Legal Alert – New Rules Regarding the Duty to Provide Consumers with Prices in Marketing
Until recently, Finnish marketing law required businesses to provide consumers with the prices of products in any kind of marketing communication specifying a consumer product. Based on the new government decree 553/2013 which entered into force on 18 July 2013, businesses are now generally allowed to leave out information on prices when advertising in television, radio, printed media and online.
The general duty to always provide the prices of consumer goods offered for sale in retail outlets remains operative under the new decree. According to section 4, both the asking price and the unit price of the goods being promoted must be displayed in physical retail outlets and related shop windows as well as in online shops, as further specified in the decree.
Moreover, businesses must still take into account the general provisions on marketing contained in Chapter 2 of the Consumer Protection Act. This includes the duty to give information which is of essential importance for consumers trying to reach a purchase decision (Section 7). In his announcement of 12 July 2013, the Consumer Ombudsman stressed that both the Market Court and the Supreme Court have rendered a number of decisions in which they deemed prices to constitute information of essential importance.
The assessment as to whether prices should be provided or not must accordingly essentially be carried out case by case (also taking into account any potential branch-specific regulations and guidelines). However, in most situations, advertisers who are leaving out price information are not violating section 7 of the Consumer Protection Act as long as prices can be provided at a later stage and marketing level, e.g. in the relevant retail outlet.
The new decree should put an end to the Finnish debate on what constitutes permissible image marketing with respect to price indication. The interpretation of these rules has been one of the questions scrutinized most frequently by the Market Court during the past ten years, even reaching the Supreme Court in a handful of cases.
For instance, in 2007 the Supreme Court confirmed the finding of the lower courts that Finland’s largest daily subscription newspaper Helsingin Sanomat had breached its duty to announce the price per issue for its newspaper in a television commercial. The 40 second long, fast-paced advertisement showed a man rushing through his day, carrying a newspaper in which he could read about upcoming events. The last frame of the commercial showed the text The NYT supplement each Friday. Helsingin Sanomat. However, the price of subscriptions or newsstand copies was not mentioned in the ad, a fact which the Supreme Court found to violate the law in force at the time in question.
The decision has been criticized as severely restricting the ability of businesses to engage in image marketing, which forms an essential part of modern business strategy. The increasing use of innovative advertising strategies on the internet further challenges the rationale behind the old rule of having to announce prices in all marketing communication. The new rules are therefore likely to be welcomed by advertisers.
The new decree implements the so called Unfair Commercial Practices Directive (2005/29/EC) which also brought about relieving changes to the Finnish rules on promotional prize draws on 15 June 2011. Under the old regime businesses had to ensure that consumers were also able to participate in promotional prize draws without purchasing the product being promoted. Based on amendment 227/2011 of the Finnish Consumer Protection Act (1978/38), businesses are now allowed to limit promotional lotteries to consumers who actually purchase the endorsed product or who offer to make a purchase.
The Unfair Commercial Practices Directive required all Member States to incorporate the Directive into national law by 12 December 2007. However, Member States have been able to apply more protective national legislation until 12 June 2013.