obligation if a consumer signed on the written statements with all mandatory information and risk alerts, even if actually financial institutions failed to inform consumers of the risks of financial products.59 However, in 2015, the SPC issued an opinion which adopted

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Article 3(4) of Guiding Opinions. Such supporting documents could be (1) product and service agreements signed by financial consumers for confirmation; (2) risk disclosure statements signed by financial consumers for confirmation; and (3) audio and video materials, among others, which record the important content explained to financial consumers. 59 See Hao Guangxing v. Changjiang Securities and Telecommunication Bank, (郝广兴与长江证 券股份有限公司、交通银行股份有限公司金融委托理财合同纠纷) Hubei Province Wuhan City Intermediate People’s Court, (2014) EWuhanZhong MinShangZhongZi No. 00572. A similar case was ruled in favor of a financial institution because the court held consumer’s signature on risk questionnaire was sufficient to prove that the bank had duly performed its duty to inform, even though the consumer claimed the questionnaire was not filled in by himself. See Pang Minsheng 58

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the suitability rule and rested the burden of evidence on financial institutions for adequate information and risk disclosure.60 It required courts to take an objective average consumer standard considering facts of the risk level of financial products and consumer’s personal context. For example, in the case of Shen Weizhen v. Guangfa Bank Hongkou Branch,61 the court ruled the bank’s general introduction about risks for structured fund to the consumer was not adequate and specific to prove the bank had fully performed its information obligation. But currently, court’s verdicts on the scope of risk alerts are still conflicting and there isn’t a unified boundary.

5.4

Education of Financial Consumers

Considering the specialization and high risks of financial products, transparency requirement imposes a patriarchy duty on financial institutions to explain financial terminologies and risks to consumers, the need to educate consumers with financial knowledge in a broad sense also gains legislative attentions. A recent survey showed 35.27% of consumers believed they have a good command of financial literacy, in particular, only one third of consumers could identify the risk levels of various investment products (People’s Bank of China 2017). Therefore, the Guiding Opinions sets the goal and supervision scheme to empower consumers with financial literacy,62 which is a statutory obligation for all financial regulatory authorities. Besides, vulnerable consumers are suggested to give favorable policies for tailored education (Zeng and Jia 2018).

6 Digital Consumers 6.1

Online Information Disclosure

Digital transactions have special features compared with offline transactions. Firstly, consumers cannot easily obtain the business operator’s identification information

v. Hang Seng Bank, (庞民盛与恒生银行 (中国) 有限公司南京中山东路支行委托理财合同纠 纷) Jiangshu Province Nanjing City Intermediate People’s Court, (2013) NingShangZhongZi No. 1228. 60 Several Specific Issues of the Supreme People’s Court on the Current Trial of Commercial Cases (最高人民法院关于当前商事审判工作中的若干具体问题) by Supreme People’s Court issued on 24 December, 2015. 61 Shen Weizhen v. China Guangfa Bank Co., Ltd. Shanghai Hongkou Branch, (沈伟珍与广发银行 股份有限公司上海虹口支行财产损害赔偿纠纷), Shanghai Hongkou District People’s Court, (2016) Hu0109MinChu No. 25028. 62 Article 3(8), 4(3) and 5 (3) of the Guiding Opinions.

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and the product’s information. Besides, multiple parties are involved in digital transactions; and internet communication makes digital consumers to read and accept information differently. Further, the unlimited space on internet reduces the restrictions on advertisement and blurred its boundary with general information. So the rules on information disclosure in digital context is different with offline transactions. The legislations on information disclosure for distance transactions are provided in Consumer Protection Law. Article 28 mandates business operators to disclose their identification information of business address and contact; for the product information the general rule of Article 20 also applies. The newly adopted E-Commerce Law sets comprehensive rules on information disclosure for e-commerce.63 The law defines two types of e-commerce business operators, as e-commerce platform business operators,64 and in-platform business operators.65

6.1.1

Identification and Operation Information

E-Commerce Law Article 15 requires all e-commerce business operators to publish their business operation certificates and all licenses held by them (or their official links), and update any change of those information promptly. Article 16 requires e-commerce business operators to continuously publish their termination operation information for 30 days in advance. The above information must be placed on the homepage of the business operator's website in a conspicuous place. Besides, platform business operators are required to distinguish their own business from in-platform business in a conspicuous manner so as not to mislead consumers.

6.1.2

E-Commerce Platform’s Codes of Conducts

Platform’s service agreements or transaction rules as standard terms contracts provided by platform business operators are required to be published at a conspicuous place of platform’s homepage. Besides, contract law rules on terms of exemption of liability also applies, so such terms are required to be published in a conspicuous manner. Alternatively, the marks of the links of above information

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E-commerce means business activities of selling commodities or providing services through the internet or any other information network. But financial products and services, and news information, audio and video programs, publication, cultural products, and other content services provided via information networks are excluded. 64 E-commerce platform business operators refer to those who provide two or more parties to trading with services, such as online places of business, match-making, and releasing information, for them to independently could trading activities. 65 In-platform business operators refer to those who sell commodities or provide services through e-commerce platform.

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can be listed at homepage. Any amendments of platform’s codes of conducts also need to be placed at a conspicuous place of its homepage. Platform business operators need to publish its disputes resolution results, either warning or suspension, to in-platform business operators regarding any violation of platform rules. Platform business operators also need to publish credit rating rules and dispute settlement rules, and publish the infringement notices and final disposition results of online disputes, but to what extent the notices to be published is not clear.

6.1.3

Information on Products and Advertisements

Due to the unlimited space on internet webpages and the use of links, e-commerce business have no space restrictions to provide information about products. The boundary line between product information and advertisements is blurred. So legislation provides that an internet advertisement should be identifiable, and be conspicuously indicated as an advertisement.66 If products or services are ranked according to bids, the word of advertisement must be marked prominently.67 Paid search services must be distinguished with the natural search results, and notably mark is needed for every paid search information.68 Consumer’s right to be informed in e-commerce transactions also concerns the personalized recommendation of products based on consumer’s preference or consumption habits. Article 18 of E-Commerce Law requires e-commerce business operators to provide such consumers with options which don’t target at their personal characteristics. Legislations set the conspicuousness requirement for important information to be disclosed on webpages, but the traditional “conspicuous” manner on papers may not have same effects as in internet, thus more innovative manners with the help of technical controls are adopted to make the information more striking to consumers. Courts’ rules also supported such a change in cases against same online platform business operator as in Zhejiang Tmall Network Co., Ltd. v. Li Haidong69 and Huang Songyun v. Zhejiang Tmall Network Co., Ltd.70 In both cases, the platform business

66 Article 7 of Interim Measures for the Administration of Internet Advertising (互联网广告管理暂 行办法) by State Administration for Industry and Commerce, Decree of the State Administration for Industry and Commerce No. 87. 67 Article 40 of E-Commerce Law. 68 Article 11 of Administrative Regulations on Internet Information Search Services (互联网信息搜 索服务管理规定) by State Internet Information Office (2016). 69 Zhejiang Tmall Network Co., Ltd. v. Li Haidong (李海东与浙江天猫网络有限公司网络购物合 同纠纷) Hainan Province Haikou City Intermediate People’s Court, (2015) HaiZhongFaLiZhongZi No. 26. 70 Huang Songyun v. Zhejiang Tmall Network Co., Ltd. (黄宋云与浙江天猫网络有限公司买卖合 同纠纷) Hubei Province Wuhan City Intermediate People’s Court, (2017) E01MinXiaZhong No. 1258.

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operator of Tmall set a jurisdiction clause in platform’s standard terms and conditions, and set the place where Tmall is located as litigation place when either party initiated the suit. In the first case, the court ruled that Tmall obtained consumer’s implied consent to platform’s terms and conditions when the consumer chose to click “agree and register”, but the detailed jurisdiction clause is only accessible when consumers make another click on the Taobao Service Agreement. The court held that the Agreement included too much information where the jurisdiction clause is immersed. As jurisdiction clause is required to be provided in a clear and obvious manner, Tmall’s practice didn’t reach such a standard. But Tmall later altered its displacing method of jurisdiction clause by adding a new small window showing directly content of jurisdiction clause after clicking “agree and register”, and it involved another new click on “agree” to remind consumers of its content. Such a new practice was held to reach the level of “clear and obvious” in the second case.

6.1.4

Sanctions

E-Commerce Law stipulates many mandatory information disclosures for e-commerce business operators, and corresponding administrative penalties. Article 76 provides sanctions for violation of identification information duties and Article 81 provides sanctions for violation of information duties during operations. Civil liability is provided by Article 74 from the perspective of breach of contract or tort law. Besides, e-commerce platform business operators are given the duty to check the authentication of the identification information provided by in-platform business operators,71 however, it is not clear to what extent the e-commerce platform business operator is responsible for the authentic check.

6.2

Consent for Personal Information Collecting

Since Cyber Security Law of the People’s Republic of China (Cyber Security Law) came into effect in 2017, the consent required for collecting personal information is different from previous requirements.72 Cyber Security Law provides clearly that consent is required if personal information is collected and processed. The national standard of Information security technology—Personal information security specification73 (Information Specification) gives detailed guidelines on how to inform data subjects and get consent from them.

71

Article 27 of E-Commerce Law. Information security technology- Guideline for personal information protection within information system for public and commercial services (信息安全技术公共及商用服务信息系统个人信 息保护指南) (GB/Z28828-2012). 73 It is a recommended national standard (信息安全技术个人信息安全规范). GB/T 35273-2017. 72

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The duty to inform data subjects about the scope and purpose of the collection of the information is advised to consider relevant context, to help users to evaluate its influence before showing their consent. The duty to inform could be realized either by stating it in privacy policy terms, or by enforced notice, just-in-time notice, voice or vibration notice, or separate notice when the collection is beyond user’s reasonable expectation (Hong 2017). If the personal information is used for commercial and personalized recommendation, the data subject could choose to opt out. But if the personal information is used in auto decision-making which has significant influence on personal interests, the consumer has the right to submit claims. The consent to be obtained from users depends on the type of information collected. In China personal information is classified into Personal Information (PI) and Personal Sensitive Information (PSI).74 There are two types of consent under Information Specification: explicit consent and authorized consent. Explicit consent is required if Personal Sensitive Information is collected. While general Personal Information only needs authorized consent. Additional consent is needed if the use of personal information is beyond the original scope of consent, or the personal information is transferred or shared with a third party. User’s explicit consent could be realized by statements, active clicking/selecting of “agree”, “next”, “register”, “send”, or “call” or other affirmative actions. In order to avoid getting user’s consent in the package agreement obtained in the beginning of the service, network operators have to distinguish its service of core business functions from affiliate functions, and explicit consent is required for each affiliate function by user’s clicking, but the refusal of such consent could not affect the service of core business functions. The explicit consent in 2017 Information Specification contains both “explicit consent” and “unambiguous consent” under European Union’s General Data Protection Regulation (GDPR); while authorized consent is different from implied consent, as it is designed to encourage firms to use explicit consent first, but if the explicit consent is not possible in the context, then implied consent is acceptable (Hong 2018). Court’s opinions on the evidence required to prove consent are outlined in the case of Beijing Baidu Netcom v. Zhu Ye.75 In this case, the court held that searched key words were general information and only required implied consent. In Baidu’s homepage there was a mark of the link to its privacy policy which listed the purpose

74 PI includes a wide variety of information recorded electronically or otherwise that can be used to independently identify or be combined with other information to identify a natural personal’s information. PSI is defined as personal information the leakage, disclosure, or abuse of which could easily endanger personal and property safety, and easily lead to the harm of one’s personal reputation and mental and physical health, or lead to discriminatory treatment. Article 3.2 of Information Specification. 75 Beijing Baidu Netcom v. Zhu Ye (北京百度网讯科技有限公司与朱烨隐私权纠纷) Nanjing City Intermediate People’s Court, (2014) NingMinZhongZi No. 5028. The case was about the searched key words were collected by cookies and later were accessed and used for sending related advertisements by Baidu. The cause of action was privacy claim and was supported by the instance court. But it was revealed by the intermediate court.

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and usage of the collection of cookie information with opt-out options. The fact that the internet user chose to use Baidu’s service was perceived as his implied consent. It shall be noted that “implied consent” requirement for general information in this case was cited from the 2012 version of Information security technology and it is different from the 2017 Information Specification. Sanctions for violations of personal information collecting regulations are provided in Consumer Protection Law and Cyber Security Law. Article 29 and Article 50 of Consumer Protection Law set tort remedies for consumer’s personal information right, while Article 56 of Consumer Protection Law impose administrative penalty ranging from one to ten times the amount of illegal income, or a fixed fine for 500,000 RMB at maximum. In serious cases, the business licenses of business operators could be revoked. Cyber Security Law sets similar administrative penalty but with the maximum amount to one Million RMB. Court cases and administrative enforcement on personal information collecting and processing are paid more attention when the Information Specification came into effect in 2018. A class action was lodged by Jiangsu Consumer Council against two App providers for collecting all information by implied consent, but the case was finally withdrew after the apps made amendments according to regulations (Zhu 2018).

7 New Trends in Information Disclosure Information disclosure in China as a solution to consumer’s information asymmetry shows a tendency in transparency requirement from conspicuousness in formality to comprehension in content as the information becomes complicated and sectorspecific. In addition, the image of average consumer is absent in legislations except in several judicial interpretations issued by the SPC, but they are still too abstract and vague for courts to apply. It also shows the dilemma of the policy on information disclosure that enlarging the scope for information disclosure could not achieve automatically the goal of the information receiver’s comprehension. Research on behavior economics contributes to reflections on the current information regulations. The costs for information acquirement and comparison and the cognitive limitations reveal the limitations of conspicuousness in format in consumer’s decision making process, but vivid and standardized expression methods in contents are proposed to make information easily accessible to consumers (Ma 2014). The hypothesis of consumer’s information processing capacity as a rational man is criticized in the face of overload information, so narrowing down the scope of information disclosure to vital interests to consumers is suggested (Wang 2018b). In addition, the status bias and anchoring effects are illustrative to the importance of default standard terms, so legislators could amend the default standard terms to alter the negotiation cost between business operators and consumers, and improve the performance of the duty to inform if business operators change the default terms (Li 2017). Nevertheless, these suggestions have not yet been taken into legislations in China.

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References Cheng Y (2018) Advertising law: theory and practice. Law Press, Beijing Financial Consumer Protection Bureau, People’s Bank of China (2017) The survey report of consumer’s financial literacy. http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/ 3344008/index.html. Accessed 28 Nov 2018 He Y (2011) Set up the rule of financial institutions’ duty to inform from the perspective of consumers. Law Sci 7:96–104 He J (2016) Consumer protection in cross-border electronic contract—online consumer protection in TPP. China Bus Mark 30(5):122–127 Hong Y (2017) The balance and innovation for network operator’s privacy terms between multiparties. China Inf Secur 9:46–49 Hong Y (2018) The path for Chinese national standardization of personal information security. http://www.yidianzixun.com/article/0IIx0mPf. Accessed 28 Nov 2018 Kristie T (2014) The (re)birth of the consumer activist in China: the “Wang Hai phenomenon” in the light of Guiding Case No. 23, Sanford Law School China guiding Case Project. http://cgc.law. stanford.edu/commentaries/12-kristie-thomas. Accessed 28 Nov 2018 Li J (2017) The application of behaviour law and economics in the legislation for financial consumer protection. China University of Political Science and Law Press, Beijing Li S et al (2013) Interpretations of consumer protection law. Law Press, Beijing Ma N (2013) The path choice and frame construction for regulating unfair terms in insurance contract- the experience and revelation of the Australian legislation reform. Insur Stud 9:65–74 Ma H (2014) Research on information regulation for standard form contracts: from the perspective of behavioral law and economics. The Jurist 4:112–126 Ma H (2016) The research on standardization of the regulation of standard terms. ECUPL J 2:74–93 Ma Y (2017) Monograph on protection of consumers’ rights and interests. Law Press, Beijing Pan J (2018) Legal structure of the trader’s duty of disclosure in consumer contract. J Cent South Univ (Soc Sci) 24(1):48–54 Qian Y (2011) Empirical studies on the change of consumer rights. Law Press, Beijing Shang L (2016) Applying the flexible system approach to the duty to inform in contracting process. Chin J Law 3:103–121 Sun T (2017) Financial conduct supervision and consumer protection. China Financial Publishing House, Beijing Supreme People’s Court, Guiding Cases Office (2017) The understanding and reference of Liu Chaojie v. China Mobile Telecommunication Group Xuzhou Branch. The People’s Judicature: Cases 23:33–38 Supreme People’s Court, the Second Civil Judgment Division (2013) Interpretation II of the Supreme People’s Court of several issues concerning the application of the Insurance Law of the People’s Republic of China. People’s Court Press, Beijing Wan F (2017) The application of business operator’s duty to inform under Consumer Protection Law. Political Science and Law 5:151–160 Wang L (1999) The comments on standard terms rules in contract law. Tribune Polit Sci Law 6:3–15 Wang J (2014a) Justification and application range of judicial control of contract terms: models of Europe and German and their model significance. J Comp Law 1:171–181 Wang J (2014b) Research on judicial application of Article 19 of Insurance Law in China-based on the empirical analysis of insurance standard terms in judgment. Polit Sci Law 1:88–99 Wang J (2018a) Monopoly operators’ duty to inform during contracting process: based on bounded rationality hypothesis. Law Econ 3:122–140 Wang X (2018b) Rethinking information disclosure in consumer contract -from the view of behavior economics. J Tianshui Normal Univ 38(2):59–65 Wen S (2015) Financial consumer protection mechanism in the United States: reforms and experience. Am Stud Q 1:105–121

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Wu J, Hao J (2001) Suggestions to improve the legislations on unfair terms in standard contract. Law Appl 182(5):23–27 Xie G (2013) The system of norms to regulate the content of standard terms. Chin J Law 2:102–118 Xie X, Chen X (2013) The scientific measurement of trademark confusion - the use of survey evidence in judgment. J Sun Yat-Sen Univ (Soc Sci Ed) 53:159–171 Yan S (2015) Research on the principle of standardization of information disclosure of commercial bank financing products. Law Sci Mag 3:79–85 Yang D (2015) Internet financial risks regulatory path. China Leg Sci 3:80–97 Yang H (2017) On the construction and application of the average consumer standard in anti-unfair competition law. Intellect Prop 1:46–62 Yao H (2014) Consumer’s diligence in judging trademark infringement. Intellect Prop 4:47–53 Zeng G, Jia X (2018) Current situation and prospects of financial consumer education. National Institution for Finance and Development. http://www.nifd.cn/researchcomment/details/950. Accessed 28 Nov 2018 Zhou Y et al (2018) On the interpretation and framework of consumer concept in civil law. Public Adm Law 10:118–129 Zhu X (2018) Jiangsu consumer council withdrew privacy litigation against Baidu after Baidu’s reforms. https://www.thepaper.cn/newsDetail_forward_2028107. Accessed 28 Nov 2018

Part V

National Reports: North and South America

Information Obligations and Disinformation of Consumers: Quebec Law Report Marie-Eve Arbour

Abstract Both the law of obligations and consumer law embed various obligations to properly inform consumers. In fact, this obligation is so important that it lies, in different shapes, on a plural, somewhat redundant basis in general and specific contract law provisions. Much like a mountain scenery, Quebec’s piecemeal legislation reveals protection peaks that are clearly visible in the field of deceptive or misleading practices, or whenever children are targeted as potential consumers. Quite recently, the Canadian Supreme Court has set further boundaries to this obligation, as it adopted the “vulnerable consumer paradigm”, setting aside the rationality one. This interesting stance has yet to stimulate the information/disinformation/misinformation debate.

1 Introduction Canada is a constitutional monarchy contained in a federal structure imagined in 1867.1 As known, two overlapping historical waves—French first, then English— explain the bijural situation whereby civil law prevails in Quebec private law, whilst common law underlies all other provinces (and Quebec’s public law, often expressed in French language).2 As a result, Quebec is the only province in Canada with a

1

Constitution Act 1867, 30 & 31 Victoria, c. 3 (U.K.), LC 1867. The Quebec Act adopted in 1774 marks the reintroduction of the civil law tradition into the colonial panorama as well as the abolition of the test oath. The goal was to prevent French Canadians from rebelling against the English conqueror by letting private law be governed by French law. The French Civil Code (code of Napoleon) was adopted a few years later in 1804. Quebec then adopted its own Civil Code in 1866, known as the Civil Code of Lower Canada (C.c.L.C.). In 1994, after a major reform, Quebec has a “New Code”, the Civil Code of Quebec. It becomes a centerpiece of Quebec law. 2

M.-E. Arbour (*) Université Laval, Law Faculty, Quebec, QC, Canada e-mail: [email protected] © Springer Nature Switzerland AG 2019 G. Straetmans (ed.), Information Obligations and Disinformation of Consumers, Ius Comparatum – Global Studies in Comparative Law 33, https://doi.org/10.1007/978-3-030-18054-6_15

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mixed tradition. Much like a grocery list, Sections 91 and 92 of 1867 Constitution Act provide a division of powers based on subject matters between the provincial and federal legislatures. Notably, private law is provincial in essence (s. 92 (13)) while criminal law is of a federal nature (s. 92 (27)). To this day, these two legal bases remain most relevant to consumer law development as they legitimate legislative endeavours. As an extension of the law of obligations, however, consumer law primarily belongs to the provincial legislature, although some areas, such as competition,3 are the object of specific federal legislation. Besides, the federal and provincial’s legislators share some contemporary powers, as they were not envisioned at a time when the welfare State had yet to come. Health or environmental protection is of a dual nature and impact, albeit indirectly, on consumer law (e.g. the Food and Drugs Act,4 or recently enacted Canadian Consumer Product Safety Act5). Within this context, Quebec’s consumer law is at the heart of two dialectics: provincial and federal jurisdictions within Canada, and, specifically in Quebec, private law governed by the Civil Code of Québec6 (“CCQ”) and statutory legislation, such as Québec’s Consumer Protection Act7 (“CPA”) and its attached regulations.

2 General Characteristics of the Consumer Information Model 2.1

Main Features of Quebec’s Consumer Law

Continental nineteenth century’s legal tradition remained faithful to a liberal conception of contractual relationships. Quebec private law copied French contract law, thus relying on the rationality paradigm. As in most industrial countries, Quebec’s consumer law was born in the wake of WWII,8 soon after society realized that free market and criminal law insufficiently protected buyers from commercial abuses.9 The Supreme Court lately reminded this context: “[i]n Quebec, the contractual fairness model based on freedom of contract, consensualism and the binding force of contracts seemed increasingly unsuited to ensuring real equality between

3

Competition Act, R.S.C., 1985, c. C-34. Food and Drugs Act, R.S.C., 1985, c. F-27 (“FDA”). 5 S.C. 2010, c. 21. 6 Civil Code of Québec, c. CCQ-1991. (“CCQ”). 7 Consumer Protection Act, R.S.Q., c. P-40.1 (“CPA”). 8 Until the 1950s, indeed, “[c]onsumer protection remained indirect in nature: for example, federal legislation was focused more on regulating the Canadian economy at a structural level than on directly protecting consumers’ interests” (Richard v. Time, at par. 35). 9 On this context, see L’Heureux and Lacoursière (2011), pp. 1–4. 4

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merchants and consumers10”. It added: “[w]hen the Quebec legislature first became involved in this area, its goal was to develop a new model of contractual fairness based on a scheme of public order that would be an exception to the traditional rules of the general law11”. In the wake of the American experience, the need was felt, at the turn of the 1970s, to protect consumers deemed vulnerable within the liberal economy. In 1971 and following the rise in trade, the emergence of industrial giants and correlative depersonalization of relations between merchants and consumers led to the idea that then in force 1866 Civil Code of Lower Canada was ill-equipped to protect consumers. This new political drive was coupled in parallel by judicial urges towards enhanced informations requirements (good faith, abuse of right, etc.12) that soon after crystallised in the 1994 Civil Code, the CCQ. Quebec’s first Consumer protection act (1971)13 entered into force to redress specific asymmetries in doorstep contracts and consumer credit contracts. A second version followed in 1978 and is still in force today. Predictably, the CPA was amended a few times since its current version, but no overall reform has been carried on despite constant invitations from scholars14 and the civil society. The CPA, nonetheless, remained the theoretical legal instrument destined to protect presumed weaker parties; it sought to enhance consumer rights and balance anew those economic forces represented by the consumer on the one side, and, in the other, the merchant.15 Few coordinating efforts were made to increase legal coherence among the Civil code and the CPA who still evolves in quite mutual ignorance. The result is a confusing legal panorama. A coordination compromise crystallized in occasion of the Civil Code Reform: the CPA shall be interpretated in symbiosis with the CCQ. Towards this end, the preliminary provision states: “[t]he Civil Code comprises a body of rules which, in all matters within the letter, spirit or object of its provisions, lays down the jus commune, expressly or by implication. In these matters, the Code is the foundation of all other laws, although other laws may complement the Code or make exceptions to it.” In fact, the CCQ acknowledges consumer law by providing an actual definition of the consumer contract: A consumer contract is a contract whose field of application is delimited by legislation respecting consumer protection whereby one of the parties, being a natural person, the consumer, acquires, leases, borrows or obtains in any other manner, for personal, family or

10

Richard v. Time, at par. 39 (emphasis added). Ibid. 12 See e.g. Houde v. Assurance-vie Banque Nationale, Cie d'assurance-vie, 2004 CanLII 40761 (QC CQ); Banque de Montréal v. Bail Ltée, [1992] 2 SCC 554; General Motors Products of Canada v. Kravitz, [1979] 1 SCC 790. 13 Consumer Protection Act, S.Q. 1971, c. 74. 14 See Bourgoignie, Thierry, Lafond, Pierre-Claude and Rouillard, Lindy. 2010. Jalons pour une codification du droit de la consommation au Québec. http://www.gredicc.uqam.ca/IMG/pdf/rap port_final_100210.pdf. 15 Thibaudeau (2014), p. 574. 11

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domestic purposes, property or services from the other party, who offers such property or services as part of an enterprise which he carries on.16

Except for unfair contract terms and fraud, the CCQ nonetheless leaves most consumer-oriented policies into the CPA, which applies to “[. . .] to every contract for goods or services entered into between a consumer and a merchant in the course of his business” (art. 2). Such scattering in sources of law is further increased by the presence of its ever-growing derived Regulation Respecting the Application of the Consumer Protection Act.17 By excluding consumer law from the CCQ’s domain, Quebec’s lawmaker, according to Baudouin, Jobin and Vézina, gives the impression “qu’il s’agit là d’un droit marginal et de peu d’importance18”.

2.2

Who’s the Consumer? The New Canadian Way

Art. 1e) CPA awkwardly states that the consumer is “a natural person, except a merchant who obtains goods or services for the purposes of his business19”. Whenever they qualify as such, the CPA covers, for example, professionals or artists. By contrast, they are not protected when they sell their services or artwork in an organised fashion, as they actually turn into merchants (whom are not defined anywhere). A fortiori, nor are protected small businesses, which fall into the business-to-business paradigm. Apart from this very broad definition, no other general parameters are set by legislation to better define “consumers” or “merchants”.20 Quite recently, however, a surprising turn was taken in Ottawa. Landmark case Richard v. Time Inc21 was handed down in 2012 by the Supreme Court in the context of deceptive practices. A Francophone consumer believed he had won a prize of over than 800 000$ after having received from Time Magazine a sweepstake participation offer written in ambiguous terms, in English only. Interpreting the relevant provisions, the Court departed from the mainstream view that the consumer is rational and reactive. Instead, it held that “[. . .] the expression “average consumer” does not refer to a reasonably prudent and diligent person, let alone a well-informed person. [under the CPA], the courts view the average consumer as someone who is not particularly experienced at detecting the

16

CCQ., s. 1384 (emphasis added). CQLR c P-40.1, r 3, http://canlii.ca/t/52z84. 18 Baudouin et al. (2013), p. 21. 19 CPA, s. 1 e). 20 It is however argued that art. 1525, al.3 CCQ which provides that “[t]he carrying on by one or more persons of an organized economic activity, whether or not it is commercial in nature, consisting of producing, administering or alienating property, or providing a service, constitutes the operation of an enterprise” serves as a becnmark in defining merchants. 21 Richard v. Time Inc, [2012] 2 1 SCR 265, 2012 SCC 8 (CanLII), http://canlii.ca/t/fq9tg, par. 69 et 72 [“Richard v Time”]. 17

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falsehoods or subtleties found in commercial representations22”. It further concluded that credulous and inexperienced consumer be the prevailing model: The words “credulous and inexperienced” [. . .] describe the average consumer for the purposes of the C.P.A. This description of the average consumer is consistent with the legislature’s intention to protect vulnerable persons from the dangers of certain advertising techniques. The word “credulous” reflects the fact that the average consumer is prepared to trust merchants on the basis of the general impression conveyed to him or her by their advertisements. However, it does not suggest that the average consumer is incapable of understanding the literal meaning of the words used in an advertisement if the general layout of the advertisement does not render those words unintelligible.23

In the Court’s eye, the model already burgeoned both within case law24 and the mind of the CPA’s intellectual father, late Claude Masse.25 Nonetheless, the buck of case law (especially small claims) had often referred to other standards that came closer, since the 1970s, to the “rational consumer” paradigm more inline with homo economicus models.26 Will this criterion shed new light on all CPA protections (including contractual warranties), or will it be confined to deceptive practice’s? The question remains unanswered, although the new model may well be destined to irradiate the entire Act. Predictably, the standard did not please all consumer law experts, who fear among other things that “[. . .] to associate an average consumer with a gullible person is a paternalistic step which disempowers the consumer, which goes against the spirit of the LPC and the principles underlying consumer law27”. Unsurprisingly, in the end, the case strengthens precontractual and contractual information duties towards consumers.

22

Id., at par. 71 (emphasis added, translation is mine). Id., at par. 72, my translation. 24 Turgeon v. Germain Pelletier ltée, 2001 CanLII 10669 (QC CA), [2001] R.J.Q. 291. The Court also cites Riendeau v. Brault & Martineau inc., 2007 QCCS 4603 (CanLII), [2007] R.J.Q. 2620, at para. 149, aff’d by 2010 QCCA 366 (CanLII), [2010] R.J.Q. 507; Adams v. Amex Bank of Canada, 2009 QCCS 2695 (CanLII), [2009] R.J.Q. 1746, at para. 126; Marcotte v. Banque de Montréal, 2009 QCCS 2764 (CanLII), at para. 357; Marcotte v. Fédération des caisses Desjardins du Québec, 2009 QCCS 2743 (CanLII), at para. 257: see Richard v. Time, at par. 70. 25 Masse (1999). 26 See Lacoursière, Marc. 2011. Richard c. Time inc.: À la recherche de la définition du “consommation moyen”. R. du B Can. 90: 493, at p. 593. 27 Id., at p. 502. 23

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3 Pre-contractual and Contractual Information Requirements By virtue of the law of sale, sellers are bound to an ever-increasing obligation to inform derived from many provisions. In this sense, Jobin & Cumyn suggest that “[i] ncidentally, the law imposes on the seller several information obligations, which are often very important in practice28”. Albeit a core obligation within the general law of obligations, this obligation lies, technically, in different shapes. Its legal bases are both disseminated and redundant. General clauses and paradigms such as good faith (art. 629 and 137530 CCQ), abuse of rights (art. 731 CCQ) and informed consent doctrine are invoked frequently to sustain its very existence. Special contrats surrounding the law of sale, too, triggers information duties in the context of quality and property warranties. As information, in the end, forges informed consent, it needs to be accurate throughout all phases: formation, execution and, in some fields, ex-post. From a semantic standpoint, French language is particularly well equipped to address the information dialectic inherent to contract law. Obligation de conseil, d’information, de renseignement, etc., are not easily translatable into English. In fact, Quebec’s civil law tries to reach an equilibrium between what buyers shall enquire about in light of their needs, expectations, etc. and what the seller must reveal in given factual and legislative contexts. In a similar fashion, consumer law embraces the trend towards redressing information asymmetries. As P.-C. Lafond notes, the CPA provides for three core mechanisms destined to do so in contrahendo: (1) mandatory information, (2) prohibited information and (3) increased formalism.32 For the present Report, the first two regulation strategies appear particularly relevant. Mandatory information includes characteristics of products and/or services (a) and, sometimes, information surrounding legal protections and rights (c).33 The CPA provides, indeed, for a bundle of guarantees that may overlap whenever disinformation or misinformation occurs (b).

28

Jobin and Cumyn (2007). “Every person is bound to exercise his civil rights in accordance with the requirements of good faith”. 30 “The parties shall conduct themselves in good faith both at the time the obligation arises and at the time it is performed or extinguished”. 31 “No right may be exercised with the intent of injuring another or in an excessive and unreasonable manner, and therefore contrary to the requirements of good faith”. 32 Lafond (2015), p. 117. 33 Id., p. 118. 29

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491

Information Surrounding Goods and Services

Information accuracy is central to some fields of classic law of obligations (e.g. medical contracts).34 Over decades, the extent to which the seller may hide, exaggerate or enhance product or services’ defects and qualities has been at the heart of case law. Notably, good faith (“[t]he parties shall conduct themselves in good faith both at the time the obligation arises and at the time it is performed or extinguished35”) and fraud (art. 1401 QCC36) are paramount provisions in the CCQ, capable of setting parameters to what must be revealed and/or enquired about. The latter reads: An error on the part of one party induced by fraud committed by the other party or with his knowledge vitiates consent whenever, but for that error, the party would not have contracted, or would have contracted on different terms. Fraud may result from silence or concealment.

Information obligations are found in more traditional seller’s obligations such as deliverance, conseil and safety (art. 1434 CCQ37). Surely enough, the lucidness and validity of a given consent is not interpretated in a linear way. In assessing the information exchange, case law has evolved in different directions. The seller finds himself in a situation where he has the right to exaggerate certain information, but he must not lie to the point that the consumer, had he known the truth, would not have contracted or would have done so at a different price. These principles are central to the validity of consent and remain relevant to consumer law, who abides, in this field, to classical principles derived from the law of obligations. In Quebec’s civil law, the span and extent of information duties firstly developed along the line of judicial input that came from the Supreme Court. Cases Banque Nationale c. Houle (abuse of right/good faith),38 Banque Nationale c. Soucisse (misinformation fault/good faith)39 and Banque de Montréal 34

Baudouin et al. (2013), p. 398. Art. 1375, QCC. 36 Emphasis added. 37 Jobin and Cumyn (2007), par. 110. 38 Houle v. Canadian National Bank, [1990] 3 SCR 122, 1990 CanLII 58 (SCC), http://canlii.ca/t/ 1fsqf. The Court states: “To summarize, then, it appears indisputable that the doctrine of abuse of contractual rights is now part of Quebec law. The standard with which to measure such abuse has expanded from the stringent test of malice or bad faith, and now includes reasonableness, as expressed by reference to the conduct of a prudent and diligent individual. This test could encompass a number of situations, including the use of a contract for purposes other than the ones contemplated by the parties. Consequently, the proper approach can be formulated as follows: were such rights exercised in the spirit of fair play?” (j. L’Heureux-Dubé, emphasis added). 39 National Bank v. Soucisse et al., [1981] 2 SCR 339, 1981 CanLII 31 (SCC), http://canlii.ca/t/ 1mjls “[. . .] once the Bank took the initiative in advising the estate of the surety’s obligations toward it, it assumed a duty to do this completely, because partial information is misleading information. The Bank especially could not simply disclose what it was to its advantage to disclose and withold [sic] what was in its interest to conceal” (j. Beetz, emphasis added). 35

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c. Bail (extracontractual fault based in misinformation)40 forged the “new morality41” of the law of obligations just when the CCQ was still a work in progress. In Bail, the Supreme court explained: [t]he advent of the obligation to inform is related to a certain shift that has been taking place in the civil law: While previously, it was acceptable to leave it to the individual to obtain information before acting, the civil law is now more attentive to inequalities in terms of information, and imposes a positive obligation to provide information in cases where one party is in a vulnerable position as regards information, from which damages may result. The obligation to inform and the duty not to give false information may be seen as two sides of the same coin.

Soon after, ancillary general clauses such as good faith and abuse or rights brought forward by the Supreme Court naturally found their way into the 1994 CCQ, just when lesion among adults, by contrast, was rejected as a legal category. Contrary to the QCC,42 the CPA provides for this central protection against defective consent. Indeed, two forms coexist: objective and subjective. We shall insist on subjective lesion for the purpose of this Report, as objective lesion has little to do with information fluxes. In this sense, article 8 and 9 CPA, provide: 8. The consumer may demand the nullity of a contract or a reduction in his obligations thereunder where the disproportion between the respective obligations of the parties is so great as to amount to exploitation of the consumer or where the obligation of the consumer is excessive, harsh or unconscionable. 9. Where the court must determine whether a consumer consented to a contract, it shall consider the condition of the parties, the circumstances in which the contract was entered into and the benefits arising from the contract for the consumer.

Technically speaking, subjective lesion lies in the sum of article 8, in fine and 9 CPA. Contrary to the objective lesion—which rises from a disproportion between the good and its actual value—subjective lesion has to do with the financial capacity of the consumer to perform his obligations. The protection tool can be better illustrated through an example in which a sale contract was deemed nulled after the consumer failed to honor the monthly instalments of a leisure yacht. The Court held: “[m]ême s'il a obtenu en échange de ce qu'il donne une prestation de même équivalence, le consommateur peut instituer son recours en utilisant uniquement l'argument qu'à son égard la convention crée des obligations qui sont soit excessives, soit abusives, soit exorbitantes”.43 Subjective lesion, hence, stems out of a disproportion between the actual value of good, and the financial burden sustained by the consumer. Rarely applied, this protection seems to imply that luxurious goods merchants must assess the financial situation of their clients to make sure that they

40

Bank of Montreal v. Bail Ltée, [1992] 2 SCR 554, 1992 CanLII 71 (SCC), http://canlii.ca/t/1fs9d. Baudouin et al. (2013), p. 17. 42 “Except in the cases expressly provided by law [e.g. consumer law], lesion vitiates consent only with respect to minors and protected persons of full age” (art. 1405, QCC). 43 Gareau auto inc. c. Banque canadienne impériale de commerce, 1989 CanLII 594 (QC CA), http://canlii.ca/t/1plcr. 41

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draw some benefit from the contract. In theory, the obligation is quite onerous from merchants’ point of view, as it seems directly proportional to the usefulness of the good.

3.2

Moving Towards the Contractual Dynamics

The information provided to consumers must be coherent with both the intended purpose of the good or service and their inherent characteristics. Otherwise, misinforming consumers may result, beyond the CCQ or deceptive practices, in the violation of three fundamental warranties founded in the CPA: (1) conformity; (2) fitness for purpose; (3) “defective instructions” and (4) latent defects. Quite like the latent defect warranty (art. 1726 CCQ), art. 53 CPA offers consumers a recourse against the merchant for latent defects. The strict product liability provision is anchored in the lack of instructions. Embedded at art. 53, al. 2 CPA: 53. A consumer who has entered into a contract with a merchant is entitled to exercise directly against the merchant or the manufacturer a recourse based on a latent defect in the goods forming the object of the contract, unless the consumer could have discovered the defect by an ordinary examination. The same rule applies where there is a lack of instructions necessary for the protection of the user against a risk or danger of which he would otherwise be unaware. The merchant or the manufacturer shall not plead that he was unaware of the defect or lack of instructions. The rights of action against the manufacturer may be exercised by any consumer who is a subsequent purchaser of the goods.

A knowledge presumption of defectiveness rests on merchant’s shoulder. In all contracts “goods forming the object of a contract must be fit for the purposes for which goods of that kind are ordinarily used” (art. 38 CPA). In fact, the definitions of “fitness” and “purposes” are closely linked to the precontractual representations made by the seller, and may overlap with deceptive practices whenever a contract is, indeed, passed. For example, the conformity warranty illustrates this mecanism, as article 40 CPA provides that “[t]he goods or services provided must conform to the description made of them in the contract”, thus opening the door to claims based on concealment, silence or otherwise misinformation. Case law surrounding misleading vacation packages abounds, as judges keep on punishing a lack of conformity between sellers representations and services reality.44 Besides, any statement or information provided by the merchant or the manufacturer has a binding effect among parties, as it shall be used to the advantage of the consumer later on: “The goods or services provided must conform to the statements or

44 See e.g. Lambert c. Minerve Canada, compagnie de transport aérien inc., 1998 CanLII 12973 (QC CA), http://canlii.ca/t/1nb0c.

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advertisements regarding them made by the merchant or the statements or advertisements are binding on that merchant or (CPA, art. 41). Finally, “A written or verbal statement by the merchant or of a manufacturer respecting goods or services merchant or manufacturer” (art. 42 CPA).

3.3

manufacturer. The that manufacturer” representative of a is binding on that

Compulsory Legal Information

Whereby the consumer is particularly vulnerable (such as credit45 or digital contracts, see infra), some specific obligations to inform are found in certain special contracts governed by the CPA or the CCQ. The same principle applies to the obligation to inform consumers about their rights, such as the existence of legal guarantees contained in the CPA46! To some authors, these statutory obligations somehow reinforce the general fraud provision47 (art. 1401, CCQ). They overlap, too, with deceptive practices48 (see infra), creating a quite confusing legal framework. Here, statutory provisions to configure contract law differently, up to a point where free market evokes a mere politicolegal artefact. The importance of information accuracy and transparency of the information provided along the commercialization chain is particularly evident whenever risks for people’s health are increased. This hypothesis is further analyzed through the examples of food, sweetened, caffeine and tobacco products, for which the regulation strategy also revolves around mandatory labeling.

3.4

Specific Food Information Requirements

In Canada, two federal regulators are responsible for food labeling: Health Canada and the Canadian Food Inspection Agency.49 A core principle in food safety is the necessity for the label to disclose truthful, non-misleading information that shall not

45 Among many others, see CPA, s. 71: “The merchant must state the credit charges in terms of dollars and cents, and indicate that they apply (a) to the entire term of the contract in the case of a contract for the loan of money or a contract involving credit, or (b) to the period covered by the statement of account in the case of a contract extending variable credit.”; Id. 46 CPA, s. 228.1: “ Before proposing to a consumer to purchase a contract that includes an additional warranty on goods, the merchant must inform the consumer orally and in writing, in the manner prescribed by regulation, of the existence and nature of the warranty provided for in sections 37 and 38 [fitness for purpose and duration warranties] (emphasis added). 47 Jobin and Cumyn (2007), par. 15. 48 Ibid. 49 L’Heureux and Lacoursière (2011), par. 452; Agence canadienne d’inspection des aliments. 27 september 2017. L'étiquetage des aliments pour les consommateurs. www.inspection.gc.ca/

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be deceptive.50 The nutritional information of foodstuffs must be indicated51; any prepacked product52 must affix the nutrient values in table form.53 If a prepacked product contains more than one ingredient, its label must state a list of the ingredients and its constituents.54 The list of ingredients found on the labels must make it possible for the consumer to understand clearly the ingredients and their proportions within the acquired package. Finally, food quantity must be affixed accurately.55 The consumer, thus, relies on nutritional information to make enlightened choices. However, labels and product packaging are not the only indicators of a product’s content. The allegations inform consumers about the products he consumes are defined as follows: “[a]ny statement that asserts, suggests or implies that a commodity has particular characteristics related to its origin, nutritional properties, nature, production, processing, composition or other quality56”. They do not, however, shed much light on negative claims. For example, claims found on product’s labels, packaging or in advertising or marketing campaigns may be of an apparent nutritional nature as it uses negative claims such as “no added sugar” or “low fat”. Perceptions problems may arise, as these claims nourish doubtful healthy messages that accompany warnings and neutral information. In order to determine whether a claim is legal, it must firstly be assessed whether the allegation is subject to specific requirements or prohibitions under the Food and Drugs Act, or in the Consumer Packaging and Labeling Act. If the allegation in question is not covered by “any particular regulatory requirement or guidance for interpretation of a particular claim57”, it shall not be likely to give consumers a misleading or false impression. Statutory law, hence, does not pre-empt deceptive practices claims. Food additives offer just another example of intertwining legal protections. If “sugar-free” claims are legal, they say little about sweeteners added to foodstuffs. Although sweeteners are otherwise regulated, consumers may still be misled as they might not properly understand the “sugar-free/sweeteners” dialectic. Simply enough, a sweetener is an additive that gives foods a sweet taste. Artificial sweeteners are regulated as food additives, and must seek regulator’s approval before

aliments/etiquetage/l-etiquetage-des-aliments-pour-les-consommateurs/fra/1400426541985/ 1400455563893. 50 Food and Drugs Act, R.S.C. (1985), c. F-27, s. 5(1) (“FDA”); Consumer Packaging and Labelling Act, R.C.S. (1985), c. C-38, s. 7(1) (“CPLA”). 51 L’Heureux and Lacoursière (2011), par. 453. 52 See art. B.01.401 (2) of the Act. Some products (fresh vegetables, fresh fruits and meat) are exceptions to this rule (see s. B.01.401 (2)). 53 See Food and Drug Regulations, C.R.C., c. 870, s. B.01.401 (“ FDR”). 54 FDR, s. B.01.008. 55 CPLA, s. 10. 56 Agence canadienne d’inspection des aliments. 8 may 2017. Impression globale créée à l'égard d'un produit. http://inspection.gc.ca/aliments/etiquetage/l-etiquetage-des-aliments-pour-l-industrie/ principes-generaux/fra/1392324632253/1392324755688?chap¼2#s1c2. 57 Ibid.

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entering the market.58 When a food product contains aspartame or is sweetened with these products, such information must appear on the label in a format at least equivalent in dimensions to the characters used in the net quantity declaration. And when contained in a product, caffeine is considered as a food additive.59 Energy drinks usually contain caffeine in various concentrations. Health Canada felt that additional safety requirements were needed.60 Towards this end, it provided for maximum limits, the affixing of the mention “high caffeine source” and the quantity of actual caffeine contained in the product. In addition to foodstuff’s mandatory information, Health Canada requires since 2012 special labeling targeting particularly vulnerable consumers for whom the consumption of such a drink is not recommended, such as children, pregnant or nursing women.61 The situation is different in the GMO industry. Contrary to the EU position, GMO labeling is voluntary.62 In daily life, eating GMO-free means turning to the organic market.63 By contrast, statutory restrictions closer to bans are visible in tobacco products. Such products are physically hidden from public sight: they are offered to retail sale behind blinds or shutters.64 Sponsorship, promotion and advertising of tobacco are basically prohibited in Quebec.65 In the same vein, tobacco labeling is also highly regulated: indeed, “[n]o manufacturer or retailer shall sell a tobacco product unless the package containing it displays, in the prescribed form and manner, the information required by the regulations about the product and its emissions, and about the health hazards and health effects arising from the use of the product or 58 The Ministry of Health has established a List of Authorized Sweeteners: see Health Canada, List of Permitted Sweeteners (Lists of Permitted Food Additives). They are excluded from paragraphs 4 (1) (a) and (d) and sections 6 and 6.1 of the (federal) Food and Drugs Act and sections B.01.042, B.01.043 or B.16.007, as the case may be, of the Food and Drug Regulations (Autorisation de mise en marché d’additifs alimentaires comme édulcorants, DORS/2012-210, s. 2 par.1). 59 FDR, B.16.001 et Table VIII. 60 Health Canada. Boissons énergisantes contenant de la caféine. http://www.hc-sc.gc.ca/fn-an/ prodnatur/caf-drink-boissons-fra.php. 61 Government of Canada. Lists of foods that have received Temporary Marketing Authorization Letters. 62 On this matter see Arbour and Hoeung (2015). 63 See specifically Glenn (2010), p. 663. See the Organic Products Regulations, SOR/2009-176, (2009) 143 Gaz Can II, s. 22 to 25, adopted pursuant to the Canada Agricultural Products Act, RSC 1985, c 20 (4th Supp) [http://canlii.ca/t/hxzr]. See especially s. 24: “(1) No person shall affix a label to a product, or make an advertisement for a product, that contains the words “organic”, [. . .] — or similar words, including abbreviations of, symbols for and phonetic renderings of those words — unless the product is (a) an organic product, [. . .]”. See: Act respecting reserved designations and added-value claims, RLRQ, c. A-20.03, s. 63 et 64. s. 63: “A person may not use a recognized reserved designation or authorized added-value claim on a product, its packaging or its labelling, in advertising or commercial documents or in the presentation of a product unless the person is registered with an accredited certification body and the product is certified by such a body as compliant with the applicable specification manual or regulation”. 64 Tobacco control Act, chapter L-6.2, s. 20.2 (“TCA”). 65 TCA, s. 21 to 28.

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from its emissions66”. Mandatory information must be affixed to the package, including health information messages67 and statements on toxic emissions.68 These imposed messages are both textual and pictorial. They are explicit and dissuasive: cigarette packs may not be entirely white, but they sure are unappealing69! As known Tobacco case further demonstrates, ex ante obligations are also the object of enhanced information obligations.

4 Extracontractuality Manufacturers also bear an information obligation towards third parties. In the wake of the EU Product Liability Directive, art. 1468, al. 1 CCQ provides that “[t]he manufacturer of a movable thing is bound to make reparation for injury caused to a third person by reason of a safety defect in the thing, even if it is incorporated with or placed in an immovable for the service or operation of the immovable”. The connection with information appears clearly whilst reading the definition of defectiveness: “[a] thing has a safety defect where, having regard to all the circumstances, it does not afford the safety which a person is normally entitled to expect, particularly by reason of a defect in design or manufacture, poor preservation or presentation, or the lack of sufficient indications as to the risks and dangers it involves or as to the means to avoid them70”. Predictably, however, “[t]he manufacturer, distributor or supplier of a movable thing is not bound to make reparation for injury caused by a safety defect in the thing if he proves that the victim knew or could have known of the defect, or could have foreseen the injury71”. The ability to evaluate risks is at the core of this dynamics: twin Tobacco cases are but another example of growing “lifestyle torts72”. Revisiting an era when strong warnings and ugly photos had yet to come, Quebec’s superior court recently highlighted, in titanic cases Létourneau73 and Blais74 (joint hearing and judgement), the importance of consent and fairness in

66

Tobacco Act, (S.C. 1997, c. 13), s. 15(1). Tobacco Products Labelling Regulations (Cigarettes and Little Cigars), SOR/2011-177, s. 22 to 31 (“TPLR”). 68 Id., s. 17 to 21. 69 See Annex. 70 Art. 1469, CCQ. 71 Art. 1473, al. 1 CCQ. 72 See specifically Arbour (2014), p. 120. 73 Imperial Tobacco Canada Ltd. v. Létourneau, 2013 QCCA 1887 (CanLII) [“Létourneau”]. 74 Conseil québécois sur le tabac et la santé et Jean-Yves Blais v JTI Macdonald Corp. And Imperial Tobacco Canada Limited and Rothmans, Benson & Hedges Inc., Superior Court of Montreal, no. 500-06-000076-980, authorized by Conseil québécois sur le tabac et la santé c. JTI-MacDonald Corp., 2005 CanLII 4070 (QC CS) [Tobacco case], commented in English by Arbour (2016). 67

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contractual relationships. The Blais class action gathered alleged victims of serious and life-threatening pathologies.75 The Létourneau case was filed on behalf victims (more than one million persons) who argue having become addicted to nicotine due to the defendants’ corporate strategies, as sustained “[. . .] an increased risk of contracting a fatal disease, reduced life expectancy, reprobation, loss of self-esteem and humiliation76”. After a 6-month hearing, the tobacco companies were found liable in both files under four specific headings (fault, safety defect, infringement of a fundamental right and prohibited practices). Victims were awarded billions of dollars of punitive and compensatory damages pursuant to the CPA and the CCQ relevant provision. Among other legal basis, the safety obligation was especially relevant in the context of famous Tobacco case, whereby Quebec’s Superior Court held that throughout the years, the defendants violated the provision by withholding information that impeded smokers to lucidally accept risks for their own health: “[b]y choosing not to inform either the public health authorities or the public directly of what they knew, the Companies chose profits over the health of their customers. Whatever else can be said about that choice, it is clear that it represent a fault of the most egregious nature and one that must be considered in the context of punitive damages77”. The Court established that from January 1st 1980, consumers knew or should have been aware of the risks of contracting diseases related to tobacco use78 and that and since march 1st 1996, they knew of should have been aware of the risks of dependence.79 While retaining that the safety obligation embedded in the CCQ “[. . .] focuses on ensuring that a potential user has sufficient information or warning to be adequately advised of the risks he incurs by using a product80”, the Court brings about 11 commandments in this newly drafted extracontractual field81: a. The duty to warn “serves to correct the knowledge imbalance between manufacturers and consumers by alerting consumers to any dangers and allowing them to make informed decisions concerning the safe use of the product” b. A manufacturer knows or is presumed to know the risks and dangers created by its product, as well as any manufacturing defects from which it may suffer;

Tobacco case, at pp. 12–13. More precisely, the group was defined as follows: “1) To have smoked, before November 20th, 1998, a minimum of 5 pack/years of cigarettes made by the defendant [. . .] and 2) to have been diagnosed before March 12, 2012, with a) lung cancer b) Cancer (squamous-cell carcinoma) of the throat [larynx, the oropharynx or the hypopharynx] or c) emphysema”. For greater clarity: “A “pack-year” is the equivalent of smoking 7300 cigarettes, as follows: 1 pack of 20 cigarettes a day over one year: 365  20 ¼ 7300 [. . .] 10 cigarettes a day for two years, two cigarettes a day for 10 years, etc.” (Judgement, at p 12). The Class was slightly redesigned by the trial Court: see Judgement, at p 164. The pack/year methodological tool is discussed at p 154 (at para 733). 76 Id., at par. 11. 77 Id., at par. 239. 78 Id., at par. 121. 79 Id., at par. 130. 80 Id., at par. 218. 81 Id., at par. 227. 75

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c. The manufacturer is presumed to know more about the risks of using its products than is the consumer; d. The consumer relies on the manufacturer for information about safety defects; e. It is not enough for a manufacturer to respect regulations governing information in the case of a dangerous product; f. The intensity of the duty to inform varies according to the circumstances, the nature of the product and the level of knowledge of the purchaser and the degree of danger in a product’s use; the graver the danger the higher the duty to inform; g. Manufacturers of products to be ingested or consumed in the human body have a higher duty to inform; h. Where the ordinary use of a product brings a risk of danger, a general warning is not sufficient; the warning must be sufficiently detailed to give the consumer a full indication of each of the specific dangers arising from the use of the product; i. The manufacturer’s knowledge that its product has caused bodily damage in other cases triggers the principle of precaution whereby it should warn of that possibility; j. The obligation to inform includes the duty not to give false information; in this area, both acts and omissions may amount to fault; and k. The obligation to inform includes the duty to provide instructions as to how to use the product so as to avoid or minimize risk.

Interestingly enough, statutory warnings do not pre-empt misinformation arguments; as partial warnings on cigarette packages were considered incomplete and insufficient to allow smokers to assess risks for their health.82 Nevertheless, the CCQ goes on providing for a defense that does not have penetrated case law yet: that of the development risks. Copying French law as it stood before the ECJ intervention, the provision subordinates the availability of the defense to the fulfillment of ex post information duties: “[the manufacturer is not bound] to make reparation if he proves that, according to the state of knowledge at the time that he manufactured, distributed or supplied the thing, the existence of the defect could not have been known, and that he was not neglectful of his duty to provide information when he became aware of the defect” (art. 1473, al. 2 CCQ). This ex post duty will certainly be at the heart of future case law addressing the impact of product recall and withdrawal on liability law. To this day, however, such duties rather stem from statutory initiative (food law, medicines) and does not embrace an overarching hypothesis. However, the quite new Canadian Consumer Product Safety Act could change things. In 2010, the federal legislator adopted the awaited Canadian Consumer Product Safety Act83 along the lines of the 2001/95/EC Directive and the US Product Safety Act. Its preamble states that “[. . .] the Parliament of Canada recognizes the objective of protecting the public by addressing dangers to human health or safety that are posed by consumer products” and that “[. . .] individuals and suppliers of consumer products have an important role to play in addressing dangers to human health or safety that are posed by consumer products”.84 Towards this end and among other thing, it provides for a safety obligation in these terms: “No manufacturer or importer 82

Létourneau v. JTI-MacDonald Corp., 2015 QCCS 2382 (CanLII), par. 110. Canada Consumer Product Safety Act, SC 2010, c 21, http://canlii.ca/t/52vlc. 84 Emphasis added. 83

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shall manufacture, import, advertise or sell a consumer product85 that (a) is a danger to human health or safety86 [. . .]87”. The CCPSA is of a penal nature, but it is suggested that any violation to this provision shall influence, directly or indirectly, the interpretation of the civil law civil safety obligation. Besides, the use of the word “consumer” in the title appears fruitful, as it allows product safety to integrate the consumer law discipline.

5 Misleading Commercial Practices The extracontractual field overlaps with deceptive practices, which are not conditioned by the presence of a contract binding two parties: they “are not contingent upon the conclusion of a contract” (s. 217, CPA). Consequently, the CPA and the Competition Act reach well beyond the contractual notions of consumers/merchants.

5.1

Misleading Actions and Omissions

Two statutes encompass relevant provisions: the CPA (provincial) and the federal Competition Act (federal). Part VI of the Competition Act is dedicated to “Offences in Relation to Competition”. Much like the CPA, it contains civil law and penal law provisions regarding bid-rigging, conspiracy, and also deceptive practices. Pursuant to art. 52 (1): “[n]o person shall, for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirectly, any business interest, by any means whatever, knowingly or recklessly make a representation to the public that is false or misleading in a material respect88”. Although the Act does not define the term “representation” many parameters are set to their evaluation. Among other things, the provision reliefs plaintiffs from proving certain matters: “For greater certainty, in establishing that subsection (1) was contravened, it is not

That is, a “a product, including its components, parts or accessories, that may reasonably be expected to be obtained by an individual to be used for non-commercial purposes, including for domestic, recreational and sports purposes, and includes its packaging” (Id., art. 2). 86 “Danger to human health and safety” is defined as “[. . .] any unreasonable hazard — existing or potential — that is posed by a consumer product during or as a result of its normal or foreseeable use and that may reasonably be expected to cause the death of an individual exposed to it or have an adverse effect on that individual’s health — including an injury — whether or not the death or adverse effect occurs immediately after the exposure to the hazard, and includes any exposure to a consumer product that may reasonably be expected to have a chronic adverse effect on human health” (Id., art. 2, emphasis added). 87 Id., art. 7 (emphasis added). 88 Emphasis added. 85

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necessary to prove that (a) any person was deceived or misled; (b) any member of the public to whom the representation was made was within Canada; or (c) the representation was made in a place to which the public had access89”. The public dimension of the representation is also presumed in certain circumstances,90 and, most importantly the “[i]n a prosecution for a contravention of this section, the general impression conveyed by a representation as well as its literal meaning shall be taken into account in determining whether or not the representation is false or misleading in a material respect91”. Narrowing down this general rule, the federal statute prohibits false or misleading representations of prices under sections 74.01 (2) and (3) of the Act. The federal Act prohibits false discounts and sales. For example, it forbids that a merchant increased the price of a product by 50% for a few weeks and lowered it afterwards. This would also be the case for year-round discounts, that is, products never actually offered at their alleged regular price: such false bargains would violate the federal law. Besides, the Competition Act also prohibits the sale of a product at a price that is not the lowest expressed (section 54 (1)). At least in Quebec, the federal statutes is used less than the CPA. Indeed, the provincial legislation offers a quite comprehensive scheme that probably cast a shadow over the Competition Act, although both may be alleged in a symbiotic fashion. One objective pursued by the CPA is to “[. . .] eliminate unfair and misleading practices that may distort the information available to consumers and prevent them from making informed choices92”. Commercial practice is taken in its broadest meaning (namely any act, conduct, commercial communication, advertising, marketing that directly or indirectly is related to the promotion, sales or supply of goods, services, etc.) as according to art. 216 CPA and likewise the federal Act, representation includes “an affirmation, a behaviour or an omission”. This wide definition is extremely precious as it encompasses all forms of means that may affect consumer judgement. In this sense, it opens the door to its constant adequation to new marketing tools, without requiring constant legislative updates. Rather, such wide judicial discretion leaves room for lawyers’ creativity who may, with the help of experts, bring about scientific evidence anchored in social sciences (behavioural economics, psychology, etc.). Tangible results are visible reading the Tobacco case,

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Art. 52 (1.1), Competition Act. “For the purposes of this section, a representation that is (a) expressed on an article offered or displayed for sale or its wrapper or container, (b) expressed on anything attached to, inserted in or accompanying an article offered or displayed for sale, its wrapper or container, or anything on which the article is mounted for display or sale, (c) expressed on an in-store or other point-ofpurchase display, (d) made in the course of in-store or door-to-door selling to a person as ultimate user, or by communicating orally by any means of telecommunication to a person as ultimate user, or (e) contained in or on anything that is sold, sent, delivered, transmitted or made available in any other manner to a member of the public, is deemed to be made to the public by and only by the person who causes the representation to be so expressed, made or contained, subject to Sect. 2.1. 91 Art. 52 (4), Competition Act. 92 Richard c. Time, at par. 161. 90

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whereby a parade of experts—historians, law and economic experts, economists— were called to the bar to instruct the Court regarding the impact of tobacco marketing strategies on consumer perception. Article 228, for instance, provides that “[n]o merchant, manufacturer or advertiser may, by any means whatever (sic), make false or misleading representations to a consumer”. In a case involving a Mazda’s defective locking door system, the Court of Appeal held that the manufacturer violated said 228 CPA by not revealing known weaknesses to its consumers: “[. . .] the failure of the lock system in Mazda vehicles was an important fact that should be disclosed to the customers of this manufacturer. I consider that this information was likely to affect the choice of the consumer to contract with the merchant or the terms to be agreed with the latter at the time of purchase93”. Awkwardly structured, a bundle of more specific misleading practices are disseminated. Within the CPA, more specific hypothesis derived from case law abound and may cast doubt as to the existence of malpractices. Albeit abundant, those provisions set parameters to judicial interpretation and, as such, reduce the length of hearing and, by the same token, increase legal certainty. For the sake of clarity, they are herewith reproduced: 220. No merchant, manufacturer or advertiser may, falsely, by any means whatever, (a) ascribe certain special advantages to goods or services; (b) hold out that the acquisition or use of goods or services will result in pecuniary benefit; (c) hold out that the acquisition or use of goods or services confers or insures rights, recourses or obligations. 221. No merchant, manufacturer or advertiser may, falsely, by any means whatever, (a) (b) (c) (d) (e) (f)

hold out that goods or services include certain parts, components or ingredients; hold out that goods have a particular dimension, weight, size or volume; hold out that goods are of a specified standard; represent that goods are of a particular category, type, model or year of manufacture; hold out that goods are new, reconditioned or used to a specified degree; hold out that goods have particular antecedents or have been used for a particular purpose; (g) ascribe certain characteristics of performance to goods or services. 222. No merchant, manufacturer or advertiser may, falsely, by any means whatever, (a) (b) (c) (d) (e) (f) (g)

invoke specific circumstances to offer goods or services; discredit goods or services offered by others; hold out that goods or services have been furnished; hold out that goods are made according to a specified method of manufacture; hold out that goods or services are necessary in order to replace a part or make a repair; hold out that goods or services have a specified geographic origin; indicate the quantity of goods or services at his disposal.

223. A merchant must indicate the sale price clearly and legibly on all the goods or, if the goods are wrapped, on the wrapping of all the goods offered for sale in his establishment, subject to the regulations.

93 Fortin c. Mazda Canada inc., 2016 QCCA 31 (CanLII), http://canlii.ca/t/gn06n, at par. 142 (emphasis added, translation is mine).

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224. No merchant, manufacturer or advertiser may, by any means whatever, (a) lay lesser stress, in an advertisement, on the price of a set of goods or services than on the price of any goods or services forming part of the set; (b) subject to sections 244 to 247, disclose, in an advertisement, the amount of the instalments to be paid to acquire goods or to obtain a service without also disclosing the total price of the goods or services and laying the greater stress on such total price; (c) charge, for goods or services, a higher price than that advertised. For the purposes of subparagraph c of the first paragraph, the price advertised must include the total amount the consumer must pay for the goods or services. However, the price advertised need not include the Québec sales tax or the Goods and Services Tax. More emphasis must be put on the price advertised than on the amounts of which the price is made up. 225. No merchant, manufacturer or advertiser may, falsely, by any means whatever, (a) invoke a price reduction; (b) indicate a regular price or another reference price for goods or services; (c) let it be believed that the price of certain goods or services is advantageous. 226. No merchant or manufacturer may refuse to perform the warranty granted by him on the pretext that the document evidencing it has not reached him or was not validated. 227. No merchant, manufacturer or advertiser may, by any means whatever, make false representations concerning the existence, the scope or the duration of a warranty.

A commercial practice that falls outside these provisions could still be considered misleading in light of catchall provisions contained in already mentioned article 228 or 229 CPA. Other specific laws impact on the advertisement market and other precontractual bad manners.94 Both the legislator and the judiciary set benchmarks to the evaluation of sector-specific prohibited practices.

5.2

Evaluation Benchmarks

The CPA poses itself the parameters to the assessment of deceptive practices: “To determine whether or not a representation constitutes a prohibited practice, the general impression it gives, and, as the case may be, the literal meaning of the terms used therein must be taken into account95”. These two criteria—the general impression and the literal meaning—were analyzed in depth in occasion of already mentioned Richard c. Time case, whereby the plaintiff argued that he truly thought

See e.g. the Bank Act, which offers just another example when it states that “[n]o person shall authorize the publication, issue or appearance of any advertisement in Canada relating to arrangements referred to in subsection 452(3), loans, credit cards, payment cards or charge cards, offered to natural persons by a bank, and purporting to disclose prescribed information about the cost of borrowing or about any other matter unless the advertisement discloses prescribed information at the prescribed time and place and in the prescribed form and manner” (art. 453, Bank Act). 95 Art. 218 CPA, emphasis added. 94

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he had won a prize in the context of a sweepstake, as the Time Magazine leaflet ever congratulated him. The Court was not particularly concerned with the second interpretative parameter—that of literal meaning. Quoting C. Masse—“the consumer does not, by definition, have time to reflect on the true meaning of the messages communicated to him or the question of whether the Meaning of the words used corresponds or not to their literal meaning”96—the Court stated that “[t]he phrase “literal meaning of the terms used therein” [. . .] It simply means that every word used in a representation must be interpreted in its ordinary sense. The purpose of this part of s. 218 C.P.A. is to prohibit merchants from raising a defense based on a subtle, technical or convoluted meaning of a word used in a representation. The legislature’s intention was thus that the meanings given to words used in representations be the same as their meanings in everyday life97”. In this particular case, it held that allegedly winning a prize suffices to induce the idea that to “win” does not actually amount to merely “participate”. As to the second criterion—general impression—case law acknowledges that it be assessed through an abstract test, thus setting aside the plaintiff’s idiosyncrasies: “[. . .] the courts now seem to accept, as did the courts below in the instant case, that the “general impression” conveyed by a representation must be analysed in the abstract, that is, without considering the personal attributes of the consumer who has instituted proceedings against the merchant98”. Digging deeper into these requirements, the Court founds that “general impression” is central as it “[. . .] reflects how, in practice, consumers are very frequently led to exercise their freedom of choice.99 The court rejects the “instant impression” test anchored in the mere perception of the advertisement’s lay out that would, in the end, discharge consumers from reading the actual message. Conversely, the test “[. . .] does not involve the minute dissection of the text of an advertisement to determine whether the general impression it conveys is false or misleading100”, it observes that “the legislature adopted the general impression test to take account of the techniques and methods that are used in commercial advertising to exert a significant influence on consumer behaviour. This means that considerable importance must be attached not only to the text but also to the entire context, including the way the text is displayed to the consumer101”. Doing so, the Court aligns the provincial model with the federal Competition Act (art. 54 (4), see infra).

96

Richard v Time, at par. 51; Masse (1999). Richard v Time, at par. 47. 98 Id., at par. 49 (emphasis added). 99 Id., at par. 52. 100 Id., at par. 56. 101 Id., at par. 55. 97

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Building on case law developed in the area,102 the Supreme Court adopts a compromising test hereby cited at length for greater clarity103: The courts must not approach a written advertisement as if it were a commercial contract by reading it several times, going over every detail to make sure they understand all its subtleties. Reading over the entire text once should be sufficient to assess the general impression conveyed by a written advertisement, [. . .] [. . .] In the case of false or misleading advertising, the general impression is the one a person has after an initial contact with the entire advertisement, and it relates to both the layout of the advertisement and the meaning of the words used.

The Court exposes the steps that shall guide judges in finding misleading practices: (1) the manufacturer violate provisions contained in Title II of the Act; (2) consumers actually saw the deceptive representation and (3) such prohibited practice impacted upon their decision to enter into a contract, and; (4) a sufficient nexus existed between the content of the representation and tobacco products, triggers a irrebuttable presumption of prejudice, as “the consumer does not have to prove that the merchant intended to mislead, as would be required in a civil law fraud case104”. Although the case is primarily anchored in classic tort law (fault and safety obligation), the CPA was evoked on three accounts: failing to mention an important fact,105 making false or misleading representations and falsely ascribing products certain advantages.106 Those headings belong the greater family of prohibited practices tackled by article 219 of Quebec’s CPA, by virtue of which “[n]o merchant, manufacturer of advertiser may, by any means whatever, make false or misleading representations to a consumer107” and pursuant to which the court concluded that “[e]ven though the Companies’ ads did not convey false information, since they conveyed essentially no information, under the CPA the question is whether their representations would have given a false or misleading impression to a credulous and inexperienced consumer. For that, it would not be necessary for them to go so far as to say that smoking was a good thing. The test is whether the general impression is true to reality108”.

102

Interestingly enough (see infra), the court evokes the Trade-marks Act, R.S.C. 1985, c. T-13 refers to Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée, 2006 SCC 23 (CanLII), [2006] 1 S.C.R. 824, at para. 20; Masterpiece Inc. v. Alavida Lifestyles Inc., 2011 SCC 27 (CanLII), [2011] 2 S.C.R. 387, at para. 41): see Richard c. Time, at par. 56. 103 Richard v Time, at par. 55-56 (emphasis added). 104 Time., at para. 123. The Court specifies: “The test is whether the general impression is true to reality. It would be enough if they suggested that it was not harmful to health” (Judgement, at para 527). 105 Art 228 CPA. 106 Art 227 a) CPA. 107 Emphasis added. To see the three possible forms of the fault, see L’Heureux and Lacoursière (2011), par. 485. 108 Tobacco case, at par. 521.

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A serious objection to this analogical reasoning has been verbalized 3 years later by Quebec’s Court of Appeal, who rightly points out—albeit in a slightly different context—that the “general impression” test “[. . .] is not a rule of contractual interpretation”. It further explained: “[o]ne source of the general impression rule can be found in the [federal law]. Another possible source can be found in trademark law where the first impression test is used to determine whether the tort of passing off has occurred. The general impression rule was incorporated into the C.P.A. upon its promulgation in Quebec in 1978 to deal with phenomena similar to passing off [. . .]109”. Accordingly, the Court would seemingly set aside the vulnerable paradigm and rather turn, whenever a contract has been formed, to basic interpretative rules: “I do not see any incompatibility between Section 218 C.P.A. and the articles of the C. C.Q. dealing with interpretation of contracts [including contra proferentem]. Rules of interpretation of contract definitely apply to Consumer contracts. Indeed, these rules of the C.C.Q. dovetail nicely with the C.P.A. Articles 1435 and 1436 C.C.Q. make direct reference to the consumer. Article 1432 C.C.Q. provides that doubt is always resolved in favour of the consumer110”. As a result, the “general impression” criteria would be relevant in tort law (common law tort of passing off) and the penal dimension attached to the prosecution of deceptive practices, but not whenever a contract was passed, as in the case discussed. Through these lenses, a confusion among interpretative tools could explain Richard v Time’s quite surprising outcome, as contractual party are certainly expected to gain more than a “general impression” of the agreed contractual terms. Other stringent information bans exist to protect children from invitations to treat.

5.3

Ban on Publicity Destined to Children

By virtue of article 248 CPA, advertisement destined to children of 13 years old and under is prohibited (emphasis added)111: “[s]ubject to what is provided in the regulations, no person may make use of commercial advertising directed at persons under thirteen years of age112”. The flowing provisions provide useful guidelines to the assessment of art. 248 CPA: 249. To determine whether or not an advertisement is directed at persons under thirteen years of age, account must be taken of the context of its presentation, and in particular of (a) the nature and intended purpose of the goods advertised; (b) the manner of presenting such advertisement; (c) the time and place it is shown. [. . .] 109 Dion c. Compagnie de services de financement automobile Primus Canada, 2015 QCCA 333 (CanLII), http://canlii.ca/t/ggdwx (par. 53). 110 Id., at par. 53 (j. Schrager). 111 Exceptions are to be found at art. 88-90 or the Regulation. 112 Emphasis added.

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Although the constitutionality of these provisions was challenged in courts, the Canadian Supreme Court came to the conclusion that although it violates companies’ protected freedom of expression, they were justified as they pursue a important goal: “[t]he concern is for the protection of a group which is particularly vulnerable to the techniques of seduction and manipulation abundant in advertising. [. . .] The material given in evidence before this Court is indicative of a generalized concern in Western societies with the impact of media, and particularly but not solely televised advertising, on the development and perceptions of young children113”. It further noted: “In establishing the factual basis for this generally identified concern, the Attorney General relied heavily upon the U.S. Federal Trade Commission (FTC) Final Staff Report and Recommendation, In the Matter of Children’s Advertising, which contains a thorough review of the scientific evidence on the subject as at 1981114”. Similar provisions are related to the prohibition of alcohol products115; these concerns for children’s contractual vulnerability are also visible in the Civil code, which exceptionally protects them from a lesion. Addressing vulnerability in contract law brings us closer to an asymmetry redressment nested in the Civil Code under the legal category of contract of adhesion, which significantly impact on the information/disinformation dialectic, by acknowledging that courts may redress, in some circumstances, unfair contract terms.

6 Contract of Adhesion Since 1994, the CCQ has acknowledged this particular vulnerability when provisions surrounding the contract of adhesion was enacted. The distinction between a contract of adhesion and a mutual agreement lies in the impossibility for the adherent to negotiate standard terms. The prohibition of unfair contract terms rests on the assumption that consumers are less experienced than businesses and lack legal knowledge and/or of bargaining power to challenge pre-drafted standard terms. Hence, unfair terms are often restricted to terms.116 As art. 1379, al. 1 CCQ states: “[a] contract of adhesion is a contract in which the essential stipulations were

113

Irwin Toy Ltd. v. Quebec (Attorney General), [1989] 1 SCR 927, 1989 CanLII 87 (SCC), http:// canlii.ca/t/1ft6g: “Since children do not have the necessary discernment to make a difference, all advertisements should initially have as target audience the parents who are the ones who will make the purchases anyway. Far from being ineffective, “commercial advertising for children contributes to impoverishment of the poor, discrediting parents’ authority and promoting reprehensible family behavior”, see L’Heureux and Lacoursière (2011), par. 572. 114 Id. 115 Regulation respecting promotion, advertising and educational programs relating to alcoholic beverages, CQLR c P-9.1, r 6, http://canlii.ca/t/52xh7. 116 Emphasis added.

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imposed or drawn up by one of the parties, on his behalf or upon his instructions, and were not negotiable”. Qualify a contract of adhesion entails protections that recoup both substantive law of obligations (a) and interpretive tools (B). These protections apply de facto to consumer contracts (art. 1436 and 1435, al. 2 CCQ).

6.1

Protection in Substantive Law

Unfair terms targeted by the contract of adhesion include protections related to illegible, incomprehensible, external and abusive clauses. As a result, even businessto-business contract (B to B) benefit from overarching legislative redresses that favors, in the end, a party that has lost any bargaining power. In parallel, certain CPA provisions contain legislative in put that build upon the contract of adhesion incomprehensible/illegible clause. They are clearly visible in the field of contract of credit (see infra) or car leasing. Article 1436 CCQ, provides that “[. . .] a clause which is illegible or incomprehensible to a reasonable person is null if the consumer or the adhering party suffers injury therefrom, unless the other party proves that an adequate explanation of the nature and scope of the clause was given to the consumer or adhering party”. The illegible clause is defined as “[Translation] the clauses written on the back in very pale gray on a white background. [. . .] One must evaluate the effects in abstracto compared to an ordinary adherent able to understand and to read. [. . .] In the case of the consumer, it is necessary to rely on the average, lay, untrained and inexperienced consumer117”. As to the incomprehensible clause, it refers to its “intellectual nature”. Reference to the reasonable person invites as well to an in abstracto evaluation of the clause. The grammatical accuracy is directly related to the comprehensibility of a clause. In order to qualify an incomprehensible clause, one must go beyond the meaning of words and the grammatical formulation. The illegible/incomprehensible clauses that are deemed to be null whenever a party suffers prejudice. The same logic applies to external clauses. If they are not expressly pointed to, external clauses are null by virtue of art. 1435 CCQ. Otherwise, they remain valid. 1435. An external clause referred to in a contract is binding on the parties. In a consumer contract or a contract of adhesion, however, an external clause is null if, at the time of formation of the contract, it was not expressly brought to the attention of the consumer or adhering party, unless the other party proves that the consumer or adhering party otherwise knew of it.

The external clause implies referral to another document, a regulation or even on the back of a sheet. The complexity of the qualification of external clauses, however,

117

Location d’autos Mont-Royal inc. c. Martzouco, AZ-99031143, J.E. 99-750 (cour du Québec).

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arises when it comes to distance contracts. The fact of having to click to get further information is not necessarily an external clause. The unfair term entails the nullity of the contract or the reduction of the obligation. In EU’s parlance, unfair terms are metabolized by art. 1437 CCQ118: Art. 1437. An abusive clause in a consumer contract or contract of adhesion is null, or the obligation arising from it may be reduced. An abusive clause is a clause which is excessively and unreasonably detrimental to the consumer or the adhering party and is therefore contrary to the requirements of good faith; in particular, a clause which so departs from the fundamental obligations arising from the rules normally governing the contract that it changes the nature of the contract is an abusive clause.

In the wake of the CCQ, the CPA, too, specifically protects consumers by preventing the merchant from including unfair or injurious clauses. If such clauses are present in a contract, they will be null and deemed unwritten (without necessarily affecting the rest of the contract).119 The CPA provides for a bundle of deemed sector-specific unfair terms. These illicit clauses include: • • • • •

118

Terms seeking merchant’s exemption or limitation of liability120 Stipulations containing merchant’s unilateral will121 Penal or anticipated damages clauses122 Mandatory arbitration clauses123 Unilateral amendment clauses124

Rogers Communications, s.e.n.c. c. Brière, 2016 QCCA 1497, par. 27-29. In this case, the Court qualified a contractual clause as being abusive: “[28] [Translation] Rogers’ abuse here is in the drafting of a clause which, on the one hand, recognizes the right of the customer to terminate the contract and, on the other hand, denies him the right by requiring compensation including Damages as if the contract were terminated as a result of the customer’s fault in performing its obligations. This way of doing things denies the right of cancellation, to the detriment of the customer [. . .] [29] [Translation] In short, the contract clause is abusive and the Termination Fee must be reduced”. 119 Lafond (2015), p. 119. 120 CPA, s. 10: “Any stipulation whereby a merchant is liberated from the consequences of his own act or the act of his representative is prohibited” (emphasis added). 121 CPA, s. 11, “Any stipulation whereby a merchant reserves the right to decide unilaterally (a) that the consumer has failed to satisfy one or another of his obligations, or (b) that a fact or circumstance has occurred, is prohibited” (emphasis added). 122 CPA, s. 13: “Any stipulation requiring the consumer, upon the non-performance of his obligation, to pay a stipulated fixed amount or percentage of charges, penalties or damages, other than the interest accrued, is prohibited. [. . .]” (emphasis added). 123 CPA, s. 11.1: “Any stipulation that obliges the consumer to refer a dispute to arbitration, that restricts the consumer’s right to go before a court, in particular by prohibiting the consumer from bringing a class action, or that deprives the consumer of the right to be a member of a group bringing a class action is prohibited. [. . .]” (emphasis added). 124 CPA, s. 11.2, “Any stipulation under which a merchant may amend a contract unilaterally is prohibited unless the stipulation also (a) specifies the elements of the contract that may be amended unilaterally; (b) [a written notice]; (c) [it provides that the consumer may refuse the amendment and

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Interpretive Tools (contra proferentem)

In case of doubt, the contract of adhesion or the consumer contracted is interpreted in favor of the consumer. Art. 1432 CCQ and redundant art. 17 CPA provide for the known contra proferentem rule: 1432. In case of doubt, a contract is interpreted in favour of the person who contracted the obligation and against the person who stipulated it. In all cases, it is interpreted in favour of the adhering party or the consumer 17. In case of doubt or ambiguity, the contract must be interpreted in favour of the consumer.

Besides the CCQ, the CPA provides for other focus-tools destined to redress consumer asymmetries in consumer contracts. Sector specific rules include the digital and financial consumer.

7 Sector Specific Rules: The Financial Consumer Addressing the financial consumer means entering in a legislative labyrinth, as credit, financial services, and insurance law are nested in federal legislation (Bank Act,125 the Cost of Borrowing (Banks) Regulations,126 and the Financial Consumer Agency of Canada Act127) and Quebec’s one (the CCQ, the CPA and the Act Respecting the Distribution of Financial Products and Services enacted in 1998 and last amended in 2005128). Despite semantic variations and differences in their respective scope, these legislative endeavours all merge toward a common desire: “compete effectively and be resilient in a rapidly evolving marketplace, taking into account the rights and interests of depositors and other consumers of banking services, contributes to stability and public confidence in the financial system and is important to the strength and security of the national economy129”. On May 2th 2017, Bill 134 titled An Act mainly to modernize rules relating to consumer credit and to regulate debt settlement service contracts, high-cost credit contracts and loyalty programs was presented, specifically touching upon consumer credit and

rescind or cancel the contract without cost, penalty or cancellation indemnity by sending the merchant a notice]. However, except in the case of an indeterminate-term service contract, such a stipulation is prohibited if it applies to an essential element of the contract, particularly the nature of the goods or services that are the object of the contract, the price of the goods or services or, if applicable, the term of the contract. [. . .] (emphasis added). 125 Bank Act, SC 1991, c 46, http://canlii.ca/t/52x4z. 126 Cost of Borrowing (Banks) Regulations, SOR/2001-101. 127 Financial Consumer Agency of Canada Act, S.C. 2001, c. 9. 128 CQLR c D-9.2, http://canlii.ca/t/52t41. 129 Preamble of the Bank Act.

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informed consent. The Bill seeks to better define information obligations and moves closer to the EU panorama. In the meantime, properly disclosing the cost remains an important obligation as “[a] bank shall not make a loan to a natural person that is repayable in Canada unless the cost of borrowing, [rate per annum130] and other prescribed information have been disclosed [. . .] to the borrower at the prescribed time and place and in the prescribed form and manner. Indeed, consumers must be better informed about the economic consequences of a technical, complex products and services. More specific provisions131 surrounding loan terms (e.g. possibility to repay, manner penalties, etc.), disclosure in credit card applications and issuance (e.g. charges, penalties) and credit lines follow this wide prescription. Mutatis mutandis, the CPA contains similar prescriptions. Its art. 12 provides that “[n]o costs may be claimed from a consumer unless the amount thereof is precisely indicated in the contract”. In the eye of the Supreme Court, the provision “[. . .] articulate[s] a contractual norm in Quebec. Merchants must bring costs to the attention of consumers and, failing to do so, cannot claim them. This requirement does not amount to setting a standard applicable to banking products. Rather, it is analogous to the substantive rules of contract found in the CCQ, [. . .]132”. Other CPA special contracts follow a similar reasoning. For example, the comprehensible and clear terms of a contract of credit must thus involve a well-defined explanation of the consequences133: The merchant must state the credit charges in terms of dollars and cents, and indicate that they apply (a) to the entire term of the contract in the case of a contract for the loan of money or a contract involving credit, or (b) to the period covered by the statement of account in the case of a contract extending variable credit.

These provisions are distinct from strengthened information/council obligations that may incumb on financial professionals, by virtue of which market intermediaries have greater duties towards their clients. They fall outside the present Report; suffices it to mention that life was made easier to financial fraud victims as the province of Québec created a special compensation fund.134 130

Id., art. 451. They can be found at art. 452, Bank Act. 132 Bank of Montreal v. Marcotte, at par. 79 (emphasis added). 133 CPA, s. 71; Id. 134 Financial consumers do not really dwell with private law: in the stream of those great abuses that arose at the turn of the new millennium, a compensation procedure has been designed by the provincial regulator: l’Autorité des marchés financiers. Of course, according to article 277, “[t]he Authority is subrogated in all the rights of a victim it compensates, up to the amount of compensation paid. The amounts so recovered shall be paid into the fund”). To the best of our knowledge, it is the only comprehensive fund in North America, although not all financial products are covered by the ongoing plan. Its core provisions provides: 258. A financial services compensation fund is hereby established under the name “Fonds d’indemnisation des services financiers”. The fund shall 131

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Insurance or annuity contracts fall outside the scope of the CPA.135 They are, thus, governed by the CCQ as an autonomous legal category (article 2389 CCQ and ff.) and special statutes such as the Act respecting insurance,136 the Automobile Insurance Act,137 the Act respecting prescription drug insurance,138 Health Insurance Act,139 etc. Under the CCQ, however, insurance contracts’ regulation does not really follow the vulnerability paradigm. The CCQ covers the insurance contract more widely by protecting not only the client but also the insurer, in particular in the event of false declarations.140 In our understanding, insurance law is not really a consumer law subfield, although it provides various case law applications of the contract of adhesion related provisions (external clauses and unfair terms). Finally, the client bears the obligation to reveal risks: he/she “[. . .] is bound to represent all the facts known to him which are likely to materially influence an insurer in the setting of the premium, the appraisal of the risk or the decision to cover it, but he is not bound to represent facts that the insurer knows or is presumed to know because of their notoriety, except in answer to inquiries” (art. 2804, CCQ141). Conversely, contracts of credit are provided for by the CPA (art. 66 ff). Without a doubt, credit has become an industry complementary to that of goods and services intended for consumption. They include three categories: a loan agreement, a variable credit agreement and a credit contract.142 The 1978 version of the CPA already focused on these contracts calling for a new contractual equilibrium.143 Unlike the buck of consumer contracts (and but for credit cards144), they command

be assigned to the payment of indemnities payable to victims of fraud, fraudulent tactics or embezzlement for which a firm, an independent representative, an independent partnership or a mutual fund dealer or scholarship plan dealer [. . .] is responsible (emphasis added). The conditions are set out in the Regulation respecting the eligibility of a claim submitted to the Fonds d'indemnisation des services financiers CQLR c D-9.2, r 1, http://canlii.ca/t/hm0s, and provide for a compensation up to 200,000$ (140,000 euros). As a result, many legal issues follow an administrative pathway. Nonetheless, objective lesion (art. 8, CPA) or fraud-related provisions contained in the CCQ (at art. 1401) remain relevant in cases involving substantial amounts of money. 135 Art. 2 and 5, CPA. 136 Act respecting insurance, RLRQ, c. A-32. 137 Automobile insurance Act, RLRQ, c. A-25. 138 Act respecting prescription drug insurance, RLRQ. c. A-29.01. 139 Health insurance Act, RLRQ, c. A-29. 140 CCQ, s. 2420 à 2424. 141 Emphasis added. See also art. 2809 CCQ: “The obligation with respect to representations is deemed properly met if the representations are such as a normally provident insured would make, if they were made without material concealment and if the facts are substantially as represented”. 142 CPA, s. 66, “This division contemplates all contracts of credit, particularly (a) contracts for the loan of money; (b) contracts extending variable credit; (c) contracts involving credit.” 143 Thibaudeau (2014), pp. 575 and 576. 144 The issuance of the credit card amounts to the signature of the merchant and its use serves as the signature of the consumer.

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greater formalism and must be written.145 Transparency and clearness surrounding credit charges are also increased. Towards this end, the CPA provides very technical definitions of core contractual terms. For example credit costs are defined as “the amount that the consumer must pay under the contract, in addition to a net capital,146 in the case of a loan contract or a variable credit agreement and a net capital and cash payment in the case of a contract with credit147”. An information obligation follow, as the merchant must “mention credit costs in terms of dollars and cents and indicate that they relate to: (a) the entire term of the contract in the case of a loan contract or Contract with credit; or (b) the period covered by the statement of account in the case of a variable credit agreement148”. Despite the legislative effort towards greater intelligibility, these provisions have made their way up to the Supreme Court. The lack of clearness has given birth to a trilogy149 whereby several financial institutions (among which Bank of Montreal, the Fédération des Caisses populaires Desjardins, American Express Bank of Canada) allegedly violated the CPA whilst converting foreign currency. Courts seemed at pain in qualifying the administrative fees attached thereto: are they “net capital” (which they are held to be) or “credit charges”150? Interpreting the CPA, the Court concludes that “[. . .] conversion charges constitute sums for which credit is actually extended and are best classified

CPA, s. 80, “Contracts of credit, except contracts for the loan of money payable on demand, must be evidenced in writing.” 146 CPA, s. 68. “The net capital is (a) in the case of a contract for the loan of money, the amount actually received by the consumer or paid into or credited to his account by the merchant; (b) in the case of a contract involving credit or a contract extending variable credit, the sum for which credit is actually extended. Every component of the credit charges is excluded from this sum”. 147 CPA, s. 69: “Credit charges” means the amount the consumer must pay under the contract in addition to (a) the net capital in the case of a contract for the loan of money or a contract extending variable credit; (b) the net capital and the down payment in the case of a contract involving credit) and 70 (“70. The credit charges shall be determined as the sum of their components, particularly the following: (a) the amount claimed as interest; (b) the premium for insurance subscribed for, [. . .]; (c) the rebate; (d) administration charges, brokerage fees, appraiser’s fees, contract fees and the cost incurred for obtaining a credit report; (e) membership or renewal fees; (f) the commission; (g) the value of the rebate or of the discount to which the consumer is entitled if he pays cash; (h) the duties chargeable, under a federal or provincial Act, on the credit”. 148 CPA, s. 71, “The merchant must state the credit charges in terms of dollars and cents, and indicate that they apply (a) to the entire term of the contract in the case of a contract for the loan of money or a contract involving credit, or (b) to the period covered by the statement of account in the case of a contract extending variable credit.” 149 Bank of Montreal v. Marcotte, 2014 SCC 55 (CanLII), [2014] 2 S.C.R. 726,Amex Bank of Canada v. Adams, 2014 SCC 56 (CanLII), [2014] 2 S.C.R. 788; Marcotte v. Fédération des caisses Desjardins du Québec, [2014] 2 SCR 805, 2014 SCC 57 (CanLII), http://canlii.ca/t/g91ds. 150 The distinction had a practical relevance, as “[i]f the conversion charge qualifies as a credit charge, then according to the CPA it would have to be disclosed on its own, included in the disclosed credit rate, and be subject to the 21-day grace period. If the conversion charge qualifies as net capital, it would not be included in the credit rate or be subject to the 21-day grace period, but would still have to be disclosed under the general s. 12 disclosure provision of the CPA (Bank of Montreal v. Marcotte, par. 50). 145

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as net capital151”. Besides, the cases raised the question as to whether the affixing of the clause Currency conversion: 1.8 % (one dollar and eighty cents ($1.80) per one hundred dollars ($100) spent) on any amounts recorded in the cardholder’s account in foreign currencies and converted into Canadian dollars on the very back of clients’ monthly statement violated art. 12 of the CPA. The facts, too, invited for an assessment of the validity of the external clause in light of art. 1437 CCQ (see supra) pertaining to adherent contracts. In the end, the Court finds that both the CPA and the CCQ had been violated, and further ordered reimbursement of the sustained administrative charges.152 The credit contract is also characterized by the possibility for the consumer to rescind the contract when the conditions for doing so are met. Except in the case of a variable credit contract (a credit card), the consumer can resolve credit agreements without having to justify himself/herself in accordance with art. 73, CPA: “Contracts for the loan of money and contracts involving credit may be canceled without cost or penalty, at the discretion of the consumer, within two days following that on which each of the parties is in possession of a duplicate of the contract153”.

8 Sector Specific Rules: The Digital Consumer Provisions relating to distance-concluded contracts date back to 2006. The CPA defines it as a “contract entered into without the merchant and the consumer being in one another’s presence and preceded by an offer by the merchant to enter into such a contract154.” When the parties are not in the presence of one another, there is a presumption the contract was concluded from a distance. One of the core provisions related to distance contracts annihilates any extraneity element and significantly increases access to justice, as “a distance contract is deemed to be entered into at the address of the consumer155”. Wherever they are located, hence, all merchants must

151

Id., par. 58. Marcotte v. Fédération des caisses Desjardins du Québec, at par. 28. 153 Consequently, “[t]he contract is dissolved plenojure from the return of the goods or of the net capital or from the sending of the notice to the merchant or his representative”. And in light of art. 77, CPA, “[w]here a contract is cancelled by virtue of section 73, the parties must as soon as possible return to each other what they have received from one another. The merchant shall assume the costs of restitution” (emphasis added). 154 CPA, s. 54.1, “A distance contract is a contract entered into without the merchant and the consumer being in one another’s presence and preceded by an offer by the merchant to enter into such a contract. A merchant is deemed to have made an offer to enter into a distance contract if the merchant’s proposal comprises all the essential elements of the intended contract, regardless of whether there is an indication of the merchant’s willingness to be bound in the event the proposal is accepted and even if there is an indication to the contrary.” 155 CPA., s. 54.2, “A distance contract is deemed to be entered into at the address of the consumer.” 152

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abide to the applicable portions of the CPA if they offer Quebec consumers products or services. Especially in the context of the digital society, it seems that information obligations do away with the pre-contractual/contractual dichotomy, as they are often contained in the same interface, such as a website. Convincingly enough, websites are held to be “both precontractual and contractual156”, thus creating a potential theoretical renewal towards a continuous, linear obligation. At a pre-contractual stage, the following information must be disclosed: the merchant’s details; a description of the good or service; associated costs (including customs duties and brokerage fees; the total amount to be paid; the date and time at which the merchant’s principal obligation must be performed; the applicable cancellation, rescission, return, exchange and refund conditions, etc.157 And in order to better prevent fraud and promote transparency, CPA provides that prior to the conclusion of the distance contract, the merchant must also disclose a series of information in order to enable the consumer to know his contact details, as well as the nature of the goods or services covered by the contract. Following the logic underlying the illegible or incomprehensible clause, the “merchant must present the information prominently and in a comprehensible manner and bring it expressly to the consumer’s attention; in the case of a written offer, the merchant must present the information in a manner that ensures that the consumer is able to easily retain it and print it158”. In e-commerce, the use of hyperlinks, multiple windows are likely to confuse the consumer are thus to be avoided since “a consumer too informed is also an uninformed consumer159”. As with all contracts, consent must be free and informed.160 In order to ensure that the consumer’s consent under a distance contract is free and informed, the merchant must “ provide the consumer with an express opportunity to accept or decline the proposal and to correct any errors161”. Whenever the contract is passed, the CPA calls for enhanced formalism; the contract must be in writing and delivered to the consumer within 15 days of its conclusion.162 As the consumer has already disclosed his contact information,163 he has accordingly,

156

Union des consommateurs c. Air Canada, 2014 QCCA 523 (CanLII), http://canlii.ca/t/glf94, par. 57 (j. Bélanger). 157 Art. 54.4, CPA. 158 CPA, s. 54.4, al. 2. 159 L’Heureux and Lacoursière (2011), p. 142, (translation). 160 CCQ, s. 1399, “Consent must be free and enlightened. It may be vitiated by error, fear or lesion.” 161 CPA, s. 54.5. 162 “If the merchant does not send a copy of the contract to the consumer within the time provided for in section 54.7, the consumer has 30 days, as of the date the contract is entered into, in which to cancel the contract.”. 163 CPA, s. 54.6.

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7 days to cancel the contract164 as soon as he received his copy.165 The obligation to deliver goods or services follows the conclusion of the contract.166 If the merchant does not fulfill his part of the contract (in particular the delivery within 30 days of the date stipulated in the contract), the consumer can also obtain the cancellation of the contract.167

9 Sanctions Sanctions attached to a lack of information or misinformation vary in light of at least three factors: (1) their chronological position within the precontractual-contractual timeline; (2) the general/specific nature of the violation (general clause rather than punctual provisions) and; (3) the provincial-federal structure of our legal system. Although distinctions subsist, a merging phenomenon can be observed among those rooted in the CPA and the Civil Code; sanctions for failing to provide sufficient or accurate information obligation often end up in the nullity of the contract, a reduction of obligations (price reduction) and the possibility of making a claim for damages.168 In all cases, consumer may ask courts for appropriate remedies, although Court may decide otherwise.

9.1

Precontractual Information Defects

Not being able to give a free and enlightened consent means that wills never actually met and no contract has ever been passed. Pursuant to the CCQ, nullity is the appropriate sanction in such a case: “[a] person whose consent is vitiated has the right to apply for annulment of the contract; in the case of error occasioned by fraud, of fear or of lesion, he may, in addition to annulment, also claim damages or, where he prefers that the contract be maintained, apply for a reduction of his obligation equivalent to the damages he would be justified in claiming169”. Article 271 CPA

164 CPA, s. 54.8, al. 2, “However, the cancellation period begins as of the merchant’s performance of the principal obligation if the consumer, at that time, observes that the merchant has not disclosed all the information described in section 54.4.”. 165 CPA, s. 54.8. 166 CPA, s. 54.9 b) “(b) the contract is for transportation, lodging or restaurant services, or for tickets to an event, and the merchant does not provide the consumer, by the date specified in the contract or the later date agreed on in writing by the consumer and the merchant, with documents enabling the consumer to receive the services or attend the event.”. 167 CPA, s. 54.9. 168 CPA, s. 271 and 272; Lafond (2015), p. 118. 169 Art. 1407, CCQ.

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entail sanctions that are, as well, linked to the formal requirements of the contractual dynamics. It reads: 271. If any rule provided in sections 25 to 28 [contracts which requires a writing] governing the making of contracts is not observed or if a contract does not conform to the requirements of this Act or the regulations, the consumer may demand the nullity of the contract. In the case of a contract of credit, if any of the terms and conditions of payment, or the computation or any indication of the credit charges or the credit rate does not conform to this Act or the regulations, the consumer may at his option demand the nullity of the contract or demand that the credit charges be canceled that any part of them already paid be restored. The court shall grant the demand of the consumer unless the merchant shows that the consumer suffered no prejudice from the fact that one of the above-mentioned rules or requirements was not respected. (emphasis added)

Case law observed that by virtue of art. 271 CPA, “[. . .] there is a rebuttable presumption in favour of consumers that they are entitled, inter alia, to compensation once it has been established that the merchant, in this case the seller, omitted to inform them of a cost of credit. The same section provides that the presumption is rebutted if the merchant shows that the consumer suffered no prejudice170”. Notably, the provision does not open the door to punitive damages. A formation defect in a contract of credit seem to offer the consumer two choices: the nullity of the contract or the restitution of credit charges/rates unduly paid.

9.2

Contractual Sanctions

At the turn of the new CCQ, formation and substantial related defect were subject to greater harmonization (see art. 1407 and 1590 CCQ). Without going into details and despite language and conceptual disparities, one can see, by comparing the particular law and civil law that there is a great similarity, too, among CCQ and CPA sanctions (see Table 1). Case Richard v. Time, again, shed light on the dynamics underlying art. 272 CPA. Among other things, the Supreme Court observed that the provision targets two main sets of obligations. Statutory contractual obligations contained at Title I of the CPA171—Contracts Regarding Goods and Services—, for which “[p]roof that one of these substantive rules has been violated entitles a consumer, without having to meet any additional requirements, to obtain one of the contractual remedies provided for in s. 272 C.P.A.172” are the first ones. As to the second ones, they are those related to some unfair practices contained in Title II of the CPA. As such, they are pre-contractual in nature: “[t]he legislature’s objective with respect to business 170

Contat c. General Motors du Canada ltée, 2009 QCCA 1699 (CanLII), http://canlii.ca/t/25mgk, at par. 24 (emphasis added). 171 Richard v. Time, at par. 113. 172 Ibid.

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Table 1 Sanctions: law of obligations vs. civil law Consumer Protection Act 272. If the merchant or the manufacturer fails to fulfil an obligation imposed on him by this Act, by the regulations or by a voluntary undertaking made under section 314 or whose application has been extended by an order under section 315.1, the consumer may demand, as the case may be, subject to the other recourses provided by this Act, (a) the specific performance of the obligation; (b) the authorization to execute it at the merchant’s or manufacturer’s expense; (c) that his obligations be reduced; (d) that the contract be rescinded; (e) that the contract be set aside; or (f) that the contract be annulled, without prejudice to his claim in damages, in all cases. He may also claim punitive damages

Civil Code of Quebec 1590. An obligation confers on the creditor the right to demand that the obligation be performed in full, properly and without delay. Where the debtor fails to perform his obligation without justification on his part and he is in default, the creditor may, without prejudice to his right to the performance of the obligation in whole or in part by equivalence, (1) force specific performance of the obligation; (2) obtain, in the case of a contractual obligation, the resolution or resiliation of the contract or the reduction of his own correlative obligation; (3) take any other measure provided by law to enforce his right to the performance of the obligation

practices is clear: to ensure the veracity of pre-contractual representations in order to prevent a consumer’s consent from being vitiated by inadequate, fraudulent or improper information173”. To sum up—wrote the Court—a consumer may seek sanctions under art. 272 CPA if he/she proves: “(1) that the merchant or manufacturer failed to fulfil one of the obligations imposed by Title II of the Act; (2) that the consumer saw the representation that constituted a prohibited practice; (3) that the consumer’s seeing that representation resulted in the formation, amendment or performance of a consumer contract; and (4) that a sufficient nexus existed between the content of the representation and the goods or services covered by the contract”. Importantly enough, the provision applies whether or not a prejudice was caused: “[w]hether a commercial representation did or did not cause prejudice to one or more consumers is not relevant to the determination of whether a merchant engaged in a prohibited practice [. . .]. The C.P.A. is concerned not only with remedying the harm caused to consumers by false or misleading representations, but also with preventing the distribution of advertisements that could mislead consumers and possibly cause them various types of prejudice174”.

173 174

Id., par. 114. Contat c. General Motors du Canada ltée, at par. 55-56 (emphasis added).

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Coordinating Pre-contractual and Contractual?

Coordinating precontractual and contractual sanctions is anything but an easy task, considering that article 271 and 272 CPA are apparently “mutually exclusive175”: “[s]ection 271 applies only when the merchant fails to conform to the rules regarding the formal requirements of the formation of consumer contracts, including the terms and conditions of payment and the computation and disclosure of credit charges and the credit rate. In contrast, s. 272 applies to substantial breaches of the Act that result in prejudice to consumers176”. As a result, defendants inevitably try to set aside art. 272 CPA in order to avoid paying punitive damages and be given a chance to rebut the prejudice presumption contained at art. 271 CPA. Whenever contracts of credit are concerned, very extensive interpretative solutions will be brought forward to suggest that credit charges or rates were really at the heart of the matter. In this context, one may expect that coordinating sanctions will require a lot of judicial energy. And it has. In Bank of Montreal v. Marcotte, for example, the Court found that some defendants’ behavior were “[. . .] substantive violation[s] that [go] against the Act’s objective of permitting consumers to make informed choices. The violation is unrelated to the formation of the consumer contract at issue. In this case, the breach of s. 12 surpasses a violation of the formal requirements of the CPA. It is not related to the terms and conditions of payment or the computation or indication of the credit charges or the credit rate, which are specifically covered by s. 271. At the very least, this violation results from ignorant or careless conduct as required by the test in Richard”. In a prior case handed down by the Court of appeal in 2006, is was held that only art. 272 CPA applies to charges imposed in relation with late payments (10$ everytime). Unlike Canadian common law, punitive damages are not a general civil law category in Quebec. They are rather provided for in an exceptional manner whenever legislator expressly says so. However and much like the consumer contract, a definition and proper evaluation criteria are embedded in the Civil Code, as article 1621 reads: 1621. Where the awarding of punitive damages is provided for by law [such as the CPA, see art. 272 CPA in fine], the amount of such damages may not exceed what is sufficient to fulfill their preventive purpose.

175

See also Service aux marchands détaillants ltée (Household Finance) c. Option Consommateurs, 2006 QCCA 1319 (CanLII), http://canlii.ca/t/1qf63 (Contra: dissenting j. Beauregard, who rather notes that “Les recours offerts par les articles 271 et 272 ne sont pas mutuellement exclusifs. Les mots “sous réserve” de l'article 272 ne signifient pas que le recours de l'article 272 ne peut être exercé que si celui de l'article 271 n'est pas offert. L'expression signifie que le recours de l'article 272 peut être exercé indépendamment des autres recours prévus par la Loi, singulièrement indépendamment du recours prévu à l'article 271” (par. 28, emphasis added). The Supreme Court never clarified the matter: see Dion c. Compagnie de services de financement automobile Primus Canada, 2015 QCCA 333 (CanLII), http://canlii.ca/t/ggdwx (par. 53). 176 Bank of Montreal v. Marcotte, par. 90. See also Richard v. Time, at par. 112.

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Punitive damages are assessed in the light of all the appropriate circumstances, in particular the gravity of the debtor’s fault, his patrimonial situation, the extent of the reparation for which he is already liable to the creditor and, where such is the case, the fact that the payment of compensatory damages is wholly or partly assumed by a third person. (emphasis added)

Policy reasons underlying these special damages was expressed by the Supreme Court in recent Richard v. Time case. It this occasion, it held that “[t]he C.P.A.’s first objective is to restore the balance in the contractual relationship between merchants and consumers [references omitted]. This rebalancing is necessary because the bargaining power of consumers is weaker than that of merchants both when they enter into contracts and when problems arise in the course of their contractual relationships. It is also necessary because of the risk of informational vulnerability consumers face at every step in their relations with merchants177”. They can be awarded independently, as an autonomous head of damages: “Consumers can be awarded punitive damages [. . .] even if they are not awarded contractual remedies or compensatory damages at the same time178”.

9.4

Penal Sanctions

The CPA pursues both preventive and deterrence goals. The latter justifies the Director of Criminal and Penal Prosecutions to make sure that prohibited practices are punished (art. 217): “[t]he purpose of such proceedings is not to protect the private interests of one or more consumers, but to protect the public in general from business practices that may be misleading179”. When a manufacturer contravenes the CPA, sanctions can range from small fines to imprisonment without the need to prove mens rea (criminal intention) as the offenses are strictly liable.180 Sanctions can range from small fines to imprisonment without the need to prove mens rea as the offense is strictly liable.181 They are similar pursuant to the Competition Act, the Food and Drug Act, the Canadian Consumer product safety Act and other sector specific legislation.

177

Richard c. Time, at par. 160. Richard c. Time, at par. 127. 179 Richard v Time, at par. 138. 180 L’Heureux and Lacoursière (2011), par. 455 & 456. 181 FDA, s. 5(1), CPLA, s. 7(1), see L’Heureux and Lacoursière (2011), par. 455 & 456. 178

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521

Conclusion

The interplay among these legislative pieces reveals a panorama that is not entirely faithful to neither the consumer vulnerability paradigm, nor the rationality one. Indeed, every analyzed legal category develops against the backdrop of different policy reasons and timelines. In Jobin & Cumyn’s words, “[. . .] l’obligation d’information est devenue polymorphe et de plus en plus exigeante. Il ne s’agit plus simplement de fournir parfois à l’acheteur quelques indications pour qu’il tire le plein bénéfice du bien; souvent le vendeur doit maintenant lui communiquer, de plus, de nombreuses informations sur la conservation du bien et pour assurer la sécurité de la personne et des biens de l’acheteur182”. Much like a mountain scenery, Quebec’s legislation reveals protection peaks that are clearly visible in the field of deceptive or misleading practices, or whenever children are targeted as potential consumers. Indeed and as interpreted by the Supreme Court in occasion of the Richard v. Time case, the redesigned vulnerable consumer model offers the advantage of being able to capture every new advertising strategy that may lay down on non-tangible support (the mind, the senses, the multimedia). In this sense, the stance taken by the Supreme Court may contrast with surrounding occidental’s models (the US’s, the EU’s), but will probably be more capable of metabolizing industry creativity in promoting products without calling for a revision of the CPA. Did it go too far? If the question remains unanswered, one may not ignore a second peak, the Tobacco case—confirmed on appeal—, which sends ever-stronger messages to those who hide behind lifestyles and risk acceptation to affirm free will. The case is original precisely because it addresses the very special correlation between labeling and advertising; a couple repeatedly used to misinform consumers. Tearing down the remainings of an already moribund tobacco industry—in Canada, at least—the stratagem rooted out by the Court with the help of science and common sense sheds light on doubtful market practices that similarly seem to inspire the car industry. This very knot between warnings, leaflets and product placement calls for a better synergy among lawyers and social sciences experts. Whomever has ever been to Quebec also knows that our mountains tops are not those that one sees on most Canadian Rockies postcards. Eroded by time, their roundish features reminds us that this landscape evolves against the backdrop of different eras. Most new CPA protections, indeed, do not turn their back on older basic law civil categories. A symbiotic interpretation between contract of adhesion (CCQ) and contract of credit (CPA) is visible in the financial services sector, and insures coherence whilst avoiding silo thinkings that end up, at last, into fragmented regulation. Despite this legislative scenery, Baudouin, Jobin and Vézina document the existence of a general obligation: “[d]ans certaines circonstances, donc, une partie ne peut plus se contenter de répondre honnêtement aux questions de l’autre partie: elle doit prendre l’initiative de lui divulguer tous les faits qui sont 182

Jobin and Cumyn (2007), par. 110.

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normalement susceptibles d’influencer son consentement de façon importante183”. The information obligation may not be linear, but it certainly configures contractual relationships, be they consumer contracts or derived from the general law of obligations contained in the CCQ, and, specifically, the good faith general clause embedded into art. 1375 CCQ (“[t]he parties shall conduct themselves in good faith both at the time the obligation arises and at the time it is performed or extinguished”). This surely is the highest protection peak. Acknowledgements The author acknowledges precious assistance by Stéphanie Béland and Anouck Paillet.

References Arbour ME (2014) Compensating non communicable diseases: “Lifestyle Torts” meet social determinants of health. In: Alemanno A, Garde A (eds) Regulating lifestyle risks. Cambridge University Press, Cambridge, p 120 Arbour ME (2016) Lifestyle torts, market manipulation and the tobacco industry: a comment on Létourneau c. JTI-MacDonald Corp. J Eur Tort Law 7(3):328–352 Arbour M-E, Hoeung S (2015) Canadian Report. In: Norer R (ed) Genetic technology in the light of food security and food. Springer, Zurich Baudouin J-L, Jobin P-G, Vézina N (2013) Les obligations. Éditions Yvon Blais, Cowansville, p 21 Glenn JM (2010) Damage caused by GMOs under Canadian Law. In: Koch BA (ed) Damage caused by genetically modified organisms - comparative survey of redress options for harm to persons, property or the environment. De Gruyter, Berlin, p 663 Jobin P-G, Cumyn M (2007) La vente. Éditions Yvon Blais, Cowansville. (par. 110) L’Heureux N, Lacoursière M (2011) Droit de la consommation. Éditions Yvon Blais, Cowansville, pp 1–4 Lafond P-C (2015) Droit de la protection du consommateur - Théorie et pratique. Éditions Yvon Blais, Cowansville, p 117 Masse C (1999) Loi sur la protection du consommateur: analyse et commentaires. Éditions Yvon Blais, Cowansville Thibaudeau L (2014) Le consommateur à la recherche de la protection adéquate. In: du Québec B, Service de la formation continue (eds) Colloque national sur les recours collectifs: développements récents au Québec, au Canada et aux États-Unis. Édition Yvon Blais, Cowansville, p 574

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Baudouin et al. (2013), p. 400.

Information Obligations and Disinformation of Consumers: Brazilian Law Report Milena Donato Oliva

Abstract The paper aims to examine the contours of consumer law in Brazilian legal reality. After exposing the theories that deal with the stormy concept of consumer, the article analyzes the main protective institutes contemplated in the national legislation. The text examines issues such as the obligation to provide suitable information which is incumbent on the supplier, the prohibition of misleading and abusive advertising, especially with regard to hypervulnerable consumers, and the control of unfair contract terms. It also studies the incidence of the consumer law in banking and insurance systems, as well as digital commerce, especially with regard to guaranteeing adequate access to information. In conclusion, the paper presents perspectives for a sustainable consumption that promotes the health and the well-being of consumers, in order to pursuit human dignity as the maximum value to be achieved in the Brazilian legal system, in the terms of article 1, subsection III, of the Constitution of the Republic.

1 Introduction: The Consumer Under Brazilian Law The consumer protection under Brazilian law, resulting from the substantial isonomy principle, aims at protecting the ‘homo economicus’ that faces the consumer market from a place of vulnerability when compared to the supplier of products and services. The 1988 Constitution of the Federative Republic of Brazil lifted consumer protection to the position of fundamental right, established in its Article 5, XXXII, and to the position of principle of economic order, as per Article 170, V. In 1990, the Consumer Protection Code came into force (Law n. 8.078/1990) with the objective of putting into practice the constitutional order and providing for an effective balance in the relations between suppliers and consumers.

M. D. Oliva (*) Rio de Janeiro State University – UERJ, Rio de Janeiro, Brazil e-mail: [email protected] © Springer Nature Switzerland AG 2019 G. Straetmans (ed.), Information Obligations and Disinformation of Consumers, Ius Comparatum – Global Studies in Comparative Law 33, https://doi.org/10.1007/978-3-030-18054-6_16

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The Consumer Protection Code, in its Article 2, defines the consumer as every individual or legal entity1 that acquires or uses a product or service as final user.2 To be characterized as a consumer, the individual or legal entity does not need to have a contractual bond with a supplier, since the provision expressly refers to the words acquirer or user. However, it is important to note that the Consumer Protection Code not only applies when it comes to final recipients. Other important provisions— Articles 173 and 294—establish the consumer by comparison with the purpose of ensuring equal treatment to everyone who is in similar vulnerable situations, even though they are not final recipients. In Brazil there are two main scholar understandings in regards to the definition of final user: maximalism and finalism. For the first, it is not required that the destination, to be considered final, be completely unrelated to the professional activity, but only that it is not part in the productive chain by means of enhancement or transformation.5 The act of final consumption would then occur every time the product is not used directly in the productive chain.6 On the other hand, for the finalists, the consumer figure is restricted to those who use the product or service for an unprofessional purpose. According to this understanding, the direct or indirect usage in the context of economic activity decharacterizes the final destination as it turns the product or service into an instrument of the productive cycle of other products or services.7

1 Even though the head of Article 2 of the Consumer Protection Code includes both the individual and the legal entity, one should pay attention, in the occasion the consumer protection diploma is being applied, to the different values that relate to them, a circumstance that is not forgotten by the Consumer Protection Code, which Article 51, I, exemplarily, allows for the limitation of the supplier’s liability when the consumer is a legal entity, as long as justified. The individual, in fact, has existential values that are not shared by the legal entity and that occupy the heart of the legal order. 2 Head of Article 2 of the Consumer Protection Code: “A consumer is any individual or legal entity who acquires or uses a product or service as a final user”. See Pasqualotto (2010). 3 Article 17 of the Consumer Protection Code: “For the purposes of this section, all victims of the event have the same rights as consumers”. 4 Article 29 of the Consumer Protection Code: “Any person exposed to what is described in this chapter and the next will be considered equal to consumers”. 5 “The company that acquires, for example, a vehicle for the transportation of raw materials or employees certainly does so in the quality of purchaser and final user of that product that shall not be subject to transformation, neither, in this case, the vehicle shall be included in the final purpose of production of the company (herein ‘consumer-legal entity’). The vehicle purchased achieves its final cycle, finding its final recipient in the company” (Alvim et al. 1995, p. 29). 6 In case law, see Superior Court of Justice, CC 41.056/SP, 2ª S., Rel. Min. Aldir Passarinho Junior, Rel. p/ Acórdão Min. Nancy Andrighi, julg. 23.6.2004. 7 In case law, see Superior Court of Justice, REsp 541.867/BA, 2ª S., Rel. Min. Antônio de Pádua Ribeiro, Rel. p/ Acórdão Min. Barros Monteiro, julg. 10.11.2004.

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The Superior Court of Justice,8 that has already applied the maximalist principles,9 altered its understanding in the ruling of Special Appeal n. 541.867 in 2004 as to apply the Consumer Protection Code only when the acquisition of the product or service does not relate to professional usage, therefore adopting the finalist parameters. Besides that, the Superior Court to Justice instituted the so-called deepened finalism, according to which, once the vulnerability is verified, even if from the finalist perspective the final destination is not present, the Consumer Protection Code would still be applicable. In this sense, the Superior Court of Justice ruled that “it is a consumer relation the one established between the truck driver that complains about a manufacturing defect of the acquired truck and the company that sold the vehicle, when recognized the vulnerability of the plaintiff with regards to the defendant”.10 The vulnerability considered by the Superior Court of Justice to decide whether the Consumer Protection Code must be applied can be of multiple natures: “technical (lack of specific knowledge regarding the product or service being consumed), legal (lack of legal, accounting or economic knowledge and its reflections in the consumer relation) and factual (situations in which the economic, physical or even psychological insufficiency of the consumer puts him in a disadvantageous position with regard to the supplier). More recently, the vulnerability with regard to information (insufficient data about the product or service that is able to influence the buying decision-making process) has also been included”.11 There is also the category of the hyper vulnerable, which means the type of consumers that have an aggravated vulnerability due to his or hers young or advanced age, for example children12 and elderly,13 to his or hers fragile

8 It is the Superior Court designated by the Brazilian Constitution to, among other functions, harmonize the interpretation of federal laws and solve any potential divergence in case law about the subject in question. 9 In the maximalist sense, see, exemplarily, the following rulings: Superior Court of Justice, REsp 208.793, 3a T., Rel. Min. Carlos Alberto Menezes Direito, julg. 18.11.1999; Superior Court of Justice, REsp 286441, 3a T., Rel. p/acórdão Min. Carlos Alberto Menezes Direito, julg. 7.11.2002; Superior Court of Justice, REsp 263229, 1a T., Rel. Min. José Delgado, julg. 14.11.2000. 10 Superior Court of Justice, AgRg no AREsp 426563/PR, 4a T., Rel. Min. Luis Felipe Salomão, julg. 3.6.2014. See also Superior Court of Justice, RMS 27512/BA, 3a T., Rel. Min. Nancy Andrighi, julg. 20.8.2009. See also Miragem (2012), part I, chapter 5, item 5.2. 11 Superior Court of Justice, REsp 1195642/RJ, 3a T., Rel. Min. Nancy Andrighi, julg. 13.11.2012. See also Marques and Miragem (2014). 12 Article 2 of Law n. 8.069/1990 (The Child and Adolescent Statute): “For the purposes of this Law, the child is considered as the person who has not yet completed twelve years of age and the adolescent as the person between twelve and eighteen years of age”. About the special protection of children under Brazilian Consumer Law, see da Cunha Brokamp (2010), de Carvalho and de Souza Oliveira (2010). 13 Article 1 of the Law n. 10.741/2003 (Elderly’s Statute): “The Elderly’s Statute is instituted with aiming at regulating the rights ensured to someone who is 60 (sixty) years old or older”. About the special protection of the elderly, see Barboza (2008), passim; Pierri (2014) and Barletta (2010), passim.

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health14 or to his or hers disability.15 Insofar as consumer protection is associated, under Brazilian law, with the repersonalizing trend brought by the 1988 Constitution of the Republic—, instead of protecting the abstract and neutral subject of law, the protection is directed to the actual person under consideration—the identification of vulnerability levels allow for a protection that is adequate and proportional to the real needs of the vulnerable person. As an example, the hyper vulnerability of an elderly is magnified when it comes to health assistance contracts, as for him/her this type of service is even more essential, especially if he/she already suffers from a disease or a debilitating physical condition.16 Besides that, the fact that banking contracts are not made available in braille has also been considered as a violation of the duty to adequately inform a disabled person.17

2 The Importance of the Supplier’s Duty to Inform and the Need for Informed Consent by the Consumer: Binding Effects of the Information Given by the Supplier in the Pre-contractual Phase The Consumer Protection Code ensures the consumer broad access to information, as it recognizes that asymmetry of information is a factor of great disparity in the consumer market.18 In several opportunities, the Code stresses the supplier’s duty to 14 “The probability of the irreparable or hard to repair damage is evident, since the appealed, hyper vulnerable as he is due to his health condition, needs urgent medical care, as per the medical report filed in the records; it is certain that Article 35-C, I of Law n. 9.656/98 establishes as mandatory the coverage of treatment in those cases” (Tribunal of Justice of Rio de Janeiro, AI 002504897.2016.8.19.0000, 27ª CC Consu., Rel. Des. Marcos Alcino de Azevedo Torres, julg. 14.9.2016). In regard to the special protection of hyper vulnerable consumers, see de Magalhães Dias (2015). 15 Article 2 of Law n. 13.146/2015 (Statute of Disabled Persons): “A person is considered disabled when he/she has a long-term impediment of physical, mental, intellectual or sensory nature which, when faced with one or more obstacles, can hinder his/her full and effective participation in society in equal conditions with other people”. 16 In this sense, see Article 15, paragraph 3 of the Elderly’s Statute (Law n. 10.741/2003): “The discrimination of senior citizens regarding payment of higher amounts of health insurance due to their age is prohibited”. About the subject, check Superior Court of Justice, REsp 1.568.244/RJ, 2ª S., Rel. Min. Ricardo Villas Bôas Cueva, julg. 14.12.2016; Superior Court of Justice, AgInt no AREsp 990938/SP, 4ª T., Rel. Min. Luis Felipe Salomão, julg. 21.2.2017. 17 Superior Court of Justice, REsp 1.349.188/RJ, 4ª T., Rel. Min. Luis Felipe Salomão, julg. 10.5.2016. 18 “More than an obligation resulting from the law, the duty to inform is a way to cooperate, a social need. In the activity of furtherance to consumption and supply chain, the duty to inform has become an authentic pro-active burden for the suppliers (commercial partners, or not, of the consumer), ending the old and unjust obligation undertaken by the consumer with regards the need to protect him/herself (caveat emptor)” (Superior Court of Justice, REsp 1.428.801/RJ, 2ª T., Rel. Min. Humberto Martins, julg. 27.10.2015). See also Superior Court of Justice, REsp 1.349.385/PR, 3ª

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inform, deriving from objective good faith, a principle established in Article 4, II of the Consumer Protection Code. In its Article 6, III,19 the Code lists the right to information as a consumer’s basic right, in order to give him/her the means to decide in a free and clarified way as to the convenience of hiring or using the products or services available.20 In its Article 31, the Consumer Protection Code clarifies that the “offer and presentation of products or services must ensure correct, clear, precise, ostensive information, also using the Portuguese language, regarding its characteristics, benefits, quantity, composition, price, guarantee, expiration dates and origin, among other data, as well as about the risks that they may present to health and security of the consumers”.21 The sole paragraph of the same provision determines that, with regards to refrigerated products, such information must be indelibly engraved. The compliance with the duty to inform by the supplier must occur in the pre-contractual phase, i.e., in the moment of publicity of the product or service; during the contractual phase, with regards to the information that comes with the product, as those found in packages and labels; and in the post-contractual moment,

T., Rel. Min. Ricardo Villas Bôas Cueva, julg. 16.12.2014; Tribunal of Justice of Rio de Janeiro, Ap. Cív. 0010581-14.2015.8.19.0206, 27ª CC Consu., Rel. Des. Antônio Carlos dos Santos Bitencourt, julg. 9.11.2016; Marques (2001); Marques (2016), chapter 3, item 1.2; Marques et al. (2004), art. 31; Oliva (2015). 19 Article 6 of the Consumer Protection Code: “The following are basic consumer rights: (. . .) III adequate and clear information about different products and services, with correct specification of quantity, characteristics, composition, quality, price and taxes, as well as of the risks presented; (. . .)”. 20 “The informed consent or the clarified agreement cannot be seen, therefore, as a simple formality. It is, without further digression, the result of a dialogue in which the supplier and the consumer, pervaded by the strictest good-faith, seek to clarify doubts and is not ended by the simple act of signing by the adherent in the contractual space reserved by the supplier” (Tribunal of Justice of Rio de Janeiro, Ap Cív. 0072407-80.2006.8.19.0004, 1ª CC, Rel. Des. José Carlos Maldonado de Carvalho, julg. 25.6.2009). In regard to the relevance of the duty of information, see Barbosa (2008) and de Almeida Santos (2016). 21 Law n. 12.414/2011, that complements the terms of the Consumer Protection Code, establishes: “Article 3: The database may contain information about the compliance by the registered person for the formation of a credit history with the terms established by this Law. Paragraph 1: For the formation of the database, it can only be stored information that is objective, clear, true, easy to understand and necessary to evaluate the economic condition of the registered person. Paragraph 2: For the purposes of paragraph 1, it is considered information: I – to be objective: those describing the facts and that does not involve a judgment of value; II – to be clear: those that allow for an immediate understanding by the registered person independently of reference to attached documents, formulas, acronyms, symbols, technical terms or specific names; III – to be true: those that are precise, complete and subject to prove as per the terms of this Law; and IV – to be easily understandable: those in common sense that allow the registered person full knowledge of the content, sense and reach of the data being collected. Paragraph 3: It is prohibited the collection of: I – excessive information, i.e., the one that are not connected to the consumer’s credit risk analysis; and II – sensitive information, which means the one that are related to the social and ethnical origin, to health condition, to genetic information, to sexual orientation and political, religious and philosophical convictions”.

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as with the case of recall, that finds its basis on Article 10 of the Consumer Protection Code.22 The Consumer Protection Code is not satisfied with the formal consent by the consumer, but states that his/hers will must be free and clarified; which is ensured not only by the prohibition of abusive practices, but also by the supplier’s duty to inform that must clarify the effects of the deal, the characteristics and risks of the product or service. In order to satisfactorily comply with its duty to inform and obtain the qualified consent by the consumer, the supplier must at the same time avoid the excess of information that ultimately leads to misinformation and adjust the content of its message to the specificities of the product or service, as well as to the target market. In this context, not only the risks and attributes of the product or service must be clarified to the consumer, but also those involved in the operation itself, considering that the consumer is usually unaware of the technical language used and the effects resulting from it. The Superior Court of Justice has stated that “adequate information, as per Article 6, III of the Consumer Protection Code, is the one that is simultaneously complete, free and useful, being prohibited, in this last case, the dilution of relevant communication by the use of loose, redundant and useless information to the consumer”. The Court continues to highlight that the information must be correct, clear, precise, ostensive and in Portuguese, being split in the following species: “a) content-focused information (¼ intrinsic characteristics of the product or service), b) usage-focused information (¼ how the product or service must be used), c) price-focused information (¼ costs and means of payment), and e) warning-focused information (¼ risks associated with the product or service)”.23 It must be further highlighted that all sufficiently precise information given by the supplier are binding,24 as per Article 30 of the Consumer Protection Code,25 prevailing over any contractual provisions in contrary (unless the latter is more advantageous to the consumer). In case of nonconformity of the product or service to the information provided, the consumer can, based on Article 35 of the Consumer

Article 10 of the Consumer Protection Code: “Supplier may not make available to the market any product or service that is known to present a high level of harm or danger to health or safety. Paragraph 1. The supplier of products or services who, subsequently to the introduction of his products or services into the market, realizes the existence of unforeseen risks involved, shall immediately communicate the fact to the competent authorities and warn consumers, through advertising notices. Paragraph 2. The advertising notices referred to in the foregoing paragraph shall be widely spread through the press, radio and television, at the expense of the product or service supplier (. . .)”. 23 Superior Court of Justice, REsp 586316, 2a T., Rel. Min. Herman Benjamin, julg. 17.4.2007. 24 Herman Benjamin warns that the information able to bind the supplier must be precise, i.e., it cannot result in excess of marketing promotion (puffing). The author warns that “it is the case of exaggerated expressions that don’t allow objective verification, such as ‘the best flavor’, ‘the prettiest’ (. . .)” (Benjamin et al. 2016, p. 264). See also Atz (2015), item 3. 25 Article 30 of the Consumer Protection Code: “Every sufficiently accurate information or advertising, announced by any vehicle or communication means, concerning products and services offered or presented, shall bind the supplier announcing it or making use of it and shall integrate the contract to be entered into”. 22

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Protection Code,26 demand the enforced compliance of the obligation according to the terms of the information provided; accept another product or service that is equivalent; or terminate the contract and be refunded the amount paid in advance financially updated and, in any case, receive potential damages.27 It is important to observe that the supplier cannot refrain from complying with what was informed under the allegation of error in the disclosure of the information in question. In fact, any possible material error is included in the risks normally undertaken by the supplier while performing his/hers activities, reason why it cannot be opposed to the consumer.28 As an example, if in a certain clothing store the amount indicated in the label is cheaper than the one registered in the computer at the moment of payment, the amount indicated in the label must prevail as it constitutes the information provided to the consumer about the price of that product. However, the binding effects of the information given by the supplier are not absolute. In light of the principle of objective good-faith, when the information given by the supplier is blatantly wrong and, for that reason, not able to create in the consumers a legitimate expectation as to its adequacy, the supplier shall not be compelled to comply with it.29 Exemplarily, the advertisement of an automotive Article 35 of the Consumer Protection Code: “If a product or service supplier refuses to comply with the terms of the offer, presentation or advertising, the consumer may elect, alternatively and at his choice: I - to a compelled performance of the obligation, in accordance with the terms of the offer, presentation or advertising; II - to accept another product or the rendering of an equivalent service; III - to break the contract, with the right of having returned any amount paid in advance, with the corresponding adjustments, plus indemnity for losses and damages”. 27 “In case of an offer in which the supplier refuses to deliver the product or service, the consumer can take the measures established in items I to III of the Article 35 of the Consumer Protection Code of his/her choice” (Tribunal of Justice of Rio Grande do Sul, Ap. Cív. 70065828675, 6ª CC, Rel. Des. Luís Augusto Coelho Braga, julg. 7.4.2016). See also Tribunal of Justice of Rio Grande do Sul, Ap. Cív. 71004995957, 1ª TRC, Rel. Des. Fabiana Zilles, julg. 24.2.2015. 28 “As it was shown in the records, the offer indicated ‘#consumer’s day Brazil’, ‘products with up to 80% off’. Therefore, the consumer, acting in good-faith and believing in the offer conveyed, acquired the products with significant discounts because that was the content of the offer. There was no reason, in view of the strong expressions used in the commercial, to suspect of error. The request for products in discount was received, processed and confirmed. Thus, if an error occurred, this is due to an internal failure by the defendant that does not release it from complying with the offer, as per the terms of Article 30 of the Consumer Protection Code. Duty to comply with the terms of the offer and deliver the products” (Tribunal of Justice of Rio Grande do Sul, Ap. Cív. 71006084172, 2ª TRC, Rel. Des. Ana Cláudia Cachapuz Silva Raabe, julg. 26.10.2016). See also Tribunal of Justice of Rio Grande do Sul, Ap. Cív. 71005040043, 3ª TRC, Rel. Des. Lusmary Fatima Turelly da Silva, julg. 9.4.2015. 29 According to the warning issued by Procon Foundation in São Paulo: “However, there are cases in which it is clear that an error occurred with regards to the price information, as it is incompatible with the product being displayed. In these situations, there is no requirement to comply with the offer as this procedure would be in disagreement with Article 4 of the Consumer Protection Code that establishes as one of the goals of the national consumer relationships’ policy the harmonization of the interests among suppliers and consumers, based on good-faith and balance in these relations” (available at http://www.procon.sp.gov.br/texto.asp?id¼2866, viewed last on 2.6.2017). Created by Law n. 9.192/1995 (see also Decree n. 41.170/1996), the Procon-SP Foundation is an institution connected to the Secretary of Justice and Citizenship Defense from the State of São Paulo and has public legal personality, with technical administrative and financial autonomy. 26

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vehicle that costs more than R$ 50,000.00 for only R$ 5.00 is unequivocally the result of a material error and there is no legitimate expectation from the consumers to be protected; therefore, dismissing the application of Articles 30 and 35 of the Consumer Protection Code. The duty to inform is so relevant that its defective compliance can still configure a defect of inadequacy or a defect of insecurity, in violation of the Quality Theory adopted by the Consumer Protection Code.30 Both defects lead to the frustration of the consumer’s legitimate expectation. The quality defects by inadequacy affect the ability of the product to perform its purpose; for example, a refrigerator that does not cool or the beverage that has a distinct color from the one that was promised.31 On the other hand, the quality defects by insecurity result in consumption accidents and cause the consumers material and moral damages.32 The lack of information can lead to the dysfunctional use of the product or service, resulting in adequacy or security problems. It is convenient to highlight that special rules can regulate with more details the spectrum of the duty to inform, as it is the case with food.33 It is required, for example, the information about the number of items contained in the package, of the net weight of the product, excluding the package, as well as the net weight of canned products, excluding water. Besides that, according to Article 1 of Ordinance n. 81/ 2002 issued by the Ministry of Justice, in case of quantity changes in packed products, there is a duty to inform that there was a change in product, the quantity of product before and after the change and the increased or reduced quantity of product, in absolute or percentage terms. The Consumer Protection Authority (PROCON)34 in the State of Rio de Janeiro, in its website,35 clarifies that, in the case of industrialized food, the package label 30 In case law, see Superior Court of Justice, REsp 713.284/RJ, 3ª T., Rel. Min. Nancy Andrighi, julg. 3.5.2005 e Tribunal of Justice of Rio de Janeiro, Ap. Cív. 0001024-62.2013.8.19.0209, 27ª CC Consu., Rel. Des. Antônio Carlos dos Santos Bitencourt, julg. 2.4.2014. 31 In case law, see Tribunal of Justice of Rio de Janeiro, Ap. Cív. 0305950-60.2010.8.19.0001, 24ª CC Consu., Rel. Des. Regina Lucia Passos, julg. 13.1.2016; Tribunal of Justice of Rio Grande do Sul, Ap. Cív. 71004987541, 1ª TRC, Rel. Des. Pedro Luiz Pozza, julg. 29.7.2014. 32 “The consumption of a product placed in circulation when its expiration date has already passed. Expired ‘Arrozina Tradicional’ that was consumed by babies that were only three months old, causing them severe gastroenteritis. Safety defect. Manufacturer’s responsibility” (Superior Court of Justice, REsp 980.860/SP, 3ª T., Rel. Min. Nancy Andrighi, julg. 23.4.2009). 33 See Board of Directors Resolution (RDC) n. 259/2002 issued by the National Health Surveillance Agency that applies to labeling of every food that is sold, of whatever origin, packed in the absence of the consumer and ready to be offered to the consumer; Ordinance of the Ministry of Justice n. 81/2002 that establishes rules for consumer information about significant modifications in packed products; INMETRO Ordinance n. 157/2002 that establishes the way to express the net weight of pre-measured products with the alterations given by INMETRO Ordinance n 45/2003 and RDC n. 26/2015 of the National Health Surveillance Agency that deals with labeling of products that may cause allergies. 34 ‘PROCON’ is an acronym for Consumer Protection Program. In Rio de Janeiro it is an autonomous government agency (State Law n. 5.738, of June 7, 2010), having as main purpose “to plan, coordinate, regulate and execute consumer protection state policy” (Article 4, item I of Law n. 5.738/2010). About the role of consumer protection bodies in Brazilian law, see Comparato (2011), item IV. 35 PROCON-RJ’s website: http://www.procon.rj.gov.br/index.php/publicacao/detalhar/31, viewed last on 26.4.2017.

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must necessarily contain the following information in Portuguese language: expiration date, also including the expiration date after the package is opened, if that is the case, batch, composition, origin, quantity, besides all other essential information to the use of the product, as preparation instructions and storage.36 Furthermore, Law n. 10.674/2003 imposes to suppliers the duty to inform about the presence of gluten in food, with the objective of protecting people suffering from celiac disease (Article 1). Law n. 8.918/1994, in its turn, when dealing with diet or low-calory beverages, establishes the duty to inform in their labelling “the generic name of sweetener(s), if any, their class, quantity or weight per unit” (Article 7, paragraph 2). The Resolution from the Board of Directors of the National Health Surveillance Agency (ANVISA) n. 259,37 in its turn, lists the required information for food, as the selling name of the food, list of ingredients, liquid contents, origin identification, batch identification, expiration date and instructions for preparation and use of the food, whenever necessary. Recently, the Superior Court of Justice decided that the use of the expression “no alcohol” in a beer label that has 0.5% of alcohol content violated the duty to inform.38 Finally, it must be highlighted the existence of the Decree n. 5.903/2006, that deals with infraction practices that violate the basic right of the consumer to obtain adequate and clear information about products and services.39 The noncompliance with the duty to inform by the supplier besides having civil consequences, like the payment of material and moral damages suffered by the consumer (Article 6, VI, Consumer Protection Code), it can lead to administrative sanctions (fine, seizure of the product, destruction of the product, cancellation of the product registration at the

36

See Decree-Law n. 986/1969. ANVISA is the National Health Surveillance Agency, an autonomous government agency subject to the Ministry of Health aiming at controlling and regulating health requirements of services and products, either local or imported. 38 “The information ‘no alcohol’, included in the product label, is false and, thus, is clear unconformity with the terms of the Consumer Protection Code, notably in prejudice with the right to clear and suitable information. As there is a decree regulating that classifies as ‘no alcohol’ the beer with up to 0.5% of alcohol content does not allows the Company (. . .) to disrespect the mostly essential consumer rights, guaranteed by special law, naturally prevailing as for the case in question” (Superior Court of Justice, EREsp 1.185.323/RS, CE, Rel. Min. Laurita Vaz, julg. 24.10.2016). 39 Article 9 of Decree 5.903/2006: “Violation to the essential consumer rights to suitable and clear information on different services and goods, subjecting the violator to the penalties set forth in Law no 8.078, of 1990, are the following conduct: I – to use letters which size is not uniform or making the perception of information difficult, considering the normal distance of visualization by the consumer; II – show prices with the letter colors the same or similar to backdrop; III – to use erased, effaced or blurred characters; IV – to inform of prices only in instalments, forcing the consumer to calculate the total amount; V – show prices in foreign currency, not followed by its conversion into national currency, in characters of equal ou superior highlight; VI – to use reference leaving doubts as for the identification of the item to which it refers to; VII – to assign different prices for the same item; and VIII – to expose information written upright or in another angle making the perception difficult”. In case law, see Tribunal of Justice of Rio Grande do Sul, Ap. Cív. 70065040016, 3ª CC, Rel. Des. Leonel Pires Ohlweiler, julg. 2.7.2015; Tribunal of Justice of Rio Grande do Sul, Ag 70056317605, 22ª CC, Rel. Des. Marilene Bonzanini, julg. 12.9.2013. 37

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competent bodies, among others, as per Article 56, Consumer Protection Code), and to criminal sanctions (crimes established in Articles 63, 64, 66, 67 and 68 of the Consumer Protection Code). Information is thus a right of the consumer strongly protected by the Brazilian legal system.

3 Protection Against Misleading and Abusive Advertisement According to Article 6, IV of the Consumer Protection Code, it is a basic right of the consumer the protection against misleading and abusive advertisement. For an ad to be considered misleading or abusive it does not matter if the supplier was acting in bad faith. The verification is rather objective, taking into account the ability to mislead (misleading advertising campaigns) or violate values worth being protected (abusive advertising campaigns).40 Misleading advertisement is regulated by paragraphs 1 and 3 of Article 37 of the Consumer Protection Code.41 It can be either commissive, when the information provided leads to confusion for the consumer, or omissive, when it lacks information regarding an essential aspect of the product or service.42 To be classified as misleading, it is enough that the advertisement is capable of deceiving; it is not required that an error effectively resulted from it. It should be noted that the standard for deceiving varies according to the consumers in question, in view of their concrete level of vulnerability (see item 1 above). By way of illustration, there is the case of the “fast” beverage, Alpino flavor. The beverage packaging was golden, just like the packaging for the Alpino chocolate. In it there was also the image of the candy Alpino and, finally, the name of the beverage was Alpino Fast. However, the package contained the following information in small font: “this product does not contain Alpino chocolate”. After questions were 40 Tribunal of Justice of São Paulo, Ap. Cív. 0117583-16.2008.826.0005, 3ª V.C., Foro Regional de São Miguel Paulista, Juiz Fábio Henrique Falcone Garcia, julg. 6.8.2014. See also Nery (1992), item 13. 41 Article 37 of the Consumer Protection Code: “Any misleading or abusive advertising campaigns are prohibited. Paragraph 1. Any information or public communication that is entirely or partially false or is in any way, even through omission, capable of inducing the consumer to make a mistake regarding the nature, characteristics, quality, quantity, properties, origin, price, and any other information about products and services will be considered misleading. (. . .) Paragraph 3. In this Code, misleading information includes failure to mention essential information about the product or service”. 42 “Misleading advertising is the one which provokes distortion in consumer’s decision-making, leading him/her to buy products and services that, in case he/she was better informed, possibly would not be bought. The consumer has the right to not be misled when he/she believes he/she is buying a financing plan for buying his/her own property when, in fact, he/she is agreeing to a capitalization plan” (Tribunal of Justice of Minas Gerais, Ap. Cív. 1.0194.05.044674-0/001, 9ª CC, Rel. Des. Mota e Silva, julg. 22.3.2007).

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raised, the beverage was announced with a new layout, in a way as to prevent consumers to think that the beverage in question had Alpino chocolate in its composition. The National Health Surveillance Agency, by means of Resolution n. 2.247/2010, suspended all ads that had the ability to mislead the consumer as to the composition of the beverage. On the other hand, the advertisement shall be considered abusive if it disrespects values worth being protected. Article 37, paragraph 2 of the Consumer Protection Code43 mentions, as examples, any type of discriminatory advertising that incites violence, exploits fear or superstition, profits from the immaturity in judging and inexperience of children, disregards the environmental values, or that can lead consumer to behave harmfully or hazardously with respect to his health or safety.44 In this sense, the advertisement for the beer “Devassa Dark” was considered discriminatory because its slogan said “The true black woman is recognized by her body. Black Devassa. Full bodied, dark style of high fermentation. Creamy with a scent of toasted malt”. Besides that, in 2014, an ad for Bis Easter eggs was considered to be inciting bullying activities because of the message contained in its packaging: “customize the package with stickers and make fun of your friend”. The PROCON-RJ45 suspended the sale until the message in the package was changed and no longer contained texts that incited bullying. With regards to hyper vulnerable people (see item 1 above), children are especially subject to the persuasive effects of marketing. If the appeals used by marketing are able to seduce consumers in general, they have even more strength when it comes to children that are still in a development stage in which they are more easily convinced. Apart from the incomplete intellectual formation, children do not have, in general, the control over practical aspects of the transaction, such as the amounts involved, the risks and benefits of the deal. This aggravated vulnerability of children is expressly recognized by Article 37, paragraph 2 of the Consumer Protection Code that considers abusive the advertisement that “profits from the immaturity in judging and inexperience of children”.46 Even if there is no advertisement activity involved,

Article 37 of the Consumer Protection Code: “Any misleading or abusive advertising campaigns are prohibited. (. . .) Paragraph 2. It shall be understood as abusive, among others, any type of discriminatory advertising that incites violence, exploits fear or superstition, profits from the immaturity in judging and inexperience of children, disregards the environmental values, or that can lead consumer to behave harmfully or hazardously with respect to his health or safety. (. . .)”. 44 In case law, see “Abusive advertisement campaign. Child-oriented ads. Incentives for excessive consumption of sweets. Violation of article 37, paragraph 2 of the Consumer Protection Code” (Tribunal of Justice of São Paulo, Ap. Cív. 0044517-82.2010.8.26.0053, 10ª CDP, Rel. Des. Antônio Celso Aguilar Cortez, julg. 6.3.2017). 45 About Procon RJ see footnote 41. 46 See, on the subject, a recent ruling by Superior Court of Justice, in REsp 1.613.561/SP: “The Superior Court of Justice has case law acknowledging the abusivity of advertising and publicity directly or indirectly oriented to children. This is because the decision to buy food products falls upon the parents, especially in times of great rates of childhood obesity” (Superior Court of Justice, REsp 1.613.561/SP, 2a T., Rel. Min. Herman Benjamin, julg. 25.4.2017). See also Martins (2015) and Miragem (2014). 43

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any business conduct that may prevail over the weakness or ignorance of the consumer in view of, among other conditions, their age and knowledge shall be considered abusive (Article 39, IV, Consumer Protection Code).47 The Consumer Protection Code establishes the principles (i) of advertisement identification, according to which the ad must be immediately and easily identified by the consumer (Article 36); (ii) of contractual binding effects of advertisement, according to which ads containing sufficiently precise messages create obligations for the supplier (Articles 30 and 35) (see item 2 above); (iii) of transparency of data used in ads (Article 36, sole paragraph), according to which the supplier must disclose factual, technical and scientific data used as basis for the ad message and (iv) of correction of advertisement deviation that contemplates the payment of damages (Article 6, VI), administrative (Article 56) and criminal sanctions (Articles 66 and 67), as well as the imposition of counterpropaganda (Articles 56, XII and 60). The comparative advertising is admitted by Brazilian law and is subject to the provisions of the Consumer Protection Code, of the Industrial Property Law (Law n. 9.279/1996), of the Copyright Law (Law n. 9.610/1998), of Decree n. 57.690/ 1996 that regulates advertising activities, of the Brazilian Code of Self-Regulatory Advertising, besides the Constitution of the Republic.48 It is, therefore, subject to abusiveness and deceitfulness control.49 It shall be considered misleading if, for example, it states that the price is cheaper than its competitor’s without mentioning to the consumer that the quantity of the product being provided is smaller. Thus, comparative advertising is admitted when “the comparison has as main objective the clarification for the consumer; the information disclosed is true, objective and does not mislead the consumer, does not depreciate the product or brand, neither abusive (Article 37, paragraph 2 of the Consumer Protection Code); and the products and brands being compared are not easily mistaken for one another”.50

Article 39 of the Consumer Protection Code: “Among other abusive practices, it shall be banned to the supplier of products and services: (. . .) IV - to profit from the consumer’s weakness or ignorance, considered his age, health, knowledge or social condition, convincing him toward products or services; (. . .)”. 48 In case law, see Superior Court of Justice, REsp 1.481.124/SC, 3ª T., Rel. Min. Ricardo Villas Bôas Cueva, julg. 7.4.2015. 49 In case law, see: “Comparative advertising is a valid and current technique, provided that the ethical rules of the advertising business are respected. It is thus understood that the products compared must be exposed in the same way, without harming the competitor. Texts must be informative and accurate, avoiding sophisms or dubious interpretation. Comparative advertising is, in fact, an instrument to consumer, because through it he/she will have decision-making options. Comparative advertising is only shown as misleading or false, as for configuring unfair competition, when providing incorrect information or slandering competitors intentionally” (Tribunal of Justice of São Paulo, Ap. Cív. 0279145-15.2009.8.26.0000, 3ª CDP, Rel. Des. Beretta da Silveira, julg. 23.2.2010). See also Siqueira and Bianco (2011). 50 Superior Court of Justice, REsp 1.377.911/SP, 4ª T., Rel. Min. Luis Felipe Salomão, julg. 2.10.2014 (Informativo 550). 47

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4 Unfairness Test of Contractual Clauses. Possibility of Inversion of the Burden of Proof in Consumer’s Favor Contracts entered into between consumers and suppliers, which terms are individually negotiated or standard form ones, are subject to the Consumer Protection Code protective control. Pre-drafted standard contracts are treated differently from the individually negotiated contracts under the Consumer Protection Code because they are a model that skips the negotiation stage and where consumer’s vulnerability is more acute. Article 54 of the Consumer Protection Code defines the standard contract as “the one which terms have been approved by the competent authority or unilaterally set forth by the product or service supplier, with no possibility of consumer’s discussing or substantially changing its content”. The Consumer Protection Code provides as requirements for consumer’s binding that such contracts are clearly drawn up with legible and ostensible characters, in a font of no less than size 12 point, in order to make its understanding by the consumer easier, as well as that the terms implying consumer’s right limitation are typed in highlight, allowing its prompt and easy comprehension.51 Besides, Article 54 stands out that the “inclusion of a clause in the form does not disfigure the nature of the standard contract”. In fact, the one-off negotiation of a specific condition does not have the power to disfigure the standard contract entered into without bargaining. The sanction for lack of clarity in the instrument wording or lack of highlight of restrictive clauses is consumer’s nonbinding. It is noteworthy that the same consequence arises, under Article 46, if the consumer has no chance to be aware of the contract purport or if its wording lacks clarity.52 In the Consumer Protection Code set of procedures, even when the contract is individually negotiated, certain clauses are inadmissible because they jeopardize the

“The purport of the rule included in Article 54, Paragraph 4 of the Consumer Protection Code, the restrictive clause, included in standard contracts, must be written with highlight in order to allow the consumer’s prompt and easy understanding. In this case, the insurance clause relating to a housing contract under the National Housing System, which excludes from its coverage the disability arising from a disease got previously to the contracting, does not comply with legal requirements” (Superior Court of Justice, REsp 669.525/PB, 3ª T., Rel. Min. Antônio de Pádua Ribeiro, julg. 19.5.2005). See also Superior Court of Justice, REsp 774.035/MG, 3ª T., Rel. Min. Humberto Gomes de Barros, julg. 5.2.2007 and Superior Court of Justice, AgInt no REsp 1.451.386/SC, 3ª T., Rel. Min. Paulo de Tarso Sanseverino, julg. 21.3.2017. 52 Article 46 of the Consumer Protection Code: “Contracts governing consumer relations shall not oblige consumers when they have not been given the chance of previously being acquainted with their contents or when they are written in such a way it is difficult to understand their meaning and scope”. “Consumer. Difficult to understand method of computation of draft included in the capitalization bond. The clause should he highlighted to make the understanding easier. It withstands the principle of objective good faith, transparency and information. Nullity of agreement rules. Interpretation of the rules included in Article 4, III, 46, par. 4, 51, IV and 54, all from Law 8.078/90” (Tribunal of Justice of Rio de Janeiro, Ap. Cív. 0148014-84.2001.8.19.0001, 3ª CC, Rel. Des. Murilo Andrade de Carvalho, julg. 17.6.2003). 51

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protection to be afforded to the consumer. In this sense, Article 51 of the Consumer Protection Code lists unconscionable clauses for the sake of example, which nullity may be acknowledged ex officio by the court.53 The item I of the above mentioned precept, for instance, prevents the consumer from resigning her/his legally established rights.54 Note that the consumer’s will is irrelevant to the assessment of the clause unconscionability. Even if the consumer has individually negotiated the clause and agreed to its inclusion in the contract, the judge may considerer it unconscionable, having the consumer’s negotiation and agreement no power to avert the Judiciary’s unfairness test. This means an objective control irrespective of supplier’s bad faith or lack of consumer’s bargaining or agreement. Therefore, in all contracts between consumer and supplier, either entered into or not as standard contracts, there is a double test, namely: (i) objective unfairness test of their clauses and (ii) assessment of the duty to mandate information disclosures and compliance with requirements set by law. Once deemed as unconscionable certain contract terms, those are reputed null (Article 51, paragraph 2 of Consumer Protection Code) and uncapable of binding the consumer. Fair clauses, but uncompliant with the legal rules (Article 54, Consumer Protection Code) or, even though clearly and standingly out written, having not been duly disclosed (Article 46, Consumer Protection Code), are also non binding to the consumer. It’s worth mentioning further that the Article 47 of the Consumer Protection Code sets forth that contractual clauses shall be interpreted more favorably to consumers. Finally, it should be highlighted that the Consumer Protection Code establishes as a basic right, in its Article 6, VIII, the inversion of the burden of proof in favor of the consumer when his/her allegation is credible or when he/she is hypersufficient. It is worth noting that the inversion of the burden of proof is not an automatic measure in any and all judicial proceeding; it depends on the fulfillment of certain requirements.55 Hypersufficiency means the specific difficulty of the consumer to produce evidence with regards to a certain fact. On the other hand, credibility is verified using a probability criterion,56 according to the arguments presented to the judge during 53 The Superior Court of Justice has the Precedent 381, as follows: “In banking contracts, it is prohibited to the court to acknowledge ex officio the unconscionability of the clauses”. The purport of the Precedent is being reviewed in Resp. 1465832, still pending of trial. 54 As an example, the clause of jurisdiction chosen by the contracting parties implies withdrawal from the procedural right provided for in Article 101, I, of the Consumer Protection Code, namely, the filing of an lawsuit in the jurisdiction of consumer’s domicile, besides opposing the basic consumer right to facilitation of defense of his/her rights (Article 6, VIII, Consumer Protection Code). See, in doctrine, Tepedino and Oliva (2017). 55 In case law, see Superior Court of Justice, AgRg no AREsp 655.584/PI, 2ª T., Rel. Min. Herman Benjamin, julg. 16.6.2015; Superior Court of Justice, AgRg no Ag 935.663, 4ª T., Rel. Min. Aldir Passarinho Junior, julg. 26.8.2008. 56 “An example: many drug consumers show, after a certain period of treatment, the same undesirable side effects. One of them files an action for damages against the manufacturer, but without getting to unequivocally evidence the causality relation between the ingestion of the drug and the damages to his/her health. Nevertheless he/she proves that other drug consumers also began to show

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the course of the proceeding. Despite the controversy among scholars about the cumulativity or alternativity of these requirements, the Superior Court of Justice mostly recognizes that they are alternative.57

5 Application of the Consumer Protection Code to Banking and Insurance Activities The consumer protection rules also apply to financial institutions, as per Article 3, paragraph 2 of the Consumer Protection Code58 and Precedent n. 297 issued by the Superior Court of Justice.59 In Brazil, there was controversy about the subject, which was settled by the ruling on the Direct Action for the Declaration of Unconstitutionality n. 2.591/DF.60 the same reactions (an evidence of causal connection). The judge will reason as follows: ‘if many consumers of such drug have started to suffer from the same harm, after beginning treatment, and as such circumstance is proven in the records (not only alleged by the plaintiff), it is highly likely that the side effects find their cause in the ingestion of the product’. In consequence of such judgment of plausibility, the burden of the proof will be inverted, assigning to the respondent, from the moment the inversion is decreed, the burden to show the inexistence of causal connection” (Moreira 1997). 57 In case law, see Superior Court of Justice, REsp 1.325.487, 3ª T., Rel. Min. Sidnei Beneti, julg. 28.8.2012; Superior Court of Justice, REsp 1.155.770, 3ª T., Rel. Min. Nancy Andrighi, julg. 15.12.2011. 58 Article 3, paragraph 2 of the Consumer Protection Code: “Service is any business provided in the consumer market, for compensation, including those of banking, financial, credit and insurance nature, save for those arising from labor relations”. 59 Precedent 297 from Superior Court of Justice: “The Consumer Protection Code is applicable to financial institutions”. 60 Supreme Federal Court, ADI 2.591/DF, Tribunal Pleno, Rel. Min. Carlos Velloso, Rel. p/ acórdão Min. Eros Grau, julg. 7.6.2006. In this case, the National Confederation of the Financial System (CONSIF) filed a Direct Action for the Declaration of Unconstitutionality (ADIn 2.591/DF) in the Supreme Federal Court, alleging the formal and material unconstitutionality of the expression “including those of banking, financial, credit and insurance nature” included in Article 3, 2nd Paragraph, of the Consumer Protection Code faced with Article 192 of Constitution of the Federative Republic of Brazil, which has assigned jurisdiction to the complementary law to regulate the Nacional Financial System. It has further alleged that the Constitution would have made an implicit distinction between consumer and financial institution client, in its Article 170, as the consumer protection would be inserted in a chapter different from the one relating to the supervision of the National Financial System. Besides, it has alleged violation to Article 5, LIV, of the Constitution, as the ordinary lawmaker would have burdened “the members of the financial system with the set of obligations set forth in Law n 8.078/90, incompatible with the peculiarities of the financial sector”, standing up to the principle of substantive due process of law, as for the aspect of proportionality. At last, it has supported the unsuitability of the Consumer Protection Code with the businesses developed under the scope of the financial system, by virtue of the requirements of legal certainty and respect of contracts, and provided that such business are controlled by the National Monetary Council, with resolutions dealing with the clients’ defense. Supreme Federal Court ruled as for the dismissal of the claim, in favor of full constitutionality of Article 3, Paragraph 2 of the Consumer Protection Code. As for the first argument, it has been considered that the reserve of

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In the context of the banking system, the information provided is relevant so as to allow the consumer to understand (i) what service is he/she paying for and (ii) the total cost of the credit, so he/she can compare the various financial institutions. It is not rare that the interest rate offered by one bank is smaller than another, but this apparent shortfall is compensated by other increased rates and the consumer ends up being misled, thinking that he/she is paying less, but the total cost of the credit is higher.61 In the banking sector, there is a strong control as to unfairness of practice and contractual clauses: even if information is provided, certain conducts are prohibited, such as the charging of rates that are not authorized by the Central Bank,62 the direct discount from checking account above certain limits,63 complementary law of Article 192 would apply solely to the regulation of the financial system, and not to the enforcement of charges and obligations relating to service provision to clients, which could be established by ordinary law. As for the second argument, it was understood that consumer right protection “projects also on the sphere relating to economic and financial order, to the extent that such basic guideline is shown as an insuppressible principle shaping the economic activity (Article 170, V, Constitution)”. As for the third argument, it was understood that the application of reasonability and proportionality as intended by the author would lead to the usurpation of legislative jurisdiction, standing up to the principle of harmony and balance among the Powers. As for the last argument, it was considered that “the National Monetary Council is competent to regulate – besides its organization and supervision – the operation of financial institutions, i.e., the performance of its businesses in the sphere of the financial system. All that exceeds such performance cannot be object of regulation by normative act issued by the National Monetary Council”. Faced with this, the Supreme Federal Court has ruled as for the constitutionality of the above mentioned provision and for the applicability of the Consumer Protection Code to banking institutions. 61 National Monetary Council (CMN) Resolution n 3.517/2007, which “sets forth about information and disclosure of total actual cost corresponding to all charges and expenses of credit operations and financial commercial leasing, contracted by or offered to individuals”. National Monetary Council (CMN) Resolution n 4.197/2013, which sets forth on measures of transparency when contracting credit operations, relating to the disclosure of the Total Actual Cost (TAC). Ap. Cìv. 0018482-80.2008.8.19.0205, 27ª CC Consu., Rel. Des. Marcos Alcino de Azevedo Torres, julg. 23.11.2016; Tribunal of Justice of Rio Grande do Sul, Ap. Cív. 70069352136, 11ª CC, Rel. Des. Antônio Maria Rodrigues de Freitas Iserhard, julg. 28.9.2016; Tribunal of Justice of Rio Grande do Sul, Ap. Cív. 70069269876, 11ª CC, Rel. Des. Antônio Maria Rodrigues de Freitas Iserhard, julg. 14.9.2016. 62 National Monetary Council (CMN) Resolution n 3.919/2010. 63 “Consumer relation. Banking contracts. Deductions in instalments and personal loans directly from the payroll bank account (rectius ¼ retirement bank account) of the plaintiff. Discounts of an amount equal to 100% of pension of the retired consumer. Abusive practice. Vulnerability. Factual weakness of the retired elderly. Excessive burden. Construction of joint application of articles 4, I, 51, IV, and First Paragraph, III, of the Consumer Protection Code. Consumer’s agreement revealing vitiated will of the weaker. Over indebtedness. Frequent pathology of modern society massified by consumption and credit. Aggression to the dignity if the deductions accrue over the amount of total income of the citizen withdrawing him/her from the chance of keeping his/her living on dignity standards. Coercive formula of collection in violation of lawfulness. Analogy with the scenario foreseen in item IV of article 649 of the Code of Civil Procedure which forbids the wage garnishment. Partial nullity under Article 42 of the Consumer Protection Code and the Law n. 10.820/03 defining the percentage of 30% on the wages as a deduction limit for financial

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the unfair offer of credit64 and misleading advertising of credit offer,65 since there is a strong concern about over indebtedness. Among the initiatives to improve the Consumer Protection Code, the Senate’s Draft Bill 283/2012 regulates the prevention and treatment of over indebtedness. Prepared by a Legal Commission established by the Presidency of the Federal Senate in 2011, this bill aims to prevent individual’s over indebtedness, to promote access to responsible credit and financial education for consumers, in order to avoid their social exclusion and the compromising of their existential minimum, this is, the minimal conditions, including financial ones connected with survival, such as water, energy, food, health, housing and education.66 Moreover, it stipulates the duty to inform and prevent the taking of loans and establishes forms of composition between the consumer and the creditor to pay off debts by means of refinancing, as a way to preserve the existential minimum and human dignity of the consumer in debt. The Consumer Protection Code also applies to the management of resources collected from consumers, as it happens with investment funds.67 Since there are a institutions. Contractual clause that sets forth the deductions only null and void when it exceeds 30% of income, a restraint guaranteeing the author’s living” (Tribunal of Justice of Rio de Janeiro, Ap. Cív. 0149808-67.2006.8.19.0001, 18ª CC, Rel. Des. Cristina Tereza Gaulia, julg, 1.4.2008). See also Superior Court of Justice, REsp 1.584.501/SP, 3ª T., Rel. Min. Paulo de Tarso Sanseverino, julg. 6.10.2016. About the protection of consumers in situation of over indebtedness, see Efing et al. (2015) and Franco (2010). 64 In this sense, the Precedent 532 of the Superior Court of Justice: “It is abusive commercial practice the sending of a credit card without previous and express consumer’s request, configuring an actionable wrongful act and subject to the application of administrative fine”. Article 39 of the Consumer Protection Code: “It is forbidden to the goods and service supplier, among other abusive practices: (. . .) III – to send and deliver to the consumer any product or to provide any service, without previous request.” 65 “In this case, the occurrence of misleading advertising included in the offer was proven, as according to what was understood from information included on page 11, the credit card would be exempt of annuity: ‘Credicard Gold credit card free from annuity for the rest of your life’. Nevertheless, it is noted that the undue and repeated collection of annuity shown in the credit card invoices, which lead to the undue negative entries for the consumer’s name, being, thus, applicable the claim for damages for pain and suffering caused, by virtue of failure in service provision” (Tribunal of Justice of São Paulo, Ap. Cív. 0012247-44.2013.8.26.0006, 22ª CEDP, Rel. Des. Sérgio Shimura, julg. 14.2.2017). See also Tribunal of Justice of São Paulo, Ap. Cív. 101162055.2015.8.26.0005, 12ª CDP, Rel. Des. Tasso Duarte de Melo, julg. 17.4.2017. 66 See Superior Court of Justice, REsp 1.245.812/RS, 2ª T., Rel. Min. Herman Benjamin, julg. 21.6.2011; Tribunal of Justice of São Paulo, Ap. Cív. 2217303-53.2016.8.26.0000, 14ª CDP, Rel. Des. Carlos Abrão; Comarca, julg. 21.11.2016; Tribunal of Justice of Minas Gerais, Ap. Cív. 1.0145.13.062056-3/001, 14ª CC, Rel. Des. Estevão Lucchesi, julg. 23.2.2016; Tribunal of Justice of Distrito Federal, Ap. Cív. 691288, 20110111989640, 2ª TC., Rel. Des. Waldir Leôncio Lopes Júnior, julg. 4.7.2013. In regard to the need to preserve the existential minimum and human dignity (Fachin 2006). About the methodological focus on the concrete needs of each singular person, see Tepedino (2000). 67 Superior Court of Justice, AgRg no Ag 1.140.811/RJ, 4ª T., Rel. Min. Marco Buzzi, julg. 23.2.2016; Superior Court of Justice, REsp 1.187.365/RO, 4ª T., Rel. Min. Luis Felipe Salomão, julg. 22.5.2014; Superior Court of Justice, REsp 1.214.318/RJ, 3ª T., Rel. Min. Sidnei Beneti, julg. 12.6.2012. See also Batista (2016), da Silva (2003) and Pfeiffer (2007).

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number of different types of investment funds, it is absolutely essential that the consumer be fully aware about the inherent risks of each fund and that he/she are counselled to invest in the fund that fits his/her profile (Article 42 of the Securities and Exchange Commission of Brazil Instruction n. 555/2014). When it comes, for example, to a conservative investor, he/she cannot be advised to apply his/her funds in higher risk profile type of fund, which could frustrate his/her legitimate expectations about investment safety. The risk involved in the performance of the investment fund is undertaken by the investor. The manager is only liable for failures in the provision of his/her service, i.e., if the service is defective, whether because there was a lack of information and, consequently, lack of consent from the consumer, or whether there was a management failure. The defect does not lie on the property loss and, thus, in the losses suffered by the consumer, but in the bad management, i.e., management that is contrary to the regulations (attention must be given to the investment policy) and the rules in force.68 The Consumer Protection Code also applies to insurance activities, comprehensively understood, including the private system of health insurance.69 In the insurance market, the information is also very relevant and subject to heavy regulation, besides the Consumer Protection Code, as it is evidenced by the regulations related to the Superintendence of Private Insurance, government body responsible for the control and supervision of insurance markets, open private pension funds, capitalization and reinsurance. This is an autarchy directly linked to the Ministry of Finance, created by the Decree-Law n. 73, of November 21, 1966. With regards to insurance contracts, all guarantees contracted by the insured must be very well specified in the insurance policy, under penalty of violation of the duty to inform by the insurer (Article 760 of the Civil Code).70 Moreover, the Superior Court of Justice is currently of the opinion that contractual clauses that use vague terms or that demand technical or legal knowledge inconsistent with the reality of the insured are abusive.71 “It is understood that in provision of financial counselling services, banking institutions are only accountable for eventual losses arising from unsuccessful investments, mainly from those in which the increased degree of risk is perfectly identifiable according to the average man understanding, if the service provision is defective, exactly because it is an obligation of best efforts and not of specific performance” (Superior Court of Justice, REsp 1.606.775/SP, 3ª T, Rel. Min. Ricardo Villas Bôas Cueva, julg. 6.12.2016). See also Superior Court of Justice, REsp 799.241/RJ, 4ª T., Rel. Min. Raul Araújo, julg. 14.8.2012. 69 Precedent 469 of the Superior Court of Justice: “The Consumer Protection Code applies to health plan contracts.” 70 Superior Court of Justice, REsp 1.311.407/SP, 3ª T., Rel. Min. Ricardo Villas Bôas Cueva, julg. 5.3.2015. 71 “The insurance clause that guarantees the protection of the insured’s property only against compound larceny, without clarifying the meaning and the reach of the term ‘compound’, as well as the situation concerning simple larceny, is plenty of abusiveness by failure in the insurer’s general duty to inform and holding back sufficient information on the contracted object. It cannot be required from the consumer the knowledge of specific technical-legal terms, not to mention the difference between the definition of crimes of the same kind” (Superior Court of Justice, REsp 1.352.419/SP, 3ª T., Rel. Min. Ricardo Villas Bôas Cueva, julg. 19.8.2014). 68

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On the other hand, it is of the essence the provision of information by the insured with regards to the object being insured. However, in relation to the insurance of individuals, especially in cases of health insurance72 and life insurance,73 this duty by the consumer had been relativized when it comes to the exclusion of coverage of a preexisting disease. It is understood that the lack of information regarding a preexisting disease does not automatically leads to refusal of coverage. This is because the insurer company could have been aware of such condition if it had demanded from the insured a health exam before the closure of the deal. To be exempt from the duty to indemnify, the company must demonstrate the bad faith of the insured in not disclosing such information.74

6 Consumer Protection in the Context of the E-commerce E-commerce moves billions of Reais every year in Brazil. An increasing number of Brazilian consumers acquire products and services through the internet.75 Aiming at minimally bringing consumer protection into the field of e-commerce, Decree n. 7.962/2013 was published. In general lines, such Decree seeks to ensure (i) the identification of the supplier so that the consumer may know with whom he/she is dealing with (Article 2, I and II); (ii) presentation of a summary of the contract before it is signed, with all necessary information for the full performance of the consumer’s right to choose, being highlighted the clauses that impose limits to rights (Article 4, I); (iii) supply of efficient tools for the consumer to be able to identify and immediately correct mistakes made in previous phases before the signing of the contract (Article 4, II); (iv) safety in the hiring process; the supplier must confirm the 72 “Before closing the health insurance contract, the insurance may request from the insured to do medical tests and examinations in order to check his/her actual physical and psychic disposition, but, if it doesn’t do it and if a loss occurs, the insurer cannot exempt from the duty to pay damages, save if it proves the insured’s bad-faith when informing his/her health condition” (Superior Court of Justice, REsp 1.23.0233/MG, 3ª T., Rel. Min. Nancy Andrighi, julg. 3.5.2011). See also Superior Court of Justice, REsp 980.326/RN, 4ª T., Rel. Min. Luis Felipe Salomão, julg. 1.3.2011. 73 Superior Court of Justice, AgInt no AREsp 826.988, 4ª T., Rel. Min. Raul Araújo, julg. 17.5.2016; Superior Court of Justice, AgInt no REsp 1.280.544/PR, 4ª T., Rel. Min. Maria Isabel Gallotti, julg. 2.5.2017. 74 Such precedents gave rise to the Thesis n 9 of the Publishing n 2 of the Case Law in Thesis by the Superior Court of Justice: “It is wrongful the refusal to give health insurance coverage under the allegation of preexisting disease to the contract, if the insurer has not submitted the patient to previous health examination and has not proven his/her bad-faith”. 75 According to a poll entitled “Content Marketing”, carried out by Hi-Mídia, an online media company specialized in segmentation and performance, and M.Sense, a company specialized in research on digital market, 93% of internet users in Brazil have bought online at least once, from which 62% do it every month. The poll has interviewed 1.214 people in the five Brazilian regions. Available on: http://www.ebricksdigital.com.br/pesquisas-de-mercado/noventa-e-tres-por-centodos-usuarios-de-internet-no-brasil-ja-fizeram-compras-online/, viewed last on 15.5.2017. In regard to the protection of consumers in electronic contracts, see Schreiber (2014).

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receipt of the demands from the consumer (Article 4, III and VI); (v) making the contract available to the consumer by means that allow the consumer to conserve or reproduce it after signing (Article 4, IV); (vi) maintenance of channels for the consumer to deal with problems relating to products and services (Article 4, V); (vii) use of safety mechanisms for processing payments and personal data provided by the consumer (Article 4, VII) and (viii) exercise of the right of retraction by the consumer (Article 5). With regards to the right of retraction, it is classified, as per the terms of Article 49 of the Consumer Protection Code,76 as a potestative right assigned to the consumer to terminate, without the need to make any payments or submit justifications, the contract entered into with the supplier. Such right is ensured only when it comes to contracts signed outside the business establishment and must be exercised within seven days. The mentioned Decree n. 7.962/2013, when dealing specifically with the right to retraction in electronic contracting (Article 5), established (a) the possibility of exercising the right to retraction by the same means used for contracting, without prejudice to other means available; (b) the termination of ancillary contracts without any financial burden for the consumer in view of the exercise of the right of retraction and (c) duty of the supplier to send to the consumer immediate confirmation regarding the receipt of the communication about the retraction.77 In spite of the broad treatment given by the provisions, the right of retraction is not an absolute right, having been relativized by scholars in cases of acquisition of immediate consumption products, for example movie rental on the internet or tickets to go see a movie or a play.78 In the case of airplane tickets, there are decisions taking stands for the inapplicability of the Article 49 of the Consumer Protection Code. The retraction is exceptionally admitted when communicated the day following the purchase.79 Recently, the Resolution n. 400/2016 of the National Civil Aviation

Article 49 of the Consumer Protection Code: “The consumer may give up a contract within a period of seven days from its signature or reception of the good or service, whenever contracting products and services outside of a commercial establishment, especially through the telephone or at his domicile. Sole Paragraph – If the consumer exercises the right of retraction as mentioned in this article, the amount possibly paid in advance for any reason during this period of consideration shall be returned promptly with the corresponding adjustments”. 77 “Such provision allows the retraction from the contract without the consumer needing to submit justifications, within the legal period, suffering no consequences, provided that the contracting requirements are present. It is noteworthy that the expression ‘outside the commercial establishment’ set forth by law has suffered a broadening in its construction in relation to electronic means and the internet” (Tribunal of Justice of São Paulo, Ap. Cív. 1011446-16.2014.8.26.0576, 31ª CDP, Rel. Des. Adilson de Araujo, julg. 14.4.2015). See also Tribunal of Justice of Rio Grande do Sul, Ap. Cív. 71006685176, 2ª TRC, Rel. Des. Roberto Behrensdorf Gomes da Silva, julg. 12.4.2017; Tribunal of Justice of Rio Grande do Sul, Ap. Cív. 71006353486, 2ª TRC, Rel. Des. Elaine Maria Canto da Fonseca, julg. 12.4.2017. 78 Bastos (2016), p. 6 and de Azevedo (2010), cit., p. 112. 79 “The right of retraction foreseen in article 49 of the Consumer Protection Code does not apply to the buying of airplane tickets by the internet, because of the peculiarities of the airline transportation 76

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Agency restricted the exercise of the right of retraction to 24 h from the receipt of the purchase receipt in case where the purchase was made 7 (seven) or more days in advance to the boarding date (Article 11). With regards specifically to the transfer of data through the internet, transparency in electronic communication is an essential step to ensure user’s privacy protection, which lack of technical knowledge cannot serve as an excuse for the use of technological artifices to collect, store and use his/her personal data without authorization.80 In Brazil, the right to privacy covers not only the protection to private life, but also the protection of personal data. In this sense, privacy can be synthetically defined as the right to control one’s own information and determine how such privacy should be constructed.81 The treatment of personal data in Brazil was matter of recent regulation trough the Law n 19.709/2018, which contemplates the consumer protection as one of the cornerstones of the safeguard of personal data. In relation to the protection of personal data in electronic contracts, attention must be given to the control of cookies, a kind of program developed to identify, track and collect data from users on the internet. This method has allowed the development of users’ profiles that suppliers use to forward the content of the advertising message and offering of products on the internet. While, in theory, all users have means to disable such cookies in their personal computers, in practice, most of consumers are unaware of such function. Moreover, the deactivation can hinder the access to many websites in which the use of cookies is a requirement for its regular operation. However, the indiscriminate use of cookies by the supplier can constitute an abusive commercial practice under Article 39 of the Consumer Protection Code, as well as a violation of privacy, which is protected by the Constitution.82

service” (Tribunal of Justice of Rio Grande do Sul, Recurso Cível 71006086474, 2ª TRC, Rel. Des. Ana Cláudia Cachapuz Silva Raabe, julg. 6.7.3016). In the same sense, Tribunal of Justice of Rio de Janeiro, Ap. Cív. 0354231-42.2013.8.19.0001, 27ª CCC, Rel. Des. Murilo André Kieling Cardona Pereira, julg. 6.7.2015; Tribunal of Justice of Rio de Janeiro, Ap. Cív. 0069072-96.2005.8.19.0001, 7ª CC, Rel. Des. Maria Henriqueta do Amaral Fonseca Lobo, julg. 4.2.2009. About the possibility to cancel the day following the purchase, see Tribunal of Justice of São Paulo, Ap. Cív. 102552214.2014.8.26.0554, 17ª CDP, Rel. Des. Afonso Brás, julg. 25.10.2016; Tribunal of Justice of Rio Grande do Sul, Ap. Cív. 70064762727, 12ª CC, Rel. Des. Guinther Spode, julg. 12.11.2015; Tribunal of Justice of Rio Grande do Sul, Ap. Cív. 71005209846, 4ª TRC, Rel. Des. Glaucia Dipp Dreher, julg. 24.4.2015. On the contrary: “The right of retraction foreseen in article 49 of the Consumer Protection Code together with Article 740 of the Civil Code, in dialogue of sources, it is perfectly applicable to the sale of airplane tickets on the internet” (Tribunal of Justice of Rio de Janeiro, Ap. Cív. 00214983620148190042, 27ª CC Consu., Rel. Des. Maria Luiza de Freitas Carvalho, julg. 12.2.2016); Tribunal of Justice of Rio Grande do Sul, Ap. Cív. 70071985162, 12ª CC, Rel. Des. Ana Lúcia Carvalho Pinto Vieira Rebout, julg. 18.4.2017; Tribunal of Justice of Rio Grande do Sul, Ap. Cív. 71006003255, 4ª TRC, Rel. Des. Gisele Anne Vieira de Azambuja, julg. 29.4.2016. 80 Laeber (2007), p. 12. 81 On the subject, see Doneda (2010), p. 31; Lewicki (2003), p. 79; Rodotà (2008), p. 92; Mulholland. Rio de Janeiro, a. 1, n. 1/2012. 82 Carvalho (2003), p. 18.

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Moreover, it should be noted that, in Brazil, following the current world trend, the internet has been used as a tool for evaluation of suppliers, through the assignment of grades by consumers that have used a certain product or service and share their experiences in a portal. By way of illustration, among the main websites used by Brazilians for this purpose are: (i) “tripadvisor” (www.tripadvisor.com.br) that evaluates suppliers in the fields of tourism and gastronomy; (ii) “ebit” (www.ebit. com.br) that allows retailers to register in the system to be evaluated by consumers and (iii) “reclame aqui” (www.reclameaqui.com.br) that evaluates the companies through grades and complaints posted by consumers. Still in the scope of digital consumption, it is possible to identify that the advent of new technologies has also contributed significantly to increase the asymmetry of information already existing between consumer and supplier, both as regards the information about the products and services offered, and as regards the data of the consumer market. As the main engine of this transformation, the Internet has enabled suppliers of products and services to collect an informational variety never imagined, especially in the face of data archiving technologies.83 In contrast to the wider access to knowledge by suppliers, the consumers inserted in the e-commerce, before the development of mass-hiring techniques, see themselfs with an increasingly lower access to information. Hiring has become faster, as the digital reality demands, but in such a process, the guardianship of the right to have clear and suitable information has been hampered. In this new context, the legislator emerges as a fundamental actor to rebalance the consumer relations. With this in mind, in 2010, the Commission for Updating the Consumer Defense Code was installed. Among the proposed changes in the Code, stands out the proposal to create a Section VII to deal with electronic commerce, providing “general rules of consumer protection in e-commerce, in order to strengthen their trust and ensure effective protection, reducing asymmetric information, preserving security in transactions, protecting the self-determination and the personal data privacy”.84 The project is still in deliberation and has no date to be voted.

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Illustratively, the 37th Civil Court of São Paulo acknowledged that the capture of passengers’ facial expression, performed through cameras installed on the subway platforms, in order to verify their reaction to the advertisements, “appears to violate the basic right of consumers the information”. The judge Adriana Cardoso dos Reis, accepting the injunctive relief requested by the Consumer Protection Institute, said that the use of sensors that make the facial recognition of passengers should be “object of ostensive information to passengers, especially due the public nature of the service provided” (ACP 1090663-42.2018.8.26.0100). 84 Federal Senate, Senate Bill. n 281, 2012.

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7 Conclusion: The Concern with Healthy Consumption in Brazil Article 4 of the Consumer Protection Code deals with the National Policy for Consumer Relations and establishes as its main objective the improvement of the consumers’ life quality. The concern with sustainable consumption that also promotes health and well-being for the consumers is meaningful in Brazil. This guideline to be followed is a reflection of the constitutional axiology that has as main purpose the development of human dignity. In this context, some products, for the risks they may offer to health, are more intensively controlled with regards to advertising. Among the examples, tobacco, alcohol beverages and medicine stand out. The Constitution of the Federative Republic of Brazil, in its Article 220, paragraph 3, II and paragraph 4, determines that advertisement of these products that are potentially hazardous to health shall be subject to legal restriction and contain, whenever necessary, warnings about the problems that could follow from their use. In compliance with the constitutional command, Law n. 9.294/1996 was published; it deals with restrictions to the use and advertisement activities of smoking-related products, alcohol beverages, medicines, therapies and agricultural pesticides. With regards to tobacco, Law 9.294/1996, with the wording adapted by the Antismoking Law (Law n. 12.546/2011), prohibits, in all national territory, the advertisement of cigarettes, cigarillos, cigars, smoking pipes or any other smoking-related product, tobacco derivative or not, with the exception only to the exposure of the referred products in sales locations, as long as accompanied by warning clauses (Article 3). Besides that, it prohibits the use of such products in closed locations, whether private or public (Article 2). It should also be noted that the National Health Surveillance Agency demands that all packaging of cigarettes contain “standardized images made available by the National Health Surveillance Agency, on its portal, containing warnings, images, logo and the phone number of ‘Disque Saúde (136)’ services” (Article 3 of the RDC n. 335/2003 according to wording of RDC n. 30/2013). According to data disclosed by the National Cancer Institute in January of 2017, the consumption of cigarettes in Brazil has dropped significantly since the 1990s. In 1989, 34.8% of the population smoked and in 2013 only 14.7%. From 2005 to 2014 there was a decrease of 30% in consumption.85 Besides that, in 2013, Brazil was referenced in a report produced by the World Health Organization as one of the countries that has most largely adopted measures to prevent the use of cigarettes, alongside Panama, Iran and Turkey.86 The data demonstrates the success of the antismoking policy in the country in favor of an education of healthy consumption, 85

Available on: http://www2.inca.gov.br/wps/wcm/connect/agencianoticias/site/home/noticias/ 2017/oms-quer-que-cigarros-fiquem-mais-caros. Viewed last on 28.5.2017. 86 Available on: http://g1.globo.com/bemestar/noticia/2013/07/cigarro-mata-6-milhoes-de-pessoasno-mundo-por-ano-diz-oms.html. Viewed last on 28.5.2017.

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in compliance with protected constitutional rights. Among the control measures, the ones brought by the Framework Convention on Tobacco Control ratified by Brazil (Decree n. 5.658/2006), whose objective is “to protect present and future generations from devastating sanitary, social, environmental and economic consequences resulting from the consumption and exposure to tobacco smoke” (Article 3). With regards to alcohol beverages, Law n. 9.294/1996, in its Article 4, determines the time limitation for the placement of advertisements of alcohol in radio and television: between nine p.m. and six a.m. This law also establishes, in its Article 4, paragraph 2, that the labels put on alcohol beverages packages shall contain warnings in the following terms: “Avoid the Excessive Consumption of Alcohol”. As to medicines, only the ones classified as anodyne and of free sale can be advertised, but in those cases, it is still necessary to clarify that in case the symptoms continue, a doctor must be consulted (Article 7, paragraphs 1 and 5 of Law n. 9.294/ 1996). The remaining can only be advertised in special publications, addressed to professional and health institutions (head of Article 7, Law n. 9.294/1996). As one can see from these examples, the right to health is extremely important in Brazilian Law, capable of influencing the offer and advertisement of certain products. The constitutional and infra constitutional legislator aims to promote the improvement of life quality of consumers, through ostensive information about the ill effects of certain products and the limitation of its offering and advertisement.

References Alvim A, Alvim T, Alvim EA, Marins J (1995) Código do Consumidor Comentado. Revista dos Tribunais, São Paulo Andrighi FN (2004) O conceito de consumidor direto e a jurisprudência do Superior Tribunal de Justiça. Revista de Direito Renovar 29:1–11 Atz AP (2015) O gerenciamento do risco no Direito do Consumidor a partir da observação do princípio da informação. Revista de Direito do Consumidor 100:225–265 Barbosa FN (2008) Informação: direito e dever nas relações de consumo. Revista dos Tribunais, São Paulo Barboza HH (2008) O melhor interesse do idoso. In: da Silva Pereira Â, de Oliveira G (Coord.) O Cuidado Como Valor Jurídico. Forense, Rio de Janeiro Barletta F (2010) O Direito à Saúde da Pessoa Idosa. Saraiva, São Paulo Bastos DD (2016) Direito de arrependimento nas relações de consumo: desafios hermenêuticos e casos controvertidos. Revista de Direito do Consumidor 105:203–235 Batista CH (2016) A Aplicação do Código de Defesa do Consumidor na proteção dos investidores de fundos de investimento, de acordo com a jurisprudência do STJ. Revista de Direito Bancário e do Mercado de Capitais 74:137–160 Benjamin AH, Marques CL, Bessa LR (2016) Oferta e publicidade. In: Manual de Direito do Consumidor. Revista dos Tribunais, São Paulo Carvalho APG (2003) O consumidor e o direito à autodeterminação informacional: considerações sobre os bancos de dados eletrônicos. Revista de Direito do Consumidor 46:77–119 Comparato FK (2011) A proteção do consumidor: importante capítulo do direito econômico. Revista de Direito do Consumidor 77:27–46

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da Cunha Brokamp EDG (2010) A Necessidade de proteção da criança diante do mercado de consumo: conflito entre liberdade e intervenção. In: Martins GM (Coord.) Temas de Direito do Consumidor. Lumen Juris, Rio de Janeiro, p 177 da Silva RA (2003) Os fundos de investimento financeiro à luz do Código de Defesa do Consumidor: a proteção jurídica do investidor. Revista de Direito Privado 13:187–249 de Almeida Santos FM (2016) Informação como instrumento para amenizar riscos na sociedade de consumo. Revista de Direito do Consumidor 107:363–384 de Azevedo CEM (2010) O direito de arrependimento do consumidor nas contratações eletrônicas. In: Martins GM (Coord.) Temas de Direito do Consumidor. Lumen Juris, Rio de Janeiro, p 112 de Carvalho DF, de Souza Oliveira T (2010) A proteção do consumidor-criança frente à publicidade no Brasil. Revista de Direito do Consumidor 94:181–211 de Magalhães Dias LAL (2015) Publicidade e hipervulneráveis: limitar, proibir ou regular? Revista de Direito do Consumidor 99:285–305 Doneda D (2010) A Proteção de Dados Pessoais nas Relações de Consumo: Para Além da Informação Creditícia. SDE/DPCD, Brasília Efing AC, Polewka G, Oyague OW (2015) A crise econômica brasileira e o superendividamento da população emergência do aprimoramento legislativo para a tutela social - Emergência do aprimoramento legislativo para a tutela social. Revista de Direito do Consumidor 101:387–433 Fachin LE (2006) O Giro repersonalizante: singrar, a viagem do redescobrimento. In: Estatuto jurídico do patrimônio mínimo: à luz do novo Código Civil brasileiro e da Constituição Federal. Renovar, Rio de Janeiro Franco MB (2010) O superendividamento do consumidor: fenômeno social que merece regulamentação legal. Revista de Direito do Consumidor 74:227–242 Laeber MRS (2007) Proteção de dados pessoais: o direito à autodeterminação informativa. Revista de Direito Bancário e do Mercado de Capitais 37:59–80 Lewicki B (2003) A privacidade da pessoa humana no ambiente de trabalho. Renovar, Rio de Janeiro Marques CL (2001) Sociedade de Informação e Serviços Bancários: Primeiras Observações. Revista de Direito do Consumidor 39:49–74 Marques CL (2016) Contratos no código de defesa do consumidor. Revista dos Tribunais, São Paulo Marques CL, Miragem B (2014) O Novo Direito Privado e a Proteção dos Vulneráveis. Revista dos Tribunais, São Paulo Marques CL, Benjamin AHV, Miragem B (2004) Comentários ao código de defesa do consumidor: arts. 1 a 74 : aspectos materiais. Revista dos Tribunais, São Paulo Martins GM (2015) A regulamentação da publicidade infantil no brasil. A proteção do consumidor e da infância. Revista de Direito do Consumidor 102:297–320 Miragem B (2012) Curso de Direito do Consumidor. Revista dos Tribunais, São Paulo Miragem B (2014) Proteção da criança e do adolescente consumidores. possibilidade de explicitação de critérios de interpretação do conceito legal de publicidade abusiva e prática abusiva em razão de ofensa a direitos da criança e do adolescente por resolução do conselho nacional da criança e do adolescente - CONANDA. Revista de Direito do Consumidor 95:459–495 Moreira CRB (1997) Notas sobre a inversão do ônus da prova em benefício do consumidor. Revista de Direito do Consumidor 22:135–149 Mulholland C (2012) O Direito de não saber como decorrência do direito à intimidade – Comentário ao REsp 1.195.995. Revista Civilistica.com 1:1–11 Nery N (1992) Os princípios gerais do código brasileiro de defesa do consumidor. Revista de Direito do Consumidor 3:44–77 Oliva MD (2015) Patrimônio Separado e Proteção do Consumidor na Incorporação Imobiliária. In: de Oliveira AJG, Xavier LP (Org.) Repensando o direito do consumidor III: 25 anos de CDC: conquistas e desafios. OAB/PR, Curitiba, pp 276–299

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Pasqualotto A (2010) O destinatário final e o ‘consumidor intermediário’. Revista de Direito do Consumidor 74:11–22 Pfeiffer RAC (2007) Aplicação do Código de Defesa do Consumidor aos Administradores de Fundos de Investimento. Revista de Direito do Consumidor 61:190–202 Pierri D (2014) Políticas públicas e privadas em prol dos consumidores hipervulneráveis - idosos e deficientes. Revista de Direito do Consumidor 92:221–298 Rodotà S (2008) A vida na sociedade de vigilância: privacidade hoje. Renovar, Rio de Janeiro Schreiber A (2014) Contratos Eletrônicos e Consumo. Revista Brasileira de Direito Civil 1:5 Siqueira RL, Bianco DD (2011) A publicidade comparativa no brasil e no direito comparado. In: Nery Junior N, de Andrade Nery RM (Org.) Doutrinas Essenciais: Responsabilidade Civil, vol 4. Revista dos Tribunais, São Paulo, pp 1.114–1.115 Tepedino G (2000) Editorial: Do sujeito de direito à pessoa humana. Revista Trimestral de Direito Civil 1:V–VI Tepedino G, Oliva MD (2017) Controle de Abusividade da Cláusula de Eleição de Foro. Revista de Direito do Consumidor 109:187–205

IACL Questionnaire: Information/ Disinformation Consumers Including Negotiation

Introduction Consumers deserve legal protection on account of their inferior position. This is the well-known rationale for adopting special rules for consumers. Prohibiting misleading information and informing consumers with correct information lies at the core of the so-called information paradigm which resulted in consumer information models across the world. To combat the market inefficiencies resulting from the information asymmetry that exists between businesses and consumers, an increasing number of mandated information disclosures are imposed on businesses. Consequently protective measures of consumers have frequently sought to give consumers the means to protect their own interests by making autonomous, informed choices. In those models consumers are often perceived as benefit maximizing creatures. Information requirements allow consumers to make decisions themselves, decisions which are supposedly better than anyone else can make for them. It follows that if consumers are given full information, they will consistently make decisions that maximise their welfare. Hence informed consumer decisions are efficient decisions. Pre-contractual information duties and labelling requirements for foodstuffs are well-known illustrations of such mandatory information obligations. In a number of legal systems they range among the earliest information obligations that have been adopted in view of protecting consumers. Together with the prohibition of misleading commercial practices these measures seek to respectively forestall and to combat the deception of consumers. Therefore they will be the subject of this questionnaire. The last decade models based on mandatory disclosures increasingly become the subject of criticism not in the least by behavioural economists. Without going into too much details behavioural economics scholars mark as major critiques on consumer information policies based on disclosures, the bounded rationality of consumers, the fact that consumers often lack the time to read information, the absence © Springer Nature Switzerland AG 2019 G. Straetmans (ed.), Information Obligations and Disinformation of Consumers, Ius Comparatum – Global Studies in Comparative Law 33, https://doi.org/10.1007/978-3-030-18054-6

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of rules on the presentation of the information, the length of the information and the understandability of information for consumers in general and for vulnerable consumers in particular. More particularly the continuous accumulation of information requirements gives rise to the question whether the ‘inundation’ of information does not risk to dis-inform the consumer rather than inform. In this debate also the so-called digital consumer and consumer of financial services must be given specific attention. The first because of the communication medium that poses new threats to consumers, the latter because the financial services sector is characterised as a complex area with specific technicalities. Consumer law is often also characterised by more intrusive measures to party autonomy. In those areas in which the consumer is not able to make a rationale choice on the basis of adequate information or a cooling-off period would not have much effect, more intrusive measures such as the control of contract terms may be introduced. Bans of unfair contract terms are the result. These prohibitions are often paired with specific transparency requirements. These transparency requirements are complementary to the general pre-contractual information requirements and hence also dealt with in this questionnaire. On a more general account the position of the consumer vis-à-vis businesses is analysed in view of obtaining deeper insights on how party autonomy, negotiation capacities and bargaining power of consumers function in the legal systems.

Questionnaire 1. General Characteristics of the Consumer Information Model a. What are the main features of your national consumer model? Is it based on the economic market model and the inherent ‘homo economicus’ or is it (also) characterised by other features? b. Which consumer (e.g. the reasonably well informed, reasonably observant and circumspect consumer who is capable of processing information which is disclosed to him and value it in view of his purchase decisions) serves as the general benchmark for your national consumer legislation? Are there specific types of consumers, e.g. types of vulnerable consumers, that have an impact on what information must be provided to consumers and how it is provided? Please specify briefly whether different benchmarks are used in relation to pre-contractual information, labelling, misleading practices, unfair terms, financial services and online sales. 2. Pre-contractual Information Requirements General information obligation a. Is there a general obligation imposed on businesses to provide consumers with pre-contractual information? When (before conclusion of the contract etc..) and

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how (durable medium etc. . .) must this information be given? What information must be given to the consumer? b. Are businesses allowed to add voluntarily information to the information particulars, if any, imposed by law? c. Can the lack of pre-contractual information give rise to sanctions, and if yes, what sanctions? Can it give rise to a culpa in contrahendo? How does it relate to party autonomy and negotiation powers in your legal system? Is there a benchmark of reasonable consumer expectations applied in this respect? Please explain. In some legal systems rules about the presentation of information include transparency requirements like: the information must be clear, unambiguous, understandable, comprehensible, intelligible etc. . . for consumers. d. Are there rules in your jurisdiction which impose transparency requirements and how the information must be presented to the consumer? e. If some of the abovementioned requirements exist in your legal system, how are these requirements then handled by courts? Please explain. f. Is there any sanction when a business omits to provide an obligatory information particular to consumers? Please explain. Specific food information requirements for consumers. a. What general features characterise your legal system’s food labelling requirements (e.g. list of ingredients, no deception. . .)? b. Are manipulative marketing techniques that exploit the fact that consumers are easier to persuade when they have not engaged their conscious decisionmaking faculties, for instance the use of specific packaging colors, addressed in your legal system? If yes, in what way? Please explain. Some legal systems require mandatory food information to be marked in a conspicuous place in such a way as to be easily visible, clearly legible and, where appropriate, indelible. It is sometimes also stated that food information may not in any way be hidden, obscured, detracted from or interrupted by any other written or pictorial matter or any other intervening material. Some legal systems further contain rules as regards font size and characters of mandatory particulars. c. Are there rules in your legal system on how food information must be presented to consumers? Please explain. d. Is there any sanction in case a business omits to provide certain mandatory particulars in accordance with the presentation requirements? Please explain. 3. Misleading Commercial Practices For the purposes of this subsection commercial practice is taken in its broadest meaning, namely any act, conduct, omission, commercial communication, advertising, marketing that directly or indirectly is related to the promotion, sales or supply of goods, services, etc. . . How is the consumer protected against misleading commercial practices in your jurisdiction? The following questions may serve as guidelines for your answer:

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Is there a provision that prohibits misleading actions and omissions? What benchmark is used to assess the misleading character of commercial practices? Are there specific rules for the protection of groups of particularly vulnerable consumers against misleading practices? Are there specific rules for information that is provided to consumers through specific media, e.g. comparison websites? Is the assessment of the misleading character of a commercial practice influenced by the way in which pre-contractual information was provided to consumers? Please explain. 4. Unfair Contract Terms—Bargaining Power The prohibition of unfair contract terms rests upon the assumption that consumers are less experienced than businesses and lack the legal knowledge and the bargaining power to negotiate pre-drafted standard terms. Hence bans on unfair terms are often restricted to terms that have not been the subject of individual negotiation. a. Are standard terms treated differently from individually negotiated terms in your legal system? If yes, in what way? b. How is in this respect the bargaining power of consumers characterised vis-à-vis businesses in your legal system? Please explain. c. Who bears the burden of proof that a term has been individually negotiated? How can it be proven? Please explain. d. If parties have a dispute about whether a term was individually negotiated or not, how is this dealt with in court practice? Please explain. e. Are so-called core contract terms excluded from the unfairness test? Please explain. Transparency of (core) contract terms a. If the use of written standard terms (or the exclusion of core contract terms from the unfairness test) is subject to a transparency requirement: how is this transparency requirement then defined and how is it applied in practice? Please explain. The following questions may serve as guidelines for your answer: Do requirements like for instance ‘contract terms have to be clear and comprehensible’ solely refer to the formal or grammatical correctness of the terms or does it also include the obligation to inform the consumer about the economic or other consequences of a term? Is the (more) vulnerable consumer offered a higher level of protection in terms of transparency? If the exclusion from the unfairness test of core contract terms is subject to a transparency requirement, is it then also subject to the obligation to bring core contract terms to the consumer’s attention in such a way that an average consumer would be aware of the term? Can pre-contractual information have a bearing on the interpretation of the precise content of a contract term? Are individually negotiated terms dealt with differently than standard terms as regards their transparency? If yes, in what way? Is there any sanction for not complying with the transparency requirement?

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5. Sector Specific Rules: The Financial Consumer Financial services are for the purposes of this questionnaire defined broadly including banking, insurance and investment services. In most legal systems specific information requirements exist as regards financial services, e.g. in terms of the comprehensibility, reliability, transparency and comparability of the information, bans on specific unfair terms. a. In what way do these specific measures in your legal system deviate from the requirements imposed in other consumer sectors? Please explain. b. Does the critique from legal and other scholars that the information disclosed to consumers in this field is too expansive play a role in recent legislative developments? For instance is there discussion in your jurisdiction about forms of ‘smart’ or ‘more targeted’, simplified information, e.g. key information documents, the use of icons or the use of scores ¼ one dimensional summaries of product features like e.g. the annual percentage rate in consumer credit? Please explain. 6. Sector Specific Rules: The Digital Consumer In most legal systems specific information requirements exist concerning online consumer sales/distance sales. a. In what way do these specific measures deviate from the requirements imposed on off line sales to consumers? Please explain. b. Consumer information can shape the reasonable expectations of consumers, and consequently also the level of protection consumers can reasonably expect. Does the legislation make use of a benchmark of reasonable consumer expectations? Please explain. Most legal orders require that the storing of information, or the gaining of access to information already stored in the terminal equipment of a subscriber or user is only allowed on condition that the subscriber or user concerned has given his or her consent, having been provided with clear and comprehensive information about the purposes of the processing. c. The fact that consent legitimizes nearly any form of collection, use, or disclosure of personal data begs the question how the consumer must be informed about to what exactly he consents? The following questions may serve as guidelines for your answers: Are there specific rules in your jurisdiction in this respect? Is the use of default options allowed? How can a trader proof that e.g. the consumer consented to the cookies policy of the business and was aware of how they function? How is the bargaining power or negotiation capacity of the consumer in this area dealt with in your legal system; does it correspond to reality or have consumers no choice but to agree with the proposed use of data? Please explain.

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7. The Information Model Under Pressure and the Problem of Disinformation a. Does the legislature take recent outcomes of studies criticizing mandatory information models into account? If so, how does this discussion affect your current legislation? For instance is the streamlining or regrouping of information debated in your jurisdiction or the fact that information in the pre-contractual stage must focus on essentials whilst more detailed information should be required only at the moment before the contract is concluded? Is it debated that consumer information should become more accessible, accurate, comprehensive, and timely, and should allow consumers to fairly compare material product features to those of competing products available on the market? Please explain. b. Is there specific legislation that deals with the problem of disinformation of consumers as a result of an overload of information? For instance, can an overload of information be characterised as a misleading commercial practice? If so, under what circumstances (e.g. in consequence of voluntary information that confuses consumers when it is added by a business to mandatory information disclosures or could there also be a case of disinformation of consumers which results from mandatory information alone that is complied with by the business)? Please explain. 8. Other Relevant Topics Do measures relating to the education of consumers (improvement of illiteracy in certain fields) complement the measures studied above and are they effective? Please explain. Are there other relevant topics related to (dis)information/negotiation capacities of consumers that are debated in your legal system but might have been overlooked in the preceding parts?

Questionnaire AIDC: Information/ désinformation des consommateurs, y compris le pouvoir de négociation des consommateurs

Introduction Les consommateurs méritent une protection juridique en raison de leur position inférieure. C’est la raison d’être bien connu des règles protectrices pour les consommateurs. L’interdiction des informations trompeuses et l’obligation d’informer d’une manière adéquate les consommateurs se trouvent au cœur du prétendu paradigme d’information aboutissant à des modèles d’information des consommateurs à travers le monde. La lutte contre l’inefficacité du marché résultant de l’asymétrie de l’information qui existe entre les entreprises et les consommateurs, fait imposer aux entreprises un nombre croissant d’informations obligatoires. Par conséquent, des mesures de protection des consommateurs ont souvent visé à donner aux consommateurs les moyens de protéger leurs propres intérêts en faisant des choix autonomes et informés. Dans ces modèles, les consommateurs sont souvent perçus comme des personnes rationnelles qui maximisent leurs propres intérêts. Les obligations d’information permettent aux consommateurs de prendre leurs propres décisions, des décisions qui sont supposés être mieux que quiconque puisse le faire pour eux. Il s’ensuit que si les consommateurs reçoivent des informations complètes, ils prendront constamment des décisions qui maximisent leur bien-être. De même il en résulte que des décisions informées des consommateurs sont des décisions efficaces. Les obligations précontractuelles d’information et d’étiquetage des denrées alimentaires sont des illustrations bien connues de cette politique d’information. Dans un certain nombre de systèmes juridiques, les obligations d’information sont parmi les mesures les plus anciennes qui ont été adoptées en vue de la protection des consommateurs. Conjointement avec l’interdiction des pratiques commerciales trompeuses, ces mesures visent respectivement à prévenir et à lutter contre la tromperie des consommateurs. Dès lors elles feront l’objet de ce questionnaire. © Springer Nature Switzerland AG 2019 G. Straetmans (ed.), Information Obligations and Disinformation of Consumers, Ius Comparatum – Global Studies in Comparative Law 33, https://doi.org/10.1007/978-3-030-18054-6

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Au cours de la dernière décennie, des modèles basés sur des informations obligatoires sont de plus en plus devenus l’objet de critiques, entre autre par des économistes comportementaux. Sans entrer dans trop de détails, les critiques principales des spécialistes en économie comportementale sur les modèles d’information des consommateurs sont les suivantes: la rationalité limitée des consommateurs, le fait que les consommateurs manquent souvent du temps pour lire les informations, l’absence de règles sur la présentation de l’information, la longueur de l’information et la clarté des informations pour les consommateurs en général et pour les consommateurs vulnérables en particulier. Plus particulièrement, l’accumulation continue des obligations d’information donne lieu à la question si «l’inondation» de l’information ne risque pas de désinformer le consommateur plutôt que de l’informer. Dans ce débat une attention particulière doit aussi être accordée au consommateur dit numérique et au consommateur de services financiers. Le premier en raison du moyen de communication qui constitue une menace nouvelle pour les consommateurs, le dernier au motif que le secteur des services financiers est caractérisé comme complexe consistant d’aspects techniques spécifiques. Le droit de la consommation se caractérise aussi par des mesures plus intrusives à l’autonomie des parties et la liberté contractuelle. Il y a notamment des situations dans lesquelles le consommateur n’est pas dans une position de prendre une décision informée et qu’aussi un délai de réflexion n’aurait pas beaucoup d’effet. Dans ces situations des mesures plus envahissantes telles que le contrôle des clauses contractuelles sont plus appropriées. L’interdiction des clauses contractuelles abusives en est le résultat. Ces interdictions sont souvent jumelées avec des exigences de transparence spécifiques. Ces obligations de transparence sont complémentaires à l’information précontractuelle générale et sont dès lors également l’objet de ce questionnaire. Plus généralement encore, la position des consommateurs vis-à-vis des entreprises est analysée en vue d’obtenir une compréhension plus approfondie du fonctionnement de l’autonomie contractuelle des parties, la capacité de négociation des consommateurs et son pouvoir de négociation vis-à-vis des entreprises dans les systèmes juridiques.

Questionnaire 1. Caractéristiques générales du modèle d’information du consommateur. a. Quelles sont les caractéristiques principales de votre système national de protection des consommateurs ? Est-ce que ce système repose sur les paramètres du marché économique et son «homo economicus» ou est-ce qu’il est caractérisé par d’autres éléments? b. Quel consommateur (p.ex. le consommateur moyen, normalement informé, raisonnablement attentif et avisé qui est présumé d’internaliser l’information divulguée par le marché et d’en bénéficier) est le point de repère dans votre

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législation nationale? Est-ce que la législation utilise des différentes images des consommateurs, par exemple une typologie des consommateurs vulnérables afin de modeler les obligations d’information et de préciser comment cette information devrait être fournie aux consommateurs? Veuillez préciser brièvement s’il existe des différentes typologies de consommateurs selon le domaine, notamment par rapport à l’information précontractuelle, l’étiquetage, les pratiques trompeuses, les clauses abusives, les services financiers et les ventes en ligne. 2. Obligations précontractuelles d’information. Obligations d’information générales : a. Existe-t-il une obligation générale imposée aux entreprises de fournir certaines informations précontractuelles aux consommateurs? Quand (avant la conclusion du contrat etc.) et comment (un support durable etc. . .) doit-on donner cette information? Quelles informations doivent être fournies au consommateur? b. Est-ce que les entreprises sont autorisés à ajouter de plein gré des informations aux informations, s’il y en a, obligatoires? c. Est-ce que l’absence d’information précontractuelle donne lieu à des sanctions et, dans l’affirmative, auxquelles sanctions? Est-ce que votre système juridique applique la théorie du culpa in contrahendo? Quelle est la relation entre l’obligation précontractuelle d’information, la liberté contractuelle et le pouvoir de négociation des consommateurs dans votre système juridique? Est-ce que le législateur applique une norme basée sur les attentes raisonnables des consommateurs à cet égard? Veuillez expliquer svp. Dans certains systèmes juridiques, des règles concernant la présentation de l’information comprennent des exigences de transparence, par exemple que l’information doit être claire, sans ambiguïté, compréhensible, intelligible pour le consommateur moyen etc. d. Existe-t-il une telle obligation de transparence dans votre juridiction et des règles comment l’information doit être présentée au consommateur ? e. Si certaines de ces exigences précitées existent dans votre système juridique, comment est-ce qu’elles sont ensuite appliquées par les tribunaux? Veuillez expliquer svp. f. Est-ce que la loi prévoit une sanction lorsqu’une entreprise omet de fournir l’information obligatoire aux consommateurs? Veuillez expliquer svp. Obligation d’informer les consommateurs sur les denrées alimentaires. a. Quelles sont les caractéristiques générales de votre système d’étiquetage des denrées alimentaires (p. ex. liste des ingrédients, interdiction de tromperie. . .)? b. Est-ce que votre système juridique prend en compte les divers techniques manipulatrices et persuasives de commercialisation qui sont utiliser par rapport aux denrées alimentaires comme par exemple l’utilisation des couleurs spécifique pour l’emballage de certains produits? Dans l’affirmative, de quelle manière sont ces techniques prises en compte dans la loi? Veuillez expliquer svp.

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Certains systèmes juridiques demandent que les informations sur les denrées alimentaires doivent être apposées d’une façon bien visible, clairement lisible et, le cas échéant, indélébile. Dans certains cas la loi exige aussi que l’information sur les denrées alimentaires ne peut en aucun cas être dissimulée, voilée, tronquée ou interrompue par toute autre élément écrit ou pictural ou tout autre élément interférant. En outre, certains systèmes juridiques contiennent des règles en ce qui concerne la taille des caractères des mentions obligatoires. c. Est-ce que votre système juridique contient des règles concernant la présentation aux consommateurs des informations sur les denrées alimentaires? Veuillez expliquer svp. d. Est-ce qu’il y a une sanction dans le cas où une entreprise omet de fournir certaines mentions obligatoires conformément aux exigences de présentation ? Veuillez expliquer svp. 3. Pratiques commerciales trompeuses. En vue de cette partie du questionnaire, une pratique commerciale est interprétée dans le sens le plus large, à savoir: toute action, omission, conduite, démarche ou communication commerciale, y compris la publicité et le marketing, de la part d’un professionnel, en relation directe avec la promotion, la vente ou la fourniture d’un produit aux consommateurs. Comment est-ce que le consommateur est protégé contre les pratiques commerciales trompeuses dans votre juridiction? Les questions suivantes peuvent servir de guide pour votre réponse: Existe-t-il une disposition qui interdit toutes actions et/ou omissions trompeuses? A la lumière de quel image du consommateur doit-on évaluer la nature trompeuse des pratiques commerciales? Est-ce qu’il y a des règles spécifiques relatives aux pratiques trompeuses qui visent la protection des groupes de consommateurs particulièrement vulnérables? Est-ce qu’il existe des règles spécifiques d’information relatives aux médias particulières, par exemple les sites de comparaison? Est-ce que l’évaluation de la nature trompeuse d’une pratique commerciale est influencée par la façon dont laquelle l’information précontractuelle a été fournie aux consommateurs? Veuillez expliquer svp. 4. Les clauses contractuelles abusives – pouvoir de négociation. L’interdiction des clauses contractuelles abusives repose sur l’idée que le consommateur se trouve dans une situation d’infériorité à l’égard du professionnel en ce qui concerne tant le pouvoir de négociation que le niveau d’information, situation qui le conduit à adhérer aux conditions rédigées préalablement par le professionnel sans pouvoir exercer une influence sur le contenu de celles-ci. C’est ainsi que l’interdiction des clauses contractuelles abusives vise notamment les contrats d’adhésion. a. Est-ce que dans votre système juridique les clauses standardisées sont traitées d’une manière différente que les clauses individuellement négociées? Si votre

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réponse est affirmative, dans quelle manière est-ce que cette différente approche se manifeste? Comment est-ce que votre système juridique apprécie, à cet effet, le pouvoir de négociation des consommateurs vis-à-vis de ce pouvoir des entreprises? Veuillez expliquer svp. Qui porte la charge de la preuve qu’une clause a été négocié individuellement? Comment est-ce qu’on peut prouver qu’une clause est individuellement négociée? Veuillez expliquer svp. Quelle est la pratique judiciaire en cas qu’il existe un litige sur le caractère négocié d’une clause ? Veuillez expliquer svp. Est-ce que les clauses qui définissent l’objet principal du contrat sont exclues de l’appréciation de leurs caractères abusifs? Veuillez expliquer svp.

Transparence des conditions contractuelles qui définissent l’objet principal du contrat : a. Dans le cas où l’exclusion de l’appréciation du caractère abusif des clauses qui définissent l’objet principal du contrat est soumise à une exigence de transparence, comment est-elle alors appliquée dans la pratique et quelles sont ces parties constitutives ? Veuillez expliquer svp. Les questions suivantes peuvent servir de guide pour votre réponse: Est-ce que la loi impose des exigences comme par exemple « les conditions contractuelles doivent être claires et compréhensibles » et est-ce que ces exigences se rapportent uniquement à l’exactitude formelle ou grammaticale des termes, ou est-ce qu’elles ont trait aussi à l’obligation d’informer le consommateur sur les conséquences économiques ou autres d’une clause? Est-ce que le consommateur (le plus) vulnérable reçoit un niveau plus élevé de protection en matière de transparence? Si l’exclusion de l’appréciation du caractère abusif des ‘conditions essentielles’ du contrat est soumise à une obligation de transparence, est-ce que cette obligation exige aussi d’apporter ces conditions à l’attention du consommateur de tel manière qu’un consommateur moyen serait en position de comprendre leurs contenues? Est-ce que l’information précontractuelle pourrait avoir une influence sur l’interprétation de la teneur précise d’une clause contractuelle? Est-ce que les clauses négociées individuellement sont traitées différemment vis-à-vis des clauses standardisées (d’adhésion) en terme de transparence? Si votre réponse est affirmative, veuillez expliquer dans quelle mesure cette distinction se manifeste? Existe-t-il une sanction pour le non-respect de l’exigence de transparence? 5. Règles sectorielles spécifiques : le consommateur financier. En vue du présent questionnaire, les services financiers sont définis au sens large, y compris les services bancaires, d’assurance et d’investissement. Dans la plupart des systèmes juridiques il existe des exigences d’information spécifiques dans le domaine des services financiers, par exemple des règles portant sur la

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compréhensibilité, la fiabilité, la transparence et la comparabilité de l’information, ainsi que des interdictions des clauses abusives spécifiques. a. Quelles sont les différences principales du système protecteur dans le domaine des services financiers en comparaison avec les autres secteurs de protection de consommateur? Veuillez expliquer svp. b. Est-ce que la critique des spécialistes juridiques et d’autres spécialistes que les informations obligatoirement communiquées aux consommateurs dans ce domaine soient trop vastes joue un rôle significatif au niveau législatif? Y-at-il par exemple des débats dans votre juridiction sur des types d’information simplifiée ou plus ciblée à donner aux consommateurs, p. ex. des débats sur les documents-clés d’information ou l’utilisation d’icônes ou des ‘scores’ (¼ résumés unidimensionnels des caractéristiques principales d’un produit/d’une service comme par exemple le taux annuel effectif global d’un crédit à la consommation)? Veuillez expliquer svp. 6. Règles sectorielles spécifiques : le consommateur numérique. Dans la plupart des systèmes juridiques des obligations d’information spécifiques sont imposées en cas de ventes aux consommateurs en ligne ou à distance. a. De quelle manière est-ce que ces mesures spécifiques s’écartent des exigences imposées sur les ventes hors ligne aux consommateurs? Veuillez expliquer svp. b. L’information donnée aux consommateurs peut créer des attentes raisonnables spécifiques dans le chef des consommateurs, et par conséquent influencer le niveau de protection offert aux consommateurs. Comment est-ce que ces attentes sont évaluées ? Est-ce que la législation fait emploi d’un type de consommateur moyen raisonnable à la lumière duquel les attentes raisonnables sont testées? Veuillez expliquer svp. La plupart des ordres juridiques exige que le stockage des données personnelles, ou l’accès aux données personnelles déjà stockées dans un équipement de terminal d’un abonné ou d’un utilisateur ne soit autorisé qu’à condition que l’abonné ou l’utilisateur concerné ait donné son consentement, après avoir reçu des informations claires et détaillées sur les finalités du traitement de ses données personnelles. c. Le fait que ce consentement autorise presque toute forme de collecter, d’utiliser ou de divulguer des données personnelles pose la question si le consommateur ne doit pas être informé plus précisément sur quoi il donne exactement son consentement? Les questions suivantes peuvent servir de guide pour vos réponses: Y-a-t-il des règles spécifiques dans votre juridiction à cet égard? Est-ce que l’utilisation des options par défaut est autorisée? Comment est-ce qu’un commerçant peut prouver que par exemple, le consommateur a consenti à la politique de cookies de l’entreprise et était au courant de leur fonctionnement? Comment sont le pouvoir de négociation et la capacité de négociation du consommateur pris en compte dans ce domaine ; est-ce que votre système correspond à la réalité ou est-ce que les

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consommateurs n’ont dans la plupart des cas pas d’autre choix que d’accepter l’utilisation des données personnelles proposée? Veuillez expliquer svp. 7. Le modèle traditionnel d’information sous pression et le problème de la désinformation. a. Est-ce le législateur prend en compte les résultats récents d’études critiquant les modèles d’information obligatoire? Dans l’affirmative, comment est-ce que cette discussion affecte-t-elle votre législation actuelle? Par exemple sont la simplification, l’alignement ou le regroupement d’information débattus dans votre juridiction ainsi que le fait que l’information dans la phase précontractuelle doit mieux se concentrer sur l’essentiel alors que l’information plus détaillée soit requise plutôt au moment juste avant la conclusion du contrat? Est-ce que un des thèmes suivants est débattu dans votre juridiction : le fait qu’il faut avoir de l’information qui soit plus accessible pour le consommateur, plus précise, plus complète, plus à temps et plus comparables afin de permettre le consommateur de prendre une décision plus informée? Veuillez expliquer svp. b. Est-ce que le problème de la désinformation des consommateurs en raison d’une surcharge informationnelle est réglé par une législation spécifique? Par exemple, est-ce que la surcharge informationnelle (l’infobésité) peut être caractérisée comme une pratique commerciale trompeuse ou déloyale? Dans l’affirmative, quelles circonstances justifient la conclusion qu’un problème de désinformation du consommateur existe (par exemple par suite des renseignements complémentaires (en surplus des obligations d’informations imposées par la loi)/facultatifs qui confondent le consommateur ou suffit-il qu’une l’entreprise se conforme aux (remplisse les) informations législatives obligatoires pour conclure qu’il existe néanmoins une situation de désinformation des consommateurs? Veuillez expliquer svp. 8. Autres sujets pertinents. Est-ce que des mesures relatives à l’éducation des consommateurs (l’amélioration de l’analphabétisme dans certains domaines) complètent les mesures ci-dessus étudiés et sont-elles efficaces? Veuillez expliquer svp. Y-a-t-il d’autres sujets pertinents liés au pouvoir (dés)informé ou à celui de négociation des consommateurs qui sont débattus dans votre système juridique, mais pas repris dans les parties précédentes du questionnaire?