Up-to claims: overview of the Hungarian Competition Authority’s practice

1. Up-to claims: overview of the Hungarian Competition Authority’s practice Second Annual Conference on the Unfair Commercial Practices Directive 13 March 2014 Dr. NAGY, Csongor István, LL.M., Ph.D., S.J.D. University of Szeged (Hungary) associate professor of law Department head

2. Agenda • General principles • Legal test on "up-to" statements • Cases and specific issues • Conclusions and dilemmas

3. When do I have a chance to get the maximum benefit?

4. Hungarian legal test: general principles • The standard of consumer awareness: reasonably informed consumer who acts prudently and carefully as expected in the given situation. (Principle Position Nr I.4.2.). The consumer acts reasonably if he does not doubt the truth of the advertisement. • A particular advertisement has to fully comply with the requirements of the UCP Act; the principle of individual and isolated compliance: in principle, the information appearing in advertisement "A" cannot supplement the information appearing in advertisement "B". • The consumer’s decision-making is a process and the law protects its each individual phase. The first phase of this process is raising the consumer’s attention. • The use of a media-mix (integrated communications campaign) does not mean that the campaign’s elements should not comply with the requirements of the law on an individual basis.

5. Hungarian legal test: general principles • The use of the terms "up-to" and "maximum" implies a possibility that does not necessarily come true; however, the promise has to encompass a real and not a theoretical possibility. (Principle Position Nr I.6.29.) • The message of the term "up-to" is that the benefit cannot be achieved in all cases, that is, it is not automatic. The legality of the "up-to" promise can be judged only on the basis of the accessibility of the conditions and the reality of the fulfillment of the conditions. (Principle Position Nr I.6.29.) • The conditions can be referred to directly and indirectly. If the term "up-to" is easily recognizable for the consumer, this is susceptible of displaying the conditions in an indirect manner. (Principle Position Nr I.6.29.)

6. Hungarian legal test on „up-to" statements: the three limb test (Principle Statement I.6.31.) • The use of the term "up-to" may qualify as misleading, if • the enterprise has no product where the maximum benefit could be achieved; • the main message of the advertisement is significantly modified by the conditions appearing separately and in a less emphasized manner; • The maximum benefit can be achieved only in extreme cases, they are available to an atypical group of consumers; however, the enterprise is not expected to prove that the benefit was available to the majority of its customers (Case Vj-77/2007).

7. Shall the maximum benefit be potentially available to all consumers? Case Vj-104/2012. Shell • Is it is illegal if the maximum benefit is available to a significant part of the consumers but it is impossible for the rest to achieve it? • Campaign slogan: „you can save even 1 liter per tank”. • According to the Competition Council: the message implies that with the fuel everyone can a achieve a consumption reduction (categorical message), the maximum of which can be 1 liter per tank ("up-to” message"). • However, a significant part of the consumers had no chance to achieve any reduction in consumption: the pre-conditions of the consumption reduction utterly excluded several consumers from the potential of achieving the benefit: e.g. the consumption reduction could be achieved only if the car was used in an urban area.

8. What if the discount if it is costly to meet the conditions of the discount? Case Vj-29/2009 Allianz • „Benefit up-to HUF 300,000” • In essence, the maximum benefit could be achieved only if the consumer was a "subscriber" to other Allianz products as well (motor-vehicle liability insurance, real estate insurance, life insurance, bank account etc.). • According to the Competition Council, the benefit was realistically available only to consumers who had already been the customers of Allianz. • Non-customers could achieve the benefit only if they purchased various financial products from Allianz, and since the latter triggered considerable costs, the costs of fulfilling the conditions of the benefit to some extent counter-weighed the benefit.

9. Final conclusions and dilemmas • United in diversity or divided in unity? • Does the focus on big cases create a competitive advantage for small firms? • Media-mix: some messages can be accommodated with certain media channels (e.g. internet, printed press) but do not square with others (e.g. television ads). • Consumer awareness: do we expect consumers to learn? • Does "up-to" imply "in range of"? Although the "up-to" term indicated that the maximum benefit is not available to all consumers, in case of price-discounts, does this imply that the benefit available to the consumers does not depart considerably from the maximum benefited highlighted in the advertisement?

10. Thank You very much for your attention! Dr. NAGY, Csongor István Associate professor of law Department Head University of Szeged E-mail: nagycs@juris.u-szeged.hu