President of the UOKiK for many years has been watching commercials directed to consumers and intervening whenever their messages have been misleading. Under the watchful eye of the authority are all kinds of commercials: on TV, Internet, radio as well as those available on corporate websites. The regulator sometimes checks on specific firms or advertising campaigns (e.g. the “FIRST AUTHENTIC NO LIMIT” campaign by T-Mobile Polska[1]), other times – an entire industry (e.g. commercials of banks and other financial institutions).
Recently, it is telecommunication industry commercials that have found themselves in the UOKiK’s President’s focus. Interestingly enough, the regulator has not imposed (as yet!) any penalties upon telecommunication firms. Instead, it has made an ‘appeal’ to them: take care of your commercials or I will do it 😉 Deadline: 31 December 2019. The appeal in practice represents ‘an offer you can’t refuse’: either the firms change the manner in which the prices for their services are presented or President of the UOKiK will instigate proceedings against them for practices violating collective interests of consumers. Quite importantly, the preliminary remarks/objections of the regulator are universal insofar as they apply to advertising campaigns in other industries, too.
What did UOKiK notice in advertising materials?
As part of its preliminary analysis of advertising campaigns, the Office has established that it is a common practice in the telecommunication industry to offer optional discounts to consumers. These are conditional on the consumer agreeing to telemarketing or receiving e-invoices. In many cases, the price shown in commercials is already reduced by the optional discount (i.e. the operator assumes in advance the consumer’s consent). In other words, the price from the commercial includes a discount that a consumer can, but does not have to obtain.
The information on the terms of obtaining the discounts does not normally accompany the information on the price calculated based on the discounts. The consumer can only learn about the terms of discounts from the legal notice. In the commercial itself, the information only appears for an instant at the bottom of the screen and in small print. The case of advertising leaflets is similar. The details of the discounts can often only be found on the reverse of the leaflet. In addition, the consumer cannot figure out the specific levels of discount (i.e. how much for the marketing consent, how much for the e-invoice).
It is not at all different in the case of telemarketing. The prices presented to the consumer during a conversation with a consultant already include the optional discounts. It is only at the end of the conversation that customers are informed about what discounts are included in the final amount. President of the UOKiK also notices that consumer are not always told directly that withdrawing a consent will result in a loss of a discount and, as a result, a higher bill.
In the opinion of President of the UOKiK, presenting lower prices can mislead consumers as to the actual price of a service or product. Marketing communications should reflect the actual terms of an offer. The information on essential conditions should be communicated to consumers in a clear and easily understandable manner. This also includes information on restrictions on the benefits of an offer. It is irrelevant here that consumers are informed (given that the terms and conditions as well as price lists do contain numerous asterisks and hashes) about the terms of the discount or that an offer presented in a commercial can be verified by the more conscious customers.
What should a ‘price’ commercial look like?
In the opinion of President of the UOKiK, the best solution involves presenting in one’s advertising communications the base price of a service or product, without any optional discounts, whose granting is dependent in each case on the consumer’s decision.
The regulator has met the marketing people half-way by deciding that it is also admissible to show two prices – the base price and the discount price. However, it is imperative then that both prices be next to each other and a similar print be used for them. The consumer need not make any additional efforts to access the information (e.g. by scrolling down the Internet page).
Given the specific nature of outdoor and television advertising, President of the UOKiK admits presenting discount prices on condition that they are presented as the ‘from’ price. In addition, a symbol such as ‘*’ should appear referring one to the legal notice where the consumer can find out more about the terms of obtaining a discount.
It is not the first time that President of the UOKiK has expressed objections to commercials. According to the hitherto practice of the regulator:
- ‘Promotions’ cannot ‘end tomorrow’ for a year or so;
- producers must not use packaging containing information about a lottery that is already over (even in the case of products with long expiry dates);
- If a business decides to carry out a promotional campaign, it is bound by its terms and conditions.
Whatever you say can be used against you…
According to the Supreme Court, President of the UOKiK can use information obtained from a business in connection with an application filed in a leniency programme that has proved ineffective. Businesses can admit before the Office to having violated competition law and disclose material information relating to an inadmissible practice. In return, they can seek a release from a fine or to have a penalty mitigated. Application for a leniency programme is voluntary. However, there is no guarantee that an application will be effective. Merely filing an application does not preclude the Office from making use of the information provided. The Supreme Court warned in the passing against too hasty an application of criminal-law standards to antimonopoly proceedings. Despite many similarities, a member of the leniency programme will not be treated as a crown witness.
Another problem was whether or not the grounds for a decision finding an agreement an inadmissible practice must name all members of that agreement if the proceedings were only issued against the promoter. According to the Supreme Court, it is not necessary to establish all undertakings involved in order to conclusively prove that the ‘prosecuted’ undertaking was the promoter of an agreement. Were President of the UOKiK to name in each case all the undertakings participating in an inadmissible practice, the Office’s efficiency would be adversely affected. The antimonopoly authority’s primary goal is to eliminate a practice that is in violation of the law. That goal is achieved where only the promoter of an agreement is deplored. The Supreme Court’s interpretation differed from those of the lower courts that required President of the UOKiK to establish the details of all members of an agreement. Reason? The decision addressee’s right of defence and shaping awareness among businesses. Failure to call on a business by the name might mean that it will not understand that its conduct was improper.
The Supreme Court also recalled its earlier case law whereby there are no obstacles to issuing proceedings against a promoter of an agreement only.
Supreme Court Judgment of 15
February 2019, case no. I NSK 11/18.
[1] Decision of President of the UOKiK no. RKR-1/2018 of 12.03.2018, in which the company undertook inter alia to broadcast a statement informing about the decision in the form an announcement in TVP1 and POLSAT channels (50 broadcasts).