Unfair Commercial Practices Directive, Chapter 2, Article 5, 2., (a)

When organizing an incentive marketing campaign, the trader is required by the principle of professional diligence to take into account the possibility that the customers may adjust their consumption behavior due to the promotion.

The defendant organized its first national incentive marketing campaign, where consumers were provided with reward stamps after each purchase for at least HUF 5,000, which could later be exchanged for coupons. The campaign had been advertised to be effective for a whole year. However, all the reward booklets distributed for collecting the reward stamps had been given away at the early stage of the campaign, and after a while, the defendant suspended the exchange of the reward stamps to coupons. Furthermore, for the second half of the campaign, the defendant had modified the conditions of exchanging and using the coupons.

The Competition Authority held that based on the above, it can be established that the defendant had not organized the campaign in compliance with the requirements of professional diligence, and thus the commercial practice is considered unfair.

In its defense, the defendant claimed that modifying the conditions of the campaign was necessary, because they had perceived a significantly higher demand for the promotional stamps as previously expected. This is because the campaign had been planned on the basis of previous statistics, however, due to the promotion, several customers (organizations, foundations, veterinarians) changed their consumption behavior, dividing their purchases for significant amounts into several purchases for smaller amounts, resulting in a rise in the number of the purchases eligible for a reward stamp. This behavior, however, could not have been foreseen by the defendant. Furthermore, the coupons issued after the reward stamps collected by such organizations were used mainly by natural persons. This indicates that the organizations may have abused the promotion and used this opportunity in a way that would infringe applicable tax laws. Therefore, the defendant had to modify the conditions of the campaign in order to prevent further abuses.

Nonetheless, the Competition Authority held that the defendant had every right to restrict the campaign to natural persons, therefore claiming that several organizations allegedly abused the promotion does not affect the defendant's liability for not planning and organizing the campaign in compliance with the requirements of professional diligence. Furthermore, when planning the campaign, the defendant should have taken into account the reasonable possibility that the customers would adjust their consumption behavior to make the most out of the promotion. Therefore, the defendant had not planned the campaign in a manner as expected by the principle of professional diligence.

When organizing an incentive marketing campaign, is the trader required by the principle of professional diligence to take into account the possibility that the customers may adjust their consumption behavior due to the promotion?

The Competition Authority held that when planning the campaign, the defendant should have taken into account the reasonable possibility that the customers would adjust their consumption behavior to make the most out of the promotion. Therefore, the defendant had not planned the campaign in a manner as expected by the principle of professional diligence.

URL: http://www.gvh.hu//data/cms1033718/Vj064_2015_m.pdf

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The Competition Authority - among others - imposed a fine of HUF 100,000,000 on the defendant.