Does ECJ ruling on broad extent of Unfair Commercial Practices Directive? – Zentrale zur Bekaempfung unlauteren Wettbewerbs eV v Plus Warenhandelsgesellschaft mbH, European Court of Justice…

The European Union introduced the Unfair Commercial Practices Directive, which the UK brought into law through the Consumer Protection from Unfair Trading Regulations. The Directive aims to stop misleading, unfair or aggressive selling practices. However, a recent case has suggested that the law goes much wider than that, and there could now be major question marks over the legitimacy over the UK’s Gambling Act.

In the case in question, a German law prohibited promotions where prizes were won by chance and where purchasing an item was a condition of entry. The European Court of Justice decided that those sorts of promotions were commercial practices within the scope of the Directive. It said that the Directive was a total harmonisation Directive, meaning that it was exhaustive of all illegal commercial practices. Building on an earlier case of VTB-VAB v Total and Galatea v Sanoma Magazines, the ECJ ruled that the 31 practices described in the annex to the Directive was an exhaustive list of all commercial practices which could be considered to be unfair. Since the particular German sales promotion law was not on that list and did not otherwise offend against the provisions of the Directive, it could not be illegal, so the particular law was invalid.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of www.Upload-IT.com, comments: ‘This case seems to dramatically expand the scope and effect of the Directive. The Directive had been considered as a useful tool to guard against unfair and aggressive selling practices. However, it seems to go further and say that if a particular commercial practice is not a problem under the Directive, then any Member State’s laws which go further than the Directive are no longer valid. The UK has a relaxed set of laws dealing with sales promotions, compared to many of our continental neighbours. However, if the validity of laws surrounding sales promotions are now questionable, then this begs the question of whether the Gambling Act – which prohibits illegal lotteries, whereby people pay something for the chance to win a prize – is also invalid. Anyone charged with operating an illegal lottery contrary to the Gambling Act should consider running the argument that UK gambling laws are no longer valid.’