Unfair commerical practices

1. Introduction
   Generally, in the Unfair Commercial Practices Directive 2005/29/EC, the Article 5 was about the general unfairness test, then Article 6 gave further specifications of what are misleading actions. In the paragraph 1, of Article 6, it provides that a commercial practice is misleading if it contains false information and thus untruthful, or if it deceives or prone to deceive an average consumer by presenting factually incorrect information of the product and cause him or her into making the purchase decision that otherwise would not have taken in considering (1) the product itself or its nature of the; (2) the product’s major features, be it directly concerns the product such as the attributes or part of the product or the service that is related to the product;(3) the scope of the seller’s promises, motivation, advertisements, the sales process and its nature, any statement concerns directly or indirectly with the sponsor or approval of the product or the seller; (4) the price or the manner how the product’s price is calculated; (5) the possibility of the need of service, product’s part, any chance or repair requirement; (6) the seller or his or her agent’s nature, attributes and rights, for example the identity, assets, qualifications, status and conditions, state approval, association and the ownership of intellectual property rights, or any prizes or awards that he or she receives; (7) the consumer’s rights, such as the right to change for a new replacement or refund, or the risks that is entailed.

The first appearance of this article is that it gave a detailed listing of every possibility; however, it is also obvious that the wording of it is overbroad, and clearly judicial interpretation will come to aid in clarify how they should operate in reality, and their effectiveness is depend thereon as well. In this article, the effectiveness of Article 6 paragraph 1 will be analysed in that a given practice must be of the nature as listed above, providing false information or factually correct information that is prone to mislead and resulting in an average consumer making a transactional decision that he or she would not otherwise have taken.

1. Unfair Commercial Practices Directive (UCPD)
   “These disparities cause uncertainty as to which national rules apply to unfair commercial practices harming consumers’ economic interests and create many barriers affecting business and consumers. These barriers increase the cost to business of exercising internal market freedoms, in particular when businesses wish to engage in cross border marketing, advertising campaigns and sales promotions. Such barriers also make consumers uncertain of their rights and undermine their confidence in the internal market”. The unfairness happens between business-to-consumer, which is harmful for the economic interest and create many barriers that keep obstructing the market. Therefore, the Directive of regulate the unfair commercial practices was adopted in 2005.

“On 11 May 2005 the European Community adopted Directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market. This introduces a general prohibition on unfair business-to-consumer commercial practices that is fleshed out by reference to the concepts of misleading and aggressive commercial practices and an annex listing practices considered unfair in all circumstances. The reference point for judging the fairness of a practice is the average consumer, building on the jurisprudence of the European Court of Justice; although this standard is adapted to take the interests of vulnerable consumers into account as considered appropriate. A controversial aspect of the Directive is its maximum harmonisation nature, by which is meant that Member States cannot, for reasons other than those specified in the Directive, restrict the freedom to provide services nor restrict the movement of goods for reasons falling within the field approximated by the Directive”. The UCP Directive, “a horizontal framework of a maximum harmonization nature is now adopting on the purpose to prohibit the unfairness. The Directive has a very wide range of application as it covers all business-to-consumer commercial practices in all sectors of economic activity”. In the UPCD, it contains main provisions on unfair commercial practices, a black list of practices reputed unfair, and particular stimulates on different topics such as Codes of Conduct and the relationship with various information duties in other EU legislation. Furthermore, the Directive contains provisions on enforcement. The heart of the Directive lies on the prohibition of practices that reverse to the demand of professional diligence which materially distort or are likely to materially distort the economic behavior of the average consumer with regard to a product or a service. The UCP Directive follows the maximum harmonization principle, however, the Directive contains important exceptions. “Article 3(2) gives that the Directive is without prejudice to contract law, and more specific to the rules on the validity, effect of a contract, which is usually comprehended to be an exception to give beneficial to national private law.

“Article 3(9) allows more restrictive national rules in the area of financial services. Thus, as far as financial services are concerned, the Directive is an instrument of minimum harmonization. Furthermore, in case of conflict between the provisions of this Directive and other Community rules regulating specific aspects of unfair commercial practices, the latter shall prevail and apply to those specific aspects (article 3[4]). Finally, as far as enforcement is concerned, Member States are to implement the Directive and to choose adequate and effective means of combatting unfair commercial practices in the interest of consumers. It is left to Member States to choose the exact form enforcement will take on their territories, as long as it offers persons and organizations having legitimate interest (including competitors) recourse to an administrative or judicial procedure. Such procedures should at least offer the possibility of ordering the prohibition of imminent unfair practices and cessation of on-going practices. Moreover, Member States shall lay down and enforce effective, proportionate and dissuasive penalties for infringements”.

1. Article 6(1) in context of consumer protection
   A major principle of EU consumer protection law is consumer information, in that consumer must be well-informed to as to make a well-informed decision, and this comes to play in the regulation of business exercise as EU in intending in making its legislation here in to a coherent whole that ensures that the consumers must be well-informed and confident in making any transactional decisions, as much as possible, in order to make sure the transaction is fair. It is not impossible to fully evaluate the EU regulation’s overall efficacy, but here, in the Unfair Commercial Practices Directive, the information plays has a key role, and the regulation of misleading practices is a mainstay of the Directive rests. Moreover the form of EU law here is directive, not a regulation, it means that the member states will have enough leeway to make their own adoption, and this is the case in many EU Member states. To be more specific, the Chapter 2 of the Directive is devoted to this topic, and it has two Articles, the Article 6 is about misleading actions and Article 7 is about misleading omissions. Generally, by far these two types are very common.

Beyond that, the first thing about the definition is the ‘untruthfulness’ of the information given, and furthermore, the assessment of the untruthfulness shall be in accordance with the ‘average consumer’ as stated in the Article. Another thing is that the Directive demands the untruthfulness to be material to such extent that it influences the consumer’s decisions in making a transaction. All these together constitute the unfairness of the transaction. Beyond these the article listed several elements related to how certain factually correct situations could be untruthful in the eyes of the law.

Textually, it is interesting to see that there is no reference to the qualification of the action of the trader such as ‘negligence’, ‘recklessness’ or ‘intentional’, therefore as a general principle of law, that the prohibition of those acts will not depend on anything wrong with the trader, and when issuing injunctive reliefs against such there is no need to consider as such. Therefore, it opens a wider range for remedial actions to take against the apparently innocent traders, especially this legislation is a directive and EU member states have wide discretion to enforce it in their own ways.

Hence, Article 6 defines the misleading actions very broadly, it covers not only the situations where the misleading information is actually given about a product or service or concerning some other aspects of a consumer transaction, but it also goes beyond the exercises that may potentially deceive the consumer such as the bait and switch advertising and pyramid promotional schemes as listed in the annex of the Directive. It is understandable that the broader definition of ‘misleading actions’ in the Directive will not miss out any possibility that it does not cover, and ensure it cover the vast majority of all cases. In the law of individual member states, it is frequent that materials there are mainly about general clause of unfair treatment than specific misleading activities, and they can enforce the Directive in their own ways.

1. The “untruthfulness” as a condition
   As stated above, a commercial practice will be deemed as misleading if it contains false information or it deceives in other ways. Clearly, these should not be viewed as two different categories, and they could serve as a starting point to gauge the veracity of the condition, and the veracity of the statement of the product or service shall range from completely innocent to utterly deceptive.

The wording here is noteworthy, as the Article states that ‘if it contains false information’ instead of something such as ‘if the trader give out false information’. Therefore, even if the information is untrue due to certain factors that are beyond the control of the trader, the trader still cannot escape responsibility, such as the product contains a general term that is not a binding contractual term, it may still be untruthful and attract responsibility. Again, information means that any information that can be proven or understood empirically, and mere aesthetic and emotional comment such as the ‘one of the best in the industry’, ‘aesthetically pleasing ’ will not be regarded as false propaganda, even if consumers made their choice basing on such advertising, because here the consumer will depend on their individual judgment and the context in making an assessment to the aesthetic or emotional value of the service of product. In this way, it is clear that the standard shall be based on an ‘average consumer’ in the market, to make it totally sensible.

In this regard, as the perception of the information of the product can be a cultural and national thing, that is, what is subjectively aesthetics or humour description can more objective in another country. Therefore the legislation is a Directive to make enough national leeway for each EU member states in taking into account national cultural and linguistic idiosyncrasies. This is especially the case of commercial exaggeration written in the Article 5(3) of the Directive, so a proper balance must be stroke between the wants of legitimate advertising practice and the need of the protection of the particularly vulnerable consumers, and it is the responsibility of the state that the exaggerated statements shall not be taken literally. This means that exaggerations more than merely praise the product is the best should be needed, and there should be risk that the consumers will take it literally. Here again, a similar result may be achieved by another part of the Article, that is the materiality condition, because a consumer who can discern that the information therein is obviously false enough then it is presumable that no reasonable person will take it literally and there should be no deception. This will be explained later.

The untruthfulness gave rise to a special problem of the burden of proof as been rightly pointed out in the Explanatory Memorandum to the Commission proposal, it is too burdensome and consumers are generally burdened with the onus to prove the untruthfulness of a factual claim untrue, as here the trader is better positioned in such proving, and this is correctly reflected in the proposed Article 6, hence this rule is very clear and if the trader cannot prove and justify that he or she does not breach a substantive provision of the Directive then his or her statement will be treated as an unfair business practice. However, the problem is, in the final version this rule was not included, and it became a procedural rule under the Article 12 of the Directive that the decision-making body should have the power to require the trader to produce evidence on the factual claims if the requirement is appropriate. Furthermore, there is an added substantive remedy to this procedural remedy, that if the decision making bodies are not satisfied with the evidence tended, then it may rule in disfavour of the trader. Therefore the Directive gave more leeway to the decision making body instead making a fixed demand as to how things will work out. Again, the decision making and the burden of proof here will stay at national level, and the Member States will have freedom to do whatever best fits in protection the rights and interests of its people, without incur unnecessary burden or threat about breaching the Directive.

Compared to untruthfulness, the ‘deceptiveness’ requires more, because a practice can be deceive the consumer even if the fact is correct, such as half-truths, or a combination truth and something omitted may give out a piece of misleading information. Therefore, as the Article provides that the overall presentation’ is important in deciding the deceptiveness of the information, so the decision must be made from a holistic approach and the entirety of the practice shall be considered, such as the layout, size and location of an advertisement. As long as consumers are misled, those activities will be within the scope of the Directive and be outlawed.

1. The average consumer in the Directive
   A special problem is that there are so many kinds of possibilities and forms of deception that it is impossible to simply tell want is acceptable and what is not in the provisions, because they are related to how the information within be understood by the consumers under specific circumstances. Therefore this is closely related to how an average consumer could be defined, because the how susceptible a consumer is to the untruthful or deceptive information shall only be determined by a typical member of the general public who is versed and bound to the local culture, and the instrument here is the ‘average consumer test’, as the interpretations of information will only be bound by cultural settings.

There are questions as to whether the content of Article 6 (1) can be understood as exhaustive of everything it covers, and whether a specific practice that falls partly into its ambit may still be regarded as unfair according to it. Whether an issue could be interpreted by using the general clauses or not is a good debate, as according to Article 5(4), whether the regulation of misleading business exercises in Article 6 shall be understood in the light of the general clause, or whether provisions concerning specifically the misleading exercises function ‘independently’ of the general clause. Following this, the definition of ‘the average consumer’ must be done in a contextual light of Article 5.

Initially, it is quite impossible to give out a unified pan-European consumer imagine, and Commission’s effort in creating a general consumer profile from the case law of the European Court Justice have failed and met with strong opposition, and specifically, Scandinavian countries opposed such proposition on the ground that it may impair the protection of vulnerable consumers such as children and the elderly. Therefore, generally, as endorsed by the European Parliament, the Directive gave out two methods to ensure the general fairness is done to various vulnerable consumers, that is, it distinguishes One applies where the vulnerable groups from the general consumers, and by doing so it sought to offer reinforced protection of the vulnerable consumers by introducing the concept of ‘fairness’ to foster a common denominator throughout the EU.
The first thing is that the unfairness is will be measured against an ‘average consumer’ who is well-informed of the situation and have full capacity, and since the Directive did not give out any definition of ‘average consumer’, the ECJ has established case law to guide such determination, according to the power conferred on it by Recital 18 of the Directive. This means that the ECJ has power to decide what a notional average consumer is like as to adjudicate the effect of misleading advertising.

During the establishment of the corpus of case law, the ECJ not only developed the conception from primary law it also transplanted the established body of law from all relevant areas such as administrative law, and other areas that is closely connected to consumers such as food, cosmetics and trademark. In the analysis of the context of Article 5, it can be seen that there is a double layered standard, the normal one is the average consumer, and the vulnerable consumer is an exception to this rule. This is specifically the case when commercial practices are addressed to a special group of consumers, then the meaning and standard of such average consumer will change as well. The ECJ, following its practices in interpreting primary legislation, formulated its formula of ‘average consumer’ on ‘social, cultural and linguistic factors’, and by doing so it broadened the conceptualization, but it just specifically addressing vulnerable groups of consumers.

Further, when interpreting this ‘average consumer’ against the Recitals 18 and 19, it is obvious that the EU was not intended to afford greater protection to vulnerable consumers such as ‘children’ and ‘the elderly’ for the sake of their vulnerability, they are just doing so to protect them against the business practices or products within which there are plenty advertising that are especially appealing to them. From a comparative perspective, similarly, Article 16 of the Television without Frontiers Directive provided that television advertising should not cause ‘physical or psychological damage’ to minors, and there is no definition as to such ‘physical or psychological damage’. It is clearly that such important term needs a proper definition in order to be applicable, and what EU did is same here, no such definition in this Directive. However, in the second sentence of Article 5(3), the Directive highlights that “common and legitimate advertising practice of making exaggerated statements or statements which are not meant to be taken literally” shall be maintained and respected. This means that although vulnerable people are protected, they are urged to lean about how should they deal with advertising and not take the message therein literally.

Again, here another problem arises, as the EU primary legislation has no definition of child and elderly, but they are mentioned in the secondary law. As the instrument here is a Directive, it is up to the individual Member State to make correct definitions of them. It seems that the EU is working on it and sought to define ‘Children’ as someone up to the age of 16 in the Regulation on Sales Promotion measures. In contrast, it might be difficult in defining the elderly, as they differ in their physical and mental vulnerability. Again, physically or mentally disabled people are also vulnerable but it is difficult to tell them from an ordinary people in terms of advertising. These are much about the same to leave national government enough leeway in dealing with to what extent their version of vulnerable people will be. But as the law here is a Directive, and national measures have to be in compliance with Treaty provisions, they could be challenged under the treaty at the ECJ as well, should a Member State implements a particular social policy by taking into account ‘social and cultural factors’ they should be prepared to justify it is not too much as to constitute a violation.

Another special tricky point is that when and how the advertisement will reach a vulnerable consumer group, because there is always a spill-over effect such as in most cases the advertisement could reach an adult as much as it can reach a child, and the effect to the addressee can vary according to how it is interpreted for different groups. For countries that do not have the tradition in distinguishing different targets of advertisement, the implementation of the Directive can differ.

Again, special consideration should be given to whether it could be expected that the trader could foresee that the commercial distortive effect of their own commercial practices on a clearly identifiable group of vulnerable consumers, such effect does not have to affect all consumers. This may suggest a subjective element in the decision making may lead to the misleading of customers, but actually there is no such thing. It concerns mainly about the balancing off the interests between the producer and the consumer expects to buy safe products, it is more about establishing a certain amount of self responsibility on the consumer when investigating the products. As the ‘foresee’ is qualified by ‘reasonably expected’, the determination will be objective. The decision of the case will be on the court.

For the actual qualification of an average consumer, it is imaginable that one may propose that statistical evidence should be taken into account, but the Commission categorically denied such allegation in Recital 18, that ‘the average consumer test is not a statistical test’, and it is the responsibility of national courts and authorities to exercise their power to determine the result in accordance with the ECJ case law. The interpretation of this recital can be problematic, as it is not sure whether it makes a special case that no statistics is necessary or it meant to abolish statistical evidence all together. Whatever, the ECJ has developed a standard formula in its case as to unify the case law and the primary and secondary legislation, and negated the empirical evidence approaches taken by Germany and Austria.

1. The consumer protection
   The word ‘consumer’, which is under the protection, have several notions of the meanings of it, the most regular way is used as to describe people who purchase the goods from the merchants. The people here, should be natural persons and for non-professional purpose. “The definition of consumer should cover natural persons who are acting outside their trade, business, craft or profession. However, 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”.

“Apart from prohibitions of unfair commercial practices, the UCP Directive covers two further subjects aimed at introducing positive obligations and promoting fair commercial practices in the European Union. As far as the first aspect is concerned, the UCP Directive includes an obligation on traders to positively disclose certain information at a certain stage of the marketing and sales process. This obligation is incurred whenever traders make an ‘invitation to purchase’ to consumers. The Directive lists a number of items on which traders need to positively disclose information when ‘inviting’ consumers to enter a commercial transaction, such as main characteristics and price. As concerns the second aspect, the UCP Directive encourages the use of Codes of Conduct to support the dissemination of fair commercial practices. It does so, for example, by designating as misleading the practice of falsely claiming to be a signatory to a code of conduct as well as the practice of undertaking and publicly signaling to be bound by, while at the same time not complying with, firm commitments contained in a code of conduct”. In order to protect the right of the consumer, mandatory disclosure was settled, the merchant is obliged to take some of the responsibility when he sales goods. For instance, the information paradigm must be provided with the product, that is, the form may benefit the consumer when they have the problem with their purchase.

According to “Art. 5 Par. 3 Unfair Commercial Practices Dir: Commercial practices which 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, 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”. It is submitted that the consumer is vulnerable, easily to get unfairness treatment and usually to be stated as the weaker party between business-to- consumer commercial practices.

1. The average consumer in the Article 6(1)
   All these being said, there is one fact that is highly relevant in the particular cases of potentially deceptive practices, that is the original definition of ‘average consumer’ found within the proposal was removed in the final version. The original version of definition was that an average consumer is ‘reasonably well informed and reasonably observant and circumspect’, and it was a reflection of the ECJ case law, and so it will continue to be of importance here as it is explicitly mentioned in the Preamble as well. Just as mentioned in the above section, without a clear definition of ‘average consumer here’, then national courts and authorities will be able to take up an independent decision in handling this issue by carefully consider the fact of the case and the commercial practices of the industry.

This is important because most consumers generally do not carefully read the advertisements, and usually they only give a cursory look at the product then decide on their purchase basing on the headings and pictures. Even though the customer must be an ‘average’ one, as it is not credulous one, but given the knowledge and sophistication of the general public the hope for the consumer’s correct and rational decisions should never be too high. According to the rule of thumb consumers are usually only normal people, they are not experts, they are not perceptive yet they are also not credulous. The Directive also noted this and emphasised on the overall assessment of an advertising measure. Then the problem for the court is how it should decide on what an average consumer may expect under such circumstances. As mentioned in the above section, here the ‘average’ is not associated with a precise empirical or mathematical content, and specifically in the Article here, the leeway is ‘likely to deceive’ and the court’s impression of such likelihood is sufficient enough. Moreover, as the leeway is left to national courts and authorities, the burden of proof will also be that of the national law, and in this way national culture, social values and local consumer expectations will come into play, and each concrete case will be decided to suit local idiosyncrasies.

However, the description of the average consumer test in Article 6 is linked yet not identical to that in Article 5. The most conspicuous difference is that the Article 5 is a general clause, it mentioned not only the ‘average consumer’ as a test for unfairness, but also noted an alternative be ‘the average member of the group’ when a business exercise is targeted to a particular set of consumers. In addition, Article 5 has some specific provisions on the protection of vulnerable consumers such as the children and the elderly, and affords special protection onto them. These additional and more nuanced definitions are not found in Article 6. Then the relationship between the two could be illustrated in this way, that Article 6, reading together with other parts of the Article, has a focus on how should the court decide on an average consumer’s understanding of certain business practices and whether he or she could be deceived by it or not. In this way, only if the factual situation of cases that fits the description of this way will be case be within the ambit of Article 6. It seems that the Commission is also of the view that, generally the situations in the Article 6 is broad enough to encapsulate the vast majority of all the cases, and thus the general clause should only play a secondary role. In other circumstances such that where the business practice only misleads a specific group of consumers or a group of vulnerable consumers then they should be handled under the general clause. In short, if the act is wide-ranging and whether it is misleading is in doubt, then it should be assessed under Article 6, but Article 5 assessment could be more specific. However, this point can be too academic and impractical, because in practice there are so many commercial practices that are aiming at certain consumer groups and therefore the assessment of the misleading effects of the act shall also be put in perspective to such groups, because there is no purely abstract average consumer and advertising is always targeted at a special group of people. Following this logic, the wording ‘the average consumer’ in the Article 6 should also cover the ‘the average member of the group’ of the Article 5(2)(b) when the business practice is aimed at to a particular group of consumers’. This is also in line with the spirits of the Directive, as it gave out in the Preamble that business practice should be evaluated from the perspective of the group’s average if such practice is targeted at a particular group of consumers, such as children or the elderly. This is further confirmed by the Explanatory Memorandum to the proposed Directive, as explained by the Commission, state that the ‘average consumer test’ in Article 6 should be understood in the light of ‘the conditions of the general prohibition’, such as an average member of the target group.42 In other words, the notions and behaviour of the consumers of the target group shall be the decisive criterion in deciding whether a practice is misleading or not.

Beyond all these, the specific rule concerning vulnerable consumers in Article 5(3) should be addressed as well, as even if it looks more likely be related to Article 5 itself, and has little to do with Article 6. However, the overall facts may suggests that certain part should be functioning well or even better when parts of Article 5(3) could be applied along with Article 6 as well. In fact, if the practice is targeted at a vulnerable group, both Article 5(2)(b) and Article 6 should be considered in the context, and it is necessary to combine the thoughts of national and local cultural habits in assessing whether the practice is deceptive.

Then again, even if the legal instrument is a EU Directive, the ‘average consumer’ here does not have to be an ‘average EU consumer’ only, as the implementation is done through national measures, it could also be an ‘average national consumer’ here, and the EU standard and national standard will be the same. But all these are just a fiction of law, because such an ‘average’ does not exist in the reality. If the commercial practice in dispute is targeting only national markets or even simply a certain area within a country, it should also be applicable and an average of the customers there could be used, and taking the characteristics of such group into account. Oddly, it can be easier to solve out whether a practice is misleading in the national or regional setting, and although the wording of this Article is of EU law, to assess whether a practice is misleading on the EU scale is much more difficult, as different countries have different views and in implementing the same Directive they have different standards and understanding, and it results in a conflict among the consumer protection, the respect for national cultures, and the internal market function of the Directive. In this situation, if different countries interpret this Article differently, then the coherence of EU law can be impaired. In this regard, ECJ is of the opinion that each individual court should make use of their own understanding of their respective domestic standards by taking ‘social, cultural or linguistic factors’ into account, and this approach is supported by the Recital 18 of the Directive.

Another cultural issue here is whether an ‘average consumers’ is supposed to only know his or her mother tongue, or must they also understand another language, or even foreign language? If so, what level of proficiency should they be at? The Directive is silent on this point. It is a well-known fact that EU is one of the most linguistically diversified regions in the world; whether a different language is to be misunderstood by average consumers in a different country as misleading can also be a tricky issue. A prominent example is English, how would one deal with an advertisement made in English language and broadcast and promoted throughout the EU, and the meaning of which can be easily understood by an average English person, but it can be misleading for someone who has only limited functional command of English language. Another issue can be the half-truths, headings, packaging, pictures, etc., the problem is it is still possible that they be made acceptable in one language but not in another. As there is no clear solution to all of them, EU also provide s no guidelines in dealing with them, not even the Commission or the ECJ, there is a need to balance the relative language assessment as well as the general average consumer assessment, as people’s language skills may diverge greatly within a country, and for countries such as Luxembourg which has three official languages, French, German and Luxembourgish, Luxembourgish authorities should have necessary skills to judge by themselves what best suits them. Especially, it is common for consumers in a country that is very good at a foreign language too, such as the Netherlands and Scandinavian countries are well-known for their English proficiency to understand and communicate, and while making assessments the national courts as such should take this into account and they can rule on this issue in a way that is similar to a country where such foreign language is spoken.

All these being said, understand a foreign language can be challenging, but the ability for domestic consumers to understand their own mother tongue could vary to a great degree, and it is natural to have someone who is good at understanding the underlying message of a piece of information and someone who is not. Then the question here can also be how do we define an average consumer, at both EU and domestic levels, especially in some countries there are many functionally illiterate people who are unable to read advertisements in a reasonably way. This is getting worse as the EU is undergoing a refugee crisis, and usually those refugees do not have good command of the local language of their asylum countries, and in that case to what extent shall and will their interests be considered as consumers is still a big problem.

1. Misleading practice
   In the practice, however, there are two other subcategories that are much more important than the main general clause of prohibit unfair commercial practices, misleading and aggressive practices. “If a particular practice fits the description of either of these two, there is no need to further test whether the practice is also unfair according to the main general clause of unfairness”. Misleading practices are divided into two parts: misleading information and misleading omissions. “A misleading action occurs when a practice misleads through the information it contains, or its deceptive presentation, and causes or is likely to cause the average consumer to take a different decision”.

When the misleading actions, the trader gives false information and even deceiving customer, it contains false information, the consumer is easily to be tempted by the incorrect information and it is likely to deceive average consumer, even if information is correct, such practices otherwise likely to cause consumer to make transactional decision that he would not have taken. For instance, in case CJEU CHS Tour Services (C-435/11), two Austrian travel agencies, CHS and Team4 Travel, are competing to sell skiing lessons and snow holidays to schoolchildren from the UK.

In Team4 Travel’s English sales brochure for 2012 winter season, described that accommodations that they had with certain establishments as exclusive, and these hotels in question on specific dates could not be offered to other tour operators. Team4 Travel’s exclusive reservation for the bed quotas was also reflected in their price list.

Team4 Travel stated they had contracts for bed quotas with a number of hotels in specific periods in 2012. After the conclusion of those contracts, the director of Team4 Travel checked with those establishments to make sure they had no pre-bookings with other tour operators, checks were also made that there were no available capacity in those establishments for other tour groups to put up in the hotel during those periods. Those contracts also had a clause pursuant so that those allocated room quotas remained at Team4 Travel’s disposable and the establishments could not deviate from the contract without first obtaining written consent from Team4 Travel and that there would be termination rights and contractual penalties in order to guarantee exclusivity.

It was found later that CHS had bed quotas booked in the same accommodation establishments on the same date as Team4 Travel. These establishments was therefore in breach of their contract with Team4 Travel.

Team4 Travel therefore in September 2010 distributed its winter 2012 sale brochures and price list without knowing CHS had made competing pre-bookings.

CHS mentioned that the exclusivity statement in those documents infringes the laws that prohibit unfair commercial practices. They consequently asked Landesgericht Innsbruck (Innsbruck Regional Court) to prevent Team4 Travel via interim injunction from claiming that certain accommodation establishments can only be booked via their agency, as those establishments can also be booked via CHS.

On the contrary, Team4 Travel asserted that is acted with professional diligence when it drew up its brochures and that accuracy, and up until the date the brochures were sent, it was not been made aware of the contracts that were concluded between the hotels in question and CHS, as a result it is not guilty of any unfair commercial practice.

“By order of 30 November 2010, the Landesgericht Innsbruck rejected CHS’s application on the ground that the exclusivity claim disputed by it was well founded in the light of the irrevocable pre-booking contracts previously concluded by Team4 Travel”.

Following the appeal to Oberlandesgericht Innsbruck (Innsbruck Higher Regional Court) by CHS, the court upheld by order of 13 January 2011 by Landesgericht Innsbruck, that no unfair commercial practice was found since Team4 Travel had complied with the requirements of professional diligence when they secured the exclusive pre-booking with the accommodation establishments concerned. The Oberlandesgericht Innsbruck stated that Team4 Travel was entitled to having their contractual commitments honored by the establishments.

CHS then proceeded to appeal on appoint of law before the Oberster Gerichtshof (Austrian Supreme Court).

“Misleading omissions concern the practice of omitting or hiding material information – including the provision of such information in an unclear, unintelligible, ambiguous or untimely manner – which the average consumer needs, according to the context, to take an informed transactional decision and thus causing distortion of the transactional decision-making process of this average consumer”.

Taking part to the misleading omission, it means to omit material information that average consumer needs, make consumer to take informed transactional decision. The misleading omission provides and hides material information in unclear, unintelligible, ambiguous or untimely manner, misleading omission can also be a situation that fails to identify commercial intent of commercial practice.

1. Conclusion
   In conclusion, Article 6(1) gave further specification of what are misleading actions, for either being untruthful or deceives an average consumer. A critical analysis of this reveals that, the untruthfulness and deception, as well as the ‘average consumer’ are simply broad provisions; and the instrument being a Directive gave the national courts and authority great leeway in implement it. Generally, the consumer must be well-informed in order for them to make sensible decisions, the un untruthfulness and deception may be blatant or implied according to the practices, and but the standards of them are objective and linked to the notion of an average consumer because the propensity of being misled can be rather subjective, yet again it is an objective test because it must be an ‘average’ consumer, to offer a solid ground in maintaining the smooth operation of the market. Here, the perception of the information of the product can be a cultural and national thing. More than that, the notion of ‘average consumer’ should be understood both within Article 6(1) and contextually with Article 5. Article 5 is a general provision, Article 6 (1) is more specific and more inclusive. Despite this, their relationship is not clear cut and what Article 6 (1) cannot resolve should be better be resolved under Article 5, this is especially the case for vulnerable consumers like the children and the elderly.

A culturally and socially sensitive issue here is that different cultures and societies may understand a piece of information differently, the attempts in introducing a clear-cut definition of the ‘average consumer’ in Article 5 or 6 by the Commission or the ECJ have all been failed, and no matter substantively or procedurally, these issues are left with national authorities to resolve, thus the same wording of the Directive could be enforced or interpreted quite differently in different countries in accordance with their local standards, and there is no unified EU level ‘average consumer’ here, the average can be a domestic instead. Also, the multitude of EU languages is also a problem, and currently there is no authoritative solution to it, and the domestic authorities should consider various factors such as the proficiency of a foreign language of local people when making decisions.

Beyond that, the damage must be material enough to trigger the protection, and the common commercial practices are allowed, and the materiality is a matter of degree and policy consideration.
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