Source: http://www.polish-translation.biz/links/consumer-protection-in-e-commerce/thesis-consumer-protection/consumers.html
Timestamp: 2017-12-13 03:40:55
Document Index: 246340475

Matched Legal Cases: ['§3', '§ 3', '§3', 'art 4', 'art 384', '§3', '§1', '§ 2', '§1', '§3', '§1', '§1', 'art. 2', 'art. 2']

Due to the fact that law provides consumers with some privileges (for instance duty of providing information, cool off period, etc…) it is very important to determine who exactly belongs to this privileged category in order to determine whether in a particular situation one of parties is entitled to such privileges or not.
Term “consumer” already has its well-established meaning. Usually consumer is described as: one who uses an article made by another30, person who uses goods31, one that utilizes economic goods32 or a person who purchases goods and services for his own personal needs33. There are two important elements supplementing these definitions that allow to achieve more precise picture of this ambiguous concept.
First is “consumer” being contrasted with “producer”34 who is presented as one who produces, a farmer or a manufacturer35, person who produces goods36, one that produces; esp. one that grows agricultural products, manufactures crude materials into articles of use37 or a person or business enterprise that generates goods or services for sale38.
Secondly, while verb “consume”, as having very broad meaning, does not help in obtaining more precise view of who consumer is; than strictly defined term “consumer goods” certainly does. It’s usually presented as: goods to be used, without further manufacturing process, to satisfy human needs39, goods that directly satisfy human wants40 goods which directly satisfy human needs and desires (eg. food and clothing) (opposing to capital goods, eg. factory equipment)41.
What’s usually mentioned while describing consumer as a passive participant of the market is his position of the “last chain” (which could be described as “final consumer” – German Endverbraucher) in the circulation of products on the market. Nonetheless description of a consumer as of a person purchasing product for the sole purpose of using it to satisfy his own and his family needs, although presenting a typical situation, nevertheless constitutes a rule with many exceptions. Rapidly developing market of consumer to consumer transactions, taking very often form of auctions – albeit not being limited to them, constitutes the best proof of such exceptions.
The law of European Union is neither clear nor unambiguous in determining the scope of the term consumer. As professor M. Dauses wrote EC law does not poses any exhaustive definition of the term consumer. As a result of this fact what’s usually used is description of partly economic and partly political nature, due to which consumer is described as an addressee of all activities undertaken by offerors of consumer goods aiming at their sale. Such a definition was supplemented by European Parliament with description of a consumer as an individual entity, which acts for the purpose of a particular transaction out of scope of trade or profession.42
In fact there is one definition which dominates in Communities’ secondary law:
“consumer” means any natural person who, in contracts covered by this Directive, is acting for purposes which are outside his trade, business or profession43
Despite differences between particular directives their comparison may lead to some general conclusion. To ascertain that we deal with a consumer three preconditions must be met – these preconditions include simultaneous existence of three elements:
I’m strongly convinced that reasonable is limiting the scope of special protection offered by consumer law only to natural persons, such approach is represented in most acts of EC law. Only Directive on package travel, departs from this “natural person” approach in article 2.4 defining consumer as: the person who takes or agrees to take the package (‘the principal contractor’), or any person on whose behalf the principal contractor agrees to purchase the package (‘the other beneficiaries’) or any person to whom the principal contractor or any of the other beneficiaries transfers the package (‘the transferee’).
Nevertheless the minimal nature of directives allows Member States to introduce higher level of consumer protection, what may mean covering also other subjects with the same protection as received by consumers. Nonetheless also in the Polish law, the new article 221 of the Polish Civil Code, contrary to derogated article 384§3, limits the notion of a consumer only to natural persons.
Extension of consumer protection, onto subjects other than natural persons, is not just a theoretical possibility – for instance in France and Denmark such protection was extended onto wider category of subjects (in France, for instance, onto political parties).44
Situation is clearer on the other side of Atlantic, as all pieces of legislation in the US relating to consumers’ protection in e-commerce, define consumer as “an individual”45 what leaves out anyone but natural persons, moreover evidently cover management of personal and family investments with consumer protection.46
Communities’ law is rather vague on this point, what could be suggestive is mention in directive on e-commerce which in article 3.4.a.i.paragraph 4 says about consumers, including investors, what could indicate that in the other articles term “consumer” does not comprise investors. On the other hand directive 2002/65 definitely covers also financial services which belong to investments47, granting thus protection to those natural persons who conduct such transactions for purposes which are outside their trade, business or profession. Although it may be possible to find transactions which could be considered as investment nevertheless are not covered by directive 2002/65, moreover this directive covers only the issue of distance marketing of such transactions.
Some of these doubts may be seen in opinion presented by W. Szpringer who defines consumer as usually a minor client, natural person, for instance a petty saver but not a institutional investor (…) What’s characteristic for a consumer is that he doesn’t act as an entrepreneur.48
According to the ECJ, determination of whether a person has the capacity of a consumer rests on an objective evaluation of relationship between the person and concerned contract. Reference must be made to the nature and aim of the contract and not to the subjective situation of the person concerned. In other words, what is relevant is not the actual use made of the purchased product but rather the purpose of the contract. As ECJ held in aforementioned case C269/95 (Benincasa) only contracts concluded for the purpose of satisfying an individual’s own needs in terms of private consumption are embraced by articles 13-15. Moreover, the concept of consumer does not encompass a person who entered into a contract “with a view to pursuing a trade or profession, not at the present time but the future”.
Aforementioned regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters states which transactions are covered. Presenting three potential situations where jurisdiction is determined by the Section 4 of Regulation – Jurisdiction over consumer contracts, these three cases are:
in all other cases, the contract concluded with a person who pursues commercial or professional activities in the Member State of the consumer’s domicile or, by any means, directs such activities to that Member State or to several States including that Member State, and the contract falls within the scope of such activities.
It’s rather unquestionable that company which offers sale of goods or services over a website to residents of a particular Member State directs its activities to that Member State. Here we come to the last necessary element – right contracting party.
Transactions concluded between two consumers (two persons acting out of their trade or profession) are not covered by typical consumer protection. The very idea of consumer protection assumes imposition of greater responsibility onto one subject because its position is somehow stronger – what may be a result of a better access to information, economical potential, professional knowledge which such an entrepreneur possesses or at least ought to posses.
Service provider means any natural or legal person providing an information society service. Directive on e-commerce distinguishes besides “average” service providers also their qualified form – established service provider – what means service provider who effectively pursues an economic activity using a fixed establishment for an indefinite period. The presence and use of the technical means and technologies required to provide the service do not, in themselves, constitute an establishment of the provider;
Recipient of the service – any natural or legal person who, for professional ends or otherwise, uses an information society service, in particular for the purposes of seeking information or making it accessible.
While it’s certain that entrepreneur may play both roles of service provider as well as of service recipient, and do it even at the same time. For example person who wants to establish Internet shop needs to obtain services of provider of access to communication network (Inernet access provider) and in most cases he’ll need to place his webpage on someone’s server (use so called hosting). At the same time as a person running an Internet shop in contacts with consumers he’ll act as a service provider.
Consumers may act only as recipients of the service, and absolutely cannot act in character of established service providers or even that of service providers. Even if a consumer runs a private webpage it still doesn’t constitute a information society service, as hobbyist webpages cannot be treated as a service normally provided for remuneration. Once a person builds such a webpage for the purpose of placing paid advertisements (banners, etc…) than he cannot take advantage of protection provided by consumer law.
What is important in the light of ECJ’s judgements – for instance Case C-269/95 between Francesco Benincasa and Dentalkit Srl is the fact that the specific protection granted by consumer law is unwarranted in the case of contracts for the purpose of trade or professional activity, even if that activity is only planned for the future, since the fact that an activity is in the nature of a future activity does not divest it in any way of its trade or professional character (C-269/95, point 17) – it has un-consumer nature from the very beginning, not for example from the moment of placing the first advertisement, etc…
Not only notions – of service provider and recipient – are used in the act on providing services by electronic means, in the same way as in directive 2000/31, also the notion of a consumer in Polish law does not differ from this adopted in most of directives.
Similarly as in EC law also in Poland there is no one universal definition of a consumer. The most important among statutory definitions is one in the Civil Code. For the first time such definition had been introduced to the Civil Code on the 1 of July 2000 by the Act on the protection of some of consumers’ rights50 which besides other amendments to article 384 of the Civil Code introduced § 3 saying that: as a consumer is considered a person who concludes a contract with an entrepreneur for a purpose not directly connected with running a business.
This definition covered not only natural persons but also organizations; still it could be understood in many ways. J. Kolczyński suggested that a kind of presumption of consumer nature of transaction; saying that everyone ought to be regarded as a consumer besides professionals in professional transactions.51
More moderated opinion expressed W. Kocot, who suggested presumption that a party dealing with a professional is a consumer, burden of proof laying here on the professional as he derived legal consequence of the fact that the other contracting party is not a consumer. This burden of proof was a consequence of the phrase: “as a consumer is considered person who…” Assumption of such a rule would let court to determine consumer nature of a transaction basing on the contracting party’s statement that he concluded the contract acting as a consumer (for a purpose not connected directly with business), unless another party proved something different.
W. Kocot suggested also some circumstances which may help in establishing direct connection between running a business and the aim of concluding a contract. To such circumstances belong for instance: amount and kind of purchased goods, delivery address, nature of transactions so far concluded between these parties, etc.…52
As E. Łętowska wrote – idea of covering by consumer protection also commercial entities entering transaction for a purpose not connected directly with business is justified because a lack of knowledge and experience in such transactions determines that even a commercial entity is as vulnerable as a typical consumer.53
However even E. Łętowska questioned appropriateness of extending protection granted by consumer law onto commercial entities in some cases – for instance in distance contracts. This idea, rather questionable in the context of enterprises, could be seriously considered in relation to nonprofit organizations (associations, foundations, etc..) especially these not conducting business activity.
Presently situation became even more complex as the Act amending the Civil Code and some other acts of 14 February 2003, which entered in force on 25 September 2003 (Dz.U.2003.49.408) removed definition of consumer from the article 384, adding instead article 221 saying that as a consumer is considered a natural person undertaking a legal action not connected directly with its business or profession. This regulation presents a significant change in consumer law. The most noticeable is limitation of consumers only to natural persons, what means a turn towards mainstream of European regulations. However there are two other important innovations, since 25 of September to obtain a status of consumer it is not necessary to conclude a contract – any legal action not connected directly with its business or profession suffices. Last but not least legislator introduced important distinction between business and profession activities – considering lack of statutory explanation of the meaning “professional activity” this may lead to excessive narrowing down of subjective scope of consumer protection54.
Nonetheless previous definition has not disappeared form the Polish legal system – it is still used in the Act on the Trade Inspection (article 2.6) and in the Act on protection of competition and consumers – its article 4.11. contains definition of a consumer identical to that used in article 384 §3 of the Civil Code; though the draft act amending the act on protection of competition and consumers amends also the definition of consumer – instead of providing its own definition art 4.11 refers to the Civil Code55.
Even before introduction of article 221 into the Civil Code some acts limited the scope of the term consumer to natural persons only. Chronologically first was an act on consumer credit – its article 2.4 presents consumer as: natural person concluding a contract with an entrepreneur for a purpose not connected directly with business.
Another example is presented by the act on special terms of consumer sale its article 1 expressis verbis limits the scope of application only to natural persons; however this act uses the notion “purchaser of consumer goods” instead of consumer. As may be read in the official introduction to the draft of this act – legislator intentionally avoided defining the term consumer as a compromise between exact implementation of directive 1999/44 into the Polish legal system and reluctance to introduce definition different from this already present in the derogated art 384 §3 of the Civil Code.
Second – was the act of 19 November 1999 – its article 2 contains two important definitions. In §1 is defined business activity itself, it’s described as paid activity belonging to: production, trade, construction, services and prospecting, identification and utilization of natural resources conducted continuously and in an organized manner.
§ 2 defines entrepreneur as: natural person, legal person or commercial company without a status of legal person professionally undertaking and conducting on its own business activity described in §1 of the same article. Accordingly to article 2 §3 for the purpose of performed by them business activity described in §1as entrepreneurs are considered also partners of a civil partnerships.
This article defines entrepreneur as a: natural person, legal person or other organizational unit described in article 331§1 of the Civil Code57, conducting on their own behalf business or professional activity.
So definition contained in the Civil Code bases on two criteria: subjective and functional. The former limits entrepreneurs to natural persons, legal persons and organizational units without the status of a legal person enabled however with legal capacity – such enumeration excludes civil partnerships from the list of entrepreneurs. The latter indicates qualities which must characterize entrepreneur’s activity. It must be permanent, paid, activity belonging to production, service or trade. Such approach excludes any activity run on behalf of someone else.
This depiction of entrepreneur is more up to date than that from the article 2 of the act on business activity; very significant here is distinction made between business and professional activity. It breaks with approach of treating every individually conducted, paid activity as business. It wasn’t appropriate in these cases where the result of activity is strictly intellectual like in case of: solicitors, physicians, etc… Thus article 431 appropriately notices that some kinds of activity may be described as business activity while others have professional nature and these two do not have a common denominator.58
Both these acts encompass with their scope both natural and legal persons. Differently they regulate the problem of other entities, while accordingly to article 431 of the CC as entrepreneur may be treated every organizational entity granted by law with the legal capacity, than the act on business activity attributes this quality only to commercial companies without a status of legal person. Both regulations exclude from the scope of entrepreneurs civil partnerships – the act on business activity expressly says that as entrepreneurs are considered partners of the civil partnership – what indicates exclusion of this partnership as such. Definition contained in article 431 of the CC contains reference to article 331 which does not cover civil partnerships.
Both regulations indicate, as a circumstance distinguishing entrepreneurs from the other subjects of the civil law, conducting business activity on their own behalf. Differences concern the scope of this activity. Article 2 of the act on business activity defines such activity as activity belonging to: production, trade, construction, services and prospecting, identification and utilization of natural resources, most likely this list encompasses all potential categories of business and is equal to the scope of article 431 of the CC. However the definition of conducting business activity is narrowed by article 3 of the act on business activity which excludes from the scope of this act multiple categories of activities mostly belonging to widely understood agriculture. This solution at the same time not only limits the scope of application of this act but also significantly limits the scope of the notion “entrepreneur” as defined by this act which applies only to this act “art. 2 expressly says “for the purpose of this act…”. On the other hand the definition in the Civil Code does not contain any limitations like this and consequently encompasses all kinds of business activity.
Moreover art. 2.1 of the act on business activity enumerates three qualities which must characterise business activity – which are: paid nature, conducted continuously and in an organized manner. The expression paid nature (“zarobkowość”) is typically understood as activity not only provided for remuneration but also for the purpose of yielding profit. Contrary – article 431 of the Civil Code does not contain such limitation what enables to rate among entrepreneurs also non-profit organizations conducting business activity.
The notion of entrepreneur adopted in the act on business activity requires that the activity of entrepreneur ought to be somehow registered (article 7 says that “entrepreneur may undertake business activity after being registered in the register of entrepreneurs”) – again there is no such requirement in article 431 of the CC.\
Reasons and consequences of broad depiction of “entrepreneur” in the Civil Code
Contrary, the Civil Code regulates relationships between private entities whose mutual relationships are based on principles of equity and contractual freedom. Fair and efficient realisation of these principles requires much broader definition of “entrepreneur”.
Nonetheless, the main motive for incorporation of such definition into the Civil Code was connected with approximation of Polish legal system to requirements of the EU law. What is also worth mentioning is fact that the present definition of entrepreneur is synchronised with contained in article 221 of the Civil Code definition of consumer – both base on the same criterion – professionalism of contracting party.
Act on providing services by electronic means covers not only business to consumer e-commerce but also business to business transactions. That’s why it is important to establish what are relations between used in this act terms of service provider and service recipient and that of consumer (and entrepreneur). These relationships are similar as in the directive 2000/31, both service provider and service recipient may be natural as well as legal persons. The notion of service provider practically mirrors that of an entrepreneur, without any express requirement of being conducted continuously it is closer to definition of entrepreneur from the article 431 of the Civil Code (such a proximity may be also deducted from expression “paid or professional activity” used in article 2.6 of the act on providing services by electronic means).
The notion of “service recipient” covers every subject using services provided by electronic means and as such may concern either a consumer or an entrepreneur what depends on two factors: whether recipient of the service is natural or legal person and the purpose he uses such a service for. Again, like in the case of directive 2000/31, while entrepreneur may act at the same time as a service recipient (in relation to service provider) and a service provider in relation to other subjects; whereas consumer may play only role of a service recipient.
Such standards result from conclusions gathered during many years of European Court of Justice’s work as well as from opinions worked out by jurisprudence. Two main approaches are paternalistic and liberal model of consumer. What makes the choice between those two more difficult is disparity between standards traditionally applied in several member states.
Or respectively those two alternative approaches to consumers’ standards may be described by contrasting confident consumer with circumspect one. The former one is favoured by directives (for instance directive on product safety) introducing notion of justified expectations of a consumer. The later attitude predominates in directives putting stress on transparency, moment of concluding a contract and right to withdraw from it. As examples may be given here directives: 85/577, 92/59 or especially relevant here Directive 97/7.63
As prof. M. Dauses says : EC law doesn’t have any clear standard of a customer what results from the fact that till introduction of article 129a by Treaty on European Union consumer protection was seen as just one of many aspects of free market’s realization. What could be construed from ECJ’s judgements is that it prefers average, adult consumer who is able to understand information directed to him and act in a reasonable way.
What confirms such a thesis are multiple ECJ’s judgments on products labelling trying to strike a balance between market freedoms and consumer protection, ad which are based on information about the product which ought to be clear and easily obtainable to everyone interested in purchasing such a product in question.
This required answer is changing, what’s neither strange nor undesirable. On the one hand all of us, what also means all consumers, live in constantly changing situation as all Community undergoes constant evolution.
On the other hand consumers themselves are also changing. It results not only from changes in surrounding them environment but also from conscious actions of Community’s authorities which take care of providing consumer with information and education what constitutes part of their duty since the first long term plan from 1975.
For the very promotion of consumers’ interests and providing them with a high level of protection, accordingly adopted in form of general framework of activities, for the period from 1 January 1999 to 31 December 2003 they are provided for that purpose with EUR 112,5 million.65
ECJ since nineteen eighties maintained that standard of a consumer, as well as consumers’ customs and habits are not something constant. For example in case 178/84 (Commission of the European Communities v Federal Republic of Germany) the Commission brought an action under article 169 of the EEC treaty for a declaration that, by prohibiting the marketing of beers lawfully manufactured and marketed in another member state if they do not comply with articles 9 and 10 of the Biersteuergesetz (law on beer duty) (law of 14 march 1952, Bundesgesetzblatt i, p . 149 ), the federal republic of Germany has failed to fulfil its obligations under article 30 (article 28 now) of the EEC treaty.
Article 9 (1) of the Biersteuergesetz provided that bottom-fermented beers may be manufactured only from malted barley, hops, yeast and water . Article 9 ( 2 ) laid down the same requirements with regard to the manufacture of top-fermented beer but authorized the use of other malts. In the view of German government, consumers associated the designation “bier” with a beverage manufactured from only the raw materials listed in article 9 of the Biersteuergesetz.
ECJ responded that consumers’ conceptions which vary from one member state to the other are also likely to evolve in the course of time within a member state. The establishment of the common market is, it should be added, one of the factors that may play a major contributory role in that development. It also revoked the case 170/78 Commission v United Kingdom (( 1980 )) ecr 417 ), where ECJ held that: the legislation of a member state must not crystallize given consumer habits so as to consolidate an advantage acquired by national industries concerned to comply with them.
Standard may be something likely to evolve during the span of time but it is also is something measurable, and it’s absolutely possible to carry out research checking for example what percentage of consumers was mislead by a particular advertisement. However too often usage of this method would be unpractical, thus what’s required is theoretical standard of a consumer which could be used for a purpose of assessing informational obligations in a particular situation.
If it is consumers’ actual expectations which matter, the following questions arise:
I’m convinced that the answer to this questions given by the ECJ may serve as a standard approach to this problem. It held that:
In order to determine whether a statement or description designed to promote sales is liable to mislead the purchaser the national court must take into account the presumed expectations which it evokes in an average consumer who is reasonably well informed and reasonably observant and circumspect. However, Community law does not preclude the possibility that, where the national court has particular difficulty in assessing the misleading nature of the statement or description in question, it may have recourse, under the conditions laid down by its own national law, to a consumer research poll or an expert’s report as guidance for its judgment.
Still introduction of such a standard does not mean treating all consumers as a homogenous group. What’s very important in determining whether a statement could be misleading for a consumer only persons to whom it is addressed are considered and the actual risk that such a statement might affect their economic behaviour.
The International League of Competition Law in 1996 adopted a resolution to that effect, that may be useful: “When applying the prohibition against misrepresentation the concept of the consumer of average intelligence and attentiveness should be used. The target audience at which the advertising is directed should be taken into account when applying this standard.”66
Children are one group which requires a separate standard of protection, however ECJ, recognizes also other groups like for instance in case R. Buet and Educational Business Services (EBS) v Ministčre public (Case 382/87)
Mr Buet, EBS and the Ministčre public appealed against the judgment claiming that application of the prohibition on canvassing to his case was contrary to the provisions of Article 30 et seq. of the Treaty inasmuch as it forced him to abandon a particularly effective sales technique and thus restricted the marketing in France of products from another Member State.
However in it’s decision which really shown rising significance of consumer protection, the court held that it is permissible for the national legislature of the Member State to consider that giving consumers a right of cancellation is not sufficient protection and that it is necessary to ban canvassing at private dwellings.
Moreover in the same decision the court acknowledged that consumers don’t constitute a homogenous group. As there is greater risk of an ill-considered purchase when the canvassing is for enrolment for a course of instruction or the sale of educational material . Because the potential purchaser often belongs to a category of people who, are behind with their education and are seeking to catch up. That makes them particularly vulnerable when faced with salesmen of educational material who attempt to persuade them that if they use that material they will have better employment prospects.
When we observe rapid changes in technologies used by consumers, new ways of concluding transactions and most of all consumers’ increasing capability of gathering information a question arises whether there should be a different standard of consumer protection used for the purpose of transactions concluded online?
It could be useful here to revoke to a fundamental question – why consumers are protected, and what is the purpose of this protection? I think that it is not controversial that they are protected because of their weaker position on the market. And that the purpose of such protection is to restore disturbed balance of market powers. The principle was aptly expressed by W. Szpringer who wrote that consumer law is aimed at protection of a market position of consumers and not interest of a particular person.67 Undertaking such approach must lead to an obvious conclusion that any differentiation of a protection standard must arise of a difference in balance of market powers.
Rise of e-commerce provides for many difficult questions that must be solved. Many phenomena are completely new and don’t have any regulations on grounds of EC law. One of such phenomena is powershopping. Powershopping (or co-shopping) describes an accumulation of customers that is gathered through the Internet in order to buy goods or services at a reduced price that is granted by providers of the goods or services provided that a sufficient quantity has been ordered.68
What is rather evident is also the fact that in online world consumers have to their disposition much more tools for gathering information than they ever had before69. And their possibilities to compare and estimate profitability of particular options greatly mollifies their position of a “weaker part”
Nonetheless there are more arguments against lowering of protection level than in its favour. There could be possibly two reasons why the level of protection should be lowered. One of them – that consumers making purchases online constitute specific, untypical group of society which is characterized by lower aptness for being mislead by businesses. If to consider data presented in multiple researches on the current trends in e-commerce70 and demography of consumers participating in it, it is quite clear that demographic profile of an average consumer is swiftly drifting towards those of offline buyers, what excludes possibility of using the first argument.
a) search goods – goods which quality may be estimated before consumption – as a very popular categories of such goods commonly sold in e-commerce one could mention books and CDs.
b) experience goods – their quality may be evaluated after consumption, what is the case with for instance clothes, and finally
c) trust goods – quality of these goods is difficult to determine even after their consumption.71
Thus, there does not seem to be any reason to lower the level of consumer protection because of an alleged change in the concept of ‘consumer’. Even though, what must be admitted, off-line rules do not completely cover requirements presented by new technologies on the Internet. These specific aspects of concluding transactions online ought to be matched by specific solutions of protecting customers.