Scope, Ambitions and Relation to Unfair Competition Law 45

The most important examples are the Television Without Frontiers Directive,51 presently the subject of revision, and the E-Commerce Directive.52

As follows from this overview, it has been possible to limit the scope of derogations and exemptions to only a few areas, apart from the six-year adjustment period. In particular, the inclusion of different sales promotion practices is notable. At present, many continental Member States apply specific prohibitions of particular types of promotional practices, eg different types of combined offers, gifts, etc. Normally, these prohibitions are primarily aimed at offering protection for small business. The Community proposal for a specific, liberalising regulation on sales promotion activities53 seems to have been dropped.54 As the Directive explicitly includes marketing directly connected with the promotion of a product to consumers,55 it should cover sales promotions and be able to tackle the need for harmonisation in this area. As already indicated, the Directive focuses on offering consumers protection against misleading or aggressive promotional practices, eg by marketing pyramid promotional schemes,56 making persistent and unwanted solicitations or by creating the false impression that the consumer has won a prize or equivalent benefit.57 The Directive seems to have achieved much of the pro-integrative object of the proposed but contested Sales Promotion Regulation via the back door.

5. WILL FULL HARMONISATION BE ACHIEVED?

The ambitions of the Directive are indeed far-reaching. In one single piece of legislation, it aims at harmonising at the European level the legal framework for the Central Part of advertising and marketing practices, which is an area characterised by very considerable differences in national legal tradition. As it is a maximum Directive, it requires full harmonisation and normally accepts, as has been discussed, only national derogations of a temporary nature. Will the Directive succeed? Will it create an environment permitting companies to make use of the same advertising and marketing practices all over Europe?

It would have been easier to answer this question if it had been possible to keep the original proposal to base the Directive on the country of origin principle. In that case, advertising fulfilling the legal requirements of its

5189/552/EEC [1989] OJ L 298/23.

522000/31/EC [2000] OJ L 178/1.

53Proposal for a European Parliament and Council Regulation Concerning Sales Promotions in the Internal Market, COM(2002)585 final.

54Stuyck et al, above n 1, at 141.

55Art 2(d).

56Recital 14.

57Points 26 and 31 in the black list.

46 Ulf Bernitz

country of origin would have had to be accepted in all the other Member States (save for specific exemptions). However, as finally accepted, it is up to the Member States to implement the Directive by making the necessary changes in their national legislation, and for national courts and administrative agencies to apply the new legislation loyally respecting the spirit of the Directive and its integrative aims. Most certainly, very different techniques will be applied in the Member States when implementing the Directive and it is to be expected these different techniques will reflect the national differences in legal tradition. For example, it makes a very great difference if the legislative starting point in a Member State is an Unfair Competition Act of the German model or a scattered system of detailed, non-systematised statutes as in England. It is also highly likely that courts in the Member States will connect to their well-known national legal concepts and case law when interpreting and applying concepts of the Directive, such as ‘professional diligence’, ‘average consumer’ or cause the consumer ‘to take a transactional decision’.

Thus, in reality, a quick and full harmonisation is not to be foreseen. Most likely, companies will find that, also after successful implementation of the Directive in the Member States, identical advertising and marketing practices will meet legal hindrances in certain Member States while considered completely acceptable in others. It will probably be necessary to have had quite a considerable number of cases referred to the ECJ for preliminary ruling before a level playing field will emerge. This legal process may very well also involve future Commission interventions against Member States trying to keep specific legal provisions contravening the Directive.

However, the Unfair Commercial Practices Directive fulfils a very important pro-integrative function and will be here to stay. It can be predicted that it will form the legal foundation for a most intriguing and important pattern of legal development to come. European marketing law will develop into an important sub-discipline of European law.

4

An End to Fragmentation? The Unfair Commercial Practices

Directive from the Perspective of the New Member States from Central and Eastern Europe

ANTONINA BAKARDJIEVA ENGELBREKT1

1. INTRODUCTION

ALTHOUGH NEGOTIATED WITH remarkable speed and efficiency and stirring up relatively limited political debate, the recently adopted Unfair Commercial Practices Directive (hereinafter UCPD) represents a veritable revolution in the field of fair trading law.2 Rarely has a

Community legislative initiative been announced with such open intent to recast national legal systems and traditions in a given field of regulation. According to the press release accompanying the initial Commission proposal the Directive was said to advance a single set of rules which were expected to do nothing less than ‘replace the existing multiple volumes of national rules and court rulings on commercial practices’.3 Indeed, the Directive sets out to introduce a comprehensive regulative regime in an area marked by considerable divergences in national policy, style and enforcement technique.4 In contrast to the colourful patchwork of Community

1Antonina Bakardjieva Engelbrekt holds a degree in law from Sofia, ‘St. Kliment Ohridski’ University, an LLM degree from the European University Institute, Florence, and a doctoral degree in law from Stockholm University. She is Associate Professor at Örebro University and Stockholm Universities and is currently a Jean Monnet Fellow at the EUI, Florence. Financial support from the STINT foundation is gratefully acknowledged.

2In the following the terms ‘fair trading law’ and ‘marketing practices law’ will also be used for the sake of simplicity.

3EU Press release IP/03/857, Brussels, 18 June, 2003.

4See HW Micklitz et al., Study on the Feasibility of a General Legislative Framework on Fair Trading, Vol I–II, Institut für Europäisches Wirtschaftsund Verbraucherrecht eV (Nov 2000) (hereinafter ‘Micklitz, Feasibility Study’).

48 Antonina Bakardjieva Engelbrekt

directives regulating various industry-, mediaand distribution-specific aspects of marketing in a vertical manner, the UCPD takes a horizontal approach and aims at providing general solutions with an effect across business sectors. It seeks to achieve full harmonisation, thus trying to overcome years of fragmentation and piecemeal harmonisation. In a political climate of constitutional sensitivity, where subsidiarity and new (less intrusive) modes of governance within the European Union (EU) are the terminology of the day, this bold approach deserves attention reaching beyond the narrow community of consumer law experts.

This chapter does not aim at a general analysis of the UCPD,5 but instead looks at the Directive from the perspective of the New Member States from Central and Eastern Europe (CEE). Given the number of these states and the differences in their legal traditions and regulative frameworks one can, of course, question whether there are sufficient commonalities associated with the continuing implementation of the UCPD in these countries to justify special attention and joint treatment. After all since May 2005 eight of the original 10 candidate states from CEE have been fully fledged members of the Union.6 Their legal systems have been acknowledged largely to comply with the Community acquis following a rigorous scrutiny by the European Commission. Insisting on a particular CEE perspective may be perceived as an unnecessary gesture of political correctness, or, alternatively, as an expression of lingering suspicion as to these states’ capacity to shoulder their newly gained responsibilities as Union members.

Nevertheless, I shall argue that bringing in the perspective of the CEE countries is necessary and valuable for several reasons. The first, and more evident, one is the persisting differences in historical legacies and in political and economic realities in the ‘new’, when compared to the ‘old’, EU Member States. These differences can be expected to trigger some context-related problems in transposing Community law which merit special attention.

Secondly, the regulative framework of commercial practices in these states has evolved only recently, and has been the testing ground for experimental institutional design. Hence, it provides a rich illustration of the variety of institutional dilemmas involved in this legal field and in its harmonisation.

5For such analysis see A Bakardjieva Engelbrekt, ‘EU and Marketing Practices Law in the Nordic Countries—Consequences of a Directive on Unfair Business-to-Consumer Commercial Practices’, Report for the Nordic Council of Ministers, Committee on Consumer Affairs (2005:424), available at: www.norden.org/pub/sk/showpub.asp?pubnr=2005:424; J Stuyck, E Terryn and T van Dyck, ‘Confidence Through Fairness? The New Directive on Unfair Business-to-Consumer Commercial Practices in the Internal Market’ (2006) 43 CMLRev 107.

6The 8 Central and East European States that joined the European Union on 1 May 2004 are the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, the Slovak Republic and Slovenia. Two more CEE countries, namely Romania and Bulgaria are in the antechamber of the Union. The laws of these latter countries are also going to be discussed since they were exposed to the same pre-accession strategy and are soon expected to become part of the Community legal order.

The Perspective of the New CEE Member States 49

Last, but not least, the relevant laws and institutions of fair trading in the CEE countries have over the course of the last decade been powerfully influenced by, and are to a large extent a product of, the recent eastward enlargement of the Union. It is generally acknowledged that the last accession process has been unique in many ways, notably through power asymmetry, the conditionality requirement and the massive transfer of both rules (the acquis communautaire) and institutional practices from the EU to the accession states.7 The outcome of this process can therefore in a sense be regarded as a condensed reflection, a reverse image, of the Europeanisation process as a whole. Whereas much has naturally got ‘lost in translation’, still I believe that a closer analysis of the legislative and institutional results of accession may help unravel paradoxes and tensions in Community law and policy-making that otherwise remain hidden due to the discrete and selective character of processes of positive and negative integration. Going further, I shall suggest that the enlargement process has occasionally functioned as an ‘incubator’ for changes at the Community level, and one reason to study enlargement policies is that they may serve as precursors of new developments. In this sense, the chapter does not claim to be a comprehensive review of the implementation process in the CEE Member States, but rather uses developments in these states as an analytical prism through which the strengths and weaknesses of the Community approach to harmonisation in this and related fields can be identified and more rigorously studied.

2. FRAGMENTATION AND ENLARGEMENT AS MAIN PREMISES

FOR THE UPC DIRECTIVE

A more specific reason to look at the new Member States from CEE is offered by the policy document which paved the way for the UCPD, namely the Green Paper on Consumer Protection of 2001. The Green Paper itself used enlargement as a main justification for embarking on a new and ambitious harmonisation project. Its starting point was the already familiar theme of fragmentation in the Community regulative regime of consumer protection:

consumer protection in the internal market is faced with a fragmented set of regulations and a fragmented system of enforcement.8

7F Schimmelfennig and U Sedelmeier, ‘Governance by Conditionality: EU Rule Transfer to the Candidate Countries of Central and Eastern Europe’ [2004] Journal of European Public Policy 661; F Schimmelfennig and U Sedelmeier (eds), The Europeanisation of Central and Eastern Europe (Ithaca, NY, London, Cornell University Press, 2005); H Grabbe, The EU’s Transformative Power: Europeanization through Conditionality in Central and Eastern Europe (Basingstoke, Palgrave, 2006).

8Green Paper on European Union Consumer Protection, COM(2001)531 final, at 3.