Case law

  • Case Details
    • National ID: Consumer Rights Protection Centre Decision Nr. E03-REUD-29
    • Member State: Latvia
    • Common Name:Leo Li Gabor/Esmeralda case
    • Decision type: Administrative decision, first degree
    • Decision date: 23/07/2009
    • Court: Consumer Rights Protection Centre (Riga)
    • Subject:
    • Plaintiff: SIA „Žurnāls SANTA”
    • Defendant:
    • Keywords: black list, capacity of trader, free, games of chance, product, proof of loss
  • Directive Articles
    Unfair Commercial Practices Directive, Chapter 1, Article 2, (b) Unfair Commercial Practices Directive, Chapter 1, Article 2, (c) Unfair Commercial Practices Directive, Chapter 1, Article 2, (d) Unfair Commercial Practices Directive, Chapter 2, Article 5, 1. Unfair Commercial Practices Directive, Chapter 2, Article 5, 4., (a) Unfair Commercial Practices Directive, Chapter 2, Article 5, 4., (b) Unfair Commercial Practices Directive, Chapter 4, Article 13 Unfair Commercial Practices Directive, Annex I, 16.
  • Headnote
    (1) A company engaged in distributing promotional material on behalf of the actual service/product provider, qualifies as a "trader" under the UCP Directive.

    (2) A product provided free of charge can qualify as a "product" under the UCP Directive. 

    (3) There is no need to prove negative effects on consumers in order to establish that an unfair commercial practice has been committed.
  • Facts
    Advertisements for a certain product which claimed to facilitate winning in games of chance, were placed in several journals in Latvia with the help of a media agency. The Consumer Rights Protection Centre (CRPC) found that the advertisement was contrary to Annex I-16 of the UCP Directive. The CRPC argued that the distributors (media) are to be regarded as traders pursuant to the UCP Directive in these circumstances, and found them liable for unfair commercial practices.

    The defendant argued that:

    (1) It is not a "trader", since its commercial activity does not consist of selling the advertised product;

    (2) The advertisement in question does not claim that it will facilitate winning in games of chance;

    (3) Since the product is provided free of charge, it is not a "product" within the meaning of UCP Directive; and

    (4) Unfair commercial practices are only those practices that have a negative effect on consumers (whereas in casu there was no proof of such effect, so that no unfair commercial practice would have been committed).
  • Legal issue
    (1) The CRPC, relying on the definition of "commercial practice" as provided in the Latvian implementation law of the UCP Directive, stated that any activity related to the promotion of a certain product (including advertising) qualifies as a commercial practice. There is no need to demonstrate a relation to sale transactions in order for an advertising activity to be regarded as a commercial practice. The sole promotion of products, with or without remuneration, can therefore be considered as commercial practice.

    Pursuant to the UCP Directive, a trader can be any person who acts in the name and on behalf of the trader, irrespective of whether the instructions were given directly or through intermediary.

    (2) The CRPC, relying on the UCP Directive's definition of "product", found that the product advertised is a product pursuant to the UCP Directive, even if it is provided free of charge.

    (3) The CRPC, relying on the meaning of the word "laimēt" (i.e "win") in the Latvian dictionary, found that the average consumer connects the word "laimēt" with games of chance, hence finding it sufficient to demonstrate unfair commercial practice.

    (4) There is no need to prove negative effects on consumers in order to establish that an unfair commercial practice has been committed. The sole fact of committing a defined unfair commercial practice is sufficient to show that the interests of the general public have been violated. 
  • Decision

    (1) Is the distribution of an advertisement a commercial practice pursuant to UCP Directive, and is the medium that displays the advertisement a "trader" pursuant to UCP Directive?

    (2) Are free products to be regarded as "products" pursuant to UCP Directive?

    (3) Is the sole statement that “the product will help to win money”, without identifying the source (i.e. games of chance), sufficient to breach Annex I-16 of the UCP Directive?

    (4) Is it relevant whether the commercial practice has actually had an impact on the targe tconsumers?

    URL: http://www.ptac.gov.lv/upload/ptac_lemumi/2009/zurnalssanta_lemums_izrakts.pdf

    Full text: Full text

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  • Result
    The trader was penalised for having committed an unfair commercial practice.