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disproportionately to hinder imported goods (since domestic goods are generally made known to the public via other channels). The national court had thus to verify whether the ban could be justified on grounds of protection of public health20 (the referring Swedish court eventually found it was not). A rule forbidding German consumers to buy pharmaceutical products on line was found to hinder the marketing of pharmaceuticals offered from other Member States more than those offered in Germany (where they can be purchased in pharmacies) and not to be justified for the protection of public health as it applies to over-the-counter pharmaceuticals.21

This case law freed Member States from the burden of justifying obstacles to the free movement of goods resulting from such regulations as being necessary to achieve a goal of general interest, such as fairness in commercial transactions and/or the protection of consumers, but only on condition that these regulations were not, in law or in fact, discriminatory vis-à-vis certain economic operators or vis-à-vis goods imported from other Member Sates.

Because of Keck there are relatively few cases in which the ECJ has scrutinised national regulations on sales promotions, advertising and sales methods on the ground of Article 30 EC or in the light of their (alleged) objective of protecting fair trade and/or the economic interests of consumers. These cases deal with ‘selling arrangement’ types of rules that either affect the conditions subject to which products can be put on the market (eg rules on advertising affecting the labelling of products) or have a discriminatory effect on imported goods (such as a ban on the use of a given medium for advertising purposes or a ban on the use of the internet for the sale of certain goods22).

4. THE UNFAIR COMMERCIAL PRACTICES DIRECTIVE: B2C ONLY

The state of play has dramatically changed with the adoption of the total harmonisation Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market.23 In the harmonised field, ie commercial practices in the relationship between undertakings and consumers, all Member States have to adopt the same set of rules. ‘Commercial practices’ are defined by Article 2(d) as ‘any act, omission, course of conduct or representation, commercial communication including advertising

20Case C–405/98 Gourmet [2001] ECR I–1795; see note by J Stuyck in [2001] Cahiers de droit européen 682.

21Case C–322/01 Deutscher Apothekerverband [2003] ECR I–14887.

22See Gourmet and Deutscher Apothekerverband, above in nn 20 and 21.

23Above n 3.

166 Jules Stuyck

and marketing, by a trader, directly connected with the promotion, sale or supply of a product to consumers’. This is a very wide concept including sales methods, methods of sales promotion and advertising. The rules are the following. Unfair commercial practices shall be prohibited. A commercial practice shall be unfair if: (a) it is contrary to the requirements of professional diligence, and (b) it materially distorts or is likely materially to distort economic behaviour with regard to the product of the average consumer whom it reaches or to whom it is addressed, or of the average member of the group when a commercial practice is directed to a particular group of consumers. In particular, commercial practices shall be unfair where they are: (a) misleading, as set out in Articles 6 and 7, or (b) aggressive, as further set out in Articles 8 and 9, (Article 5). Annex I contains the list of those commercial practices which shall in all circumstances be regarded as unfair. The same single list shall apply in all Member States and may be modified only by revision of this Directive.

Consistently with the scope of application of the Directive (B2C only), Recital 8 states:

This Directive directly protects consumer economic interests from unfair busi- ness-to-consumer commercial practices. Thereby, it also indirectly protects legitimate businesses from their competitors who do not play by the rules in this Directive and thus guarantees fair competition in fields coordinated by it. It is understood that there are other commercial practices which, although not harming consumers, may hurt competitors and business customers. The Commission should carefully examine the need for Community action in the field of unfair competition beyond the remit of this Directive and, if necessary, make a legislative proposal to cover these other aspects of unfair competition.

Although the Community legislator thus recognised the existence of a strong link between the law of unfair commercial practices in B2C relations and the law of unfair competition, it nevertheless adopted a directive that is limited to B2C relations and postponed sine die the harmonisation of the law of unfair competition.

5. THE LAW OF UNFAIR COMPETITION IN THE MEMBER STATES

In certain national legal systems (like those of the Nordic countries) the law on sales methods, advertising and unfair practices is often seen as one branch of the law with its specific system of legal protection (involving a

Consumer Ombudsman or consumer organisations). In other countries, like Germany and Belgium, it is integrated with the law of unfair competition (the aim of which is historically the protection of competitors, but which has been enlarged so as to include the protection of consumers and even the public at large, the general interest).

Regulation of Sales Promotion and Unfair Competition 167

The old German law on unfair competition dating from 1909 (see now the UWG 2004 discussed hereinafter) was the prototype of a private law approach to the regulation of fairness of commercial practices: protection of private interests (in particular the Mittelstand or small shop keepers) and private law enforcement. In a completely opposite approach to the German, the Scandinavian countries, Sweden being the first, started enacting a different type of legislation in this field as from 1970. The Scandinavian approach is one of public law (a Consumer Ombudsman) in the interest of consumers.24

The national systems in the EU show varying degrees of autonomy of the law on unfair competition and of integration of consumer law, competition law (in the broad sense) and unfair competition law, with ramifications on IP law.

Historically the law on unfair competition as it still exists in most of the Member States (though in a few, such as Germany, Austria and Greece, it is covered by a specific and separate Act) originates in the Paris Convention on Industrial Property of 1883 as amended in 1900 in Brussels. Article 10bis introduced the principle of domestic treatment of all citizens of Member States with regard to unfair competition. The Hague revision of the Convention additionally obliged the Member States to protect each other’s citizens against unfair competition (concurrence déloyale).25 At the same time unfair competition was defined as acts which are contrary to honest business practices (actes contraires aux usages honnêtes en matière commerciale et industrielle). The creation of confusion and misleading the public by false statements about competitors are listed as acts of unfair competition.26 The law on unfair competition started as part of the law on industrial property, and in many countries the two are still closely linked.27

Germany was the first country to adopt legislation implementing the Paris Union Convention. A first Act on Unfair Competition (Gesetz gegen den unlauteren Wettbewerb or UWG) was adopted in 1896 and soon replaced by a more effective UWG in 1909. The 1909 UWG served as a model for several other countries. In 2004 it was replaced by a modern UWG. Section 1 of the new UWG sets out its objective: the protection of competitors, consumers and other market participants against unfair competition. It also protects the general interest in undistorted competition.

24 See for an interesting comparison between the German and the Swedish models A Bakardjieva-Engelbrekt, Fair Trading Law in Flux (PhD thesis, Stockholm, 2003) at 13 ff.

25See above n 24.

26Harte-Bavendamm and Henning-Bodewig, above n 5, 46.

27The TRIPS Agreement contains a partial reference to unfair competition and to the Paris Convention. Pursuant to Art 39(1) Members shall, in the course of ensuring effective protection against unfair competition as provided in Article 10bis of the Paris Union Convention

(1967), protect undisclosed information in accordance with para 2 and data submitted to governments or governmental agencies in accordance with para 3. Thus this provision only covers part of what is meant by unfair competition under the Paris Convention, i.e. the protection of undisclosed information.

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The new German Unfair Competition Act (UWG) modernises and liberalises this branch of the law. After the abrogation of the Zugabeverordenung (regulation on premium offers) and the Rabattgesetz (law on discounts) in 2001, the new UWG also abolishes the rules of the old UWG on special sales and clearance sales. It expressly recognises the consumer as beneficiary of the laws against unfair competition (following established case law) and it introduces a de minimis threshold (like in competition law).

While the new German UWG was enacted after due consideration of the proposal for a UCPD and was indeed inspired by that proposal, Germany has integrated the rules on commercial practices in an Act which also relates to B2B relations. The central provision, the grosse Generalklausel of section of the new UWG 3 prohibits unlawful acts of competition which are liable to affect not merely insignificantly competition to the disadvantage of competitors, consumers or other market participants. In other words the old standard of gute Sitten (honest business practices) has been replaced by a notion of fairness that directly relates to the requirements of effective competition and which grants market participants a market oriented freedom to act and make decisions.28 In addition section 1 of the Act states that: ‘[t]he objective of the Act is to protect competitors, consumers and other market participants against unfair competition. It also protects the general interest in undistorted competition’.29 This law integrates consumer protection, protection of competitors and protection of competition. It remains to be seen how these new provisions will change the longstanding case law that has been developed on the basis of the traditional Unfair Competition Act of 1909, a law that did not mention the consumer or the general interest, but that was often applied taking into account these interests.30

The implementation of the Unfair Commercial Practices Directive (UCPD) is a complex matter. The three-tier structure of the Directive (a general clause, two more specific clauses and a black list) will necessitate important and varied adaptations of the national laws of the Member States. In some Member States, like the UK,31 Ireland, Cyprus

28‘Unlautere Wettbewerbshandlungen, die geeignet sind, den Wettbewerb zum Nachteil der Mitbewerber, der Verbraucher oder der sonstigen Marktteilnehmer nicht nur unerheblich zu beeinträchtigen, sind unzulässig.’ (free translation: “acts of unfair competition that are likely to impede not only insignificantly competiiton to the detriment of competitors, consumers or other market participants are prohibited”)

29‘Dieses Gesetz dient dem Schutz der Mitbewerber, der Verbraucherinnen und der Verbraucher sowie der sonstigen Marktteilnehmer vor unlauterem Wettbewerb. Es schützt zugleich das Interesse der Allgemeinheit an einem unverfälschten Wettbewerb.’ (free translation: “this law aims at protecting competitors, consumers and other market participants against unfair competition. It also protects the general interest in undistorted competition”).

30Harte-Bavendamm and Henning-Bodewig, above n 5

31See S Weatherill, ‘National Report—United Kingdom’ in R Schulze and H Schulte-Nölke,

Analysis of National Fairness Laws Aimed at Protecting Consumers in Relation to Commercial Practices (June 2003), available at www.europa.eu.int./comm/consumers/cons_int/safe_shop/ fair_bus_pract/green_pap_com/studies/unfair_practices_en.

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and Malta,32 there is no general rule governing the fairness of commercial practices. In Sweden, the fairness of commercial practices is guaranteed by a statute (the Marketing Practices Act) the primary aim of which is to protect consumers and which consists of a general fairness clause supplemented by more specific provisions. Protection of business people against acts of unfair competition is a secondary aim of the Act.33 Denmark has a similar approach.34 Austria, Germany, Greece, Poland, Slovenia and Spain have laws on unfair competition.35 Originally these laws aimed at business- to-business relations only. Nowadays at least some of their provisions also relate to fairness in business-to-consumer relations. Germany adopted a new Unfair Competition Act (UWG) in 2004; its aim is to protect competitors, consumers and other market participants against unfair competition as well as the general interest in undistorted competition. Poland amended its Law on Unfair Competition of 1993 very recently, on 15 June 2005: an act of unfair competition is conduct of an undertaking which violates a legal provision or bonos mores and damages or puts in jeopardy the interests of another undertaking or a consumer. The Czech provisions on unfair competition (including a general clause) are integrated in the Commercial Code.36 In France37 and the Netherlands fairness in commercial practices is guaranteed on the basis of tort law (Civil Code). Italy has a specific provision on unfair competition in its Civil Code. Belgium has one Trade Practices Act with a general clause on unfair competition and a general clause on fair practices vis-à-vis consumers (both clauses being based on the same notion of honest business practices derived from the Paris Union Convention).38 Luxembourg has a comparable Act.39 In Finnish law there are two separate statutes: a Consumer Protection Act and an Unfair Trade Practices Act.40 Estonia, Latvia, Lithuania and Hungary have Competition Acts with a double aim: promoting effective as well as fair competition. In Portugal ‘unfair competition’ is part of the Code on Intellectual Property, but this country also has an Advertising Code and a Consumer Code which contain important provisions in the area covered by the UCPD.41 Spain has a very complex system of national laws (a Competition Act and an Advertising Act, with civil sanctions) and laws of the autonomous regions.42

32Harte-Bavendamm and Henning-Bodewig, above n 5, 239, 271 and 344.

33See U Bernitz, ‘National Report—Sweden’ in Schulze and Schulte-Nölke, above n 30.

34Harte-Bavendamm and Henning-Bodewig, above n 5, 191.

35Ibid, at 180 ff and R Schulze and H Schulte Nölke, ‘Comparative Overview’ in Schulze and Schulte-Nölke, above n 30 at 11, for some of the countries.

36Harte-Bavendamm and Henning-Bodewig, above n 5, 331.

37Consumer law in France is grouped in a Code de la Consommation.

38J. Stuyck, Handelspraktijken (Mechelen, Kluwer, 2004).

39Harte-Bavendamm and Henning-Bodewig, above n 5, 264.

40Schulte Nölke, ‘Comparative Overview’, in Schulze and Schulte-Nölke, above n 30, at 11.

41Harte-Bavendamm and Henning-Bodewig, above n 5 299–300.

42Ibid, at 323–4.