Amended proposal for a European Parliament and Council Regulation concerning sales promotions in the Internal Market (presented by the Commission pursuant to Article 250 (2) of the EC Treaty)
Date: 2002-10-25
Institutions: European Commission
Subjects: common commercial policy, consumer protection, free movement of goods, freedom to provide services, sales promotion, single market

EN

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 25.10.2002
COM(2002) 585 final

2001/0227 (COD)

Amended proposal for a

EUROPEAN PARLIAMENT AND COUNCIL REGULATION

concerning sales promotions in the Internal Market

(presented by the Commission pursuant to Article 250 (2) of the EC Treaty)

 
 
EXPLANATORY MEMORANDUM

The  Commission  hereby  presents  a  modified  proposal  for  a  Regulation  of  the  European
Parliament  and  Council  concerning  sales  promotions  in  the  Internal  Market.  The  modified
proposal  incorporates  those  amendments  by  the  European  Parliament  at  the  First  reading
which are acceptable to the Commission.

1.

INTRODUCTION.

a) Background.

The Commission adopted its proposal on 2 October 2001 and it was formally transmitted to
the  European  Parliament  and  Council  on  5  October  2001.  The  Economic  and  Social
Committee gave its opinion on 8 May 2002. The European Parliament adopted a Resolution
at  its  First  Reading  on  4  September  2002,  and  proposed  amendments  to  the  Commission
proposal.

b) Purpose of the regulation.

The objective of the regulation is to ensure the proper functioning of the Internal Market, by
eliminating  restrictions  to  the  free  movement  of  services  between  the  Member  States  ,
ensuring the freedom of establishment and eliminating appreciable distortions of competition
between the Member States. In addition, the aim is to facilitate the free movement of  goods
that benefit from the use of sales promotions.

2.

EP AMENDMENTS ACCEPTED BY THE COMMISSION

Of the 57 amendments adopted by the European Parliament at First reading, the  Commission
can accept 40 in full and 7 in part, making a total of 47.

Amendments accepted in full: 2, 3, 4, 6, 7, 9, 10, 11, 14, 15, 16, 17, 18, 19, 23, 24, 25, 26, 27,
31, 32, 33, 34, 35, 36, 40, 42, 43, 44, 45, 46, 47, 48, 51, 52, 53, 55, 56, 57 and 58.

Amendments accepted in part: 5, 12, 13, 21, 29, 38 and 39.

The Commission has accepted those amendments which:

–  strengthen, or at least are in line with, the Internal Market objective of the proposal;

–  contribute to a constructive compromise on the treatment of sales below costs;

–  contribute to a constructive compromise on promotional games; and

–  are of a technical nature that improve the text1.

1

In  addition,  for  certain  language  versions  (including  English)  the  Parliament  requested  to  change  the
term "person" to "individual" throughout the text. The Commission agrees with this proposal.

2

                                                
3.

EP AMENDMENTS NOT ACCEPTED BY THE COMMISSION

The  Commission  has  not  accepted,  in  part  or  full,  17  of  the  57  amendments  adopted  in  the
Parliament. The reasons are given below, for the not accepted amendments (10 amendments) as
well  as  the  partly  accepted/partly  not  accepted  (7  amendments).  Where  possible  the
amendments have been grouped into broad categories: 

Amendments not accepted (rejected) in full: 8, 20 ,22 ,28, 30, 37, 41, 49, 50, 54.

Amendments not accepted in part: 5, 12, 13, 21, 29, 38 and 39.

Amendments that undermine the Internal Market objective of the proposal

(Amendments 12, 13, 28 and 39 (second part))

The  second  part  of  Amendment  12  and  amendment  28  that  would  allow  Member  States  to
impose general bans on sales promotions on the basis of very general and therefore easy to meet
criteria. These undermine the legal security offered by the current proposal.

Amendment 13 (a) that would allow Member States to restrict incoming sales promotions for
the liberal professions for unjustified reasons.

Amendment 13 (b) which excludes all sales promotions for pharmaceuticals from the scope of
the regulation should be accepted because the Commission's policy has always been not to treat
pharmaceuticals as ordinary consumer products.

Amendment 39 (second part) that implies, contrary to the existing acquis that sales promotions
from other Member States should be in the language of the Member State of destination.

Amendments that alter existing definitions in the acquis.

(Amendments 20, 21 (second part) and 22)

These exclude illegal gaming activities from commercial communications although they are de
facto already excluded from this term.

Amendments  that  re-impose  value  limits  or  bans  on  sales  promotions  that  have  been
shown to be disproportionate given the proposed information requirements  that would
replace them.

(Amendments 29 (first part), 30 and 37)

Amendment 29 (first part) that would allow for existing general value limits on premiums to be
maintained.  Amendment  30  that  re-imposes  general  bans  on  discounts  prior  to  seasonal  sales
periods.

Amendment 37 that would disproportionately interfere with national civil procedures.

Amendments  that  delete  information  or  other  redress  provisions  that  are  necessary  to
replace the outdated value restrictions that the proposal lifts and that would reduce the
level of consumer protection proposed by the text.

(Amendments 38, 41, 49, 50 and 54)

3

Amendment 38 that deletes the use of free help lines for complaints when these are offered by
the promoter.  Amendment  41  exempting  small  companies  from  the  redress  requirements  that
are not burdensome. Amendment 49 deleting the information  requirements in the commercial
communications of discounts. Amendment 50 deleting the requirement to indicate the previous
price  that  was  in  force  prior  to  the  offer  of  the  discount.  Amendment  54  deleting  the
requirement to indicate in the commercial communication of a sales promotion the value of the
free gift or premium.

4.

CONCLUSION

The Commission has accepted 47 of 57 amendments proposed by the European Parliament at
First Reading, either in whole or in part.

In accordance with article 250 paragraph 2 of the EC Treaty, the Commission amends its initial
proposal, incorporating these amendments.

4

2001/0227 (COD)

Amended proposal for a

A EUROPEAN PARLIAMENT AND COUNCIL REGULATION

concerning sales promotions in the Internal Market

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article
95(1) thereof,

Having regard to the proposal from the Commission1,

Having regard to the opinion of the Economic and Social Committee2,

Having regard to the opinion of the Committee of the Regions3,

Whereas:

(1)

(2)

(3)

In accordance with Article 14(2) of the Treaty, the internal market comprises an area
without  internal  frontiers  in  which  the  free  movement  of  goods,  services  and  the
freedom  of  establishment  are  ensured;  the  development  of  the  use  and  commercial
communication of sales promotions within the area without internal frontiers is vital to
promote  the  development  of  cross-border  activities  provided  that  steps  are  taken  to
ensure a high level of consumer protection as well as protection of small and medium-
sized enterprises (SMEs).

The  use  and  communication  of  sales  promotions  contribute  to  the  growth  and
development of all businesses in the Community; they are particularly important tools
for small and medium-sized enterprises who rely on such affordable practices as inputs
and  outputs  to  develop  their  cross-border  activities;  such  promotions  therefore
stimulate competitiveness in the European economy and accordingly allow consumers
to benefit from greater choice and competitive prices.

Community law and the characteristics of the Community legal order are a vital asset
to enable European citizens and operators to take full advantage, without consideration
of  borders,  of  the  opportunities  offered  by  the  use  and  communication  of  sales
promotions.  This  Regulation  therefore  has  the  purpose  of  ensuring  a  high  level  of
Community legal integration in order to establish a real area without internal borders
for  the  use  and  communication  of  sales  promotions  and  of  ensuring  a  high  level  of
consumer protection.

1

2

3

OJ C [ ], [ ], p. [ ]
OJ C [ ], [ ], p. [ ]
OJ C [ ], [ ], p. [ ]

5

                                                
(4)

(5)

(6)

(7)

(8)

(9)

The use and  communication of sales  promotions within the Community is hampered
by  numerous  identified  legal  obstacles4  to  the  proper  functioning  of  the  Internal
Market  which  make  less  attractive  the  exercise  of  the  freedom  of  establishment  and
the freedom to provide services; these obstacles arise from divergences in legislation
and  from  the  legal  uncertainty  as  to  which  national  rules  apply  to  the  use  and
communication of sales promotions; a relatively narrowly defined set of rules on sales
promotions are giving rise to a multiplicity of Internal Market barriers affecting a wide
range of businesses. The removal of these barriers will facilitate the free movement of
goods associated with the sales promotion.

In the absence of uniform rules at Community level, obstacles to cross-border services
and goods or the freedom of establishment might be justified in the light of the case-
law of  the  Court  of  Justice as  long  as  they  seek  to  protect recognised  public  interest
objectives  and  are  proportionate  to  those  objectives;  in  the  light  of  Community
objectives, of the provisions, in particular articles 28, 43 and 49 of the Treaty relating
to  free  movement  of  secondary  Community  law,  and  in  accordance  with  the
Commission’s  policy  on  commercial  communications5,  such  obstacles  can  only  be
eliminated by establishing uniform rules at Community level and by clarifying certain
legal concepts at Community level to the extent necessary for the proper functioning
of the Internal Market; other restrictions have been identified as requiring replacement
by  less  restrictive  measures;  remaining  restrictions  relating  to  the  use  and
communication  of  sales  promotions  should  be  submitted  to  the  principle  of  mutual
recognition of national legislation.

Given  the  specific  nature  of  the  problems  to  be  addressed,  in  particular,  the  need  to
tackle in a very targeted manner a small number of issues, which affect a wide variety
of  services,  there  is  a  need  to  establish  through  a  Regulation  a  few  precise,
unconditional  and  uniform  Community  requirements.  The  use  of  a  Regulation
strengthens  legal  security,  in  particular,  for  customers  and  small  and  medium-sized
companies.

This  Regulation  covers  sales  promotions  which  are  all  ‘temporary’  in  nature  as
against, for example, long term price cuts. Its scope includes loyalty programmes and
air-miles schemes.

This Regulation does not cover or affect national rules that set conditions for seasonal,
clearance  or  closing  down  sales  except  in  so  far  as  such  rules  restrict  the  offer  of
discounts.

This  Regulation  covers  promotional  contests  or  games  where  the  purpose  is  to
encourage  the  sale  of  goods  or  services,  other  than  gambling  activities,  and  where
payments,  if  they  arise,  serve  only  to  acquire  the  promoted  goods  or  services.  This
excludes  gambling  activities,  such  as  games  of  chance,  lotteries  and  betting
transactions, which involves wagering a stake with monetary value, from the scope of
application.

(10)

This  Regulation  applies  without  prejudice  to  Community  and  national  competition
law, which contains specific provisions concerning the press.

4

5

Green paper on “Commercial communications in the Internal Market”: COM(96) 192 final. 18.05.96
“The  follow-up  to  the  Green  paper  on  Commercial  Communications  in  the  Internal  Market”
Communication from the Commission. COM(1998) 121 final. 04.03.1998

6

                                                
(11) By dealing only with those specific identified matters which give rise to problems for
the  Internal  Market,  this  Regulation  is  fully  consistent  with  the  need  to  respect  the
principle  of  subsidiarity  as  set  out  in  Article  5  of  the  Treaty.  In  particular,  the
definition  of  what  is  included  in,  or  associated  with,  a  book  for  the  purposes  of  this
Regulation is of subsidiary nature. In accordance with the principle of proportionality
and  the  Commission’s  policy  on  commercial  communications,  which  through  the
work  of  the  Expert  Group  on  commercial  communications,  has  sought  to  apply  this
principle in as transparent and precise a manner as possible, the measures provided for
in this Regulation are strictly limited to the minimum needed to achieve the objective
of the proper functioning of the internal market; where  action at Community level is
necessary, and in order to guarantee an area which is truly without internal frontiers as
far  as  sales  promotions  are  concerned,  the  Regulation  must  ensure  a  high  level  of
protection  of  objectives  of  general  interest,  in  particular  the  protection  of  minors,
consumer protection and in that context fair trading and the protection of public health.

(12)

This Regulation does not affect the Community acquis, which is applicable to the use
and communication of sales promotions, which covers, in particular, Council Directive
84/450/EEC concerning misleading advertising and comparative advertising6 , Council
Directive  89/552/EEC  concerning  the  pursuit  of  television  broadcasting  activities7
Council  Directive  92/59/EEC  on  general  product  safety8,  Directive  95/46/EC  of  the
European Parliament and of the Council on the protection of individuals with regard to
the  processing  of  personal  data  and  on  the  free  movement  of  such  data9,  Directive
97/66/EC of the European Parliament and of the Council concerning the processing of
personal  data  and  the  protection  of  privacy  in  the  telecommunications  sector10,
Directive  98/6/EC  of  the  European  Parliament  and  of  the  Council  on  consumer
protection  in  the  indication  of  prices  of  products  offered  to  consumers11,  Directive
98/27/EC  of  the  European  Parliament  and  of  the  Council  on  injunctions  for  the
protection of consumers’ interests12, Council Directive 92/28/EEC on the advertising
of medicinal products13, Directive 1999/44/EC of the European Parliament and of the
Council on certain aspects of the sale of consumer goods and associated guarantees14,
Council  Recommendation  “Drinking  of  alcohol  by  children  and  adolescents15  and
Directive  2000/31/EC  of  the  European  Parliament  and  of  the  Council  on  electronic
commerce16.

(13)

For  purposes  of  enforcement  this  Regulation  has  strong  complementary  links  with
Council Directive 84/450/EEC; non compliance with the information requirements of
this Regulation shall be considered  as breaches of the ban on  misleading  advertising
established by Council Directive 84/450/EEC.

6

7

8

9

10

11

12

13

14

15

16

OJ  L  250,  19.9.1984,  p.17.  Directive  as  amended  by  Directive  97/55/EC  of  the  European  Parliament
and of the Council (OJ L 290,23.10.1997,p.18)
OJ L 298, 17.10.1989, p.23. Directive as amended by Directive 97/36/EC (OJ L 202, 30.7.1997, p. 60)
OJ L 228, 11.8.1992, p.24
OJ L 281, 23.11.1995, p.31
OJ L 24, 30.1.1998, p.1
OJ L 80, 18.3.1998, p.27
OJ L 166, 11.6.1998, p.51. Directive as amended by Directive 2000/31/EC (OJ L 178, 17.2.2000, p.1)
OJ L 113, 30.4.1992,.p.13
OJ L 171, 7.7.1999, p.12
COM (2000) 736 final
OJ L 178, 17.7.2000, p.1.

7

                                                
(14)

(15)

(16)

(17)

This Regulation provides for a high level of consumer protection in order to enhance
trust  and  confidence  in  the  Internal  Market  for  sales  promotions  by  setting  down  a
detailed  number  of  information  requirements;  these  provisions  ensure  that  the
commercial  communications  relating  to  sales  promotions  are  transparent  and  that  an
individual interested in a communicated sales promotion will be able to easily obtain
all the relevant information announced in that communication. In view of the need to
protect  minors  and  public  health, 
the  use  and  commercial
communication of sales promotions subject to a number of harmonised targeted bans
and precise restrictions;

it  also  makes 

The requirement preventing Member States from imposing prohibitions on the use or
commercial communication of a sales promotion may apply only to those prohibitions
that relate to sales-promoting activities generally.

This regulation does not apply to restrictions by Member States in relation to the use
and  commercial  communication  of  sales  promotions  for 
the  marketing  of
pharmaceuticals, whether or not subject to a prescription.

The heightened protection that the Regulation provides by the establishment of these
uniform  rules  allows  for  the  removal  of  certain  national  bans  or  limitations.  This
removal  is  necessary  to  eliminate  the  barriers  to  establishment  and  the  export  of
services  as  well  as  the  substantial  distortions  of  competition  that  they  give  rise  to;
other  cross-border  barriers  to  the  use  and  commercial  communication  of  sales
promotions are submitted to the application of the principle of mutual recognition of
national  legislation;  requirements  at  national  level  which  are  subject  to  mutual
recognition  cover  only  those  relating  to  the  use  of  sales  promotions  or  references  to
them in commercial communications and not general requirements on advertising such
as  those  relating  to  health  and  ethical  claims,  advertising  for  certain  products  and
services, nor requirements relating to other marketing practices.

(18) Without  verifiable  prior  consent  this  Regulation,  in  order  to  protect  the  health  of
children and consistent with Directive 92/59/EEC, prohibits promoters of free gifts or
premiums  from  dispatching  promotional  products  or  providing  services  to  children
unless the promoters ensure that the products dispatched or services provided are not
of a nature such that they could harm a child’s health.

(19)

In view of the recognised need for reasons of public health to prevent inciting children
and adolescents to drink alcoholic beverages; given the objective underlying the use of
sales  promotions  which  is  to  encourage  consumption  of  promoted  products  and
services,  this  Regulation  bans  the  offer  of  free  alcoholic  beverages  as  promotional
gifts to minors.

(20) Commercial communications of sales promotions for tobacco products and restrictions
thereon  are  addressed  in  the  proposed  Directive  on  advertising  and  sponsorship  of
tobacco products17.

(21)

This regulation lays down a number of obligations on promoters to ensure that, in the
event  of  them  breaching  obligations  relating  to  the  use  and  communication  of  sales
promotions, complainants will be able to identify the promoter and have easy access to
in-house redress systems; the provisions  of  this Regulation  will  also encourage best-

17

COM (2001) 283 final

8

                                                
practice in the field of in-house customer complaint schemes as well as promote and
facilitate the access to affordable out of-court redress schemes.

(22) Complainants  may  also  make  use  of  other  out-of-court  mechanisms  (conciliation,
mediation)  to  settle  disputes,  along  the  lines  of  the  self-regulation  arrangements
applied  in  the  advertising  sector  and  based  for  example  on  working  methods  to  be
defined during the pilot stage of the European Extra-judicial Network (EEJ-Net).

(23)

(24)

For  purposes  of  achieving  the  Internal  Market  for  commercial  communications  of
which this Regulation is the first step, the work of the Expert Group on Commercial
Communications will be accelerated in the other areas that the Commission recognised
as requiring priority attention in its 1998 Communication.

This  instrument  demonstrates  how  targeted  and  complete  harmonisation  can  be
achieved  by  reliance  on  a  regulation  that  offers  full  legal  security.  In  line  with  the
object  of  achieving  better  regulation,  harmonisation  in  this  field  should  be  targeted
such  that  regulations  rather  than  directives  should  be  relied  upon  to  maximise  the
benefits of the Internal Market for European Citizens.

(25) Neither  consumers  nor  businesses  are  assisted  by  requiring  excessive  information  in

sales promotions.

HAVE ADOPTED THIS REGULATION:

Article 1

Object

This Regulation establishes rules concerning the use and commercial communication of sales
promotions in order to ensure the proper functioning of the internal market and a high level of
consumer protection.

Article 2

Definitions

For the purposes of this Regulation:

(a)  ‘commercial  communication’  means  any  form  of  communication  designed  to  promote,
directly or indirectly, the goods, services or image of a company, organisation  or  individual
pursuing  a  commercial,  industrial  or  craft  activity  or  exercising  a  regulated  profession.  The
following do not constitute commercial communications:

- 

- 

information allowing direct access to the activity of the company, organisation
or individual in particular a domain name or an electronic-mail address; and

communications  relating  to  the  goods,  services  or  image  of  the  company,
organisation  or  individual  compiled  in  an  independent  manner,  particularly
when this is without financial consideration;

(b) ‘sales promotion’ means the offer of a discount, a free gift, a premium or an opportunity to
participate in a promotional contest or game,

9

(c)  ‘promoter’  means  a  user  of  a  sales  promotion,  meaning  a  company,  organisation  or
individual by whom or on whose behalf a sales promotion is undertaken,

(d)  ‘customer’  means  a  company,  organisation  or  individual  who  purchases  the  good  or
service promoted by the promoter;

(e) ‘discount’ means the temporary offer of:

- 

- 

- 

a price reduction;

an  additional  quantity  of  the  identical  good  or  service  purchased  which  is
offered at no additional cost to the purchaser;

a coupon or voucher entitling a purchaser of a good or service to a reduction on
the price of an identical good or service on a subsequent purchase;

f)  ‘free  gift’  means  the  temporary  offer  to  provide  free  of  charge  a  good  or  service
independently of any obligation to purchase whatsoever;

(g) ‘premium’ means the temporary offer to provide a good or service of a type which is not
identical to the good or service with which it is offered for purchase;

(h) ‘promotional contest’ means the temporary offer to participate in a contest which may be
subject to a prior obligation to purchase a good or service, in which the winner is designated
primarily by means of skill;

(i)  ‘promotional  game’  means  the  temporary  offer  to  participate  in  a  game,  in  which  the
winner  is  designated  primarily  by  chance  and  no  fee  is  required  to  participate  and  where
participation  is  not  subject  to  a  prior  obligation  to  purchase  or  to  order  the  provision  of  a
service.  Such  promotional  games  shall  not  include  gambling  activities  which  involve
wagering  a  stake  with  monetary  value  in  games  of  chance,  including  lotteries  and  betting
transactions.

(j) ‘child’ means a individual under the age of 14 years, unless other age-limits apply to the
sale of specific products;

(k) ‘alcoholic beverages’ means alcoholic beverages within the meaning of Articles 2, 8, 12,
17 and 19 of Directive 92/83/EEC;

(l) ‘general prohibition on the use or commercial communication of a sales promotion’ means
a prohibition that is not specific to a particular type of promoted good or service.

(m)  ‘Non-public  regulatory  body”  means  an  organisation  or  association  not  governed  by
public  law,  exercising  its  legal  autonomy  to  regulate  in  a  collective  manner  economic
activities; and

(n) ‘sale below cost’ means a discount consisting of a sale of a product or service by a retailer
below the retailer’s net invoice price inclusive of carriage, insurance and other delivery costs
as well as tax.

Article 3

The use and commercial communication of sales promotions

10

1.

Member States or non-public regulatory bodies shall not impose:

- 

- 

- 

- 

a  general  prohibition  on  the  use  or  commercial  communication  of  a  sales
promotion unless required by Community law;

a limitation  on the  value of a  sales  promotion, except  for  discounts  on  fixed-
price products and sales below cost;

a prohibition on discounts preceding seasonal sales; or

a  requirement  to  obtain  prior  authorisation,  or  any  requirement  having
equivalent  effect,  for  the  use  or  commercial  communication  of  a  sales
promotion.

2.

3.

Member States or non-public  regulatory bodies  shall neither restrict the freedom to
provide services nor restrict the free movement of goods benefiting from the use of
sales  promotions  on  the  grounds  of  the  use  of  sales  promotions  and  references  to
them in commercial communications; Community and national competition law shall
remain unaffected.

This  article  is  without  prejudice  to  national  provisions  governing  sales  or  resales
below cost.

Article 4

Information to be provided in respect of sales promotions

In  addition  to  other  information  requirements  deriving  from  Community  law,  the  promoter
shall  ensure  that  the  commercial  communication  of  a  sales  promotion  complies  with  the
requirements set out at Annex to this Regulation. All the information requirements set out in
Annex  shall  be  provided  in  a  clear  and  unambiguous  manner.  The  information  that  the
promoter must make available to the client on request must be available on the launch of the
relevant sales promotion.

Article 5

Protection of children and adolescents

1.

2.

3.

A promoter, when making a sales promotion, shall not collect personal data from a
child without the verifiable consent of that child’s legal guardian, except where it is
necessary to ask a child for contact details of his legal guardian in order to seek the
consent of the latter.

A promoter is prohibited, in accordance with general product safety legislation, from
providing directly to a child a free gift or a premium or a service if it is of a nature
that could in any way harm its health.

A promoter is prohibited from providing a free gift consisting of a product the sale of
which  is  prohibited  to  minors,  in  particular  an  alcoholic  beverage  to  individuals
under the age of 18.

11

Article 6

Redress

1.

2.

3.

4.

A  promoter  shall  at  the  request  of  a  court  or  administrative  authority,  provide
evidence as to the accuracy of the information referred to in Article 4.

A  promoter  shall  provide,  free  of  charge,  an  address  to  which  complaints  can  be
directed to him. Where a promoter provides a telephone advice service and/or e-mail
address in connection with a sales  promotion, the promoter  shall  ensure  that this is
provided free of charge and that appropriate resources are dedicated to its operation.

A promoter shall respond to an initial complaint relating to a sales promotion, within
four weeks of the promoter’s receipt of that complaint. The initial complaint and the
response shall be in writing, which may include by electronic means. The  response
shall be in the language of the communication of the sales promotion.

In the event of a out-of-court settlements of disputes the national law shall apply. If
the  sales  promotion  is  being  conducted  from  another  Member  State  the  promoter
shall  be  required  to  state  under  which  national  law  sales  promotions  are  being
offered.

Article 7

Revision clause

Not later than * [two years of the entry into force of this Regulation], the Commission shall
submit to the European Parliament and the Council a comprehensive impact assessment report
on  the  application  of  the  Regulation,  accompanied,  if  appropriate,  with  a  proposal  for  its
revision.

This  report  shall  include  an  assessment  of  the  impact  of  sales  promotions  law  on  both
consumers and business in the European Community.

The  report  shall  also  contain  a  detailed  evaluation  of  the  Internal  Market  effects  on  the
differing  national  prohibitions  on  sales  below  cost  and  an  assessment  of  the  impact  of  a
potential liberalisation of such sales.

This Regulation shall enter into force on 1 January 2005.

Article 8

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, []

For the European Parliament
The President
[]

12

For the Council
The President
[]

13

ANNEX 

Information to be provided in respect to the use and the commercial communication of

sales promotions

1.

ALL SALES PROMOTIONS

1.1.

Information to be provided in the commercial communication:

- 

- 

- 

- 

- 

the  price  (inclusive  of  taxes)  of  the  promoted  good  or  service  and  any
additional costs associated with freight, delivery or postage;

the promoter’s name and address;

the duration of the offer including the start date and either the end date or the
quantity of stock available;

where the offer is subject to conditions, an indication of where these conditions
or any other information can be obtained; and

an indication  of  how  the  terms  and  conditions  governing  the  sales  promotion
can be obtained.

2.

DISCOUNTS

2.1.

Information to be provided in the commercial communication:

- 

- 

the  exact  amount  of  the  discount  represented  as  either  a  percentage  or  a  unit
cost; and

an indication of a sale below cost.

2.2.

Information to be made available on  request unconditional on  purchase  of  the
promoted product or service:

- 

- 

- 

any conditions or limitations applicable to the discount;

the  preceding  price  of  the  promoted  good  or  service  and  the  length  of  time
(including dates) that this preceding price was applied; and

where  the  good  or  service  in  question  has  previously  been  bundled  and/or
distributed  in  a  format  that  prevents  a  direct  price  comparison  with  the
promotional offer, the basis for assessing the pre-discount price.

2.3.

Information to be made available on a coupon or voucher: 

- 

the  redemption  value  of  the  coupon  or  voucher,  which  may  be  a  good  or
service, or where the coupon  or voucher can  be exchanged  for  cash, the  cash
value;

- 

any limitation on its use including its expiry date; and

14

- 

the goods or services against which the coupon or voucher may be redeemed.

3.

FREE GIFTS AND PREMIUMS

3.1.

Information to be provided in the commercial communication:

- 

- 

the actual value of the free gift or premium; and

any costs associated with obtaining the free gift or premium.

3.2.

Information to be made available on  request unconditional on  purchase  of  the
promoted product or service:

- 

any conditions or limitations applicable to the free gift or premium.

4.

PROMOTIONAL CONTESTS AND PROMOTIONAL GAMES

4.1.

Information to be provided in the commercial communication:

- 

- 

- 

- 

- 

- 

the commercial value and nature of the prize;

the closing date for receipt of entries;

any geographical or personal restrictions such as location or age;

the need to obtain permission to enter from an adult or employer;

any associated costs other than the purchase of the promoted good or service in
the participation in the promotional contest or promotional game; and

in the case of a promotional game, sufficient information for any participant in
the promotion to understand their likely chance of winning.

4.2.

Information to be made available on  request unconditional on  purchase  of  the
promoted product or service:

- 

- 

- 

- 

- 

- 

- 

any  conditions  applicable  to  the  promotional  contest  or  game  including  any
limitations on entries or prizes;

the number of prizes which may be won and the number of prizes of any one
type if more than one type of prize is on offer;

the rules governing who is eligible to participate and the award of prizes;

the criteria for judging entries;

the selection procedure for the award of prizes and, where the selection is made
by jury, the composition of the jury; 

the date of the results and the manner in which they are to be announced; 

the  means  by  which  prizes  may  be  delivered  or  collected  and  any  associated
costs; 

15

- 

- 

- 

the time period during which prizes must be collected;

any intention and conditions to use winners in post event publicity; and

details of prize-winning entries subject to the agreement of prize winners and
data protection rules.

16