EU Court outlines unfair practice guidelines for consumer driven lottery
By Leo Gasteen
The European Court of Justice (ECJ) has ruled that allowing customers to take part in a lottery free of charge following a certain number of purchases does not automatically constitute an unfair commercial practice, following a request from the German Federal Court of Justice.
The ECJ observed that promotional campaigns which enable consumers to take part free of charge in a lottery subject to their purchasing a certain quantity of goods or services constitute commercial acts which clearly form part of an operator’s commercial strategy and relate directly to the promotion thereof and to its sales development. It follows that they do indeed constitute commercial practices within the meaning of the Directive and, consequently, come within its scope.
The ECJ highlighted that the Directive fully harmonises at Community level the rules relating to unfair business to-consumer commercial practices. Accordingly, as the Directive expressly provides, Member States may not adopt stricter rules than those provided for in that directive, even in order to achieve a higher level of consumer protection.
With regard to the practice at issue in the present case, the ECJ noted that it is not listed in Annex I to the Directive, which exhaustively lists the only commercial practices which can be prohibited without a case-by-case assessment. Accordingly, that practice cannot be prohibited without an assessment, having regard to the facts of each particular case, as to whether it is ‘unfair’ in the light of the criteria set out in the Directive. Those criteria include the question whether the practice materially distorts, or is likely materially to distort, the economic behaviour of the average consumer with regard to the product concerned.
Background
The German retailer, Plus, launched a promotional campaign ‘Ihre Millionenchance’ (‘Your chance to win millions’) in which the public was invited to purchase goods sold in its shops in order to collect points. By collecting 20 points, customers could take part free of charge in certain draws held by the Deutscher Lottoblock (national association of 16 lottery undertakings).
The German association founded to combat unfair competition considered Plus' practice to be unfair within the scope of the German Law on unfair competition ( UWG), which lays down a general prohibition of combining a prize competition and lottery with the obligation to purchase goods.
On application by the association, Plus was ordered at first and second instances to discontinue that practice. The German Bundesgerichtshof (Federal Court of Justice), which must decide on this case at final instance, asked the ECJ whether the European Unfair Commercial Practices Directive (EUCPD) precludes a prohibition such as that laid down by the UWG.
The European Court of Justice - Justice and Application - Full text