Commercial Practices in European Union - Free Essay Example

Sample details Pages: 4 Words: 1084 Downloads: 3 Date added: 2017/06/26 Category Law Essay Type Analytical essay Tags: European Union Essay Did you like this example? Introduction The memorandum is intended to deal with two issues arising from Mr.Nedkova related to the unfair commercial practice Directive (UCPD) in European Union. First of all, whether a commercial practice in Mr.Nedkova case considered as à ¢Ã¢â€š ¬Ã…“unfairà ¢Ã¢â€š ¬Ã‚  and to what extent commercial practice may be regarded as unfair? Furthermore, the second issue concerning on which measures may be taken by Bulgarian Consumer Protection Authority for ensure compliance of à ¢Ã¢â€š ¬Ã…“Money4Uà ¢Ã¢â€š ¬Ã‚  with the provisions of the Unfair Commercial Practices Directive? Assessment of à ¢Ã¢â€š ¬Ã…“Unfairà ¢Ã¢â€š ¬Ã‚  To begin with, there are three steps in order to analyze whether a commercial practice in present case fall within the scope of à ¢Ã¢â€š ¬Ã…“unfairà ¢Ã¢â€š ¬Ã‚  under the UCPD. First of all, it is important to check whether advertisement of à ¢Ã¢â€š ¬Ã…“Money4Uà ¢Ã¢â€š ¬Ã‚ in present case violate the à ¢Ã¢â€š ¬Ã…“black listà ¢Ã¢â€š ¬Ã‚  of Annex I under the UCPD. Don’t waste time! Our writers will create an original "Commercial Practices in European Union" essay for you Create order The Black List includes the 31 à ¢Ã¢â€š ¬Ã‹Å"exhaustive list of à ¢Ã¢â€š ¬Ã…“misleadingà ¢Ã¢â€š ¬Ã‚  and à ¢Ã¢â€š ¬Ã…“aggressiveà ¢Ã¢â€š ¬Ã‚  practices which shallà ¢Ã¢â€š ¬Ã¢â€ž ¢, in al circumstances, be considered as unfair and shall ban uniformly in member states. If the commercial practice can not be found in black list of Annex I, then second step is to test whether à ¢Ã¢â€š ¬Ã…“commercial practice constitute a misleading (Art 6, and Art7 UPCD) OR an aggressive practice (Art8, and Art9 UPCD) which is likely to distort the transactional decision of the average consumerà ¢Ã¢â€š ¬Ã‚ [1]? If practice is not fall with the scope of Art 6 to Art9 UPCD, third step is to analysis whether commercial practice infringes the professional diligence under Article 5(1) of UPCD. In the end, if none of above three steps can found the infringement of commercial practice, it will not consider commercial practice as unfair under the UNPD. According to paragraph 14 à ¢Ã¢â€š ¬Ã…â €œblack listà ¢Ã¢â€š ¬Ã‚  of UNPD provide that misleading practice shall ban whenà ¢Ã¢â€š ¬Ã‹Å" Establishing, operating or promoting a pyramid promotional scheme where a consumer gives consideration for the opportunity to receive compensation that is derived primarily from the introduction of other consumers into the scheme rather than from the sale or consumption of products.à ¢Ã¢â€š ¬Ã¢â€ž ¢[2] In this case, à ¢Ã¢â€š ¬Ã…“Money4Uà ¢Ã¢â€š ¬Ã‚  advertised its loan services by stating that anyone who registers on its website can receive 10 lev. Or 20 lev credit for introduction of friends. A commercial practice, in this case, shall be prohibited under UNPD. Next, in order to make sure this commercial practice is considered as à ¢Ã¢â€š ¬Ã…“unfairà ¢Ã¢â€š ¬Ã‚  under the UNPD. It is necessary to assess the second steps. Art 6 and Art7 of UNPD provide that à ¢Ã¢â€š ¬Ã…“a commercial practice shall be regarded as misleading if: (a) It contains false information and is th erefore untruthful; Or (b) it misleads or is likely to mislead the average consumer even if the information is factually correct; Or (c) it omits certain relevant information that the average consumer needs and in all three alternatives this practice causes or is likely to cause a consumer to take an economic decision that he would not have taken otherwise.à ¢Ã¢â€š ¬Ã‚ [3] In this case, the advertisement was not contain any false information, promotion was directly mislead consumers, since the pyramid scheme fall within the black list of Annex I, therefore, the assessment of average consumer test is unnecessary. Furthermore, Art8 and Art9 of UNPD stated that à ¢Ã¢â€š ¬Ã‹Å"A commercial practice shall be regarded as aggressive if: a) It by harassment, coercion, including the use of physical force, or undue influence; Or b) significantly impairs or is likely to significantly impair the average consumer ´s freedom of choice and thereby; c) causes or is likely to cause him to take economic decision that he would not have taken otherwise.[4]à ¢Ã¢â€š ¬Ã‚  In present case, the advertisement of à ¢Ã¢â€š ¬Ã…“Money4Uà ¢Ã¢â€š ¬Ã‚  can not be considered as aggressive practice, because the company neither harassment, coercion impair on average consumerà ¢Ã¢â€š ¬Ã¢â€ž ¢s freedom of choice or cause consumer to take economic decision. Last but not least, the third step also should not be overlooked. Art 5(1) indicates that à ¢Ã¢â€š ¬Ã…“the practice shall be unfair when the practice is contrary to the requirement ofprofessional diligence.à ¢Ã¢â€š ¬Ã‚ [5] Professional diligence, in this case, Money4U was not act bad faith of field of activity. Advertisement of Money4U did not infringe the professional diligence under the art5 (1) UCPD. Therefore, concerning to first issues, instead of sale or consumption of products, the main purpose of advertisement of à ¢Ã¢â€š ¬Ã…“Money4Uà ¢Ã¢â€š ¬Ã‚  was to gain abundant consumers by using a pyram id promotional scheme. Since Mr.Nedkova had suffered detriment due to the à ¢Ã¢â€š ¬Ã‹Å"pyramid schemeà ¢Ã¢â€š ¬Ã¢â€ž ¢ of Money4U, as a result, in this case, advertisement of à ¢Ã¢â€š ¬Ã…“Money 4Uà ¢Ã¢â€š ¬Ã‚  can be regarded as an unfair misleading commercial practice and shall prohibited under the paragraph 14 black list of UNPD. Enforcement of UCPD According to Art 11(2)(a) of Unfair commercial Directive stated that à ¢Ã¢â€š ¬Ã‹Å"Member States shall confer upon the courts or administrative authorities powers enabling them, in cases where they deem such measures to be necessary taking into account all the interests involved and in particular the public interest: (a)to order the cessation of, or to institute appropriate legal proceedings for an order for the cessation of, unfair commercial practices.à ¢Ã¢â€š ¬Ã¢â€ž ¢[6] In present case, the promotion of à ¢Ã¢â€š ¬Ã…“Money4Uà ¢Ã¢â€š ¬Ã‚  has been advertised four month from October 2013 to February 2014. Thus, the Bulgarian Consumer Protection Authority shall eliminate the continuing effect of unfair practice and order the cessation of unfair commercial practices which arise from Money4U Company. To sum up, it is necessary to comply with UCPD framework of analysis in order to decide whether a commercial practice can be regarded as à ¢Ã¢â€š ¬Ã…“unfairà ¢Ã¢â€š ¬Ã‚  under the UCPD. Moreover, since Mr.Nedkova had suffered detriment due to the à ¢Ã¢â€š ¬Ã‹Å"pyramid schemeà ¢Ã¢â€š ¬Ã¢â€ž ¢ of Money4U, as a result; in this case, advertisement of à ¢Ã¢â€š ¬Ã…“Money 4Uà ¢Ã¢â€š ¬Ã‚  is misleading commercial practice and infringes the paragraph 14 black list of UNPD. Finally, the Bulgarian Consumer Protection Authority shall fulfill art 11(2) (b) of UNPD, and termination of à ¢Ã¢â€š ¬Ã‹Å"pyramid schemeà ¢Ã¢â€š ¬Ã¢â€ž ¢ of Money4U. [1] Council Directive2005/29/ECof the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market [2005] Art6,7 [2] Council Directive2005/29/ECof the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market [2005] Art8.9 [3] Council Directive2005/29/ECof the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market [2005] Art6,7 [4] Council Directive2005/29/ECof the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market [2005] Art8-9 [5] Council Directive2005/29/ECof the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market [2005] Art5(1) [6] Council Directive2005/29/ECof the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market [2005] Art11(2)(a)