IP, IT & Life Sciences

Advertising directed at children

It is unlawful for advertisements to include a direct exhortation to children to purchase – however, it is still unclear what this actually means in practice.

Number 28 of the Unfair Commercial Practices Directive’s black list

The annex of the Unfair Commercial Practices Directive (2005/29/EC – “UCP-Directive”) contains a list of commercial practices that are considered unfair in all circumstances (black list). Advertising directed at children is one of the most controversially discussed topics dealt within this list. According to N 28 of this annex, it is unlawful (because deemed aggressive) to include in an advertisement a direct exhortation to children to buy advertised products or to persuade their parents or other adults to buy advertised products for them.

While it is comprehensible that the UCP-Directive (being only applicable in the B2C business) identifies children as particularly vulnerable target group among consumers, an outright ban on advertising directed at children would seem to be both excessive and unrealistic. This tension and the need to balance interests – also reflected in recital 18 of the UCP-Directive – seem to be continued in the present case law.

Recent court decisions

Imperative “get” as exhortation

The first decision materially dealing with N 28 of the annex to the Austrian Unfair Competition Act “UWG” (corresponding with N 28 of the UCP-Directive’s annex) concerned the recently very popular sticker albums offered by various supermarket chains. Having purchased the relevant album, the stickers are then a bonus added to each purchase of at least EUR 10. One of such albums was offered with the words “Get the book for it”, clearly directed at children. In its decision (OGH 4 Ob 110/12y) the Austrian Supreme Court on the one hand made clear that the term “children” has to be interpreted autonomously covering in any case all minors under 14, and on the other hand considered the use of the imperative “get” strong enough to qualify as (direct) exhortation. Thus, deeper analyses were not necessary.

It needs to be a direct exhortation to buy a specific product

In a further decision concerning an analogous case (OGH 4 Ob 244/12d), the Austrian Supreme Court clarified that only direct exhortations to buy a specific product (the advertised product) are covered by the prohibition of N 28 of the annex to the UWG. As regards other advertising methods that are directed at children on a general basis only or use children as purchase driver (which could both be considered aggressive on a case-by-case basis in accordance with Art 8 UCP- Directive respectively Sec 1a UWG), the Supreme Court referred to the parents’ responsibility to educate their children and to set limits for them.

Against this background, there seems not to be much scope to deal with a case of advertising directed at children under Art 8 of the UCP-Directive respectively Sec 1a UWG, since according to the present case law it is either prohibited in any way according to the black list or it is lawful.

Indirect exhortations do not fall within the scope of N 28

The most recent case concerned an advertisement for computer games, CD’s and DVD’s, all of which were promoted on a website through the use of invitations like “Solve puzzles and kick off”, “Listen to the soundtrack on the CD and watch the live performance of H* M* on DVD“. While the court of appeal held that the applicability of N 28 of the annex to the UWG depends on whether the website contains a link to an actual purchase offer regarding the advertised products, the Austrian Supreme Court considered the “exhortations” to be mere indirect invitations to purchase, which are generally not covered by N 28 of the annex to the UWG. The invitations would only refer to the intended use of the advertised products in order to make them attractive for the consumers, but not yet to directly exhort the potential customer to buy the product. (OGH 4 Ob 95/13v).

It seem questionable whether the Austrian Supreme Court’s interpretation is actually balanced, since for example the invitation “Get the soundtrack on CD” would be unlawful in any way, while the exhortation “Listen to the soundtrack on CD” would probably not even be considered aggressive in accordance with Art 8 Unfair UCP-Directive respectively Sec 1a UWG on a case-by-case basis. For example, the German Supreme Court just recently considered the “invitation” “Take the chance and give your armour and weapons that certain something” on the website of a computer role game with a link to the actual upgrade-offer to be an unlawful direct exhortation to purchase (BGH 17.7.2013, I ZR 34/12).

Conclusion

Against this background, the actual scope of N 28 of the annex to the UWG appears to remain unclear. This should give reason to take the next case before the CJEU for a preliminary ruling. If that occurs, the next Roadmap might be able to report about a uniform interpretation of N 28 of the UCP-Directive’s annex effective for all member states.

Despite several Austrian Supreme Court decisions dealing with the topic, it remains unclear how the phrase “direct exhortation” should be interpreted correctly– therefore, a preliminary ruling of the CJEU is eagerly awaited.