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Case Details

Case Details
National ID 2S-27
Member State Lithuania
Common Name link
Decision type Administrative decision, first degree
Decision date 11/11/2010
Court Competition Council of the Republic of Lithuania (Vilnius)
Subject
Plaintiff N/A
Defendant UAB “Dagris”
Keywords black list, free, price

Unfair Commercial Practices Directive, Annex I, 20.

A conditional purchase promotion which announces the offering of a free product when buying a paid-for product, however applying a price higher than the applicable price for the paid-for product, constitutes a commercial practice which is considered unfair in all circumstances.
The defendant launched a promotional campaign on the internet and in newspapers offering two free car tires when buying two new ones.

In reality, however, it was established that the price against which the two tires were announced in the promotional campaign, was actually twice higher than the previously announced and applied retail price.

 
The Competition Council first referred to the misleading advertising regulation which provides that advertising shall be in all circumstances considered misleading if it falls within the blacklist of the unfair commercial practices.

Next, the Competition Council noted that the main message of the advertisement in question was that consumers buying 2 tires got extra two (i.e., for free). It was noted that in cases where goods are advertised as “free” or “gratis”, a commercial practice should be considered to be unfair in all circumstances if the consumer has to pay anything other than the unavoidable cost of responding to the commercial practice and collecting or paying for delivery of the item because otherwise the trader may create a false impression about itself, its good or services. Therefore, the court ought it necessary to investigate whether the consumer did not actually pay (part of) the two "free" tires.

In this respect, the Competition Council treated such advertisement as a conditional purchase promotion concept which has been elaborated on by the European Commission’s Guidance on the implementation/application of the UCP Directive (3 December 2009 SEC(2009), 1666). Based on the said guidance, it was noted that a trader should be able to show that the quality or composition of the paid-for items has not been reduced and the price of the paid-for items has not been inflated to recover the cost of supplying the free item.

The court established that the promotional price of the tires was actually twice higher than the announced retail price. It was noted that the consumer did not receive any free products as in reality he paid a double price for the paid-for tires. As a result, the Competition Council concluded that the consumer actually had to pay for the tires described as free and, thus, treated the defendant’s advertising as a commercial practice which in all circumstances is considered unfair.
Does a conditional purchase promotion which announces the offering of a free product when buying a paid-for product, however applying a price higher than the applicable price for the paid-for product, constitute a commercial practice which is considered unfair in all circumstances?
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A fine of LTL 14,000 (EUR 4,000) was imposed on the defendant and it was ordered to cease the advertising campaign.