Unfair Commercial Practices Directive, Chapter 2, Section 1, Article 6, 1., (d) Unfair Commercial Practices Directive, Annex I, 20.

It is not permissible to advertise a product or service as “free of charge” when the actual use of such product or service requires the consumer to incur additional indirect expenses on another product or service, even if the consumer should have reasonably foreseen such indirect expenses in relation to using the other product or service.

The defendant published advertisements of two product packages on its website.

According to the first advertisement, the first package consisted of the following products and services: a smart phone, a telephone card and a free of charge, unlimited use of mobile internet. A closer look at the terms and conditions of the said offering revealed that the free unlimited use of mobile internet was subject to the fulfillment of certain preconditions which required the consumer to purchase certain amounts of calling time to the telephone card, thereby incurring additional expenses.

According to the second advertisement, the second package consisted of the following products and services: a mobile phone, a telephone card and free calling time amounting to EUR 15. At a lower part of the advertisement it was specified, that the free calling time was to be granted to the consumer in 10 separate installments on the condition that the consumer purchased a certain amount of additional calling time to the telephone card every month, thereby incurring additional expenses.

On 9 January 2012, the Estonian Consumer Protection Board issued a notice to the defendant, whereby it notified the defendant of the commencement of administrative proceedings with regard to the two advertisements, as the Board was confident that the advertisements mentioned are misleading. The defendant was granted an opportunity to present its objections in the matter. The defendant argued that in case of both of the packages, the smart phone / mobile phone is the main feature of the package and that all the other items offered are supplementary only. The defendant was of the opinion that as it had disclosed all conditions of use of the advertised packages and as a reasonable consumer should have had foreseen the necessity of purchasing calling time when using a calling card as inevitable, the defendant was not in breach of any rules arising from advertisement or consumer law.

 

The Consumer Protection Board considered the advertisement of the first package to be a misleading commercial practice, as it is in conflict with the prohibition of the use of the words “free of charge”, as it was established that 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. The Board reminded that as the “free” and unlimited use of mobile internet was actually tied to purchasing calling time for the calling card, there was no question of a "free" service in the sense of the UCP Directive.

The fact that the consumers should have foreseen that when they purchased a package including a telephone card they would need to purchase calling time to use the calling card nonetheless, did not justify the advertisement of the mobile internet as “free of charge”.

The advertisement of the second package was considered as misleading advertising under the Advertising Act of Estonia, as the promise of calling time in the amount of EUR 15 included in the package was tied to purchasing additional calling time and therefore incurring additional expense compared to what was advertised to the consumer.

 

Is it allowed to advertise a product or service as "free of charge" when the actual use of such product or service requires the consumer to incur additional indirect expenses related to another product or service, even if the consumer should have reasonably foreseen such indirect expenses in relation to using the other product or service?

URL: http://www.tka.riik.ee/doc.php?15696

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Defendant’s objections were overruled. The defendant was required to remove the advertisements.