Case law

  • Case Details
    • National ID: MD 2016:10
    • Member State: Sweden
    • Common Name:link
    • Decision type: Court decision in appeal
    • Decision date: 17/06/2016
    • Court: The Swedish Market Court
    • Subject:
    • Plaintiff: The Swedish Consumer Ombudsman
    • Defendant: A.B.
    • Keywords: advertising, misleading omissions, unfair commercial practices
  • Directive Articles
    Unfair Commercial Practices Directive, Chapter 2, Section 1, Article 6, 1. Unfair Commercial Practices Directive, Chapter 2, Section 1, Article 6, 1., (g) Unfair Commercial Practices Directive, Chapter 2, Section 1, Article 6, 2. Unfair Commercial Practices Directive, Annex I, 20. Unfair Commercial Practices Directive, Chapter 2, Article 5
  • Headnote
    (1) To falsely give the consumer an impression that an agreement is concluded, without an underlying contractual obligation, constitutes unfair market practice.

    (2) To falsely state that a service is free of charge in marketing is misleading and unfair commercial practice, in accordance with Section 20 in Annex 1 to the Directive 2005/29/EC of the European Parliament and of the Council.

    (3) Omission to provide full information of the conditions to be met in order to receive the price provided in a valuation by the trader constitutes misleading omission as it is likely to affect the consumer's ability to take an informed transactional decision.
  • Facts
    The defendant previously owned a business registered under the name PhoneCash. The business involved the defendant purchasing second hand mobile phones from consumers and was advertised on the defendant's website.

    The defendant provided valuations of the second hand value of the consumers' mobile phones on the website. However, the further terms and conditions of the valuation, such as that the phone needed to be completely without faults or damages, were not provided on the website.

    Consumers could order a "mobile package" which was describe as being "free of charge" on the website. The consumers then received an agreement and an envelope in which the consumers should return their second hand phone to the defendant. In turn, the defendant resold the mobile phone and reimbursed the consumer.

    If a mobile package was ordered but no phone was sent back, the consumer was invoiced due to breach of contract.
  • Legal issue
    The court prohibits the defendant, under the penalty of a fine, in its marketing of mobile phone purchases, to invoice or otherwise demand payment from consumers for a breach of contract, when no contract containing a payment obligation has been entered into.

    The court finds that the plaintiff's claims cannot be construed as including a claim that the defendant has committed a breach of section 21 and 29 in Annex 1 to the Directive 2005/29/EC of the European Parliament and of the Council. The invoicing was however made with the intention of deluding the consumers about the existence of a binding agreement that involved a payment obligation. This commercial practice is considered misleading and unfair market practice.

    The court prohibits the defendant, under the penalty of a fine, when marketing mobile phone purchasing, to state that the service is free of charge or to use statements with the essentially same meaning, when it is not the case.

    The court finds that the use of "free of charge" is misleading and unfair commercial practice as it is a breach of section 20 in Annex 1 to the Directive 2005/29/EC of the European Parliament and of the Council.

    The court imposes the defendant, under the penalty of a fine, to explicitly in connection to the price stated when valuing a mobile phone online, provide information on the conditions that need to be met in order for the consumer to receive the stated amount, for example that the phone must not have any damages.

    The court finds that any omission to provide essential information in the marketing of its services, such as the conditions for receiving the valuated price, is considered unfair commercial practice as it is likely to affect the consumer's ability to take an informed transactional decision.
  • Decision

    (1) Is the commercial practice of giving the consumer an impression that an agreement is concluded without an underlying contractual obligation considered to be unfair market practice?

    (2) Is it considered misleading and unfair commercial practice to falsely state that a service is free of charge when marketing the service?

    (3) Does the omission to provide full information of what conditions need to be met in order to receive the price provided in a valuation by the trader constitute misleading omission?

    URL: http://www.marknadsdomstolen.se/Filer/Avgöranden/Dom2016-10.pdf

    Full text: Full text

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  • Result
    The court approved the plaintiff's claims.