COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Protecting businesses against misleading marketing practices and ensuring effective enforcement Review of Directive 2006/114/EC concerning misleading and comparative advertising
Date: 2012-11-27
Institutions: European Commission
Subjects: advertising malpractice, application of EU law, comparative advertising, consumer information, cross-border cooperation, public consultation, small and medium-sized enterprises

EUROPEAN 
COMMISSION 

Brussels, 27.11.2012  
COM(2012) 702 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Protecting businesses against misleading marketing practices and ensuring effective 
enforcement 

Review of Directive 2006/114/EC concerning misleading and comparative advertising 

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COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Protecting businesses against misleading marketing practices and ensuring effective 
enforcement 

Review of Directive 2006/114/EC concerning misleading and comparative advertising 

1. 

INTRODUCTION 

The  EU's  Single  Market  is  a  motor  for  growth  and  provides  consumers  with  greater  choice 
and better prices. Smart, sustainable and inclusive growth is the objective of the Europe 2020 
strategy1  aimed  at  helping  Europe  and  its  businesses  emerge  stronger  from  the  crisis  and 
create new jobs. All EU policies are geared towards this objective.  

Advertising has a strong economic impact on companies as it is a key element of any business 
strategy. It allows traders to present their goods and services and is an important element for 
commercial  success.  It  can  also  enhance  competition  by  providing  customers  with  better 
information  and  the  possibility  to  compare  products.  In  the  Single  Market,  businesses  can 
reach customers from every corner of Europe with a commercial message.  

In  business  relations,  customers  and  competitor  firms  expect  companies  to  use  truthful 
marketing  communication  and  to  act  with  professional  diligence.  Small  businesses  –  the 
mainstay  of  Europe's  economy2  –  are  particularly  vulnerable  to  misleading  marketing 
practices  as  they  lack  the  resources  to  protect  themselves.  They  need  a  clear  and  efficient 
framework safeguarding fair competition and providing effective means to enforce it.  

EU rules on business-to-business (B2B) advertising aim to ensure that companies use truthful 
advertising  or  marketing.  Such  provisions  create  a  necessary  regulatory  framework  in 
business-to-business marketing where companies enjoy a high degree of contractual freedom. 
In  particular,  the  Misleading  and  Comparative  Advertising  Directive3  provides  a  common 
minimum level of protection against misleading advertising for traders across the EU and also 
regulates comparative advertising.  

As  more  and  more  advertising  moves  online,  advertising  and  marketing  practices  are 
changing and may affect thousands of businesses worldwide. Misleading marketing practices, 
such as misleading directory companies4, continue to cause considerable harm to companies 

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Europe 2020, A strategy for smart, sustainable and inclusive growth, COM(2010)2020 
Small  and  medium-sized  enterprises,  9  out  of  10  of  SMEs  are  micro-enterprises  with  less  than  10 
employees.  
Directive  2006/114/EC  of  the  European  Parliament  and  of  the  Council  of  12  December  2006 
concerning  misleading  and  comparative  advertising  (referred  to  in  this  Communication  as  "the 
Directive"); OJ L 376 of 27.12.2006, p. 21,  
See  section  3.2.  Misleading  directory  companies  are  traders  who  use  misleading  marketing  practices 
and  send  out  forms  asking  businesses  to  update  details  in  their  directories,  seemingly  for  free.  If  the 
targeted  business  signs  the  form,  they  are  however  told  that  they  have  signed  a  contract  and  will  be 
charged a yearly sum.  

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and  especially  small  businesses.  The  Commission  therefore  announced  in  its  Review  of  the 
Small Business Act5 its intention to reassess the functioning of existing rules.  

More  generally,  misleading  marketing  practices  generate  market  failure  by  impairing 
businesses'  ability  to  make  informed,  and  hence  efficient,  choices.  The  distortion  of 
businesses'  economic  decision-making  also  gives  rise  to  distortions  of  competition.  This  is 
either  because  the  trader  who  is  acting  unfairly  manages  to  win  customer  businesses  away 
from honest competitors or because affected businesses are forced to pay for useless services 
of no value. In addition, misleading marketing practices have a knock-on effect on consumers 
as they have to pay more for products and services. 

This  Communication  therefore  gives  an  overview  of  how  the  Misleading  and  Comparative 
Advertising Directive is currently implemented in the Member States, identifies problems in 
how it is applied and outlines plans to revise it in the future. 

2. 

THE DIRECTIVE AND ITS IMPLEMENTATION IN THE MEMBER STATES 

2.1. 

Development and scope of EU rules on advertising in business relations 

The  Misleading  and  Comparative  Advertising  Directive  is  a  horizontal  instrument  which 
applies  to  all  advertising  between  businesses.  It  defines  advertising  very  broadly  as  any 
communication or representation to promote goods and services, without specifying its form. 
This therefore includes both classical advertising and other types of marketing practice. The 
Directive sets a minimum legal standard of protection applying to misleading advertising in 
any  business-to-business  transaction  across  the  EU,  while  leaving  the  Member  States  the 
flexibility to set a higher level of protection.  

The  Directive  also  lays  down  uniform  rules  on  comparative  advertising6,  setting  conditions 
for  assessing  when  such  advertising  is  permitted7.  The  aim  is  to  ensure  that  comparative 
advertising  compares  "like  with  like",  is  objective,  does  not  denigrate  or  discredit  other 
companies' trademarks and does not create confusion among traders. 

EU action in the area dates back to 1984 when the first Directive on misleading advertising 
was adopted8 to protect both consumers and businesses. Out of the much more extensive field 
of  unfair  competition  and  unfair  commercial  practices  law,  the  Directive  was  originally 
limited  to  the  important  area  of  advertising.  However,  many  Member  States  already  had 
provisions  against  misleading  advertising  and  the  changes  brought  by  the  Directive  in  their 
legal  systems  were  limited.  The  rules  were  amended  in  1997  to  include  fully  harmonised 
provisions  on  comparative  advertising9  given  the  fact  that  Member  States'  provisions  on 

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Review of the Small Business Act for Europe, COM(2011)78 
Any advertising which explicitly or by implication identifies competitor or goods or services offered by 
a competitor. 
According to its Article 1, the Directive protects only businesses against misleading advertising but sets 
conditions for comparative advertising targeting both consumers and businesses. 
Council  Directive  84/450/EEC  of  10  September  1984  relating  to  the  approximation  of  the  laws, 
regulations and administrative provisions of the Member States concerning misleading advertising; OJ 
L 250 of 19.09.1984, p. 17  
Directive  97/55/EC  of  the  European  Parliament  and  of  the  Council  of  6  October  1997  amending 
Directive 84/450/EEC  

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comparative advertising differed widely10, thus entailing an obstacle to the free movement of 
goods and services and creating distortions of competition.  

In 2005 the Unfair Commercial Practices Directive11 created a separate comprehensive legal 
framework  protecting  consumers  against  all  forms  of  unfair  commercial  practices,  before, 
during  and  after  a  commercial  transaction,  and  applicable  also  to  all  advertising  practices 
which  harm  the  economic  interests  of  consumers,  irrespective  of  whether  it  affects  the 
interests of a competitor. The Unfair Commercial Practices Directive reduced the scope of the 
Misleading  and  Comparative  Advertising  Directive  to  situations  where  advertising  is 
addressed  solely  to  businesses.  However,  comparative  advertising  provisions  remained 
relevant  to  business-to-consumer  transactions  because  they  provide  a  general  test  for 
assessing whether comparative advertising is lawful.  

The  original  Misleading  and  Comparative  Advertising  Directive  and  its  subsequent 
amendments were consolidated in a new directive in 200612.  

2.2. 

Overview of how the Directive is implemented in the Member States 

The Misleading and Comparative Advertising Directive was transposed in the Member States 
through  various  legislative  instruments,  such  as  commercial  codes,  general  consumer 
legislation and marketing laws. While the fully harmonised rules on comparative advertising 
have been transposed in a uniform manner, there is, according to the information gathered by 
the Commission on all Member States' legal systems, a great variety of rules going beyond 
the minimum EU-wide protection against misleading advertising.  

Some  Member  States  decided  to  go  beyond  the  minimum  legal  standard  enshrined  in  the 
Misleading  and  Comparative  Advertising  Directive  and  extended  the  level  of  protection 
granted by the Unfair Commercial Practices Directive to business-to-business relations, either 
partly  or  in  its  entirety.  In  particular,  in  Austria,  Denmark,  Germany,  France,  Italy  and 
Sweden the national legislation protecting consumers against unfair commercial practices also 
applies  either  partly  or  entirely  to  marketing  practices  affecting  businesses.  Other  Member 
States  emphasise  contractual  freedom  and  the  higher  degree  of  diligence  expected  in 
transactions between businesses instead, and do not consider it appropriate that businesses and 
consumers should be equally protected. For example in the Czech Republic, Poland and the 
United  Kingdom  the  relevant  legislation  on  business-to-business  advertising  grants  only  the 
minimum  protection  laid  down  in  EU  rules.  In  general,  the  Member  States  chose  many 
different models to transpose the Directive13.  

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While in Denmark, Sweden or the United Kingdom comparative advertising was relatively widely used 
and in France, Germany and Italy it was explicitly allowed by national case-law, albeit in a restrictive 
manner, in Luxembourg it was considered as an act of unfair competition and in Portugal it was subject 
to an ad hoc authorisation scheme. 
Directive  2005/29/EC  of  the  European  Parliament  and  of  the  Council  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  (The  Unfair  Commercial 
Practices Directive), OJ L 149 of 11.06.2005; p.22 
Directive  2006/114/EC  of  the  European  Parliament  and  of  the  Council  of  12  December  2006 
concerning misleading and comparative advertising; OJ L 376 of 27.12.2006; p. 21 
In  Bulgaria  provisions  on  misleading  and  comparative  advertising  are  included  in  the  Competition 
Protection  Act.  In  Cyprus  there  is  a  separate  Law  on  the  Control  of  Misleading  and  Comparative 
Advertisements.  Hungary 
in  business-to-business  situations  distinguishes  between  misleading 
advertising,  regulated  by  the  Act  on  the  Basic  Requirements  and  Certain  Restrictions  of  Commercial 

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Consequently,  the  level  of  protection  for  European  businesses  remains  varied  leaving 
businesses  uncertain  about  their  rights  and  obligations  in  cross-border  situations.  The 
differences between consumer and business protection systems further blur the picture.  

With  regard  to  enforcement  systems,  the  requirements  introduced  by  the  Misleading  and 
Comparative Advertising Directive are rather limited. In general terms, Member States need 
to  ensure  that  adequate  and  effective  means  exist  to  combat  misleading  advertising  and  to 
enforce  compliance  with  the  provisions  on  comparative  advertising.  This  includes  the 
obligation  to  introduce  the  possibility  of  legal  action  against  non-compliant  advertising, 
granting courts powers to order cessation or prohibition of such advertising and enabling them 
to  require  the  advertiser  to  furnish  evidence  as  to  the  accuracy  of  factual  claims  in 
advertising14. Member States currently enforce this Directive on the basis of different national 
systems.  The  crucial  difference  concerns  the  possibility  of  public  enforcement.  In  some 
Member  States,  authorities  can  take  action  against  rogue  traders,  while  in  other  Member 
States  only  victims  can  seek  redress.  Especially  in  cross-border  advertising  such  disparities 
substantially change the effective level of protection.  

An enforcement by public authorities against a trader using misleading marketing practices is 
possible  in  countries  such  as  Bulgaria,  France,  Italy,  Latvia,  Lithuania,  Romania  and  the 
United Kingdom15.  

In  other  Member  States  only  affected  companies  or  specific  associations  can  seek  court 
action.  For  example,  Austria  and  Germany  have  a  system  of  private  self-regulatory 
associations which can bring cases against traders in courts. The enforcement is based on civil 
law  actions  and  sanctions  can  involve  order  for  removal,  injunctive  relief  or  damage 
compensation. In Poland, Czech Republic and Ireland it is up to the affected company to seek 
remedies in courts, and the public authorities intervene only in cases where unfair practices 
constitute an offence under criminal law16.  

Furthermore, there is a significant jurisprudence of the European Court of Justice in the area 
of  misleading  and  comparative  advertising17.  Since  1984,  when  the  first  Misleading 
Advertising  Directive  was  adopted,  the  judgments  of  the  Court  have  provided  several 
important clarifications. Importantly, the Court started developing the notion of the "average 
consumer".  This  term  was  later,  in  2005,  codified  by  the  Unfair  Commercial  Practices 
Directive, which now governs advertising in business-to-consumer relationships.  

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Advertising,  and  other  unfair  practices,  regulated  by  the  Act  on  the  Prohibition  of  Unfair  Trading 
Practices and Unfair Competition. Latvia, Lithuania and Slovakia have separate advertising laws. 
Article 5 par. 1 and 3, and Article 7 of Directive 2006/114/EC 
In France, the consumer protection authority can conduct investigations against rogue traders and some 
offences may involve criminal sanctions. The Italian Antitrust Authority has powers to investigate cases 
of  misleading  advertising  affecting  businesses  and  to  impose  fines.  In  Lithuania,  the  Competition 
Council can impose administrative penalties. Similarly, Romania has an enforcement system where the 
Directorate General for State Aid, Unfair Practices and Regulated Prices can impose fines on traders. In 
the United Kingdom, the Office of Fair Trading can begin court proceedings for a civil injunction, but 
misleading advertising is also a criminal offence which can lead to up to two years imprisonment. 
Some cases of large-scale clearly misleading advertising practices were tackled under national criminal 
legislation against fraud. 
See in particular cases C-362/88 GB-INNO-BM; C-373/90 Criminal proceedings against X; C-126/91, 
Schutzverband  gegen  Unwesen  in  der  Wirtschaft;  C-210/96  Gut  Springenheide  and  Tusky;  C-220/98 
Estee  Lauder;  C-112/99  Toshiba  Europe;  C-44/01  Pippig  Augenotopic;  C-71/02,  Herbert  Karner 
Industrie-Auktionen; C-228/03 Gillette; C-59/05. Siemens; C 533/06 O2 Holdings; C-487/07, L'Oréal; 
C-414/06 Lidl Belgium; C-159/09 Lidl. 

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Moreover, the conditions under which comparative advertising is permitted were examined by 
the Court on several occasions. This is due to the fact that comparative advertising constituted 
a  new  form  of  marketing  in  many  Member  States  and  its  boundaries  had  to  be  drawn.  For 
example,  the  Court  outlined  the  condition  for  comparison  of  general  price  levels18  and 
interpreted the provisions regarding the comparison of products with a designation of origin19. 

3. 

PUBLIC CONSULTATION AND THE IDENTIFIED PROBLEMS 

To  gather  more  specific  information  on  misleading  marketing  practices,  the  Commission 
published a public consultation and requested detailed information from the Member States in 
the form of a questionnaire20.  

As part of this review, the Commission has not only gathered data on the overall effectiveness 
and existing problems in application of the Directive, but also collected information on wider 
issues concerning marketing practices. The assessment covered different types of commercial 
communications in business-to-business relations which have as their objective the promotion 
of goods and services21.  

This  Communication  focuses  on  misleading  marketing  practices  which  also  include 
misleading  advertising  and  marketing  techniques  which  are  not  under  the  present  definition 
easily classified as advertising. For example, it concerns situations where a commercial intent 
or  identity  of  a  trader  is  hidden  and  the  communication  pretends  to  be  a  simple  update  of 
information or a communication from the authorities. 

The  public  consultation  took  place  between  21  October  2011  and  16  December  2011, 
attracting considerable attention and a total of 280 responses. A good balance was achieved, 
both  as  regards  the  geographical  coverage22,  and  the  type  of  respondents  (16  European 
associations, 10 national authorities, 41 business organisations, 142 companies including 126 
SMEs and 38 citizens)23.  

3.1.  Most common misleading marketing practices 

The  vast  majority  of  stakeholders  focused  their  concerns  on  a  number  of  misleading 
marketing practices which are very often operated cross-border (sometimes referred to as 
mass-marketing frauds or scams)24.  

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C-356/04 Lidl Belgium. 
C-381/05 De Landtsheer Emmanuel SA. 
21 Member States responded to the questionnaire. 
This 
included  online  advertising,  environmental  claims,  comparative  advertising,  etc.  The 
Communication does not address certain contractual practices between companies mostly in the retail 
sector  which  can  possibly  be  considered  unfair  due  to  an  unbalanced  relation  resulting  from  a 
considerable  bargaining-power  of  some  market  players.  These  issues  will  be  addressed  in  the 
forthcoming initiative on unfair trading practices between businesses in the retail chain. 
The Commission received stakeholders' responses from all Member States apart from Latvia, Lithuania 
and Malta. 
The results of the public consultation: 
http://ec.europa.eu/yourvoice/ipm/forms/dispatch?userstate=DisplayPublishedResults&form=Misleadin
gAd  
The Finnish Federation of Enterprises notes that, according to a survey, 60% of self-employed traders 
received  disturbing  advertising  in  2010.  The  German  Association  against  Economic  Crime  (DSW) 
estimates the potential yearly businesses' losses resulting from those practices in Germany at around € 
340 million.  

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In  addition  to  the  most  prominent  misleading  directory  company  schemes  25,  the  following 
common practices were reported:  

•  Misleading  payment  forms  disguised  as  an  invoice  for  services  that  the  trader  has 
purportedly  already  ordered,  where  in  fact  he  has  not,  or  payment  requests  purporting  to 
come from public authorities, e.g. official trade register.  

•  Offers  to  extend  internet  domain  names  (e.g.  extension  to  other  country  domains) 
whereby  a  trader,  through  mass-marketing  techniques  provides  false  information  and 
exercises  psychological  pressure  in  order  to  conclude  a  contract.  The  trader  pretends  to 
offer  a  distinctive  service  but  in  fact  requests  abusive  prices  for  a  simple  domain 
registration that can be easily obtained through official providers at much lower prices.  

•  Offers to extend protection for trademarks in other countries employed by traders who 
use  misleading  advertising  and  provide  untruthful  information  about  the  nature  of  the 
service. In fact such protection of trademarks can only be granted by official bodies and the 
trader offers mere listing in a directory.  

•  Legal advice through an internet platform based on a marketing scheme where the service 
offered is purely based on publicly accessible free legal databases and the trader provides 
misleading  information  about  the  features  of  the  service.  There  is  therefore  hardly  any 
added-value offered by the trader, although the charged price is high.  

•  Misleading  marketing  concerning  advertising  on  social  networks  based  on  a  practice 
involving abusive prices (e.g. very expensive pay per click), whilst actually this service is 
offered by the social networks themselves at much lower rates. 

In some Member States there is a problem of traders sending invoices for services purportedly 
ordered over the phone, where in fact no contract was concluded.  

A limited number of companies responding to the Commission's consultation complained also 
about misleading environmental claims26, unfair comparative advertising practices and, more 
generally, about lack of sufficient information at the pre-contractual stage in relations between 
businesses where one of them wields important market power. 

Furthermore,  stakeholders  considered  that  misleading  marketing  practices  in  the  on-line 
context  are  a  significant  problem  and  that  there  is  an  increase  in  misleading  cross-border 
advertising  affecting  businesses.  A  growing  number  of  online  schemes  which  affect 
businesses worldwide have been identified as a new trend. 

3.2.  Misleading directory companies 

3.2.1.  History of the problem 

Among the misleading marketing practices that cause most problems to businesses in Europe, 
the issue of misleading directory companies seems to be of particular concern. Employed on a 
large  scale  and  causing  considerable  economic  damage,  these  schemes  are  by  no  means 

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See section 3.2 
A practice whereby traders falsely claim that their products have beneficial effects on the environment, 
e.g.in relation to energy efficiency. 

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new27. Nevertheless, the Internet, new mass marketing tools28 and low publication costs have 
changed the scale of the problem in recent years. The most notorious operators of this kind of 
mass-marketing techniques can reportedly send up to 6 million forms a year.  

This  issue  forms  the  basis  of  two  resolutions  of  the  European  Parliament  adopted  on  16 
December  200829  and  on  9  June  201130  which  have  vigorously  called  for  improved 
cooperation  between  the  Member  States,  review  of  the  Misleading  and  Comparative 
Advertising Directive and better protection of businesses.  

The schemes can take various forms. The most frequent practice is that misleading directory 
companies send out forms asking businesses to update details in their directories, seemingly 
for  free.  If  the  targeted  traders  sign  the  form,  they  are  then  told  that  they  have  signed  a 
contract and will be charged a yearly sum. Attempts to withdraw from the contract are usually 
refused and the companies are often pursued for the amount purportedly owed through debt 
collection agencies.  

The specific issue of misleading directory companies is a good example of a larger problem of 
various misleading schemes aimed at traders, in particular small businesses and independent 
professionals, such as doctors or plumbers. 

3.2.2.  Data on the extent of the problem 

A survey for the report commissioned by the European Parliament in 2008 documented more 
than 13,000 complaints from 16 Member States and suggested that these numbers are just the 
"tip of the iceberg"31.  

Several Member States clearly consider the problem of misleading directory companies to be 
a serious one32. Nevertheless, only a few have reliable data on its real extent. In Belgium the 
authorities received  460  complaints  in 2008, 1165 in 2009 and 1258 in 2010.  In the United 
Kingdom  there  were  1318  complaints  in  the  period  2008-2010.  The  Czech  authorities 
provided  numbers  from  their  national  business  protection  association,  which  estimates  that 
around  2000  people  were  victims  of  various  scams  of  this  type  between  2007  and  2010.  In 
Hungary  only  recently  a  large  scale  directory  company  scam  received  considerable  media 
attention.  At  the  same  time,  in  some  Member  States,  such  as  Bulgaria,  Cyprus,  Latvia  and 
Romania the problem is seemingly non-existent or unreported. 

Businesses  also  see  the  problem  as  very  significant:  almost  half  of  the  replies  to  the  public 
consultation came from companies directly affected by misleading directory schemes. SMEs 
and  independent  professionals  are  most  vulnerable  but  other  types  of  businesses  and 

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The  European  Association  of  Directory  and  Database  Publishers  (EADP),  which  represents  the 
directories industry, notes this type of unfair practices were reported even 40 years ago and one of the 
reasons for the creation of their member associations was precisely to distinguish legitimate from rogue 
traders. 
Such as direct e-mailing, websites or social media advertising, text messages. 
European  Parliament  resolution  of  16  December  2008  on  misleading  directory  companies  2008/2126 
(INI) A6-0446/2008. 
European  Parliament  resolution  of  9  June  2011  on  misleading  directory  companies  2011/0269  B7-
0342/2011. 
"Misleading  practices  of  directory  companies  in  the  context  of  current  and  future  internal  market 
legislation aimed at the protection of consumers and SMEs" IP/A/IMCO/FWC/2006-058/LOT4/C1/C6. 
In  particular  Austria,  Belgium,  Czech  Republic,  Germany,  France,  Luxembourg,  Poland,  Portugal, 
Sweden, Slovakia and the United Kingdom.  

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organisations are also affected. It is very difficult to assess the financial damage to individual 
companies but it can be estimated at between €1000 and €5000 per year for each company. 

Many small businesses also underline having suffered constant psychological harassment. For 
several years, they face a struggle under threat of legal action in a foreign jurisdiction, with 
rising "administrative costs" and constant phone calls from debt collectors, described by the 
victims as close to threats. Some respondents were also able to provide specific data to show 
the scale of the problem33.  

3.2.3.  Legislative and enforcement actions against misleading directory companies 

The Misleading and Comparative Advertising Directive covers misleading directory schemes 
but some enforcement authorities raised doubts as to whether these practices are advertising 
as,  in  reality,  hardly  any  goods  or  services  are  promoted  and  there  is  only  appearance  of  a 
commercial relation. Therefore, the application of the Directive and its effectiveness remain a 
problem.  Some  schemes  have  been  taken  to  court,  but  it  seems  that  results  were  varied.  In 
Denmark and Austria, thanks to effective cooperation between business organisations and the 
police,  as  well  as  consistent  case-law  from  the  courts,  these  schemes  have  almost  been 
eradicated  at  national  level,  but  cross-border  practices  remain  an  issue.  Authorities  in 
Belgium, France and Spain have also taken action to enforce the rules, but again, these were 
mainly at national level.  

Austria34  in  2000  and  Belgium35  in  2011  introduced  specific  legal  provisions  in  their 
legislation  targeting  the  practices  of  misleading  directory  companies.  Austria  reduced  the 
problem significantly at national level but Austrian companies are still targeted by misleading 
marketing practices originating from other Member States. In the Netherlands a help-point for 
marketing fraud was established and provides legal advice for victims. 

3.3. 

General feedback from the consultation  

Legislative action is widely supported by stakeholders. In the public consultation there was a 
very  strong  call  for  increased  protection  for  small  companies  and  independent 
professionals  against  misleading  marketing  practices36.  Furthermore,  there  is  a  virtual 
consensus  that  a  cooperation  procedure  needs  to  be  developed  for  cross-border  cases  of 
misleading  advertising,  as  the  majority  stated  that  existing  enforcement  procedures  are  not 
effective.  

This was recurring message, raised equally by small businesses, chambers of commerce and 
public authorities37. There was similarly strong support for an EU-wide instrument to protect 
businesses against the most harmful misleading marketing practices38.  

33 

34 
35 

36 

37 
38 

For example, the Danish Federation of Enterprises has been receiving at some point 200 calls per month 
regarding  this  problem.  A  Spanish  advertising  self-regulatory  body  has  received  902  complaints  over 
the  last  5  years.  The  Belgian  authorities  report  that  over  9%  of  all  complaints  (from  consumers  and 
businesses) concern misleading directory companies.  
UWG (Unfair Competition Law) Section 28a. 
Art  95-99  of  the  Belgian  Law  of  23  June  2011  on  commercial  practices  and  the  protection  of  the 
consumer. Chapter 4 Section 2: Unfair market practices in relation to persons other than consumers. 
79%  of  respondents  were  in  favour  of  strengthening  the  protection  of  small  businesses,  especially  in 
cross-border transactions.  
85% of respondents supported the creation of a cooperation procedure in cross-border cases. 
84% of respondents support EU-wide legislation against most harmful commercial practices affecting 
businesses. 

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The  consultation  also  shows  that  almost  no  Member  States  have  so  far  taken  cross-border 
action regarding misleading advertising. Several Member States consider that this is the result 
of  a  lack  of  a  structured  cooperation  system  and  the  weakness  of  the  Misleading  and 
Comparative  Advertising  Directive,  which  contains  only  general  clauses  for  assessing 
whether a commercial communication is misleading39.  

4. 

THE COMMISSION'S ASSESSMENT 

The Commission conducted a thorough investigation of the issues in relation to the marketing 
practices based on the public consultation, information gathered from the Member States and 
several complaints, and has come to the following conclusions:  

• 

• 

• 

The Misleading and Comparative Advertising Directive40 and the existing systems of 
self-regulation foreseen in Article 6 of the Directive appear to provide a rather solid 
regulatory framework for a considerable part of the business-to-business advertising 
market. In several Member States businesses have created voluntary self-regulatory 
codes and standards for advertising, which  do help in creating a level playing field 
for  fair  competition,  in  defining  good  business  practices  and  in  offering  alternative 
ways of solving disputes.  

However,  the  persistence  of  certain  large-scale  misleading  schemes  shows  that  the 
existing  mixture  of  the  EU-wide  rules  combined  with  self-regulation  needs  to  be 
strengthened to address certain clearly identifiable scams. Small businesses are most 
affected  by  such  practices,  as  their  vulnerability  is  not  much  different  from  that  of 
consumers.  At  the  same  time,  in  business-to-business  relations  the  same  level  of 
diligence is expected from small businesses and large corporations. 

Furthermore,  specific  consideration  should  be  given  to  the  interpretation  of 
comparative advertising rules where significant case-law has been developed by the 
Court of Justice of the EU. 

4.1.  Marketing practices that require legislative action at EU level 

The  scale,  persistence  and  financial  detriment  resulting  from  certain,  clearly  misleading 
marketing  practices  both  at  cross-border  and  national  level  need  to  be  addressed  in  a  more 
targeted and efficient manner at EU level.  

Primarily, the definition of advertising in the current Directive is not clear enough to stop 
current  misleading  marketing  practices  and  respond  to  future  developments.  The  Directive 
defines advertising in broad terms as a representation made in any form in order to promote 
goods or services but this definition can be imprecise as regards marketing practices disguised 
as  an  invoice  or  an  obligatory  payment.  Consequently,  affected  traders  as  well  as  national 
enforcers find it sometimes difficult to recognise that such practices are "advertising" within 
the meaning of the Misleading and Comparative Advertising Directive and hence fail to make 
proper use of it as a legal basis for action. 

39 

40 

The weakness of substantive provisions concerns mainly the criteria for assessing whether advertising is 
misleading as outlined in Article 3 of the Directive. 
Broad  definition  of  advertising  (Article  2a),  misleading  advertising  (Article  2b)  and  grounds  for 
assessing whether advertising is misleading (Article 3).  

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Furthermore,  the  test  for  determining  whether  a  practice  is  misleading  does  not  give 
sufficient legal certainty for the purpose of tackling these clearly misleading schemes41 as it 
is  broad,  general  and  open  to  different  interpretations  and  case-by-case  assessment.  An 
additional specific ban on harmful marketing practices, as for example the fact of concealing 
the  commercial  intent  of  a  communication,  in  the  form  of  a  "black-list"  would  strengthen 
legal certainty and the level of protection, without unduly affecting the contractual freedom in 
business-to-business relations.  

The  current  Directive  does  not  provide  for  a  cross-border  cooperation  procedure42  and 
therefore the national authorities have no formal basis to request an enforcement action from 
their counterparts in other Member States. Moreover, there are no established tools to share 
information about marketing practices affecting businesses in Europe.  

Furthermore,  in  some  Member  States43  national  authorities  lack  enforcement  powers  to 
stop  such  practices  in  business-to-business  relations.  Consequently,  in  cases  of  cross-
border misleading practices victims need to bring costly civil actions in foreign jurisdictions. 
Even  if  misleading  marketing  practices  are  of  a  large-scale  and  have  significant  overall 
financial  detriment,  the  only  administrative  response  is  through  criminal  investigations 
concerning  fraud  which  do  not  seem  to  bring  sufficient  results.  It  is  often  difficult  to  prove 
that misleading practices are fraud in the criminal sense as it may well appear that there is a 
service provided in return. 

National  authorities  lack  a  system  of  mutual  cooperation  and  are  not  able  to  request 
enforcement  action  from  their  counterparts  in  other  Member  States  where  misleading 
marketing  practices  endanger  the  collective  economic  interest  of  businesses.  The  purpose  is 
not  to  engage  in  commercial  disputes  and  enforce  the  rights  of  individual  companies  but  to 
intervene  in  cases  of  serious  market  failure,  when  widespread  practices  cause  harm  to 
European businesses.  

4.2. 

Comparative Advertising  

Although  in  comparative  advertising  there  is  an  inherent  risk  of  deception  with  regard  to 
compared  products  and  their  prices,  this  type  of  advertising  can  also  promote  market 
transparency  and  competition.  A  respectable  body  of  case-law  on  the  scope  of  comparative 
advertising has evolved since the enactment of the Directive on Comparative Advertising44.  

Based  on  that  case-law,  the  Commission  intends  to  look  into  the  scope  of  the  definition  of 
comparative  advertising  and  its  relation  with  certain  intellectual  property  rights  of 
competitors.  Areas  that  might  require  further  clarification  are  related  to  the  use  of  a 
competitor's  trademark  in  comparative  advertising,  the  comparison  of  products  with 
designation  of  origin  with  those  without  such  designation  as  well  as  the  conditions  under 
which  a  trader's  advertising  can  lawfully  be  based  on  a  price  comparison  solely  concerning 
certain product groups. 

41 
42 

43 
44 

Article 2 (b) and Article 3 of Directive 2006/114/EC 
For instance, a procedure similar to the mutual assistance obligations laid down in Regulation (EC) No 
2006/2004 on consumer protection cooperation.  
E.g. Czech Republic, Ireland, the Netherlands and Poland.  
C-112/99 Toshiba Europe, C-44/01 Pippig Augenoptik, C-356/04 Lidl Belgium, C-59/05 Siemens AG; 
C-381/05 De Landtsheer Emmanuel, C-533/06 O2 Holdings; C-487/07 L'Oréal SA and C-159/09 Lidl. 

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5. 

FUTURE STEPS 

The  Commission's  assessment  of  problems  around  the  Misleading  and  Comparative 
Advertising  Directive  shows  that  legislative  action  is  necessary  as  the  current  legislative 
framework  has  several  deficiencies,  both  as  regards  substantive  rules  and  enforcement 
(procedural  rules).  The  Commission  therefore  intends  to  table  a  proposal  to  strengthen  the 
protection of businesses  against cross-border misleading marketing practices. This proposal, 
to amend the Misleading and Comparative Advertising Directive, will be complemented by a 
forthcoming  initiative  addressing  unfair  trading  practices  between  businesses  in  the  retail 
chain.  

This  revision  of  the  Directive  will  target  specific  areas  of  concern.  It  will  clarify  the 
interplay of the Directive with the Unfair Commercial Practices Directive. It will also focus 
on  improving  the  effectiveness  of  cross-border  enforcement,  including  cooperation  among 
competent authorities of Member States, and strengthening the key substantive provisions. It 
will  respond  to  businesses'  needs  while  at  the  same  time  not  creating  any  unnecessary 
administrative burden45. The Commission will also step up enforcement and create an ad-hoc 
working group of national enforcers with immediate effect.  

5.1. 

Stepping up enforcement of existing rules as an immediate action  

Notwithstanding the limitations of the current legislative framework on misleading marketing 
practices  in  business-to-business,  the  Commission  will  push  for  better  enforcement  on  the 
basis of existing provisions.  

As  a  first  step  and  in  parallel  with  its  legislative  work,  the  Commission  will  step  up 
enforcement  of  the  Misleading  and  Comparative  Advertising  Directive.  To  this  end,  it  will 
explore with the Member States what measures can be taken within the existing provisions to 
improve the situation of businesses before a new proposal enters into force. 

In order to facilitate the cooperation of Member States, the Commission will create within the 
next  months  an  ad-hoc  working  group  of  national  enforcers  and  key  authorities  to 
exchange information on large-scale misleading marketing practices and to further coordinate 
enforcement activities.  

The European Commission will: 

-  Set up, as from now, an ad hoc network of authorities to step up enforcement of the 

Misleading and Comparative Advertising Directive and share information. 

5.2. 

Putting forward a legislative proposal 

5.2.1.  New substantive rules on misleading marketing practices 

Alongside  better  enforcement  and  cooperation,  businesses  clearly  also  need  additional 
substantive  rules  clarifying  the  legal  position  and  targeting  the  most  harmful  misleading 
marketing practices affecting them across Europe. 

45 

The  foreseen  actions  will  be  subject  to  a  full  impact  assessment  and  to  the  rules  set  in  the  financial 
framework proposed by the Commission. 

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In  particular,  the  scope  of  the  Directive  should  be  clarified  so  that  a  general  clause 
unambiguously covers and prohibits all different types of misleading marketing practices.  

The  introduction  of  a  new  definition  of  misleading  marketing  practices  will  clarify  the 
scope of the Directive and better serve the purpose of business protection as it would better 
cover  situations  where  a  marketing  practice  is  not  easily  recognised  as  typical  advertising. 
This  will  eliminate  confusion  and  establish  legal  certainty.  Some  specific  advertising 
practices, such as green claims46, could also require additional, clear definitions in view of the 
reported misleading practices in this area47. 

Moreover,  the  Commission  envisages  strengthening  the  protection  granted  by  the  general 
clauses  in  the  Directive  by  introducing  an  additional  layer  of  protection,  which  will  also 
facilitate clearer enforcement, in the form of a black-list of banned misleading marketing 
practices.  Consequently,  the  future  legislative  instruments  would  be  based  on  a  two  tier 
system of prohibition with a general clause covering all misleading marketing practices and a 
specific black-list of the most harmful schemes in business-to-business relations.  

In particular such a black-list would entail an upfront ban on misleading marketing practices 
such  as  concealing  the  commercial  intent  of  a  communication,  the  identity  of  a  trader  or 
material  information  on  the  consequences  of  the  reply  to  a  communication.  Additionally, 
disguising  a  commercial  communication  as  an  invoice  or  obligatory  payment  should  be 
clearly prohibited. The Commission will also examine solutions at national level, such as in 
Austria  and  Belgium,  where  specific  provisions  prohibit  either  a  number  of  misleading 
marketing practices or solely the practices of the misleading directory companies.  

The  Commission  intends  to  examine  the  possibility  of  strengthening  penalties  for 
infringements  of  national  provisions  applied  under  the  Directive.  Any  such  new  proposal 
would  require  Member  States  to  ensure  that  penalties  for  misleading  marketing  practices  in 
business-to-business relations are effective, proportionate and dissuasive48.  

The  Commission  also  envisages  further  clarifying  rules  on  comparative  advertising,  in 
particular as regards price comparison and the relation between comparative advertising and 
intellectual property rights.  

The European Commission intends to revise the Directive in order to: 

-  Clarify  its  scope  by  introducing  a  clearer  definition  of  misleading  marketing 

practices; 

- 

- 

Introduce a black-list of the most harmful misleading marketing practices; 

Introduce  effective,  proportionate  and  dissuasive  penalties  for  infringements  of  the 
national provisions adopted in application of the Directive;  

-  Clarify certain aspects of comparative advertising based on the jurisprudence of the 

Court of Justice. 

46 

47 

48 

Advertising claims that the product is more beneficial or less harmful to the environment than products 
offered by competitors. 
In  parallel,  the  Commission  intends  to  recommend  best  practices  based  on  a  life  cycle  approach  and 
adequate methodologies, like the upcoming European harmonised methodologies for the calculation of 
the Environmental Footprint of Products (PEF) and Organisations (OEF) 
Similar to Article 13 of Directive 2005/29/EC on Unfair Commercial Practices. 

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5.2.2.  New enforcement cooperation procedure 

In order to address the divergent national enforcement systems and the absence in the existing 
Directive of a basis for efficient cross-border cooperation, the Commission intends to create 
an  enforcement  cooperation  procedure  in  this  field  that,  whilst  creating  minimal  additional 
costs, allows enforcers to efficiently react whenever cross-border problems become systemic, 
affect  the  collective  interest  of  businesses  in  Europe  and  evidently  breach  the  rules  of  fair 
trading and good commercial practices.  

The Commission therefore intends to propose an enforcement cooperation procedure that 
will serve the purpose of business protection in the area of misleading marketing practices..  

In  order  to  establish  a  clear  basis  for  cross-border  enforcement  action,  an  explicit  mutual 
assistance  obligation  would  be  introduced  in  the  legislative  proposal.  Moreover,  specific 
provisions will require Member States to designate authorities with ex officio enforcement 
powers  for  the  correct  and  effective  implementation  of  the  Misleading  and  Comparative 
Advertising Directive. This means that the Member State could also extend powers of existing 
authorities in the field of consumer protection or competition49 and not necessarily introduce 
new  administrative  bodies.  An  online  application  for  exchange  of  requests  would  ensure 
swift, secure and cost-effective cooperation without much additional burden and costs for the 
Member States. The existing Internal Market Information System (IMI) could be used for this 
purpose.  

Finally,  the  Commission  will  also  seek  cooperation  at  the  international  level  to  ensure  that 
European  businesses  are  not  targeted  by  misleading  marketing  practices  originating  from 
outside Europe50. 

In the context of the legislative revision, the European Commission intends to: 

-  Create  an  enforcement  cooperation  procedure  (enforcement  network)  grouping 
national enforcement authorities in charge of the legislation protecting businesses to 
cooperate in cases of cross-border misleading marketing practices; 

- 

- 

Introduce mutual assistance obligations for the Member States entailing the explicit 
possibility of requesting enforcement measures in cross-border situations; 

Introduce  provisions  that  will  require  Member  States  to  designate  an  enforcement 
authority in the area of business-to-business marketing.  

49 

50 

The  viability  of  extending  the  scope  of  existing  cooperation  procedure  such  as  the  mechanism 
established  by  Regulation  (EC)  No  2006/2004  on  the  Consumer  Protection  Cooperation  to  some 
business-to-business practices or the option of establishing a new dedicated cooperation procedure will 
be assessed.  
For  example  such  cooperation  could  take  place  in  the  framework  of  the  International  Consumer 
Protection and Enforcement Network (ICPEN) 

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6. 

CONCLUSIONS 

Small and medium-sized enterprises created 85% of net new jobs in the EU between 2002 and 
201051. They hold  the  potential  to  grow  and create new jobs, which is exactly what Europe 
needs in times of economic uncertainty. In order to flourish and expand in the Single Market, 
all businesses need a friendly regulatory environment that will not only secure their economic 
freedom  but  also  guarantee  security  in  transactions  with  other  traders.  Small  businesses,  in 
particular, also need basic security against misleading marketing practices.  

The  Commission  therefore  intends  to  propose  specific  changes  to  the  Misleading  and 
Comparative Directive with a view to eliminate harmful misleading marketing practices in the 
business-to-business sector, such as the schemes of misleading directory companies. For this 
purpose, the Commission will present a targeted legislative proposal and will step up actions 
to ensure that existing rules are properly enforced.  

51 

"Do SMEs create more and better jobs?", A study on SMEs' impact on the EU labour market prepared 
by  EIM  Business  and  Policy  Research  with  financial  support  from  the  European  Commission. 
Zoetemeer, November 2011.  

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