Assessment of (un)fairness in B2C telecommunications and banking advertising

3.1. Consumer of telecommunications and banking products

The UCP Directive, which aims at guaranteeing a high level of consumer protection, does not, extend the protection from unfair commercial practices to all consumers. The UCP Directive takes as a benchmark for unfairness an average consumer who is reasonably well-informed as well as reasonably observant and circumspect, taking into account social, cultural and linguistic factors as interpreted by the Court of Justice. Where a commercial practice is specifi cally aimed at a particular group of consumers, such as children, the impact of the commercial practice is assessed from the perspective of the average member of that group. This means that only these commercial practices, which might affect an average consumer, can be assessed as unfair. A commercial practice remains fair if a consumer below this average was exploited. Unlike the UCP Directive, which presents the standard of the average consumer only in recital 18, the defi nition of the average consumer is included in the core text of the Unfair Market Practices Act²⁸.

As national courts and authorities may exercise their own faculty of judgement to determine the typical reaction of the average consumer in a given case²⁹, inquiries have often been made as regards the characteristics of the Polish average consumer of the telecommunications and banking products.

The President of the UOKiK repeatedly stated that neither a specifi c consumer of telecommunications advertising³⁰, nor a specifi c consumer of banking advertising on consumer credit³¹ or time deposit³² can be distinguished. The usage of a mobile phone does not require any special skills or knowledge of new technologies³³. The same applies to the consumer of a consumer credit, which

28 Article 2 point 8 of the Unfair Market Practices Act.

29 Recital 18 of the UCP Directive.

30 Decision of the President of the UOKiK nr RWA-44/2012 of 27 December 2012, p. 14; nr RWA-20/2011 of 14 December 2011, p. 9–10.

31 Decision of the President of the UOKiK nr RPZ 46/2012 of 28 December 2012, p. 30.

32 Decision of the President of the UOKiK nr 33/2008 of 12 December 2008.

33 Decision of the President of the UOKiK nr RPZ 28/2010 of 9 December 2010, p. 12; nr RWA-44/2012, p. 14.

is a basic fi nancial product and unlike other fi nancial products does not require any specifi c knowledge of fi nancial mechanisms³⁴.

Therefore, only the average consumer might be taken into account, not a specifi c one. In the opinion of the President of the UOKiK, the Polish average consumer understands the information addressed to him. He recognises the language of advertising, recognises the use of metaphor, exaggeration, shortcuts, as well as the conventionality of the advertising language. He also trusts well-known traders. The knowledge of an average consumer is, however, incomplete and not professional. He has the right not to know everything, as he is not a specialist in a certain fi eld. The average consumer is not naïve, and yet he may assume that the information provided by the trader is clear, unequivocal and not misleading³⁵.

The level of attention of the average consumer, which infl uences the assessment of (un)fairness, differs depending on the advertised product itself.

For example, mobile phones are commonly used, their price and the price of the telecom services is not high. The consumer may, therefore, easily switch to another telecom provider. Therefore, the average consumer can make a decision on such a service without carefully analysing the details of an offer. Hence, the level of attention paid to such an advertisement is not very high³⁶. Yet, the consumer of banking products has the right to reliable, true and full information as the decisions have fi nancial consequences and thus should not be made on the basis of an unfair practice³⁷.

3.2. Misleading actions

In Poland, the commercials in the telecommunications and banking sectors are most often assessed as misleading practices.

The prohibitions of misleading commercial practices play a central role in the UCP Directive, which in Article 6 and Article 7 distinguishes between misleading actions and misleading omissions, respectively. The provisions on

34 Decision of the President of the UOKiK nr RPZ 46/2012, p. 30.

35 See e.g. the decisions of the President of the UOKiK: nr DDK 14/2008 of 19 August 2008, p. 12; nr RPZ 28/2010, s. 13; nr RWA-44/2012, p. 15; nr RPZ 2/2013 of 12 March 2013, s. 15.

36 Decisions of the President of the UOKiK: nr RWA-20/2011, p. 10; nr RWA-44/2012 of 27 December 2012, p. 15.

37 Decision of the President of the UOKiK nr RWA-44/2012, p. 36.

both misleading actions and omissions are applied in Poland to advertising of telecom and banking products.

On the other hand, the Code of Ethics in Advertising introduces only a general prohibition on misleading practices in Article 10 and several specifi c bans on misleading practices addressed to children or on advertising with environmental claims. How the actual evaluation of practices as misleading actions or omissions is made is, therefore, not transparent.

3.2.1. Provisions on misleading actions

An advertisement may be assessed as a misleading action on the basis of Article 5 (1) of the Unfair Market Practices Act, according to which a commercial practice shall be regarded as misleading if it causes or is likely to cause the average consumer to take a transactional decision that he would not have taken otherwise. Article 5 (2) gives examples of misleading actions such as dissemination of false information, or of factually correct but misleading information. A misleading action may concern issues like the existence, nature or availability of the product, the characteristics of the product, such as its quantity, quality, composition or the price, the manner in which the price is calculated, or the existence of a specifi c price advantage³⁸. Article 5 (4) of the Polish act underlines that while assessing whether a market practice constitutes a misleading action, all its features as well as the circumstances accompanying the product launch, including overall presentation, should be taken into account.

3.2.2. Examples of misleading actions in advertising A) Telecommunications advertisements

One of the advertisements assessed by the President of the UOKiK was based on the slogan „Closeness creates Christmas. Calls for free with your closest ones”³⁹. It was presented during Christmas and was specifi cally referring to Christmas by the use of Christmas symbols; the main service (calling for free), however, was switched off during the holiday season. Since under Article 2 point 7 of the Unfair Market Practices Act the “transactional decision” means any decision taken by a consumer concerning whether, how and on what terms to purchase, make payment in whole or in part for, retain or dispose of a product, or to exercise a contractual right in relation to the product, as well as whether the consumer decides to act or to refrain from acting, the President

38 See Article 5 (3) of the Unfair Market Practices Act.

39 Decision of the President of the UOKiK nr DDK 14/2008.

of the UOKiK concluded that it is irrelevant if the consumer decided to act or not. Of importance is only his understanding of the advertising on the basis of all the features of the evaluated advertising which may affect its reception by the average consumer. In the case at hand, every element of the advertisement emphasised the connection to Christmas. The commercial used symbols such as snow, Christmas trees or snowmen. In the opinion of the President of the UOKiK, the advertisement unequivocally suggested that the telecom provider wanted to guarantee the possibility to spend Christmas close to relatives. The commercial was addressed to all, not to a specifi c group of consumers, and it can be said that everyone in general shares the wish to be close to one’s relatives. The President of the UOKiK decided that the advertisement was misleading by action because the essential information regarding the fact that the free of charge calls, which can be considered as the main emphasis of the aforementioned advertising campaign, would not be provided during Christmas time. The fact that a consumer may be informed on the details at a later time, e.g. at the moment of sale, could not have changed the assessment as it suffi ces that a misleading advertisement raises interest for the offer. The decision had to be published and the fi ne of 806 400 PLN (0,01% of the revenue generated in the preceding year) was imposed.

The President of the UOKiK also assessed as a misleading action various forms of advertising, which promised a price of 0,29 PLN per minute for all calls, while in reality the cost per minute to one telecom service provider was higher⁴⁰. The information concerning this exception was illegible for the average consumer in the TV advertisement, and thus it was capable of making him take a transactional decision that he would not have taken otherwise. The illegibility of the inscription resulted from the colour and the size of the fonts employed, while the speaker did not mention the existence of this exception.

Moreover, the relevant sentence was written vertically. The same advertisement on the billboard did not contain any notice on the exception. The President of the UOKiK underlined that advertisements on billboards are a special case due to the fact that it is often placed in busy locations, close to the road. The consumer does not even have the possibility to look closely at them because of being in motion – in a car, in a bus or going on foot. It is thus important to create the design of the advertisements in a way that guarantees an unproblematic understanding. However, the analogous web advertisement was assessed as non-misleading due to the simplicity of obtaining all the information by clicking

40 Decision of the President of the UOKiK nr RWA-44/2012.

on the indicated link. Even if it is up to the trader to decide on the elements of the offer presented in commercial, the trader has to take the responsibility for misleading the consumers. In the opinion of the President of the UOKiK the competition in the telecom sector is the reason why marketing practices are often too expansive. Some of the advertising techniques cause an overemphasis on the slogans themselves, and not on explaining the offer. The particular elements of an advertised offer may be selectively shown in a way which does not mislead the consumers. The form of the advertisement determines its capacity to provide the necessary explanations. The advertisers have to take into account that it is the price or the price advantage that will most often infl uence the decision of a consumer. A fi ne of 4 493 233 PLN was imposed for the stated infringements.

As the revenue in the preceding year was declared to be a trade secret, the fi ne to revenue ratio was not disclosed.