Case law

  • Case Details
    • National ID: 4 Ob 188/08p
    • Member State: Austria
    • Common Name:MEL
    • Decision type: Supreme court decision
    • Decision date: 20/01/2009
    • Court: Supreme Court, Vienna
    • Subject:
    • Plaintiff: N/A
    • Defendant: N/A
    • Keywords: B2C, false impression, financial services, investments
  • Directive Articles
    Unfair Commercial Practices Directive, Chapter 2, Section 1, Article 6, 1.
  • Headnote
    (1) The advertisement for an investment product may be misleading, although it is not in contradiction to the capital market brochure.

    (2) It does not suffice to refer in an advertisement for financial products to the more extensive financial prospectus so as to exclude the misleading character of the advertisement.

    (3) An obligation exists according to which the trader must make a group-specific assessment in the event advertisements are aimed at potentially different target customer groups.

    (4) The prohibition on misleading commercial practices can be invoked as soon as the commercial practice involved is able to mislead a fictive average member of a certain group which may lead this member to take a transactional decision which this member would not have taken otherwise.

     
  • Facts
    The plaintiff is a society engaging in the protection of consumers' interests. The first defendant party is known in Austria especially for its coffee and for being a former exclusive food chain with only one shop left in the Inner District of Vienna. The second defendant party is a complete subsidiary of the first defendant party which offered shares and certificates of a third party company, headquartered in Jersey, which conducts business in real estate investment.

    In general terms, the thirteen pages thick promotional brochure the defendants used to promote its products, showed only the positive aspects regarding the current and already achieved growth of the investment product. The promotional brochure led a reader without profound knowledge on the legal and economic background knowledge to think the promoted investment was as secure as a savings account. The described promotional brochure was used to promote the product to experienced investors as well as to inexperienced newcomers on the financial market.

     
  • Legal issue
    (1) According to the court, the advertisement for an investment product may be misleading, although it is not in contradiction to the capital market brochure. The ability to mislead, the court held, has to be assessed by the rules of ordinary Unfair Competition law.

    (2) Further, the court clears out that a formal reference to the prospectus is not sufficient to eliminate an otherwise existing ability to mislead. On the other hand, every risk must not be addressed in the promotional brochure. Whether a certain risk has to be addressed depends on the relevant circumstances of the case.

    (3) The court also addressed the issue of advertisements aimed at various target groups. For different target groups which may be identified by objective criteria, a group-specific assessment has to take place, according to the court. Hence, it is not sufficient to provide professionals and non-professionals with an identical advertisement document.

    (4) The prohibition on misleading commercial practices in general can be invoked, as soon as the commercial practice involved is able to mislead a fictive average member of a certain group which may lead this member to take a transactional decision which this member would not have taken otherwise.
  • Decision

    (1) May an advertisement for financial products be misleading, although the advertisement is not in contradiction with the capital market prospectus?

    (2) Does it suffice to refer in an advertisement for financial products to the more extensive financial prospectus so as to exclude the misleading character of the advertisement?

    (3) Does an obligation exist based upon which the trader must make a group-specific assessment in the event advertisements are aimed at potentially different target customer groups?

    (4) Under which circumstances can the prohibition on unfair commercial practices be invoked?

     

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  • Result
    The plaintiff's request was partly granted.