International Report

 

Regulatory authority

Competitor

Class action

Consumer/Consumer associations

Supplier

Purchaser

Austria

Yesa

Yesb

Debatedc

Yes

Yesd

Yesf

Belgium

Yese

Yes (provided it has an interest)

Nof

Yes (provided he has a direct and personal interest)

Yes

Yes

Brazil

Yesg

Yes

NK

Yes/Consumer associations can enforce

Yes

Yes

France

Yesh

Yes

NK

Noi/Consumer associations can enforce

Yes

Yes

Germany

Noj

Yes

No

Nok/Consumer associations can enforcel

No

No

Hungarym

Yesn

Yes

Yeso

Yes/Nop

Yes

Yes

Italy

Yesq

Debatedr

Yes

Yes/Consumer associations can enforce

Yess

Yest

Ukraine

Yesu

Yes

NK

Yes

Yes

Yes

United Kingdomv

Yesw

No

No

No

No

No


a The Austrian Unfair Competition Act is enforceable by the Federal Competition Authority but only where such is likely to distort competition significantly to the detriment of enterprises. It is not clear that there is a specific regulatory authority that is there to protect consumers (as opposed to enterprises); b Provided the competitor is “directly affected”; c See ¶2.2.2.2, Austrian National Report; d Provided the supplier or purchaser is directly affected; e Minister of Economic Affairs and the Director General of the Federal Public Service of Economic Affairs; f Intended to be brought in and being discussed in Parliament; g Public prosecutor; h The main authority is L’Autorité de Régulation Professionelle de la Publicité (“AARP”); i Where the legal cause of action is unfair competition claims; j The UWG (Gesetz gegen den unlauteren Wettbewerb) permits business associations, chambers of commerce and industry or craft chambers to bring an action, but there is no actual regulatory authority tasked with enforcement of the UWG. However, the Wettbewerbszentrale, although not a state body, is a highly influential independent association whose main role is to enforce the law against unfair competition; k There is some debate on this issue, but the prevailing view is that the UWG is not a Schutzgesetz (protective law)—see p. 16, German Report; l E.g., the German federal consumer organisation (Verbraucherzentrale Bundesverband) or consumer centres in the German Länder; m In general, any legal entity that can show it has suffered may enforce the unfair competition laws; n The UCP Act (which implements the UCPD) is primarily enforced by the National Consumer Protection Authority (“NCPA”), but the Hungarian Competition Authority has the right to enforce the law on misleading and comparative advertising. The HCA may issue a “class action” on behalf of a class of consumers in the courts provided it has commenced its own competition supervision proceedings; o Provided that the claimants’ interests are sufficiently aligned to each other. See also previous table footnote; p A consumer association does not have locus standi as it is not itself an injured party; q Autorita Garante della Concorrenza a del Mercato (“AGCM”); r This is the subject of academic debate, but as pointed out by the Italian National Rapporteur, Art. 27, Consumer Code indicates that “any subject or organisation having interest” can seek enforcement against a misleading practice; s If they have a “relevant interest”; t Although there is some debate whether an association of suppliers can bring an action; u Antimonopoly Committee of Ukraine (“AMC”); v In implementing the UCPD, the United Kingdom has not conferred a private cause of action for breach of the directive. As the United Kingdom does not have any other laws of unfair competition, a competitor or consumer would have to rely upon other laws, e.g., passing off, malicious falsehood, trademark infringement or contract law, which are much more limited in scope; w This will be enforced by either the Office of Fair Trading or local authority trading standards officers



It can be seen from the above that there is considerable variety as to who can enforce unfair competition laws. In some countries (e.g., Ukraine and Hungary), the only requirement for locus standi is that the suing party is aggrieved, i.e., affected adversely by the practice complained of. In contrast, the United Kingdom does not permit the enforcement of unfair competition laws other than by regulatory or statutory authorities.30 This UK provision has had some strange consequences. For instance, in the context of comparative advertisements (potentially a form of unfair competition), aggrieved competitors have brought actions for trademark infringement where their registered mark is used, and in such circumstances, the CJEU has held that European unfair competition laws concerning comparative advertising are a complete defence if the conduct falls within such laws.31 This depends arbitrarily on whether the defendant has used a registered trademark in the advertisement. In contrast, in Germany, there is no regulatory authority to enforce the German unfair competition law, but instead its enforcement is left to powerful consumer associations or other associations such as the Wettbewerbszentrale (which is an independent institution of German industry whose aim is to ensure that companies compete fairly in the marketplace).

Many countries report that it would be unusual for consumers to bring an action even though they have locus standi because of the cost and uncertainty of such actions. However, as a counterbalance, consumer associations play an important role in protecting the consumer against unfair competition. However, because consumer associations are not themselves injured by the actions, certain countries, e.g. Hungary, do not permit them to bring actions to enforce unfair competition laws. In such circumstances, the non-CSR-compliant undertaking does not have to fear the award of damages against it.

Art. 11 UCPD requires Member States to ensure that persons or organisations regarded under national law as having a legitimate interest in combating unfair commercial practices, including competitors, may take legal action against such unfair commercial practices and/or bring proceedings before an administrative authority competent to decide on complaints or to initiate legal proceedings.32 There is an interesting issue whether such gives Member States complete discretion as to which persons or organisations have locus standi to enforce domestic legislation implementing the UCPD in a private action. The German reporter considers that such gives significant discretion to Member States with regard to who can bring enforcement proceedings. This may indeed be a correct analysis. On the other hand, the wording of Art. 11 UCPD suggests that if under national laws on unfair competition laws that existed prior to the implementation of the UCPD permitted, an undertaking was entitled to bring an action against an other undertaking for unfair commercial practices, then Member States must ensure that the same undertaking also has an equivalent right of action under the UCPD. Apart from the United Kingdom, where no private action can be brought at all for breach of domestic legislation implementing the UCPD, in the other Reporting Countries, private actions can be brought, and in general, such includes both competitors and consumers where such have a legitimate interest. In the case of the United Kingdom, neither competitors nor consumers have locus standi. Either may inform administrative authorities and encourage them to initiate appropriate legal proceedings, but neither can compel them to bring such actions (and indeed such authorities will prioritise according to their limited resources). It is highly arguable that the United Kingdom’s enforcement of the UCPD in this regard is deficient. However, there is considerable discretion given to Member States under the UCPD as to how to implement the directive.



21.5 The Courts and Tribunals that Can Enforce Unfair Competition Laws and the Available Remedies


In general, unfair competition laws concerning CSR policies can be enforced in the courts of Member States. However, in certain countries, unfair competition laws can be enforced in administrative proceedings before an administrative tribunal, which may itself also have the ability to enforce unfair competition laws in civil courts. In this sense, such organisations are similar, in the field of competition law, to the European Commission, which acts as both enforcer and a first instance administration tribunal.

It is useful to set out the differences in the Reporting Countries regarding the existence of administrative tribunals for enforcing unfair competition laws and the remedies available to them (the position regarding competition laws, i.e., abuse of dominant position/anti-competitive conduct is not considered; see Table 21.2).


Table 21.2
Enforcement by regulatory authorities in Reporting Countries

































Austria

Public administrative authorities such as BWB and those responsible for enforcement of standards may issue cease and desist orders, but their jurisdiction is limited.a

Belgium

The Minister of Economic Affairs may conduct an investigation and issue a warning requiring that the undertaking cease practice. However, it has no right to levy fines (although non-compliance with an injunctive order is punishable by fines). If the warning is not complied with, the matter may be referred to the Public Prosecutor. If pursued through the criminal courts, then available fines range from €250 to €10,000.

Brazil

Enforcement only through courts.

France

The AARP can bring proceedings before the Jury de Déontologique Publicitaire (JDP): such cannot order fines or imprisonment but may request the withdrawal of the disputed advertisements.b

Germany

No regulatory or administrative tribunal for enforcement of unfair competition laws. Enforcement is through the courts.

Hungary

The National Consumer Protection Authority (“NCPA”) and Hungarian Competition Authority (“HCA”) may injunct the offending practices and/or issue fines (between €50 and €6.5 million or 10 % of the net turnover of the undertaking in the previous business year).

Italy

The AGCM can enforce unfair competition and issue prohibitory orders and issue fines (€5,000 to €500,000). The AGCM can act ex officio or at requests of any subject or organisation having an interest (e.g., competitors, consumers).

Ukraine

The AMC may issue cease and desist orders and fines (up to 5 % of annual turnover of undertaking in the previous financial year). The consumer protection authority may also impose fines (up to 30 % of the relevant sales revenue).

United Kingdom

There is no administrative authority that can issue cease and desist orders or fines for breach of unfair competition. Enforcement by regulatory authorities is through the courts.


aThus, it does not extend to all unfair commercial practices—see ¶2.3.1.1, Austrian Report

bIt is not clear whether the JDP has any legal powers to prohibit advertisements or promotions or is, instead, a self-regulatory organisation that relies upon organisations complying with its rulings. It would appear the latter is the case


21.6 Enforcement Through Courts


As discussed above, there is considerable variety as to whether private undertakings (e.g., competitors) can bring civil proceedings under the laws of the Reporting Countries for breaches of CSR policies. The UCPD specifically envisages that competitors be able to bring proceedings.

However, as with any civil proceedings where the proceedings are brought not by a body tasked with enforcement of particular legislation but rather by a private individual, a claimant will usually need to show that it has sufficient interest in the subject matter of the proceedings and that it has suffered damages.

In general, where there is a breach of a CSR policy, it will not be difficult for a consumer who has purchased products where there has been an overt breach of the policy to show that he was misled and that he is entitled to compensation. However, aside from “class” actions by consumers, such proceedings are rare. In general, the interests of the consumers are protected by consumer associations or regulatory organisations.

In the case of competitors, an undertaking that breaches its well-publicised CSR policy may indeed be harmful to a competitor. For instance, an undertaking that misleads the public by saying that teak (tropical wood) furniture has been sourced from forests where sustainable forestry is practised when in fact such is not the case will have a competitive advantage over those undertakings that do source from sustainable forestry as wood sourced from the latter will invariably be more expensive.

In the case of CSR policies, Reporting Countries were asked to consider three different scenarios in the context of a competitor being able to obtain relief against an undertaking that has not complied with its CSR policy:



  • coffee marketed with a Fair Trade label that was not sourced from Fair Trade coffee farmers (Scenario 1);


  • coffee marketed by a business that has imported coffee using ships that emit excessive carbon dioxide that do not comply with a business’s “green” CSR policy (Scenario 2); and


  • coffee marketed by a business that advertises its CSR policy of providing 2 % of all sales revenue to educating children in the third world but, upon audit, is found not to have complied with that policy (Scenario 3).

Whilst it might be thought that, within the European Union, the ability to recover is harmonised, such is not the case. The UCPD does not harmonise the procedural aspects of enforcing the UCPD other than to require that Member States “shall ensure that adequate and effective means exist to combat unfair commercial practices”. The modality of enforcement is very much left to the Member States.

These three scenarios were chosen because they differ widely in the degree of nexus between the products being bought (coffee) and the offending practice. Plainly, the first scenario has the closest nexus, although it should be emphasised that a failure to comply with the first scenario does not mean necessarily that the coffee’s physical characteristics are any different. This is because Fair Trade conditions relate to social as well as environmental conditions.

In Table 21.3, the responses of the Reporting Countries are set out in tabular form as to whether a competitor could obtain injunctive or financial relief where another undertaking breaches its CSR policy.


Table 21.3
Remedies in civil courts in Reporting Countries








































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Scenario 1

Scenario 2

Scenario 3

Austria

Injunction and damages if capable of being proven.

Belgium

Injunctive relief and damages.

Probably too vague for any relief.a

Injunctive relief but difficult to prove damage.

Brazil

Injunction and damages if capable of being proven.

France

Remedies can include injunction or award of damages depending on the circumstances of case. A competitor would be unlikely to be able to prevent Scenario 3.

Germany

Injunction in all three cases. Damages are also available if competitor can prove that damage was caused by violation of the UWG (unfair competition law) and the acts were done intentionally or negligently. In practice, it is easier to prove such in Scenarios 1 and 3 as opposed to 2. Under German law, no business can request disgorgement of profit.

Hungary

Injunction/damages—dependent on competitor proving damage.

Italy

Injunction/damages.

Depending on proof of harm to competitor, injunction and damages.

Dependent on proof of harm to competitor, injunction and damages.

Ukraine