Unfair commercial practices

 

SUMMARY OF:

Directive 2005/29/EC concerning unfair business-to-consumer commercial practices

WHAT IS THE AIM OF THE DIRECTIVE?

• Directive 2005/29/EC:
  • defines the unfair business-to-consumer commercial practices that are prohibited in the European Union (EU);
  • applies to any act or omission directly related to the promotion, sale or supply of a product* by a trader to consumers*, protecting the economic interests of consumers before, during and after a commercial transaction has taken place;
  • ensures the same level of protection to all consumers irrespective of the place of purchase or sale in the EU.
• It was amended in 2019 by Directive (EU) 2019/2161, which also modernised EU consumer protection rules on consumer rights (see summary), on unfair terms in consumer contracts (see summary) and on indicating prices (see summary), to ensure better enforcement and to address new developments on the market, in particular online marketing.
• In 2024, further rules were introduced by Directive (EU) 2024/825 to address commercial practices that mislead consumers and prevent them from making sustainable consumption choices. These rules (applicable from 27 September 2026) relate to practices associated with the early obsolescence of goods, misleading environmental claims (‘greenwashing’) and misleading information about the social characteristics of products or traders’ businesses.

KEY POINTS

• Unfair commercial practices are those which:
  • are contrary to the requirements of professional diligence*; and
  • are likely to materially distort the purchasing behaviour of the average consumer.
• Certain consumers enjoy a higher level of protection due to their particular vulnerability to the practice or the product, their age (children or the elderly), their naivety or their mental or physical infirmity.
• Directive 2005/29/EC distinguishes two categories of commercial practice that are unfair if they cause the average consumer to take a purchasing decision that they would not have taken otherwise: misleading commercial practices (by action or omission) and aggressive commercial practices.
• Annex I to Directive 2005/29/EC contains a list of practices that are prohibited in all circumstances (a ‘blacklist’).

Misleading commercial practices

Misleading actions

A practice is misleading if it contains false or untrue information or is likely to deceive the average consumer, even though the information may be correct, and cause them to make a purchasing decision they would not otherwise have made. Examples of such actions include false or deceptive information regarding:

• the existence or nature of the product;
• the main characteristics of the product (its availability, benefits, risks, composition or geographical origin, results to be expected from its use, etc.);
• the extent of the trader’s commitments (in codes of conduct by which the trader has agreed to be bound);
• the price or the existence of a specific price advantage;
• the need for service or repair.

The directive also prohibits the misleading marketing of goods as being identical when in reality their composition is significantly different in different EU Member States (this is often referred to as the ‘dual quality’ of goods).

Misleading omissions

• A practice is also misleading if material information needed by the average consumer to take an informed purchasing decision is omitted or is provided in an unclear, unintelligible, ambiguous or untimely manner and is likely to cause them to take a purchasing decision that they would not have taken otherwise.
• Directive 2005/29/EC provides a general list of information that should be regarded as material, such as the price and main characteristics of the product. There are additional requirements for online sales, such as obligations for online marketplaces* to inform consumers about the main criteria determining the ranking* of the offers provided in response to a search query, and the obligation to provide information on whether and how the authenticity of consumer reviews is checked.

Aggressive commercial practices

• Purchasing decisions must be made freely by the consumer. A practice is aggressive and unfair if by harassment, coercion or undue influence* it significantly impairs the average consumer’s freedom of choice and causes them to take a purchasing decision they would not have taken otherwise.
• Several elements must be taken into consideration in order to determine whether a commercial practice is aggressive or not. These include:
  • the nature, location and duration of the practice;
  • the possible use of threatening or abusive language or behaviour;
  • the exploitation by the trader of any specific circumstance of such seriousness (e.g. a death or a serious illness) as to impair the consumer’s judgement in order to influence their decision with regard to the product;
  • any disproportionate, non-contractual condition imposed on the consumer wishing to exercise their contractual rights (such as terminating or changing a contract).

Practices prohibited in all circumstances (‘blacklist’)

• Directive 2005/29/EC contains a list of commercial practices that are prohibited in all circumstances. Following amendments made by Directive (EU) 2019/2161, it also prohibits several additional practices such as publishing fake consumer reviews, hiding advertising in search results and reselling tickets that the trader has acquired using automated means (known as bots).
• Directive (EU) 2024/825 also adds several additional practices to the blacklist, as mentioned below.
  • Forms of greenwashing (misleading environmental claims), including the following.
    • The making of a generic environmental claim suggesting or creating the impression of excellent environmental performance, such as ‘environmentally friendly’, ‘eco-friendly’, ‘green’, ‘ecological’, ‘climate-friendly’, ‘carbon-friendly’, ‘energy-efficient’, ‘biodegradable’ or similar, without recognised excellent environmental performance that is relevant to the claim.
    • Displaying a sustainability label that is not based on a certification scheme or not established by public authorities. Before displaying a sustainability label, a trader must ensure that it meets minimum conditions of transparency and credibility and that there is objective monitoring of compliance with the requirements of the scheme. That monitoring must be carried out by a third party whose competence and independence from both the scheme owner and the trader are ensured based on international, EU or national standards and procedures.
    • The making of claims, based on the offsetting of greenhouse gas emissions, that a product has a neutral, reduced or positive impact on the environment in terms of emissions, which may mislead consumers into believing that such claims relate to the product itself or to the supply and production of that product, or that the consumption of that product does not have an environmental impact.
  • Misleading practices amounting to early obsolescence, including:
    • false claims on the durability or reparability of a good;
    • any commercial communication in relation to a good that contains a feature introduced to limit its durability despite information on that feature and its effects on the durability of the good being available to the trader.

Redress and penalties

• Member States must ensure that consumers have the right to individual remedies (compensation, a price reduction, etc.) when they are harmed by unfair commercial practices.
• Member States must introduce effective, proportionate and dissuasive penalties to punish traders who break national rules on unfair commercial practices.
• When imposing penalties, Member States must provide for fines of at least 4% of the trader’s turnover or €2 million when information about the turnover is not available in cases where national authorities of several countries are working together on major cross-border infringements affecting consumers in several Member States.

Guidance document

In 2021, the European Commission issued updated guidance on the implementation and application of Directive 2005/29/EC. It explains key concepts and rules and gives practical examples taken from the case-law of the Court of Justice of the European Union and from national courts and administrations to make enforcement easier for national authorities and to ensure greater legal certainty for traders. The guidance covers the amendments introduced by Directive (EU) 2019/2161.

FROM WHEN DO THE RULES APPLY?

• Directive 2005/29/EC had to be transposed into national law by 12 June 2007. These rules have applied since 12 December 2007.
• The rules introduced by amending Directive (EU) 2019/2161 have applied since 28 May 2022.
• The rules introduced by Directive (EU) 2024/825 have to be transposed by 27 March 2026 and will apply from 27 September 2026.

BACKGROUND

For further information, see:

• Unfair commercial practices directive (European Commission)
• Factsheet – The New Deal for Consumers – What benefits will I get as a consumer? (European Commission)
• Empowering the consumer for the green transition (European Commission).

KEY TERMS

MAIN DOCUMENTS

Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 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) No 2006/2004 of the European Parliament and of the Council (‘unfair commercial practices directive’) (OJ L 149, 11.6.2005, pp. 22–39).

Successive amendments to Directive 2005/29/EC have been incorporated into the original text. This consolidated version is of documentary value only.

Directive (EU) 2024/825 of the European Parliament and of the Council of 28 February 2024 amending Directives 2005/29/EC and 2011/83/EU as regards empowering consumers for the green transition through better protection against unfair practices and through better information (OJ L, 2024/825, 6.3.2024).

RELATED DOCUMENTS

Commission notice – Guidance on the interpretation and application of Directive 2005/29/EC of the European Parliament and of the Council concerning unfair business-to-consumer commercial practices in the internal market (OJ C 526, 29.12.2021, pp. 1–129).

Communication from the Commission to the European Parliament and the Council: New Consumer Agenda – Strengthening consumer resilience for sustainable recovery (COM(2020) 696 final, 13.11.2020).

Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee – A New Deal for Consumers (COM(2018) 183 final, 11.4.2018).

Regulation (EU) 2017/2394 of the European Parliament and of the Council of 12 December 2017 on cooperation between national authorities responsible for the enforcement of consumer protection laws and repealing Regulation (EC) No 2006/2004 (OJ L 345, 27.12.2017, pp. 1–26).

See consolidated version.

Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European Parliament and of the Council (OJ L 304, 22.11.2011, pp. 64–88).

See consolidated version.

Directive 98/6/EC of the European Parliament and of the Council of 16 February 1998 on consumer protection in the indication of the prices of products offered to consumers (OJ L 80, 18/03/1998, pp. 27–31).

See consolidated version.

Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ L 95, 21.4.1993, pp. 29–34).

See consolidated version.

last update 31.05.2024