The impetus for developing new rules on advertising trade, which formed the basis of the Directive on Unfair Commercial Practices (The Unfair Commercial Practices Directive), according to European officials, was the increasing number of complaints about dishonest advertising campaigns from private individuals and consumer protection organizations.
Under the European Parliament's initiative, 28 types of advertising activity will be prosecuted by law. In the EU, the following will be outlawed: sending SMS messages to mobile phones offering participation in lotteries and contests, advertising pyramids (what we call network marketing), offers from non-existent online stores, and advertising in which children directly ask their parents to buy them a product from a specific company.
Lawmakers paid special attention to so-called advertising tricks: for example, when an airline announces cheap tickets for passengers on a particular route, but in fact the discount applies only to a few seats on the entire flight.
Under the new law, unfair advertising campaigns in the European Union also include advertising goods at reduced prices when the company is not sure it can offer discounts to everyone who wants them.
It is also prohibited during advertising campaigns to state that the advertised product is already sold out and to offer something else instead.
In addition, under the new rules, companies are prohibited from advertising their products in the guise of private individuals. This is now especially common in the used car trade. Companies in this business often pose as private individuals and publish advertisements for selling used cars in newspapers, magazines, and on websites.
Advertisers will be officially prohibited from providing deliberately false information about the healing properties of a particular product. The law will also prosecute store owners who advertise that the store is holding a sale due to imminent closure, when in fact it has no intention of closing. It is also prohibited to state that the seller has a license to distribute the product or is a member of any consumer protection organization if this is not actually the case. In addition, advertising is henceforth prohibited from referring to the fact that a product can only be bought at a strictly defined time, as this deprives the consumer of the right to make an informed choice within the time he or she needs.
Advertising campaigns that involve intrusive phone calls, frequent distribution of advertising information by fax or e-mail, as well as regular unwanted visits by distributors of a particular product who try to force a potential consumer to make a purchase, and often simply play on pity, saying that if you don't buy anything from them, they will lose their jobs, are considered aggressive.
The new law for the first time introduces common fair trading obligations for all European companies, which will replace existing national consumer protection mechanisms. In the near future, the bill will be submitted for consideration to the administrations of EU states and, as expected, will come into force for all EU member states as early as 2007.
As the latest report by the UK's Fair Competition Commission showed, Britons lose around a billion euros a year due to dubious marketing schemes. The British government has already supported the European Parliament's initiative, since the new bill 'is designed to protect consumers in all European Union countries from unfair and aggressive methods of competition'.
According to members of the European Commission, uniform legislation regulating advertising activity in the EU was needed because fraudsters often operate in one country and, to avoid being caught by local authorities, register in another.
In addition, European officials and the project's developers believe it will help boost trans-European trade, including on the Internet, as companies will no longer have to rely on national regulatory mechanisms, which often differ.
The European Parliament directive is also intended to make life easier for dissatisfied consumers who want to sue unscrupulous advertisers. As stated in the directive, unscrupulous advertisers will be prosecuted by law. But whether they will face criminal or only administrative liability is not yet being said in the EU.