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The Warsaw Voice » Law » February 20, 2008
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Misleading Advertising Targeted
February 20, 2008   
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A new act of parliament on unfair competition hit the statute books Dec. 21. The act on counteracting unfair business practices implements into Polish law EU Directive 2005/29/EC and targets dishonest behaviors which are all too often used by businesses in dealings with clients. The new regulations also tidy up a few loose ends left by the Act on Unfair Competition of 1993.

Article 1 sets out unfair business practices which are to be avoided by traders. These are defined as any unfair act towards a consumer that may mislead and/or deceive during the process of choosing a product.

Traders must analyze their goods and services on offer in terms of credibility and reliability with the information provided. This might go at least some way towards curbing misleading advertising, which may sometimes give rise to excessive expectations towards the products or services.

To give an example, just think of all those adverts for cheap air fares to exotic and not-so-exotic destinations. You might have been disappointed in the past when you rushed to the internet and followed up on an ad for a cheap flight only to discover that the real price was much higher. Somehow, they seemed to forget to show us the airport fees, luggage charges and taxes. The problem is that the client was not always fully aware of what his decision involved and certainly not well informed.

From now on, businesses have an obligation to show you all the important details when you are buying a plane ticket and cannot conceal any inconvenient truths.

The new act sets out a code of good practice (Art. 2 pt. 5) including ethical and professional rules which have to be used when advertising, promoting or offering a product. A client has to be provided with a high standard of information and to feel free to decide whether or not to buy.

"Business practice" is defined as an act or omission of a business, encouraging a manner of behavior towards clients, trade information, statement-especially advertising and marketing-directly involved in the purchasing of a product or service by a consumer (Art. 2 pt. 4).

Importantly, this act provides differentiated legal protection depending on the relations at issue.

The law now affords varying degrees of protection to persons and entities under the headings: businesses-to-consumer (B2C) and business-to-business (B2B).

Henceforth, the 1993 Act on Unfair Competition will govern relations only between traders, and the new provisions of law will protect consumers in relation with businesses.

To be more specific, from Dec. 21, 2007, two new laws are now in force and the only problem will be how to separate consumer from trader when very often we have a two-in-one situation. A simple example will illustrate this. Imagine a situation where an advertisement misleads an interested party and at the same time a competitor loses custom through an unfair offer. A business that unfairly advertises its goods harms the customer and its competitor.

To avoid this problem, in spite of the fact that both parties must be separated in legal assessment, there is supposed and presumed obligation to judge each situation by using two point of views. On the one hand, we should look at the situation between the trader and consumer; on the other hand, we look at the competitor who is strictly involved with the same services.

The new act defines trade practice and determines its unfair application. A presumption of unfairness is made if the practice contradicts good customs and distorts the way in which the consumer acts and behaves when selecting or buying a product. It concerns situations both in the run-up to signing a contract and after it (Art. 4 pt. 1).

To sum up, the new provisions aim to safeguard the customer and give businesses minimum standards for promoting their goods and services. An interested party may defend his rights not only on general provisions of civil, administrative and criminal law, but can turn to the Act on Unfair Competition and the Act on Counteracting Unfair Business Practice as well. Consumers may benefit by exercising their rights without having to prove unfair behaviors on the part of a trader, especially if they suffer due to one of the forbidden practices specifically listed in the new act.

Arkadiusz Wierzbicki
Jagoda Brzezińska
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