Legal Alert – ECJ Judgment on Consumer Protection – Prize Promotions
JUDGMENT OF THE EUROPEAN COURT OF JUSTICE FROM 18.10.2012 IN CASE C-428/11
(CONSUMER PROTECTION – PRIZE PROMOTIONS)
On 18.10.2012 the European Court of Justice (“the ECJ”) delivered a landmark judgment on the interpretation of paragraph 31 of Annex 1 to the Unfair Commercial Practices Directive (“the UCPD”) concerning promotions which give a false impression that consumers have won a prize, but for which they have to pay money to claim it. The corresponding regulation in Bulgaria is provided by article 68k, point 8 from the Bulgarian Consumer Protection Act.
Facts and questions referred to the ECJ
The ECJ addresses the following key issues related to the prize promotions in question at the main proceedings:
- Individually addressed letters, scratch-cards and other advertising materials placed into newspapers and magazines informing the consumers that they are “lucky” to win an unspecified prize, one of a number of prizes;
- Consumers then being asked either to call a premium rate phone number, use a reverse SMS or apply by ordinary post to obtain more specific information on the nature of the prize they have won and how to collect it;
- Consumers being told the SMS cost, the maximum call duration and the cost per minute;
- 99% of the so-called “winners” received a small-scaled prize, the value of which is less than the total amount of money they have to pay to claim it;
- Compatibility of such promotions with the EU Consumer protection regulations cited above;
- Liability of businesses running such promotions with respect to the costs of claiming the prize by the consumers.