On 1 July 2008 a new Marketing Practices Act entered into force. The new act implements Directive 2005/29/EC on unfair commercial practices and implies some new aspects for Swedish companies to take into consideration. These include a new way of qualifying commercial practices and the fact that marketing statements can, in the final instance, be subject to assessment by the European Court of Justice. Swedish businesses should also note that the new act will mean that imposition of market disruption fines will be a more common sanction.
The aim of the directive on unfair commercial practices is to harmonize unfair competition law throughout the EU. For Sweden, EU harmonization means that the restrictive view on marketing which has, above all, characterised decisions from the Market Court, will likely be liberalized. The directive does not, however, regulate matters of taste or decency. These issues will continue to be dealt with by industry bodies such as the Marketing Ethics Council and the Ethical Council on Gender Discrimination in Advertising.
An important change in relation to the 1995 Marketing Practices Act is that the “marketing” term has been expanded to include post-sales situations. This means, for example, that the handling of complaints and service or support will be subject to the same requirements as sales promotions. Another core change is that the assessment of commercial practices will be subject to a transaction test. Somewhat simplified, this means that marketing is judged in the light of whether it affects the average consumer’s ability to reach well founded commercial decisions. If the test is positive, the marketing practice is deemed to entail a distortion of the economic behaviour of the consumer which thus constitutes an unfair commercial practice. The new Marketing Practices Act also contains a black list which sets out a number of practices which are always to be deemed as unfair.
Marketing statements and practiced can be expected to be subject to a more nuanced assessment and probably a more liberal one too under the new act, not least in light of judgements from other member states and the European court influencing Swedish court practice. For sanctions, however the opposite is true. Under the new Marketing Practices Act, market disruption fines must always be imposed in the event of breach of any prohibition on the black list and in several cases it is presumed to be payable. In addition, the existence of mitigating circumstances will not affect assessment of whether a fine is to be imposed but merely the size of the fine.
In conclusion, the new Marketing Practices Act means that Swedish companies are given some new marketing options but also that liability now embraces more steps in the sales chain and that this liability is accompanied by harsher sanctions. |