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The Impact of the Unfair Commercial Practices Directive (2005/29/EC) on Contract Law

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The Impact of the Unfair Commercial Practices Directive (2005/29/EC) on Contract Law The Impact of the Unfair Commercial Practices Directive (2005/29/EC) on Contract Law Mateja Đurović Thesis submitted for assessment with a view to obtaining the degree of Doctor of Laws of the European University Institute Florence, June 2014 2 European University Institute Department of Law The Impact of the Unfair Commercial Practices Directive (2005/29/EC) on Contract Law Mateja Đurović Thesis submitted for assessment with a view to obtaining the degree of Doctor of Laws of the European University Institute Examining Board Hans-Wolfang Micklitz, European University Institute (Supervisor) Giorgio Monti, European University Institute Geraint Howells, University of Manchester Viktor Kreuschitz, General Court of the European Union © Mateja Đurović, 2014 3 No part of this thesis may be copied, reproduced or transmitted without prior permission of the author This Thesis has benefited from language correction 5 6 SUMMARY This thesis examines the relationship between the law on unfair commercial practices and consumer contract law. The thesis develops the claim that Directive 2005/29/EC, on unfair commercial practices (UCPD) has had a strong impact on the content of consumer contract law, despite the declaration concerning the independence between both branches of law contained in Article 3(2) UCPD. In order to substantiate this claim, the thesis examines the implications for consumer contract law of the main components of the regulatory regime laid down by the UCPD, namely, (1) the notion of average consumer, (2) the duty to trade fairly, (3) the duty of information and (4) the remedies. By looking both at the theoretical underpinnings and at the actual operation of this regulatory regime, the thesis casts light on the way in which the UCPD has shaped consumer contract law. The thesis further shows that this is an ongoing phenomenon whose ramifications may be far-reaching, for it implies that the UCPD is powerfully fuelling the Europeanization of contract law. 7 8 TABLE OF CONTENTS SUMMARY ............................................................................................................................ 7 ACKNOLEDGEMENTS ................................................................................................. 15 CHAPTER I - INTRODUCTION ................................................................................. 19 The main hypothesis and problem of the thesis .......................................................................... 19 The main research question ................................................................................................................ 21 Structure of the thesis ............................................................................................................................ 22 Setting of the scene: the background of the problem ................................................................. 24 Two branches of EU Consumer Law .............................................................................................................. 24 Europeanisation of the law unfair commercial practices.......................................................................... 26 The commencement of the process of Europeanisation .......................................................................................... 26 Directive on 84/450/EEC on misleading advertising ............................................................................................... 28 The adoption of Directive 2005/29/EC on unfair commercial practices ........................................................... 29 The Regulatory Framework of the UCPD .................................................................................................... 32 The scope of application of the Directive .................................................................................................................... 32 Three-step mechanism for assessment of fairness .................................................................................................... 34 Maximum harmonisation character of the Directive ................................................................................. 36 Significance of maximum harmonisation .................................................................................................................... 36 Reasons for maximum harmonisation ........................................................................................................................... 37 The notion of commercial practice .................................................................................................................. 39 Meaning of commercial practice ..................................................................................................................................... 39 Relationship between a commercial practice and a contract ................................................................................. 40 Europeanisation of contract law ....................................................................................................................... 41 European v national contract law .................................................................................................................................... 41 Fragmentary character of European contract law ...................................................................................................... 42 Codification of European private (contract) law? ..................................................................................................... 43 Projects on the Europeanisation on contract law ....................................................................................................... 45 The Optional Instrument and its future ......................................................................................................................... 46 The case of Directive 2011/83/EU on consumer rights........................................................................................... 47 The role of article 3(2) UCPD .......................................................................................................................... 48 CHAPTER II - THE AVERAGE CONSUMER ........................................................ 51 Introduction: Which consumer is protected by EU law? ........................................................... 51 Protected consumer under the UCPD ............................................................................................... 53 Two definitions of consumer ............................................................................................................................. 53 Consumer as the subject of protection .......................................................................................................................... 53 Consumer as a standard of expected behaviour ......................................................................................................... 54 The average consumer between the two goals of the UCPD .................................................................. 56 European average consumer as a compromised solution ....................................................................................... 56 A comparative example of understanding of average consumer ......................................................................... 57 Three components of the definition of average consumer ....................................................................... 58 The average consumer as a reasonably well-informed and reasonably observant and circumspect consumer.................................................................................................................................................................................. 59 Social, cultural and linguistic factors............................................................................................................................. 64 The limited scope of application of the factors .......................................................................................................... 68 The autonomous interpretation of the average consumer ....................................................................................... 70 The interpretation of the average consumer under the UCPD ................................................................ 72 The distinction between the average consumer and vulnerable consumer ......................................... 76 Average consumer of a particular group ...................................................................................................................... 76 The notion of vulnerable consumer ................................................................................................................................ 77 Examples of vulnerable consumers ................................................................................................................................ 79 9 Vulnerable consumer in action ........................................................................................................................................ 80 Vulnerable consumer in services of general economic interest............................................................................ 81 Protected consumer under consumer contract law .................................................................... 83 Lack of clear standard of protected consumer ............................................................................................
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