Tuesday, December 08, 2009

EU guidance on unfair commercial practices - confirms rules apply to social networking, blogs

The Commission has just published a lengthy working document (PDF) with guidance on the application of the Unfair Commercial Practices Directive. This confirms that the Directive applies to blogs and social networking sites and gives some examples of banned practices - such as the use of fake comments or "astroturfing":
Social media, which include blogs, social networking sites, have become important avenues for commercial practices, especially hidden ones. They are sometimes used by traders to promote and advertise their products.

For example, several Member States have reported that cosmetic companies have paid bloggers to promote and advertise their products on a blog aimed at teenagers, unbeknownst to other users. In such cases, the authorities considered that the bloggers concerned were engaging in hidden commercial practices.

Unfair commercial practices may also occur on price comparison websites. An obvious case is when an online price comparison service belongs or is linked to a trader and is used to advertise its products. For example, the site "quiestlemoinscher.com" (literally "whoisthecheapest.com"), a grocery price comparison service created by a French major supermarket company, was considered by French courts to be a trader's website and a tool for comparative advertising...

[T]he Directive tackles the particular situation of "hidden" traders or traders representing themselves as consumers. Under Annex I of the Directive (the "black list"), the following practice is prohibited in all circumstances: Falsely claiming or creating the impression that the trader is not acting for purposes relating to his trade, business, craft or profession, or falsely representing oneself as a consumer.

For example, "hidden" traders may be:
– a hotel website including flattering comments supposedly by consumers which are actually drafted by the hotel owner;
– a bookshop advertising its "customers' choice" books where customers have never been consulted and the choice is made by the bookseller.
Of course, none of this should come as any suprise to Irish readers. The Directive was implemented in Ireland by the Consumer Protection Act 2007, and both Daithi and Damien had good posts around that time pointing out that the Act would prohibit businesses from posing as consumers or (covertly) paying bloggers to post about them.

Responsibility for enforcing the Consumer Protection Act lies with the National Consumer Authority. Given how common fake comments have become, I'm surprised that they haven't put out any guidance on this topic. It may be that it will take a complaint from an annoyed blogger (is there any other type?) or forum moderator before they take any action in this area.

Incidentally, it must be said that the approach taken by the Directive and national law (which is limited to paid posts or "advertorials") is much more sensible than the approach which the FTC has taken in the United States, where it now requires bloggers and twitterers to post details of any supposed conflict of interest - even a review copy of a book! - on pain of a $11,000 fine. Jack Shafer has more on the FTC rules (PDF).


  1. Good article, what about the company who created the social networking site, are they allow to advertise their products and services on the site?

  2. Of course - provided that the advertising doesn't infringe the other rules of the Directive / implementing Irish law. There's an accessible summary of the rules here: