EU Court of Justice forbids dividing price into components

The European Court of Justice issued a preliminary ruling on the interpretation of the Unfair Commercial Practices Directive. Indicating the price is misleading if the price is divided into components with only one of them being emphasised, thereby giving the consumer a mistaken impression about its price and leading to a decision the consumer would not otherwise have taken.

The Court of Glostrup in Denmark had requested the Court to make a preliminary ruling on the interpretation of the Unfair Commercial Practices Directive. The reason for the request was a case about Canal Digital marketing concerning whether Canal Digital’s television package advertisements on television and the Internet had indicated clearly enough to consumers that in addition to a monthly price for the channel package they also had to pay card service every six months.

The Court was requested to give an interpretation on Articles 6 and 7 which under the Finnish Consumer Protection Act correspond to giving false or misleading information or omitting material information, and duty to provide information when offering specific consumer goods.

According to the Court, the price of the product is a significant factor when an average consumer makes purchase decisions. Naturally it is not enough to simply give the price details, it is also important how the information is presented.  This information may not be presented in an unclear, unnecessarily difficult or ambiguous way nor, from the consumer’s perspective, too late or otherwise in an untimely manner if doing so prevents the consumer from understanding the total price of the product.

The Court considers it misleading advertising if a product’s price is divided into many components and emphasis is only placed on one of them, provided such a practice gives the wrong impression about a favourable price, causing consumers to make a purchase decision they otherwise would not have made.

The Court of Glostrup that requested a preliminary ruling will, based on the preliminary ruling of the European Court of Justice, decide later whether Canal Digital has engaged in misleading marketing or neglected its duty to provide information.

The decision by the European Court of Justice is in line with the observations made by the Finnish Government and the Consumer Ombudsman. The Consumer Ombudsman has also expressed its opinion in previous comments that giving the price of consumer goods in marketing by dividing it up into components is misleading and therefore illegal. The previous comments by the Consumer Ombudsman have concerned, among other things, the marketing of communications services and flight tickets.

European Court of Justice decision