Source: http://www.howtocrackanut.com/blog/2015/12/cjeu-companies-cannot-mislead-consumers.html
Timestamp: 2017-10-22 17:05:38
Document Index: 697716529

Matched Legal Cases: ['CJEU ', 'CJEU ', 'Art 9', 'Art 11', 'Art 10', 'CJEU ', 'CJEU ', 'CJEU ', 'Art 11', 'Art 11', 'CJEU ', 'CJEU ', 'CJEU ', 'Art 11', 'CJEU ', 'CJEU ', 'CJEU ', 'CJEU ']

CJEU: companies cannot mislead consumers under their 'freedom of expression' (C-157/14) — How to Crack a Nut
In its Judgment of 17 December 2015 in Neptune Distribution, C-157/14, EU:C:2015:823, the Court of Justice of the European Union (CJEU) addressed whether companies making potentially misleading claims about their products could be protected under a right to 'freedom of expression and information'. In short, the CJEU assessed whether companies could issue commercial statements apt to mislead consumers and still be protected under that type of 'corporate human right'.
This is a global issue, and the relevance of this problem has been picked by mainstream media, such as John Oliver's piece on an episode of HBO's Last Week Tonight in 2014. Interestingly, the CJEU ended up rejecting the idea of affording protection to companies that potentially mislead consumers in breach of EU foodstuffs law, but only after assessing their claims under a strict proportionality test. Its reasoning, which falls quite short from resolving the issue once and for all, deserves some analysis.
In Neptune Distribution, the contested claims concerned the presentation of carbonated water as low or very low in salt or in sodium in a manner contrary to Art 9(1), 9(2) and Annex III of Directive 2009/54 on the exploitation and marketing of natural mineral waters, when read together with the annex to Regulation No 1924/2006 on nutrition and health claims made on foods. The main issue was that, in the way they were advertised (eg per comparison to milk, or by establishing claims as to the different effects of sodium chloride and sodium bicarbonate), the mineral water products sold by Neptune could be perceived by consumers as '(very) low salt/sodium' despite actually (significantly) exceeding the the limits for the amounts of sodium or the equivalent value for salt laid down by the relevant EU legislation.
Remarkably, Neptune claimed that its marketing statements were protected by freedom of expression and information under Art 11 of the Charter of Fundamental Rights of the EU and corresponding rules under the European Convention on Human Rights (ECHR, Art 10). The CJEU does not disagree with this general approach. The CJEU indeed recognises that there is significant scope for protection of corporate claims, including marketing claims, under their right to freedom of expression and information. As the CJEU stresses, the freedom of expression and information enshrined in Art 11 of the Charter 'applies, inter alia, as is clear from the case-law of the European Court of Human Rights, to the circulation by an entrepreneur of commercial information in particular in the form of an advertising slogan' (para 64).
Therefore, Art 11 Charter protection can be claimed in relation to 'the use by a business, on packaging, labels and in advertising for natural mineral waters, of claims and indications referring to the sodium or salt content of such waters' (para 65). This results in the fact that '[t]he prohibition on the displaying on the packaging, labels and in the advertising for natural mineral waters of any claim or indication referring to the fact that such waters have a low sodium content which may mislead the consumer as to that content is an interference with the freedom of expression and information of the person carrying on that business and with his freedom to conduct that business' (para 67, emphasis added).
Even if technically correct de lege data, I find this approach criticisable in itself because it recognises a type of strong 'corporate human right' to freedom of expression and information that seems unwarranted in view of the extremely weak (if not inexistent) link between the development of commercial activities and the exercise of (properly understood) civil and political liberties [see the main arguments in A Sanchez-Graells and F Marcos, "'Human Rights' Protection for Corporate Antitrust Defendants: Are We Not Going Overboard?", in P Nihoul and T Skoczny (eds), Procedural Fairness in Competition Proceedings (Cheltenham, Edward Elgar, 2015) 84-107].
However, in a line of argument that clearly restricts the general approach outline above, the CJEU also recognises that such interference with corporate freedom of expression can be compatible with the applicable rules under the Charter and the ECHR if it serves a valid social purpose, not least because 'the freedom to conduct a business ... must be considered in relation to its social function' (para 66). In that regard, the CJEU considers that 'While those freedoms may nevertheless be limited, any limitation on their exercise must ... be provided for by law and respect the essence of those rights and freedoms. Furthermore ... subject to the principle of proportionality, limitations may be made only if they are necessary and genuinely meet objectives of general interest recognised by the European Union or the need to protect the rights and freedoms of others' (para 68).
In the assessment of the proportionality of the measure restricting Neptune's right to make any claims whatsoever about its products, the CJEU focusses on three aspects. First, that the restriction is created by law. Second, that 'the freedom of expression and information of the person carrying on the business is not affected by those provisions, since they merely make the information which may be communicated to the consumer regarding the sodium or salt content of natural mineral waters subject to certain conditions' (para 70). And, third, that 'far from prohibiting the production and marketing of natural mineral waters, the legislation at issue ... merely controls, in a very clearly defined area, the associated labelling and advertising. Thus, it does not affect in any way the actual content of the freedom to conduct a business' (para 71). This comes to establish that, provided that the restriction is not absolute and that it derives from a legal source, then a claim under Art 11 Charter is unlikely to prosper. However, this will not always be the case and, in particular for products other than foodstuffs, compliance with all these conditions may be difficult to achieve--particularly if the products are totally unregulated, which makes the first condition difficult to achieve unless general consumer protection or unfair competition rules fill that possible regulatory gap.
Further to these general considerations, the CJEU also assesses the purpose and proportionality of the restrictions. In that regard, it gives particular weight to several factors related to the fact that the 'limitations on the use of the claims and indications ... aim to ensure a high level of consumer protection, to guarantee adequate and transparent information for the consumer relating to the sodium content of drinking water, to ensure fair trading and to protect human health' (para 72), In particular,
75 ... the determination of the validity of the contested provisions must be carried out in accordance with the need to reconcile the requirements of the protection of those various fundamental rights protected by the EU legal order, and striking a fair balance between them ...
76 With regard to judicial review of the conditions of the implementation of the principle of proportionality, the EU legislature must be allowed a broad discretion in an area such as that involved in the present case, which entails political, economic and social choices on its part, and in which it is called upon to undertake complex assessments ...
77 ... even if a claim or indication referring to the sodium content of natural mineral waters associated with chloride ions can be regarded as being substantively correct, the fact remains that it is incomplete if it suggests that the waters are low in sodium whereas, in reality, their total sodium content exceeds the limits provided for by EU legislation ...
78 In such a situation, the information displayed on the packaging, labels and in advertising containing that claim or indication may mislead the consumer as to the sodium content of the mineral waters ... (C-157/14, paras 75-78, references omitted).
There is a final step in the analysis concerning certain claims of Neptune that EU legislation was unnecessarily restrictive, which the CJEU sorts out by deferring to the EU legislator's action under the precautionary principle. Thus, overall, the CJEU has no qualms in restricting the previously recognised corporate right to freedom of expression and information on the basis of a pretty straightforward analysis of the labelling requirements coupled with a high degree of deference on the basis of the precautionary principle.
Overall, the outcome of the case must be welcome (and follows some other positive developments in EU food law). However, in my view, the trouble is in the process that the CJEU had to follow before upholding the restrictions on labelling of mineral waters for consumer protection health-related reasons. It would seem to me that these issues would be better reconducted under a standard case of judicial review of the administrative action and the underpinning legal rules imposing labelling requirements. In that regard, it seems quite clear that Neptune would not have had legal standing to challenge the European rules on mineral water labelling. However, it managed to trigger the same level of judicial review through a claim of corporate human rights (certainly artificially overblown). Is it time to reconsider, once and seriously, a change in the rules for judicial review of EU acts, or are we better off by indulging endlessly in this ridiculous discussion on corporate human rights?
Tags CJEU, EU:C:2015:823, consumer protection, food law, food warning
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