26.1.2016
The Consumer Ombudsman applies the Supreme Court for a precedent on what an ‘average consumer’ means and how an average consumer understands the price promise used by the sports shop XXL in its marketing.
In its marketing, the sports shop XXL Sports & Outdoor Oy (XXL) has used a price promise according to which it aims to be the cheapest option on the market and to credit consumers with the difference if they find an equivalent product at a cheaper price elsewhere. In the view of the Consumer Ombudsman, the purpose of the price guarantee was to create an impression that XXL is the cheapest operator on the market.
However, according to the ruling of the Market Court in November 2015, XXL’s price promise does not mean that XXL would claim that to have the cheapest prices, and a reasonably well informed and circumspect average consumer will not understand the price promise in that way, either. Therefore, the Market Court rejected the Consumer Ombudsman's requirement concerning the use of the price promise in marketing. The Market Court nevertheless prohibited XXL from giving a misleading impression of the duration of its offers and the cheapness of its prices.
Differences in the assessment of the concept of an average consumer
In accordance with the Unfair Commercial Practices Directive, the misleading nature of marketing is assessed from the point of view of a so-called average consumer. The concept is based on the definition drawn up by the European Court in the 1990s of an average consumer who is reasonably well informed and reasonably observant and circumspect and who carefully studies advertisements and product information.
Later, research results from behavioural economics have shown that in reality, people do not always act rationally or analyse information in a machine-like manner. This has also been taken into account in the Commission’s instructions for implementing the Directive, according to which the national courts and administrative authorities must assess whether information is misleading based on recent observations on consumer behaviour, among other things.
In the Finnish Consumer Protection Act and the case law based on it, marketing has traditionally been assessed from the point of view of a consumer that is quickly browsing advertisements. This method of study matches the research results from behavioural economics regarding the real behaviour of consumers. In contrast, the Market Court’s decision considers consumers as being rational actors, who study the content of the price promise and understand that the prices will not always be the cheapest on the market based on it.
The Supreme Court has not previously assessed the concept of an average consumer in its judgments concerning consumer protection. The Consumer Ombudsman considers setting a precedent on this issue important. The key issue is whether the concept of a consumer used in Finnish legal praxis and the research results from behavioural economics can still be used in order to assess how an average consumer understands the price promise marketed by XXL and whether the price promise is misleading to the consumer.
FCCA press release on 24 November 2015
Decision of the Market Court MAO:829/15