Adaptation of European advertising rules – higher fines, new rules of misrepresentation

News from Europe: on 17 April 2019 the European Parliament voted to amend the Unfair Commercial Practices Directive. Most important change: much higher maximum fines for among others misleading advertising.

The European Unfair Commercial Practices Directive is the basis for European and Dutch legislation on, among other things, misleading advertising. The 2005 Directive is now being amended for the first time. The legislative amendment has yet to be adopted by the European Council. Member States then have 24 months to adapt national legislation to the new rules.

In case of infringements in multiple Member States, the authorities should be able to impose a fine of up to 4% of the annual turnover. In the Netherlands, fines are mainly imposed by the Consumer & Market Authority. The maximum fine in the Netherlands now is € 900,000.

The amendment of the law also brings new rules in the field of online advertising. For example, webshops will have to inform consumers about how they check whether product reviews on their websites are genuine. Comparison sites should also provide information on how their search results are generated.

A final important change concerns the politically sensitive issue of dual quality products. Research has shown that products in Central and Eastern Europe are often of lower quality than products of the same brands in the rest of Europe. Under the new rules, the marketing of those products in Central and Eastern Europe will be misleading if the impression is given that the products are of the same quality as in other Member States. An important new rule for large exporting companies, especially in the food industry.

Bram Duivenvoorde