‘4finance’ UAB v Valstybinė vartotojų teisių apsaugos tarnyba and Valstybinė mokesčių inspekcija prie Lietuvos Respublikos finansų ministerijos.
Date: 2014-04-03
19. It should be recalled that, according to the settled case-law of the Court of Justice, the need of uniform application and of uniform interpretation of an act of EU law makes it impossible to consider one language version of the text in isolation, but requires that measure to be interpreted on the basis of both the real intention of its author and the aim that the latter seeks to achieve, in the light, in particular, of the versions in all the languages (see Case C‑569/08 Internetportal und Marketing , EU:C:2010:311, paragraph 35 and the case-law cited).
20. In that regard, it should be noted that the prohibition of pyramid promotional schemes is based, in all language versions of Annex I, point 14 of Regulation 2005/29, on three common conditions. First, such a promotion is based on the promise that the consumer will have the opportunity of making a commercial profit. Next, the realisation of that promise depends on the introduction of other consumers into the scheme. Finally, the greater part of the revenue to fund the compensation promised to consumers does not result from a real economic activity.
21. It is common ground that, when there is no effective economic activity to generate enough revenue to fund the compensation promised to consumers, such a promotion scheme is necessarily based on the economic contribution of its participants, since the opportunity for a member of that scheme to receive compensation depends essentially on the fees paid by additional members.
22. Such a scheme can only be a ‘pyramid’ in the sense that its sustainability requires the subscription of an ever increasing number of new participants to fund the compensation paid to existing members. It also means that the most recent members are less likely to receive compensation for their participation. That scheme ceases to be viable when the growth in membership, which should theoretically tend to infinity in order for the scheme to continue, is no longer sufficient to fund the compensation promised to all participants.
23. It follows from the foregoing that the recognition of a ‘pyramid promotional scheme’ within the meaning of Annex I, point 14 of Directive 2005/29 requires, first, the members of such a scheme to give financial consideration.
24. That interpretation is supported by the purpose of Directive 2005/29, which, according to recital 8 in its preamble, ‘directly protects consumer economic interests from unfair business-to-consumer commercial practices’ and which, according to Article 1, provides ‘a high level of consumer protection by approximating the laws, regulations and administrative provisions of the Member States on unfair commercial practices harming consumers’ economic interests’ (Case C‑206/11 Köck  EU:C:2013:14, paragraph 29 and the case-law cited). As the Advocate General observed at point 32 of her Opinion, without financial consideration from the consumer, it would be difficult to identify the economic behaviour that requires consumer protection under that directive.
26. As to the question whether any sum paid by a member of a promotional scheme must be viewed, regardless its amount, as consideration within the meaning of Annex I, point 14 of Directive 2005/29, it should be noted that that provision does not provide for any minimum amount in the language versions that mention the existence of financial consideration given by the consumer (see, by analogy, Case C‑428/11 Purely Creative and Others  EU:C:2012:651, paragraph 30). Furthermore, the objective of providing greater legal certainty in the identification of unfair commercial practices, referred to in recital 17 in the preamble to Directive 2005/29, would not be ensured if the Member States could decide what amounts are to be regarded as financial consideration. Accordingly, the concept of consumer consideration includes any financial contribution from the consumer, regardless of the amount.
27. Secondly, it necessarily follows from paragraphs 20 to 22 of the present judgment that classification as a ‘pyramid promotional scheme’ within the meaning of Annex I, point 14 of Directive 2005/29 requires the existence of a link between the consideration given by new members and the compensation received by existing members.
28. That interpretation is confirmed by the wording of most language versions of Annex I, point 14 of Directive 2005/29, from which it is apparent that the funding of the compensation that a consumer may receive depends ‘primarily’ or ‘mostly’ on consideration given subsequently by new participants in the scheme.
31. First, Annex I of Directive 2005/29 includes the commercial practices which are, in all circumstances, unfair and which, therefore, do not require a case-by-case assessment against the provisions of Articles 5 to 9 of that directive. Secondly, the practices which are not listed in that annex may be declared unfair after a case-by-case examination of their characteristics, having regard to the criteria set out in those Articles 5 to 9 ( Purely Creative and Others  EU:C:2012:651, paragraph 45, and Köck EU:C:2013:14, paragraph 35).