Legal Alert – Market Court Ruling Concerning Promotional Lotteries
The Finnish Market Court has published a noteworthy ruling on promotional lotteries (MAO 55/14). The matter concerned a lottery organized by a multinational company involved in the manufacture and sale of consumer products.
SCA Tissue Finland Oy (SCA) had carried out a lottery in connection with the campaign Lotus-Potti.fi for the purposes of marketing and promoting tissue and paper towel products. By buying campaign products consumers could participate in the prize draw where they had a chance of winning the jackpot amounting to EUR 100,000, or other smaller monetary prizes. The odds of winning the jackpot were, according to the Consumer Ombudsman, 2.4 billion to 1 (a fact which was not given publicity during the campaign).
The Consumer Ombudsman considered the campaign to constitute an aggressive commercial activity contrary to the Consumer Protection Act (1978/38). The case was brought before the Market Court for a ruling due to its general interest even though SCA had offered undertakings to the Consumer Ombudsman to refrain from introducing similar promotions in the future.
The case was noteworthy due to the fact that marketing lotteries that require purchasers to buy a product as a condition for participating in the lottery were fairly recently permitted by an amendment to the Consumer Protection Act which became effective on 15 June 2011. At the time the amendment was introduced the Consumer Ombudsman stressed that the Consumer Agency would continue to enforce general rules prohibiting e.g. misleading promotions and this case can be seen as a test case on the application of the rules concerning aggressive commercial activity.
The Consumer Ombudsman requested primarily that SCA forthwith be prohibited from giving a false impression of the possibility to win a prize when the chance to win is extremely small. Secondarily, the Consumer Ombudsman requested that SCA forthwith be prohibited from using lotteries which dominate advertisements in such a way that the consumers attention focuses on the lottery instead of the actual product being offered.
The Consumer Ombudsman argued that the lottery shall be considered as prohibited aggressive commercial activities pursuant to Chapter 2 section 9 of the Consumer Protection Act or, in any event, unfair marketing pursuant to the general clause on unfair marketing in Chapter 2 section 3 of the Act.
According to the Consumer Ombudsman, the extent of the prize and the poor odds to win led to a situation in which the promotional game inappropriately influenced the discretion and decision-making of the consumer. The value of the main prize itself meant that the lottery was dominating the advertisement, according to the Consumer Ombudsman. The Consumer Ombudsman stated that the marketing took advantage of the psychological impact of the possibility of winning, although the odds to win the main prize were even smaller than in the popular Lotto game where the likelihood to win the main prize is 1 in 15 million.
The Market Court ruled, however, in favor of SCA. The small odds to win did not mean that the main prize did not exist. The prohibition against aggressive commercial activities was considered as mainly targeting oppressive or hostile marketing, which was not the case in this matter. Further, even though the lottery had been in a central position in the television campaign and announced with a large font in product packaging, an average consumer would not, according to the Market Court, buy the products in question solely in hope of winning the main prize. The type of lottery was considered normal by its nature and the goods to which it was connected were familiar daily products. The marketing was not contrary to generally accepted business-like practice and it did not aim at clearly weakening the capacity of a consumer to make a founded purchase decision or a decision which it would otherwise not have done. Thus, the promotional lottery was not considered contrary to the Consumer Protection Act.
The Unfair Commercial Practices Directive (2005/29/EC) and amendments 2008/561 and 227/2011 to the Finnish Consumer Protection Act introduced the concept of aggressive commercial practices and implemented changes to the general clause on unfair marketing as well as to the Finnish rules on promotional prize draws.
The Market Court ruling is an interesting precedent ruling in which the concept of aggressive commercial practices and promotional prize draws are assessed under the new regime. The ruling suggests a more pragmatic and liberal approach, taking the reasonably well-informed, observant and prudent average consumer, as well as the type and value of the main product into account when assessing the possible effects of the marketing activity on consumers purchase behavior.