1

Introduction

STEPHEN WEATHERILL AND ULF BERNITZ

The title of this book promises an inquiry into ‘new rules’ and ‘new techniques’ under the EC’s Directive 2005/29 on Unfair Commercial Practices (UCPD).1 The purpose of this brief Introductory Chapter is to sketch the background to the adoption of the Directive, to situate the measure in the context of the existing literature on EC activity in the field and to set the scene for the Chapters to follow: what really are these ‘new rules’ and ‘new techniques’?

1. CONSUMER LAW: THE GROWTH OF THE LEGISLATIVE ACQUIS

IT IS WELL known that the bulk of the EC’s legislative acquis in the field of consumer law concerns the harmonisation of contract law. The EC has always possessed a competence to harmonise laws for defined (market-making) ends. Originally the relevant provision was Article 100, which became Article 94 on the renumbering effected by the Treaty of Amsterdam. In practice the key provision today is Article 95 EC, which was Article 100a in its pre-Amsterdam guise. In so far as national laws vary, the argument has typically proceeded that the construction of a unified trading space within the EU was hindered. Therefore harmonisation of laws at EC level was required—‘common rules for a common market’. So the strict constitutional purpose of harmonisation was rule-making designed to make an integrated market, but its effect was to allocate to Community level (albeit by virtue of the commonly used minimum formula, typically not exclusively) the competence to decide on the substance of the rules in question. So the subjection of any rule of national law to the discipline of harmonisation carries with it the inevitable implication that the area previously regulated (in different ways) within the Member States will acquire

1 In full: 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 and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) 2006/2004 of the European Parliament and of the Council [2005] OJ L 149/22.

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a common ‘Europeanised’ regulatory footprint. In this sense harmonisation performs a dual function, first by integrating and deregulating markets (through the reduction of up to 25 different regulatory regimes to one common regime) and secondly by regulating, or more precisely re-regulating, them according to the chosen EC-level regulatory technique.

Harmonisation breaks open traditional national regulatory structures, but also stimulates a search for understanding of its ‘Europeanising’ character. Harmonising contract law is not simply a technical process. It unavoidably means the shaping of a species of European contract law. Choices have to be made by the EC’s legislature about the content or the quality of the EC’s contract law acquis. What is ultimately produced is not an EC contract law system on the orthodox model of national systems—but it is a set of rules that force adjustment of national systems and cause reflection on the purpose of the EC’s own contribution. There are thematic connections that bind together the EC’s interventions. So one may identify within the contract law acquis visible and emerging principles and techniques, such as information disclosure, party autonomy and inquiry into substantive unfairness. Important work has been devoted to exploration of how much ‘system’ is at stake and, still more ambitiously and doubtless controversially, to the recommendation of ways to develop law and practice further.2 Moreover, it is the complex interaction of harmonised EC contract law and broader systems of deep-rooted national contract law that has triggered the quest for greater ‘coherence’ to which the Commission is currently dedicated.3

So the EC (re-)regulates package travel,4 unfair terms in consumer contracts,5 timeshare,6 and so on. But the consumer law legislative acquis stretches beyond contract law. The ‘Product Liability Directive’ takes the EC’s influence into the field of non-contractual liability.7 Admittedly, there are aspects of this broad and broadening programme of harmonisation which seem more vigorously driven by a unanimous political commitment among the Member States to a species of EC consumer policy than by a

2Eg, with varying points of emphasis, J Stuyck, ‘European Consumer Law after the Treaty of Amsterdam: Consumer Policy in or beyond the Internal Market?’ (2000) 37 Common Market Law Review (CMLRev) 367; G Howells and T Wilhelmsson, ‘EC Consumer Law: Has It Come of Age?’ (2003) 28 European Law Review 370; S Grundmann, ‘Information, Party Autonomy and Economic Agents in European Contract Law’ (2002) 39 CMLR 269; HW Micklitz, ‘De la Nécessité d’une Nouvelle Conception pour le Développement du Droit de la Consommation dans la Communauté Européenne’ in J Calais-Auloy (ed), Liber amicorum Jean Calais-Auloy, Études de droit de la consummation (Paris, Dalloz, 2004); H Rösler, Europäisches Konsumentenvertragsrecht (Munich, CH Beck, 2004); K Riesenhuber,

Europäisches Vertragsrecht (Berlin, de Gruyter, 2003).

3For examination of this process see S Vogenauer and S Weatherill (eds), The Harmonisation of European Contract Law: Implications for European Private Laws, Business and Legal Practice (Oxford, Hart Publishing, 2006).

4Directive 90/314 [1990] OJ L 158/59.

5Directive 93/13 [1993] OJ L 95/29.

6Directive 94/47 [1994] OJ L 280/83.

7Directive 85/374 [1985] OJ L 210/29, amended by Directive 99/34 [1999] OJ L 141/20.

Introduction 3

constitutionally pure focus on the role of Article 95 as an instrument for promoting economic integration through legislative harmonisation.8 And quite how this body of European private law meshes with orthodox understandings of autonomy and individual rights under private law represents another profound challenge.9 But, as a general observation, the practical impact of the EC’s harmonisation programme on consumer law has been substantial.

2. EC ADVERTISING LAW

The EC’s harmonisation programme also stretches into advertising law; and, beyond that, into law related to broader types of commercial practice to which the Directive under examination in this book is dedicated. The influence of the EC’s legislative acquis is significant and growing.

Directive 84/450 on misleading advertising was the EC’s first adventure into the field.10 This applied a harmonised control over misleading advertising and therefore served both to achieve an integrated market, by establishing a common rule for the whole territory of the EU, and to establish the EC’s own chosen standards of consumer protection. The Directive was subsequently amended by Directive 97/55,11 the principal purpose of which is to lay down common criteria according to which comparative advertising is permitted in the EC.

The EC also possesses some productand sector-specific controls over advertising. Directive 2001/37 harmonises laws concerning the manufacture, presentation and sale of tobacco products.12 It deals with rules governing warnings on packets, as well as the maximum tar yield of tobacco products. Directive 2003/33 harmonises rules governing advertising of tobacco products in the press and other media.13 Directive 89/552, the ‘Television without Frontiers’ Directive, harmonises national laws concerning the pursuit of television broadcasting activities.14 Its primary purpose is the removal of obstacles to free movement of television broadcasting services within the Community, but, as part of its re-regulatory choice,

8Cf S Weatherill, ‘European Private Law and the Constitutional Dimension’ in F Cafaggi (ed), The Institutional Framework of European Private Law (Oxford: Oxford University Press, Collected Courses of the Academy of European Law, 2006) 79.

9Cf O Cherednychenko, ‘EU Fundamental Rights, EC Fundamental Freedoms and Private Law’ (2006) 14 European Review of Private Law 23.

10[1984] OJ L 250/17.

11[1997] OJ L 290/18.

12[2001] OJ L 194/26.

13[2003] OJ L 152/16. This is the (more narrowly drawn) successor to Directive 98/43, annulled by the Court in Case C–376/98 Germany v Parliament and Council: Tobacco Advertising [2000] ECR I–8419.

14[1989] OJ L 298/23, amended by Directive 97/36 [1997] OJ L 202/60.

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it prohibits ‘all forms of television advertising and teleshopping for cigarettes and other tobacco products’ and prohibits sponsorship by tobacco product manufacturers, while also controlling television advertising for and sponsorship by medicinal producers and manufacturers of alcoholic beverages.15

There is, then, a recognisable ‘EC advertising law’. The focus on market integration distinguishes the package of rules from what one would normally expect to find in a national system, but the content reveals a clear concern to curtail the perceived pernicious effects of (in short) irresponsible advertising.

3. THE IMPETUS FOR A DIRECTIVE ON UNFAIR COMMERCIAL

PRACTICES

Advertising is an important element in successful marketing of goods and services. But there is a wider scope to the range of commercial practices that may be deployed by traders. In 2001 the Commission published a Green Paper on Consumer Protection which tracked the heap of diverse national laws that are relevant to the regulation of marketing practices.16 It described the sheer number of legal obligations that arise in the Member States as ‘off-putting’ to ‘nearly all businesses but those who can afford to establish in all Member States’, and, in addition, as a brake on consumer confidence. This was plainly intended to establish EC competence to set harmonised rules in the field pursuant to Article 95 EC, as well as to make the substantive case in favour of an EC intervention into the regulation of marketing practices in business-to-consumer transactions.

A follow-up document in 2002 reported that consultation had shown strong support for the adoption of a framework Directive in the field.17 This in turn was followed by a Draft Directive published by the Commission in June 2003.18 This proposed a prohibition against unfair business-to-con- sumer commercial practices. In April 2004 a supportive legislative resolution was adopted by the Parliament,19 and in May 2004 the Council reached a political agreement on the Directive20 which was duly welcomed by the Commission.21 In November 2004 the Council reached a common position on the adoption of a Directive, which was transmitted to the Parliament.22

15See in detail ch 8 of S Weatherill, EU Consumer Law and Policy (Cheltenham, Elgar European Law, 2005).

16COM(2001)531, 2 Oct 2001.

17COM(2002)289, 11 June 2002.

18COM(03)356, 18 June 2003.

19A5-0188/2004, 20 Apr 2004.

202003/0134 (COD), 25 May 2004.

21IP/04/658, 18 May 2004.

222003/0134 (COD), 9 Nov 2004.