COM(2001)546-1 - Sales promotions in the Internal Market

official title

 

Legal instrument	Communication
reference by COM-number55	COM(2001)546
Additional COM-numbers	COM(2001)546
CELEX number58	52001DC0546

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• 1. 

  The scope of the proposal covers all forms of cross-border communication of sales promotions. The particularities of communications of sales promotions that make them relatively attractive to advertisers and direct-marketers compared with other commercial communication services were set out in the Commission's services Working Document that accompanied the Green paper on 'Commercial communications in the Internal Market': COM(96) 192 final. 18.05.96. This and other key documents can be found at:
  
   
• 2. 

  Commercial communications consist of any form of communication designed to promote, directly or indirectly, the goods, services of image of a company, organisation or person pursuing a commercial, industrial or craft activity or exercising a regulated profession.
  
   
• 3. 

  Survey undertaken by the European Federation for Sales Promotions covering Belgium, Denmark, France, Germany, Ireland, Italy, the Netherlands, Spain and the United Kingdom.
  
   
• 4. 

  See footnote (i).
  
   
• 5. 

  Resolution on the Commission Green Paper on Commercial Communications in the Internal Market (COM(96)0192 - C4-0365/96) adopted on 15.07.97. ref : A4 - 0219/1997
  
   
• 6. 

  The follow-up to the Green paper on Commercial Communications in the Internal Market: Communication from the Commission. COM(1998) 121 final.
  
   
• 7. 

  See the 1996 Green Paper.
  
   
• 8. 

  Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce). All language versions of the Directive can be downloaded from: europa.eu.int/comm/internal_market/en/media
  
   
• 9. 

  This joint Commission-Council declaration stated:
  
   
• 10. 

  See Analytical Report, Section 5 for a list of the Expert Group members.
  
   
• 11. 

  The regulation of discounts, defined as (i) simple price reductions, (ii) quantity discounts and (iii) coupons and vouchers, and the application of the principle of mutual recognition was considered at the first four meetings of the Expert Group and the Group's first opinion was published in June 1999. The opinion on the regulation of free gift and premium offers, respectively defined as (i) gifts offered unconditional on sale and (ii) offers other than discounts which are provided to the consumer once the latter has ordered or bought the promoted product or service was published in August 2000 and the final opinion on the regulation of commercial communications consisting of promotional competitions and games with a view to achieve the optimal functioning of the Internal Market was published in January 2001. For the latter issue, promotional contests and games were divided into three different categories: Category 1: Promotional contests involve questions to consumers, the solution of which require certain skills; Category 2: 'Promotional games are where the winner is designated by chance and where no payment is required to participate'; and Category 3: 'Promotional games are where the winner is designated by chance and where no payment nor obligation to buy is required to participate.'
  
   
• 12. 

  The Member States (often represented by their enforcement authorities) have been involved through their participation in the Expert Group and interested parties have been informed through the publication of the opinions of the Expert Group in the newsletter Commercial Communications . The latter is distributed free of charge to consumer associations and is now self-financing. Information on this newsletter can be obtained from Information on this publication can be obtained from The Editor, Commercial Communications, 111 Whitchurch Road, Tavistock, PL19 9BQ, UK. Tel: 00 44 1822 618628 Fax: 00 44 1822 618629 e-mail:
   
• 13. 

  As adopted in the Commission's Communication in 1998.
  
   
• 14. 

  See the Analytical Report Section 1 presents the regulatory tables adopted by the Expert Group.
  
   
• 15. 

  See footnote (vi)
  
   
• 16. 

  Report on the communication from the Commission to the Council, the European Parliament and the Economic and Social Committee on the follow-up to the Green paper on Commercial Communications in the Internal Market (COM(98)0121 - C4-0252/98) Committee on Economic and Monetary Affairs and Industrial Policy. PE 228.224/fin. 15 December 1998 A4-0503/98
  
   
• 17. 

  In its resolution the Parliament noted that it:
  
   
• 18. 

  This has consisted of:
  
   
• 19. 

  See section on restrictions in promotional contests and games in the next section of this Communication.
  
   
• 20. 

  Council recommendation 'Drinking of alcohol by children and adolescents' - COM (2000) 736 final The final proposal of these recommendations is available at :
  
   
• 21. 

  Case 286/81 Oosthoek's Uitgeversmaatschappij BV. Judgement of the Court of 15 December 1982.
  
   
• 22. 

  To quote: 'Given the accelerating economic trend towards branch diversification and parallelism since the 1970s, however, these requirements were more of an obstacle to competition than a protection for economic operators against competition distortion. The Act meant that specialist traders in particular were less able to react quickly and effectively to gift campaigns launched by, for example, chain stores with an extensive range at their disposal. The protection intended by the Act thus had the opposite effect. Quite apart from the fact that consumers nowadays can be seen as fully-functioning and responsible market operators, they have access through product and price information, e.g. via offers from other traders, to ample information enabling them to assess the real value of a gift. Moreover, there are traders who compete on the grounds of other aspects (price, service and guarantee) than gifts, and it appears that consumers take part in gift campaigns in full knowledge of the facts.'
  
   
• 23. 

  This definition is consistent with national provisions in this field , e.g. in France and in Ireland. Jurisprudence in the field of predatory pricing suggests that such a definition would indeed mark a threshold below which risk of abuse of dominant positions may become apparent. Case C-62/86 AKZO Chemie BV v Commission of the European Communities 3 July 1991. In this case the Court considers that prices below average variable costs (that is to say, those which vary depending on the quantities produced) if applied by a dominant player represent abuse of a dominant position. This is because each sale generates a loss, namely the total amount of the fixed costs (that is to say, those which remain constant regardless of the quantities produced) and therefore such an operation simply seeks to eliminate a competitor. In contrast, prices below average total costs, that is to say, fixed costs plus variable costs, but above average variable costs (which would be equivalent to the definition noted above for a reseller), must be regarded as abusive only if they are determined as part of a plan for eliminating a competitor. Such prices when applied systematically can drive from the market undertakings which are perhaps as efficient as the dominant undertaking but which because of their smaller financial resources, are incapable of withstanding the competition waged against them. It follows that it is once discounts result in a price that is below this cost level that the risk of anti-competitive behaviour by a dominant player arises.
  
   
• 24. 

  Advocate General Tesauro pointed out in his opinion on the Familiapress case, which was not contested by the subsequent judgement (see footnote (xxvii));
  
   
• 25. 

  Advocate General Tesauro took this line in his opinion delivered on 13 March 1997 which was not contested by the subsequent judgement. Vereinigte Familiapress Zeitungsverlags- und vertriebs GmbH v Heinrich Bauer Verlag. Reference for a preliminary ruling: Handelsgericht Wien - Austria. Measures having equivalent effect - Distribution of periodicals - Prize competitions - National prohibition. Case C-368/95.ECR 1997 page I-3689
  
   
• 26. 

  Council Directive 92/28/EEC of 31 March 1992 on the advertising of medicinal products for human use, OJ L 113 , 30/04/1992 p. 13-18
  
   
• 27. 

  COM (2001) 283 final
  
   
• 28. 

  The scope of the proposal covers all forms of cross-border communication of sales promotions. The particularities of communications of sales promotions that make them relatively attractive to advertisers and direct-marketers compared with other commercial communication services were set out in the Commission's services Working Document that accompanied the Green paper on 'Commercial communications in the Internal Market': COM(96) 192 final. 18.05.96. This and other key documents can be found at:
  
   
• 29. 

  Commercial communications consist of any form of communication designed to promote, directly or indirectly, the goods, services of image of a company, organisation or person pursuing a commercial, industrial or craft activity or exercising a regulated profession.
  
   
• 30. 

  Survey undertaken by the European Federation for Sales Promotions covering Belgium, Denmark, France, Germany, Ireland, Italy, the Netherlands, Spain and the United Kingdom.
  
   
• 31. 

  See footnote (i).
  
   
• 32. 

  Resolution on the Commission Green Paper on Commercial Communications in the Internal Market (COM(96)0192 - C4-0365/96) adopted on 15.07.97. ref : A4 - 0219/1997
  
   
• 33. 

  The follow-up to the Green paper on Commercial Communications in the Internal Market: Communication from the Commission. COM(1998) 121 final.
  
   
• 34. 

  See the 1996 Green Paper.
  
   
• 35. 

  Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce). All language versions of the Directive can be downloaded from: europa.eu.int/comm/internal_market/en/media
  
   
• 36. 

  This joint Commission-Council declaration stated:
  
   
• 37. 

  See Analytical Report, Section 5 for a list of the Expert Group members.
  
   
• 38. 

  The regulation of discounts, defined as (i) simple price reductions, (ii) quantity discounts and (iii) coupons and vouchers, and the application of the principle of mutual recognition was considered at the first four meetings of the Expert Group and the Group's first opinion was published in June 1999. The opinion on the regulation of free gift and premium offers, respectively defined as (i) gifts offered unconditional on sale and (ii) offers other than discounts which are provided to the consumer once the latter has ordered or bought the promoted product or service was published in August 2000 and the final opinion on the regulation of commercial communications consisting of promotional competitions and games with a view to achieve the optimal functioning of the Internal Market was published in January 2001. For the latter issue, promotional contests and games were divided into three different categories: Category 1: Promotional contests involve questions to consumers, the solution of which require certain skills; Category 2: 'Promotional games are where the winner is designated by chance and where no payment is required to participate'; and Category 3: 'Promotional games are where the winner is designated by chance and where no payment nor obligation to buy is required to participate.'
  
   
• 39. 

  The Member States (often represented by their enforcement authorities) have been involved through their participation in the Expert Group and interested parties have been informed through the publication of the opinions of the Expert Group in the newsletter Commercial Communications . The latter is distributed free of charge to consumer associations and is now self-financing. Information on this newsletter can be obtained from Information on this publication can be obtained from The Editor, Commercial Communications, 111 Whitchurch Road, Tavistock, PL19 9BQ, UK. Tel: 00 44 1822 618628 Fax: 00 44 1822 618629 e-mail:
   
• 40. 

  As adopted in the Commission's Communication in 1998.
  
   
• 41. 

  See the Analytical Report Section 1 presents the regulatory tables adopted by the Expert Group.
  
   
• 42. 

  See footnote (vi)
  
   
• 43. 

  Report on the communication from the Commission to the Council, the European Parliament and the Economic and Social Committee on the follow-up to the Green paper on Commercial Communications in the Internal Market (COM(98)0121 - C4-0252/98) Committee on Economic and Monetary Affairs and Industrial Policy. PE 228.224/fin. 15 December 1998 A4-0503/98
  
   
• 44. 

  In its resolution the Parliament noted that it:
  
   
• 45. 

  This has consisted of:
  
   
• 46. 

  See section on restrictions in promotional contests and games in the next section of this Communication.
  
   
• 47. 

  Council recommendation 'Drinking of alcohol by children and adolescents' - COM (2000) 736 final The final proposal of these recommendations is available at :
  
   
• 48. 

  Case 286/81 Oosthoek's Uitgeversmaatschappij BV. Judgement of the Court of 15 December 1982.
  
   
• 49. 

  To quote: 'Given the accelerating economic trend towards branch diversification and parallelism since the 1970s, however, these requirements were more of an obstacle to competition than a protection for economic operators against competition distortion. The Act meant that specialist traders in particular were less able to react quickly and effectively to gift campaigns launched by, for example, chain stores with an extensive range at their disposal. The protection intended by the Act thus had the opposite effect. Quite apart from the fact that consumers nowadays can be seen as fully-functioning and responsible market operators, they have access through product and price information, e.g. via offers from other traders, to ample information enabling them to assess the real value of a gift. Moreover, there are traders who compete on the grounds of other aspects (price, service and guarantee) than gifts, and it appears that consumers take part in gift campaigns in full knowledge of the facts.'
  
   
• 50. 

  This definition is consistent with national provisions in this field , e.g. in France and in Ireland. Jurisprudence in the field of predatory pricing suggests that such a definition would indeed mark a threshold below which risk of abuse of dominant positions may become apparent. Case C-62/86 AKZO Chemie BV v Commission of the European Communities 3 July 1991. In this case the Court considers that prices below average variable costs (that is to say, those which vary depending on the quantities produced) if applied by a dominant player represent abuse of a dominant position. This is because each sale generates a loss, namely the total amount of the fixed costs (that is to say, those which remain constant regardless of the quantities produced) and therefore such an operation simply seeks to eliminate a competitor. In contrast, prices below average total costs, that is to say, fixed costs plus variable costs, but above average variable costs (which would be equivalent to the definition noted above for a reseller), must be regarded as abusive only if they are determined as part of a plan for eliminating a competitor. Such prices when applied systematically can drive from the market undertakings which are perhaps as efficient as the dominant undertaking but which because of their smaller financial resources, are incapable of withstanding the competition waged against them. It follows that it is once discounts result in a price that is below this cost level that the risk of anti-competitive behaviour by a dominant player arises.
  
   
• 51. 

  Advocate General Tesauro pointed out in his opinion on the Familiapress case, which was not contested by the subsequent judgement (see footnote (xxvii));
  
   
• 52. 

  Advocate General Tesauro took this line in his opinion delivered on 13 March 1997 which was not contested by the subsequent judgement. Vereinigte Familiapress Zeitungsverlags- und vertriebs GmbH v Heinrich Bauer Verlag. Reference for a preliminary ruling: Handelsgericht Wien - Austria. Measures having equivalent effect - Distribution of periodicals - Prize competitions - National prohibition. Case C-368/95.ECR 1997 page I-3689
  
   
• 53. 

  Council Directive 92/28/EEC of 31 March 1992 on the advertising of medicinal products for human use, OJ L 113 , 30/04/1992 p. 13-18
  
   
• 54. 

  COM (2001) 283 final
  
   
• 55. 

  De Europese Commissie kent nummers toe aan officiële documenten van de Europese Unie. De Commissie maakt onderscheid in een aantal typen documenten door middel van het toekennen van verschillende nummerseries. Het onderscheid is gebaseerd op het soort document en/of de instelling van de Unie van wie het document afkomstig is.
   
• 56. 

  De Raad van de Europese Unie kent aan wetgevingsdossiers een uniek toe. Dit nummer bestaat uit een vijfcijferig volgnummer gevolgd door een schuine streep met de laatste twee cijfers van het jaartal, bijvoorbeeld 12345/00 - een document met nummer 12345 uit het jaar 2000.
   
• 57. 

  Het interinstitutionele nummer is een nummerreeks die binnen de Europese Unie toegekend wordt aan voorstellen voor regelgeving van de Europese Commissie.
  Binnen de Europese Unie worden nog een aantal andere nummerseries gebruikt. Iedere instelling heeft één of meerdere sets documenten met ieder een eigen nummering. Die reeksen komen niet overeen met elkaar of het interinstitutioneel nummer.
   
• 58. 

  Deze databank van de Europese Unie biedt de mogelijkheid de actuele werkzaamheden (workflow) van de Europese instellingen (Europees Parlement, Raad, ESC, Comité van de Regio's, Europese Centrale Bank, Hof van Justitie enz.) te volgen. EURlex volgt alle voorstellen (zoals wetgevende en begrotingsdossiers) en mededelingen van de Commissie, vanaf het moment dat ze aan de Raad of het Europees Parlement worden voorgelegd.
   
• 59. 

  Als dag van bekendmaking van een Europees besluit geldt de dag waarop het besluit in het Publicatieblad wordt bekendgemaakt, en daardoor in alle officiële talen van de Europese Unie bij het Publicatiebureau beschikbaar is.