To engage customers responsibly, businesses need to find a balance between strong marketing efforts and fair commercial practices. The European Union (EU) has strict regulations to protect consumers from unfair commercial practices, and it's vital for e-commerce companies to understand and comply with these rules. Failure to do so can result in legal penalties and harm a brand's reputation.
What Are Unfair Commercial Practices?
Unfair commercial practices cover a wide range of actions that businesses may use to influence consumer decisions. These can include misleading advertising, high-pressure sales tactics, or not disclosing key information. The EU's Unfair Commercial Practices Directive (UCPD) protects consumers from these types of actions before, during, and after a transaction, including online. It applies to all products and services, including digital ones.
Examples of unfair trading practices are:
- providing incomplete or inaccurate information about products or services
- offering enticements which turn out not to be available
- advertising “free” products that actually have hidden costs
- displaying prices without including all additional charges
- using low-priced offers to lure customers in, only to push them towards more expensive alternatives.
- using false certificates, quality marks, or endorsements without permission.
- displaying fake online reviews or endorsements
- pressuring customers into making a purchase
- including unfair or one-sided terms in contracts, such as terms and conditions online
- making exaggerated claims or emotional appeals that misrepresent the value or quality of a product or service
The list provided is exemplary, not exhaustive, and it's important to note that even using just one of these tactics, no matter how subtle, can still be considered an unfair commercial practice. Such actions can still be deemed misleading or aggressive under EU law, even if their impact is not immediately obvious.
Consequences for Businesses
Under EU rules, consumers can file complaints against companies making misleading claims and demand immediate compensation. National authorities can also investigate and impose fines for unfair practices.
For instance, Italy's antitrust authority fined Amazon €10 million for automatically setting the “subscribe and save” option on various products without clear consumer consent. Similarly, the Netherlands Authority for Consumers and Markets fined Epic Games €3.5 million for using aggressive in-game advertisements. Meta was also fined €3.5 million for unfair practices related to creating and managing Facebook and Instagram accounts. In the UK, Tesco has been reported to the Competition and Markets Authority (CMA) over concerns its Clubcard pricing offers could be misleading consumers.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
