Unfair Commercial Practices Directive, Annex I, 5.

Announcing a product at a discounted price, without stating the limited availability of the products announced, constitutes a prohibited commercial practice.

In its decision of 8 January 2009, the Italian Competition Authority decided to impose a fine of 120.000 Euros on the plaintiff for having conducted two unfair commercial practices consisting of bait advertising in supermarkets. According to the Italian Competition Authority's findings, the products advertised during the plaintiff's promotional campaign (two televisions) at a specified price for a certain period were not available in adequate quantities.

In the appeal proceeding brought before the Administrative Tribunal of first instance, this in order to obtain the annulment of the Italian Competition Authority' s decision, plaintiff claimed that the advertisements were made public through a limited number of flyers. In addition, plaintiff argued that the Authority received only one complaint about the facts.

 

The court first reminds that bait advertising covers cases in which a trader  (i) offers a product at a highly discounted price in order to attract consumers and (ii) does not hold adequate storage of such products.

Next, the court held, according to the UCP Directive bait advertising constitutes an unfair commercial practice since it is aimed at encouraging consumers to visit the point of sale, where they then discover that the promoted products are no longer available, while other (similar) products at higher prices are available. Subsequently, traders making use of "bait advertising" are obliged to ensure a sufficient degree of availability of the promoted product so to satisfy the demand increase triggered by the promotional offer. Alternatively, the trader should indicate in the advertising the limited availability of the product in question.

Responding to the plaintiff's  arguments, the court reminded that the limited number of complaints has no relevance for the assessment of the trader's conduct, since the unfairness of the practice depends on objective elements, such as the lack of sufficient information on discounted products availability and the potential reach of the advertisements.

 

Does announcing a product at a discounted price, without stating the limited availability of the products announced, constitute a prohibited commercial practice? 

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The court decided to fine the plaintiff with 60.000 Euros.