Information Obligations and Disinformation of Consumers

According to economic theory informed consumer decisions are efficient. If the information is ineffective or irrelevant, it will simply be ignored by consumers and businesses. Economic theory thus presupposes that information in general cannot have a negative impact. See also on this point Better Regulation Executive and National Consumer Council (2007), p. 9.

See e.g. “The total capacity that is available in the human mental architecture for the processing of input information is limited” Mangold (2015), p. 142 and see A Lang on LC4MP ‘Limited Capacity model of mediated motivated message processing’ Lang (2000), pp. 46–70 and Lang (2009), pp. 193–204. A central assumption in the LC4MP-model is that processing of information needs capacity and that the total amount of capacity is limited: if one process gets more capacity for operation, other processes being executed at the same time will get less. See also Mangold (2017), pp. 75–87: “the demands of different processes for a variable level of capacity are strongly related to the kind of processing (deep and rule-governed or superficial or heuristic). Processes not receiving the capacity they would require for thorough operation will only attain superficially computed results” (p. 79). Motivation (the information relates to the consumer’s interests, needs, goals or expected gratifications) turns out to be one of the dominant factors for the allocation of capacity (p. 80). However, customers tend not to be consciously aware of their own needs. Yet, to date, it has never been shown and according to Mangold could never be shown that unconscious priming “allows the creation of new and previously non-existing needs or motivates subjects to make decisions that are contrary to their general intentions” (p. 87). Compare with Kahneman (2011), p. 477, who refers to the “planning fallacy” as one of the manifestations of our pervasive optimistic bias. Planning fallacy is our tendency to overestimate benefits and underestimate costs, and hence foolishly to take on risky projects.

See e.g. Bakos et al. (2014), p. 1. See recently Wagner (2017), p. 1027.

The lack of transparency is an important factor that impedes consumers to read disclosed information and contract terms, but also a considerable number of cognitive and social factors as well as rational and economic factors play a crucial role in here; see to that extent respectively Stark and Choplin (2009), p. 659 and also Barnes (2007), pp. 228–272 and Becher and Unger-Aviram (2010), pp. 199–210.

Courts in common law systems are, more than in civil law systems, reluctant to intervene in the terms of the contract, nor even generally to define forms of “weakness” of one party, or “inequality” between the parties, that deserve their protection. For instance, in the United Kingdom Lord Denning’s plea in 1985 to devise a common law principle of ‘inequality of bargaining power’ was rejected. See more on this issue in the contribution of Cartwright to this book.

The emergence of industrial giants and correlative depersonalisation of relations between traders and consumers also contributed to these market failures.

Markets becoming more open almost automatically result in increased attention for the (weaker) position of consumers; see extensively on this subject, Straetmans (1998), p. 242 e.s.

See e.g. Baldwin et al. (2011), pp. 118–119 and Ramsay (2007), pp. 61–71 and 119 e.s. By impairing the consumer’s ability to make choices which are informed, unfair commercial practices generate a market failure.

See also the contribution of Hyvönen and Schinkels in this book. Schinkels further submits that the informable consumer more easily fits as an explanation for market-complementing information than as an explanation for market correction. Also Rott expressly differentiates between informed and informable consumers, whereby the latter are seen as a benchmark for consumer contract law (see in that sense Rott 2015, p. 164).

In this regard, Piazzon distinguishes subjective consumer law (weaker party protection) and objective consumer law (proper functioning of the internal market); see his contribution to this book.

Based on the responses to the questionnaire from professor G. Low, Singapore Management University, garylow@smu.edu.sg: “The emphasis in Singapore has been on encouraging competitive processes and raising consumer awareness … as active competition policy is seen as a more efficient way to deliver benefits … to end-user consumers … [and] business consumers”. With regard to Japan, Nakata (2016), pp. 481–482, points out that consumer law reforms in 2004 aimed at converting the existing law from a consumer that needs protection towards a consumer who is self-reliant, namely “an independent subject, acting so as to ensure its interests” (p. 482). The law reform entailed the creation of an environment tailored to a self-reliant consumer with ex post regulation based on market rules instead of ex ante controls and the promotion of information disclosure. Also these elements reflect an economic orientation of consumer law with the emphasis on deregulation and self-responsibility as marketplace principles. Also the Japanese Consumer Contract Act of 2001 reflects this idea: “The purpose of this Act is to ensure self-determination of consumers, and to provide an environment which will support it”, o.c., 487.

See the contribution of Arbour to this book.

Furthermore, it must be stressed that in common law systems individualised definitions of consumers are approached differently than in civil law systems “as there is no general expectation that legislation will be dovetailed to form a coherent, systematic whole”, see the contribution of Cartwright to this book.

The personal scope of legislation is often adapted to its particular purposes.

The European Commission recognizes that Member States’ approaches are different and fragmented, but also found that there is no consensus on the stakeholders on how to reduce legal uncertainty generated by the fragmentation (see Report of the Fitness Check of EU Consumer and Marketing Law 2017, p. 109).

The UK for instance evolved from a broader to a narrower conception of consumer in the field of unfair contract terms where ‘consumer’ protection was initially extended to corporations as long as the transaction in question was neither an integral part of their business, nor conducted with a sufficient degree of regularity to make it part of the business. Also, Poland briefly experienced with an extension of the notion to ‘persons’ but it was quickly abandoned as it was believed that the inclusion of non-governmental organisations and micro-, small- and medium-sized undertakings would negatively affect the national traders in the internal market. See respectively the contribution of Cartwright and Namysloswka and Jablonowska to this book.

See the contribution of Karamptzos and Kotios to this book.

See Head of Article 2 of the Consumer Protection Code.

Read more on this scholarly debate in the contribution of Donato Oliva to this book, who submits that vis-à-vis a legal entity the liability of a supplier may be limited.

A concrete example is the protection provided by the Insurance Contracts Act which not only protects the consumer but also a legal person who in terms of the nature and scope of its business can be compared to a consumer vis-à-vis the insurer. See more in the contribution of Hyvönen to this book.

However, it must be pointed out that the unfairness of a term is evaluated differently in the case of a consumer or a small business. “Consumer protection is much broader and includes the protection provided for in the national Consumer Protection Act (Sections 1–2 of Chapter 4) or the EU directives on consumer protection. In the case of a small business, unfairness is evaluated on the basis of general contract law (Section 36 of the Contracts Act)”, see the contribution of Hyvönen to this book.

For instance, trade unions may benefit as non-professionals from protective rules provided that the subject matter of the contracts they conclude does not present a direct link with their professional activity. See the contribution of Piazzon to this book.

Thus, commercial companies were generally excluded from the protection whereas case law was divergent with regard to the classification as consumers of civil companies.

See the contribution of Nozawa to this book. Compare with Nakata (2016), p. 489, who adds that “there are situations in which consumers might appear as ‘business operators’ due to special characteristics of the transaction, or business operators are put in similar positions of those consumers” (p. 489).

Professional fake commodities buyers are persons who deliberately and repeatedly buy substandard commodities with the intention to obtain punitive damages since those commodities do not correspond to the national safety and quality standards. Chinese Courts tend to be receptive towards such claims initiated by fake commodities buyers. Yet recent statements in 2017 from the Supreme People’s Court will restrict the professional fake buyer’s exploitation so that more disqualifications as consumers may be expected in case law. See more extensive on this point, the contribution of Yang to this book.

In Italy the consumer is defined as any person who buys products or services from a business to satisfy his proper needs, those of his family and partially also his professional needs, provided that he acts for purposes that do not enter the framework of his commercial, industrial, artisanal, liberal or professional activity. See the contribution of Benacchio to this book.

CJEU 20 January2005, Johann Gruber v. Bay Wa, case C-464/01, ECLI:EU:C:2005:32.

The reference to legal act does not severely limit the scope of the definition, see more in the contribution of Namyslowska and Jablonowska to this book.

See Brazilian Superior Court of Justice, REsp 1195642/RJ, 3aT., Rel. Min. Nancy Andrighi, julg. 13.11.2012.

See the contribution of Donato Oliva to this book.

Based on the responses to the questionnaire from professor G. Low, Singapore Management University, garylow@smu.edu.sg., who submits: “Although these requirements are aimed at ameliorating the probability of pressure sales, they also and necessarily go towards what information is shared with the consumer and how it is shared. The same may also be said regarding disclosure in financial products or services contracts, where although there is a mandatory minimum disclosure, the manner and extent of disclosure of information beyond that hinges on the assessment of the savviness of the consumer. As with much in the common law, everything turns on its facts”.

Directive 2005/29/EC, cited above.

See the national reports of The Czech Republic, France, Germany, Greece, Ireland, Italy, Poland, Romania, The United Kingdom. This is also the case in Belgium. Also Finnish consumer law applies this average consumer benchmark, but concentrates on top of that also on individual measures after a conflict has arisen with a consumer; see the contribution of Hyvönen to this book.

It follows that the expected behaviour of the consumer is to be determined in abstracto. See more extensively on this point, Duivenvoorde (2014), pp. 63–75, more specifically on pp. 64 and 73.

In Greece courts tend to rely on a relatively well informed but inexperienced consumer who is not specifically careful, suspicious or observant, but who at the same time is not a gullible, completely indifferent or careless person. The average consumer is not expected to have legal expertise in contract drafting but is supposed to read the contract terms which should allow him to understand his rights and duties. See the contribution of Karampatzos and Kotios to this book.

See the contribution of Namyslowska and Jablonowska to this book.

This is all the more so since the Directive on Unfair Contract Terms states that “the unfairness of a contractual term shall be assessed, taking into account the nature of the goods or services for which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it is dependent”(own emphasis), see Article 4(1), Directive 93/13/EEC, O.J. 1993, L 95/29. The overall assessment implies that also pre-contractual information and advertisements must be taken into account and their possible impact on the contract terms. Also the misleading character of those commercial practices may play a role in this assessment. It would then be odd if the average consumer used for the assessment of the misleading character of those practices would be different from the benchmark used for the unfair character of the term. Also the fact that several European law instruments impose to inform the consumer prior to the conclusion of the contract about at least some of the general conditions and clauses of the contract, strengthens this analysis. The most extensive obligation is imposed on service providers by Article 22 (1f) and 1g)) of Directive 2006/123/EC on services in the internal market, O.J. 2006, L 376/36.

The European Commission concludes in its Fitness Check Report that Member States rather apply the average consumer implicitly than explicitly (see Report of the Fitness Check of EU Consumer and Marketing Law 2017, p. 109).

See the contribution of Hyvönen to this book. In Finland contractual liability is at stake when the content of a contract does not correspond to what the consumer expected. The consumer expectation test with regard to informational defects is based on the general level of expectations and not the consumer’s personal level of expectations, but the price of the contract is taken into account when evaluating the defect (see Finnish Supreme Court Decision 1992:86).

In this regard Hyvönen notes that “the Finnish (and the Nordic) average consumer is not similar to the EU consumer image. Nonetheless, when the UCPD is applicable, the EU benchmark is as well. Duty to disclose information has not played a similar role in Nordic consumer law as it has in EU consumer law. Consumer protection after the conclusion of a consumer contract, e.g. by adjusting an individual term, has been regarded as being equally as important as a company’s duty to disclose information prior to the purchase. Concentrating solely on duty to disclose has been seen as protecting the more well-off, educated consumer, and less other weaker consumer groups”, see the contribution of Hyvönen to this book.

See the contribution of Kelly to this book.

At this point Kelly rightly points out that the UCPD prohibits misleading commercial practices irrespective of the trader’s intentions to or not to mislead. Misleading conduct is a strict liability offence.

Kelly highlights in her contribution the Court’s reasoning: “It seems to me that no sensible person could be misled by the use of general slogans that are the commonplace stuff of most advertising. … I think that shoppers have to be given some credit for intelligence and appreciation of common marketing practices. A lawyer’s exegesis of the words used is wholly inappropriate and it would correctly be brushed aside as unworldly and unrealistic by any average shopper. In my view, the proposition accepted and adopted by the trial judge in this regard is, with respect, unrealistic and inconsistent with the attitude to be ascribed to a reasonably well-informed and circumspect shopper”.

See the contribution of Kelly to this book. It must be submitted that the case concerned a common law action for passing off.

[2013] 1 ILRM 369, at para.43.

Ibid. For more, see the contribution of Kelly to this book.

See the contribution of Namyslowska and Jablonowska to his book.

See more extensively on this point, the contribution of Bercea and Caramidariu to this book.

See the contribution of Selucka, Staviková Reznicková and Loutocký to this book.

BGH 20 October 1999, I ZR 167/97, WRP 2000, 517 – Orient-Teppichmuster.

In this sense BGH 18 October 2001, I ZR 193/99, GRUR 2002, 550—Elternbriefe, BGH 26 September 2002, I ZR 89/00, WRP 2003, 275—Thermal Bad and BGH 2 October 2003, I ZR 252/01, GRUR 2004, 162—Mindestverzinsung.

See also on this point, Duivenvoorde (2014), pp. 88–94 who adds that according to the BGH the same holds true if the consumer glances through advertising leaflets or advertising in newspapers (p. 90).

See the contribution of Cartwright to this book. Compare with the analysis of cases prior to the transposition of the UCPD in the UK in Duivenvoorde (2014), pp. 103–128.

The legislation imposes sanctions such as enforced compliance on demand of the consumer in accordance with the pre-contractual information, replacement by another product if the consumer accepts so or even the consumer’s termination of the contract with the right to be refunded and to obtain compensation for damages. See more on this topic in the contribution of Donato Oliva to this book.

As a result, the lower price indicated on the product prevails on the price inserted in the computer.

For instance when a new car would be advertised at 50 (currency) instead of 50,000 (currency), the seller is not forced to sell the car at this ridiculous price, as the consumer cannot legitimately expect that a new car would be sold at that price.

See the contribution of Nozawa to this book. See also on this point, Nakata (2016), pp. 479–505, who submits: “The notion ‘consumer’, which forms the core of consumer law, was firstly used in the Consumer Protection Basic Act which was promulgated and put into force in 1968, but there is no provision defining this term” (p. 481). Compare with Kano (2016), pp. 467–468 and 471–472 and see also Nakata (2009), pp. 803–815.

See the contribution of Yang to this book.

Supreme Court of Canada, Richard v. Time Inc., 2012 SCC 8 [2012] 1 SCR 265 at par. 71 (emphasis added).

Supreme Court of Canada, Richard v. Time Inc., 2012 SCC 8 [2012] 1 SCR 265 at par. 72.

This new turn has been criticized by legal scholars as being too paternalistic and shirking consumer’s responsibility. See in that regard the contribution of Arbour to this book.

See the contribution of Arbourto this book, who further state that according to the Québec Consumer Protection Act any statement or information provided by the merchant has a binding effect among parties and is used to the advantage of the consumer. Also the contractual fitness for purpose and conformity requirement opens doors to claims based on concealment, silence or otherwise misinformation connected with pre-contractual representations.

Contractual parties are expected to gain more than a general impression of the agreed contractual terms. See more on this in the contribution of Arbour to this book.

Helberger et al. (2013), pp. 50–51. These scholars argue that instead of leaving the matter entirely at the discretion of suppliers and relying on consumer information, a certain minimum standard of usability, safety and consumer friendliness of digital content must be imposed (p. 50).

Helberger et al. (2013), p. 51.

See more extensively on this point, the contribution of Piazzon to this book.

See Greek Supreme Court Decision nr. 1435/2015, available on http://​www.​areiospagos.​gr, and more in the contribution of Karampatzos and Kotios to this book.

CJEU 7 March 1990, Case C-362/88, GB-Inno-BM, ECLI:EU:C:1990:102, para. 17: “a prohibition against importing certain products into a Member State is contrary to (the provisions relating to free movement of goods) where the aim of such a prohibition may be attained by appropriate labelling of the products concerned which would provide the consumer with the information he needs and enable him to make his choice in full knowledge of the facts”(own emphasis).

See CJEU 7 March 1990, Case C-362/88, GB-Inno-BM, ECLI:EU:C:1990:102. The ECJ agreed with the European Commission that any normally aware consumer knows that annual sales take place only twice a year so that the ‘European’ consumers would not be misled by information on temporary price reductions.

CJEU 18 May 1993, Case C-126/91, Yves Rocher, ECLI:EU:C:1993:191. The Court held that the prohibition on ‘eye-catching’ advertising was disproportionate: it also prohibits correct advertising that is eye catching.

See Directive 2005/29/EC on unfair commercial practices (UCPD) and Directive 2011/83/EU on consumer rights (CRD).

See Directive 2000/13/EC on the labelling, presentation and advertising of foodstuffs, OJ 2000, L 109/29. This directive is repealed by Regulation 1169/2011/EU on the provision of food information to consumers, OJ 2011, L 304/18.

Also in the domain of unfair contract terms the CJEU showed itself prepared to reduce the impact on the (un)fair character of contract clauses of even extensive pre-contractual information, see CJEU 3 April 2014, Case C-342/13, Katalin Sebestyén v Zsolt Csaba Kővári, OTP Bank Nyrt., OTP Faktoring Követeléskezelő Zrt, Raiffeisen Bank Zrt, ECLI:EU:C:2014:1857. The CJEU first confirmed the fundamental importance of pre-contractual information for the consumer’s decision to be bound by the conditions drafted in advance by the seller or supplier. But instead of connecting immediate consequences for consumers to this voluntary disclosure by the trader, the CJEU was prepared to mitigate its impact on consumers, pointing out that “even assuming that the general information the consumer receives before concluding a contract satisfies the requirement under Article 5 that it be plain and intelligible, that fact alone cannot rule out the unfairness of a clause such as that at issue (red.: arbitration clause) in the main proceedings”(own emphasis). The high level of consumer protection set forth by the Unfair Contract terms Directive must also have played a role in the ECJ’s decision. See more extensively infra in Sect. 5.2.

Ibid.; para 44.

See more on misleading practices, infra Sect. 3.

It must be noted that Intermarché also exploited hypermarkets and that the advertising only provided additional information about the basis of the price comparison on the website of the advertiser or through the less visible reference to ‘super’ in much smaller font, at the bottom of the advertising.

Namely that even in the presence of complete and correct information deception of an average consumer can take place. See already on this point prior to the Canal Digital Danmark case, Straetmans (2018), pp. 102–103.

It must be observed that those recent developments in the case law of the CJEU offer interesting parallels with the Irish Supreme Court’s analysis in the McCambridge-case and the Bundesgerichtshof’s case law highlighted above. See more extensively on this point Straetmans (2018).

See the contribution of Yang to this book.

See Article 5 (3) UCPD, O.J. 2005, L 149/22. Article 5(2) UCPD already prescribes that if a commercial practice is specifically targeted to a particular group of consumers, the assessment of its unfair nature must be made in the light of the average member of that group. In this regard the European Commission recognizes that legal scholars increasingly criticise the appropriateness of the benchmark of the average consumer and voice concerns that the benchmark provides insufficient protection to consumers that are less capable and more careless than average. However, even though the Fitness Check Report provides arguments to basically doing away with the specific rule in Article 5(3) and integrating its content in Article 5(2)(b), the European Commission refrains from amending the UCPD in the absence of evidence of major problems in the application of the current rules (see Report of the Fitness Check of EU Consumer and Marketing Law 2017, p. 111).

The annex to the UCPD contains specific prohibitions in this regard: “Including in an advertisement a direct exhortation to children to buy advertised products or persuade their parents or other adults to buy advertised products for them” is an aggressive practice prohibited under all circumstances. “Falsely claiming that a product is able to cure illnesses, dysfunction or malformations” and “Claiming that products are able to facilitate winning in games of chance” are misleading commercial practices prohibited under all circumstances.

For an analysis from a behavioural perspective, see Duivenvoorde (2014), pp. 183–192, who concludes that “it is difficult in practice to identify vulnerable groups. Qualifying groups as inherently vulnerable is problematic, as vulnerability is highly dependent on the individual consumer and the specific situation” (p. 192).

See the contribution of Namyslowska and Jablonowska to his book.

See the contribution of Selucká, Staviková Reznicková and Loutocký to this book.

See the contribution of Karampatzos and Kotios to this book.

See the contribution of Piazzon to this book. See also for a more extensive analysis of the case law concerning particularly vulnerable groups such as children, teenagers and elderly in Germany and in Italy, Duivenvoorde (2014), pp. 97–100 and 144–152.

See the contribution of Nozawa to this book. Compare with Nakata (2016), pp. 490–491, who refers to specific solicitation acts of elderly people that are prohibited by the Consumer Contract Act as practices that run against the principle of good faith.

Article 2 of Law n. 8.069/1990 (The Child and Adolescent Statute): “For the purposes of this Law, the child is considered as the person who has not yet completed twelve years of age and the adolescent as the person between twelve and eighteen years of age”.

Article 1 of the Law n. 10.741/2003 (Elderly’s Statute): “The Elderly’s Statute is instituted with aiming at regulating the rights ensured to someone who is 60 (sixty) years old or older”.

“The probability of the irreparable or hard to repair damage is evident, since the appealed, hyper vulnerable as he is due to his health condition, needs urgent medical care, as per the medical report filed in the records; it is certain that Article 35-C, I of Law n. 9.656/98 establishes as mandatory the coverage of treatment in those cases” (Tribunal of Justice of Rio de Janeiro, AI 0025048-97.2016.8.19.0000, 27ª CC Consu., Rel. Des. Marcos Alcino de Azevedo Torres, julg. 14.9.2016).

Article 2 of Law n. 13.146/2015 (Statute of Disabled Persons): “A person is considered disabled when he/she has a long-term impediment of physical, mental, intellectual or sensory nature which, when faced with one or more obstacles, can hinder his/her full and effective participation in society in equal conditions with other people”. See also Pierri (2014), p. 27.

For more examples see the contribution of Donato Oliva to this book.

In the context of whether a consumer consented to a contract. Subjective lesion allows the consumer to demand the nullity of a contract or a reduction in his obligations thereunder where the disproportion between the respective obligations of the parties is so great as to amount to exploitation of the consumer or where the obligation of the consumer is excessive, harsh or unconscionable. Where the court must determine whether a consumer consented to a contract, it shall consider the condition of the parties, the circumstances in which the contract was entered into and the benefits arising from the contract for the consumer. See in more detail, the contribution of Arbour to this book.

The option in the Directive to include language requirements regarding the contractual information is taken up by some member states; see e.g. Poland, Italy, France (e.g. on consumer demand businesses must provide a copy of the model contract they normally conclude in French). Romania and Greece further impose specific language requirements in accordance with the European food labelling regulation. These language requirements must be reconciled with the case law of the Court of Justice that allows member states to impose specific language requirements unless full information of consumers may be achieved by other means such as pictograms, symbols, labels, figures etc. The language used by the trader often has an impact on the national judges’ assessments of transparency of contract terms, especially when the contract terms are provided to the consumer in another language than the official language of the territory where the contract is offered. However, the Unfair Contract Terms Directive (O.J. 1993, L 95/29) does not contain any clarification in this respect. Hence legal scholars argue that transparency in a cross-border context implies that consumers are provided information on contract terms in the same language as the one in which they were approached by the seller, see in particular Loos (2017), pp. 54–59.

Additional European rules on the form into which this information is to be provided by the trader in case of specific types of contracts will be left out of the analysis here.

See the contribution of Nozawa to this book.

Brazilian law also imposes information duties during the contractual phase and after the conclusion of the contract.

See the contribution of Donato Oliva to this book.

See more on this topic in the contribution of Donato Oliva to this book. The Civil Codes in the Member States of the European Union often contain specific rules about consumer’s consent to contract clauses. The German BGB for instance excludes so-called surprising clauses from becoming part of the contract. Surprising clauses are according to the Bundesgerichtshof terms that are unusual and which the other party to the contract cannot be expected to have been aware of (see BGH 26 February 2013 – XI ZR 417/11, NJW 2013, 1803). Thus a clause that assigned costs to a buyer of real estate although the contract was presented as an ‘all-inclusive price’-contract, was held to be surprising as well as charging for services that ordinarily were gratuitous (see respectively BGH 26 July 2012 – VII ZR 262/11, NJW RR 2012, 1261 and BGH 29 September 1983, NJW 1984, 171). However if an under normal circumstances surprising term is brought to the consumer’s attention, it would forfeit its surprising character and could no longer be sanctioned (see BGH 18 February 1992 – XI ZR 126/91, NJW 1992, 1823). See more extensively on this issue, the contribution of Schinkels to this book.

See more on this topic in the contribution of Donato Oliva to this book.

See the contribution of Yang to this book.

See the contribution of Yang to this book.

See more extensively on this subject the contribution of Baysal to this book.

Based on the responses to the questionnaire from professor G. Low, Singapore Management University, garylow@smu.edu.sg.

In time share and colportage contracts information about the contract and the consumer’s right to withdraw and how to invoke that right must be contained in a ‘consumer information notice’. This notice must be given in writing in hard or soft copy, e.g. via email. “The statutory exceptions do not specify when businesses must disclose such information, but if businesses omit to provide the consumers information about his right to withdraw the contract, the consumer may withdraw from the contract at any point in time in the life of the contract, as failure to provide such information will in principle not be seen as a defect in consent leading to recission. Consequently businesses have an incentive to disclose this information as soon as practicable”. Based on the responses to the questionnaire from professor G. Low, Singapore Management University, garylow@smu.edu.sg.

The administrative ex ante control resulted in more than 80 ‘model’ contracts. For reasons of consumer protection the freedom of contract and party autonomy have been replaced by mandatory and prohibited clauses imposed by the central authorities.

Based on the responses to the questionnaire from professor Jiin Yu Wu, National Chengchi University, Taiwan, jywu@nccu.edu.tw.

Comprehensibility can be seen as a synonym to the wording ‘easy to understand’ which is used for information in food labelling, but it can also be regarded as a less strict demand.

Tangible medium or digitally. In Greece for instance the requirement of good faith imposes that consumers receive pre-contractual information which is easily accessible and which they can understand, whether this information is on the businesses’ website or provided in a hard copy. See the contribution of Karampatzos and Kotios to this book. It may indeed be assumed that pre-contractual consumer information must be provided in writing.

The Italian Consumer Code refers to parameters like exhaustiveness, clarity, comprehensibility, good faith and accessibility for the assessment of information. Romanian legislation seems to introduce a threefold standard of complete information (before, during and after the conclusion of the contract); transparency which refers to visibility of the information, readability and easiness to understand the information, and comprehensibility which encompasses understandability in the grammatical sense of the concept but also the obligation to inform the consumer about the real implications of the contract; and correct information. See more extensively on this standard, the contribution of Bercea and Caramidariu to this book.

He also submits that despite the absence of any guidance from the directive the French legislator has imposed the burden of proof on the trader to demonstrate whether he has fulfilled his information obligation. The assignment of the burden of proof has also been the subject of debate in Belgian doctrine. There is a tendency in scholarly views and case law that the burden of proof, contrary to the Civil Code rules, should rest on the trader. See in this regard Cambie and Straetmans (2016), pp. 57–58. Also Romania imposed the burden of proof on the trader, see the contribution of Bercea and Caramidariu to this book.

In that regard French law prescribes that if certain information provided on paper is subject to specific readability requirements, equivalent requirements apply to the digital counterpart of this information.

See e.g. Regulation 1169/2011 of 25 October 2011on the provision of food information to consumers, O.J. 22 November 2011, L 304/18. This regulation provides for instance for mandatory country of origin labelling (COOL) but also includes a provision that allows Member States to adopt national COOL measures. It has been argued that national COOL measures lead to a decrease in purchase of products coming from outside the concerned Member State. An American pilot study seems to confirm that American consumers are more likely to purchase meat when it is identified as a U.S. product since The COOL requirement impacts inferred attributes, such that meat products from the U.S are perceived to be safer, tastier, and fresher than meat products from Mexico. However, the study also reveals that the direct and indirect effects of the country-of-origin disclosure are attenuated by the presentation of objective information about the meat processing systems of competing countries. See Berry et al. (2015), pp. 533–542. Schmeiser also points out that the regulator’s decision to mandate a disclosure signals to consumers that an attribute is important and the intensity of the disclosure determines the strength of the signal, see Schmeiser (2014), pp. 192–200. On the basis of his model, Schmeiser concludes that “if regulators over-warn consumers about the side effect, consumers receive conflicting messages about the severity. If consumers react in accordance with the level of risk implied by the regulatory effort rather than the statistical data, it may seem as if they are over-estimating the risk from a small probability event. (…) Consumers might also draw inferences from information voluntarily disclosed by private firms. If consumer preferences are not malleable, then firms only devote advertising resources to attributes that consumers care about. But if a firm knows that its advertisements affect consumer preferences, then they will use this to their advantage” (p. 198).

Japanese law for instance introduced detailed rules relating to the print size of the mentions on the label of foodstuffs. The size of all mentions on the package of a product must be larger than 8 points, save in cases where the surface of the packaging is less than 150 cm², in which case the print size may be reduced to 5.5 points. See the contribution of Nozawa to this book.

See the contribution of Kelly to this book. According to Purnhagen, Van Herpen and Van Kleef, who examined the EU health claims regime, visuals may mislead consumers to a larger extent than textual claims in that they overpromise health benefits of consuming the product. Therefore, they claim that in order to effectively regulate health claims in the EU, regulation has to devote much more attention to the regulation of pictorial claims. See Purnhagen et al. (2016), pp. 197–216.

See the contribution of Schinkels to this book who refers to Spiegel online, 24. July 2009, Verbraucher wollen Lebensmittel-Ampel; see also https://​www.​foodwatch.​org/​de/​informieren/​ampelkennzeichnu​ng/​mehr-zum-thema/​studie-vergleich-ampel-gda/​.

Der vertrauende, der verletzliche oder der verantwortungsvolle Verbraucher? Plädoyer für eine differenzierte Strategie in der Verbraucherpolitik Stellungnahme des Wissenschaftlichen Beirats Verbraucher- und Ernährungspolitik beim BMELV, as of December 2010, accessible via: https://​www.​vzbv.​de/​sites/​default/​files/​downloads/​Strategie_​verbraucherpolit​ik_​Wiss_​BeiratBMELV_​2010.​pdf.

Trusting consumers do not want to and cannot take the time necessary to inform themselves and to achieve the expertise to take well-grounded decisions especially in the fields of healthcare and finance.

Vulnerable consumers are persons excluded from social and economic interactions because of excessive indebtedness, sickness or lacking means of access to the internet.

Responsible consumers are persons who actively inform themselves and others in order to optimize sustainability of consumption regarding ecological and social aspects of production and disposal of consumables.

See the contribution of Schinkels to this book.

Competition and Markets Authority United Kingdom (2017).

Competition and Markets Authority United Kingdom (2017), pp. 76–79.

Competition and Markets Authority United Kingdom (2017), pp. 79–81.

Competition and Markets Authority United Kingdom (2017), p. 9, 72. Being clear implies that DCTs explain their services and how they make money; it includes for instance that they prominently provide a general explanation of how they make money and clearly explain how much of the market they cover and how they have ranked the results. Being accurate necessitate to provide information that is complete, correct, relevant, up to date and not misleading and that for instance in each result all the information consumers need, including price and main characteristics, is included. Being responsible requires to protect people’s details and be easy to deal with, e.g. when showing reviews, it requires DCTs to have processes in place to ensure users see the full picture and be clear about how reviews are collected and checked. Being easy to use implies that DCTs make information easy to find and understand, and e.g. that all key information is present in a clear, prominent and timely way.

In that regard it must be noted also that the model forms annexed to some European legal instruments incite businesses to make use of them as they create the assumption that the provided information meets the required standard.

See the contribution of Benacchio to this book. In other countries like Greece the principle of good faith in the pre-contractual stage could be used to combat information that would confuse or perturb consumers; see for instance the contribution of Karampatzos and Kotios to this book, who refer to the Greek Supreme Civil Court Decision nr. 1028/2015, available on http://​www.​areiospagos.​gr.

French law takes a peculiar position as it seeks to distinguish between infringements in the pre-contractual phase, which may give rise to tort liability, and in the contractual phase which may then give rise to contractual liability. However, in practice, the focus on consumer protection of the information obligations seems to blur this civil law distinction to great extent. Find more on this topic in the contribution of Piazzon to this book. With regard to the failure to provide the consumer with mandatory information, the French Court of Cassation applies a formalist approach sanctioning the absence of any mandatory information even when that particular information did not have an influence on the consumer’s consent. This overprotective approach, often leading to the nullity of contracts, is criticised by French legal scholars. In the same vein Benacchio criticizes the European legislator’s neo-formalism, in his contribution to this book. In contrast, failure to provide mandatory information requirements in Turkey does not affect the validity of the contract, but the Law on Consumer Protection requires the trader to immediately fill in the lacunae and thus to promptly comply with his information obligation (see the contribution of Baysal to this book). In Canada, and more in particular in Québec, sanctions attached to a lack of information vary in light of three factors: (a) the chronological position within the pre-contractual timeline; (b) the general or specific nature of the violation; and (c) the provincial-federal structure of the legal system. See extensively on this subject the contribution of Arbour to this book, who refer to common sanctions like the nullity of the contract, price reduction or claims for damages, and exceptionally in Québec punitive damages. The simultaneous pursuit of preventive and deterrence goals justifies also the imposition of penal sanctions.

See the contribution of Nozawa to this book.

With regard to misleading price comparisons websites, some of the reported countries have specific regulatory mechanisms. See for instance the UK Regulators Network (2016). Also the French Consumer Code developed a specific rule in that regard, but incorporated it into the general pre-contractual information duty. It requires persons whose activity consist in the exploitation of comparison websites to inform in a loyal, clear and transparent manner. In France, also specific rules exist concerning online platform and website operators; see in more detail, the contribution of Piazzon to this book.

In the words of the European directive (UCPD): a practice that materially distorts or is likely to materially distort the decision making process of the consumer and causes him to take a transactional decision that he in absence of the unfair commercial practice would not have taken.

See the contribution of Hyvönen to this book. The ticket sales agent and organiser were both equally responsible for the misleading commercial practice.

See more in the contribution of Piazzon to this book. Also Schinkels indicates that transparency does not play an important role and can hardly be seen as a dominant factor to reject information that is correct. In his contribution to this book Schinkels points to case law of the Bundesgerichtshof wherein the court accepted the concretion in footnotes of mandatory instructions about the applicable withdrawal period (see BGH 14 March 2017 – XI ZR 442/16, NJW RR 2017, 815). In an insurance contract case the Bundesgerichtshof even accepted that a formally correct and typographically emphasized instruction about the right of withdrawal sufficed despite the fact that it was accompanied by non-emphasized information that included a wrong (and divergent) indication of the time limit for the withdrawal (see BGH 16 December 2015 – IV ZR 71/14, BeckRS 2015, 21001. The latter approach has been confirmed by the BGH in a case of distance marketing (see BGH 10 October 2017 – XI ZR 443/16, WM 2017, 2248).

Cass. Crim. 13 May 2003, n° 02-84.100.

However, it is to be noted that there exist in Turkish law a certain reluctance towards comparative advertising. Although theoretically comparative advertising is permitted as long as it is not misleading, does not constitute an unfair commercial practice and compares goods or services of the same quality meeting the same needs or intended for the same purpose, explicit comparative advertising is still categorised as an unfair commercial practice in court practice. See the contribution of Baysal to this book.

But it also goes beyond where it considers advertisements abusive if they disrespect values worth of being protected. Among the prohibited advertisements on that ground are discriminatory advertising, advertising that incites to violence, exploits fear or superstition, profits from the immaturity of judgment and inexperience of children, disregards environmental values, or is capable of leading consumers to behave harmfully or hazardously with respect to their health and safety. Thus, the slogan “The true black woman is recognized by her body” accompanying the beer ‘Devassa Dark’ was considered discriminatory on that basis. See for more examples, the contribution of Donata Oliva to this book. In the EU, Directive 2005/29/EC on unfair commercial practices (UCPD) does not address legal requirements related to taste and decency which vary widely among the Member States (see introductory recital 7). That type of advertising falls outside the harmonised scope of the UCPD and remains within the ambit of the member states which consequently enjoy a broad discretion in that domain.

Brazilian advertisements that contain sufficient precise information can have a contractually binding effect. Ads must also be immediately recognizable as such by the consumer and must be transparent about the data used therein. Furthermore, Brazilian Law permits comparative advertising provided that the comparison has as its main objective to inform the consumer on the basis of true, objective information and that it does not mislead consumers, is not abusive, does not depreciate the product or brand of the competitor and does not lead to confusion between products or brands.

See the contribution of Donato Oliva to this book.

See the contribution of Yang to this book.

Furthermore, the Law in Singapore contains a number of practices that are considered to be unfair under all circumstances (black list). Among those black listed practices, we find false claims about products, bait-and-switch tactics, charging prices for goods or services higher than initially agreed, exerting undue influence or duress on consumers to enter into a transaction. The foregoing is based on the responses to the questionnaire from professor Gary Low, Singapore Management University, garylow@smu.edu.sg. Also the UCPD lists misleading and aggressive practices that are under all circumstances prohibited in Annex I to the directive.

Based on the responses to the questionnaire from professor Jiin Yu Wu, National Chengchi University, Taiwan, jywu@nccu.edu.tw.

The following principles developed by the Fair Trade Commission must be observed: The advertising (1) truthfully reflects the opinion, trust, discovery or experience of the recommender and demonstrator and shall not include any false or misleading information; (2) If a public figure or a professional figure (institution) serves as the recommender and demonstrator and the advertised products or services change in content or quality, the main advertiser must assure that the recommender and demonstrator do not change the information to be conveyed in the advertising during the broadcasting; (3) If a professional figure (institution) serves as the recommender and demonstrator or the recommended-demonstrative advertising clearly shows or implies that the recommender or demonstrator is an expert in the advertised product or service, the recommender or demonstrator must indeed have the expertise or technology and its opinion must be consistent with the result of the demonstration by others who share similar professionalism or technology; (4) if the recommender and demonstrator share experience as a consumer, the consumer must be an actual user of the recommended and demonstrated product or service; in case that the consumer is not an actual user, the audience must be informed of that fact in the advertising. What is recommended and demonstrated must be based on science or experimental evidence. The results which consumers may obtain or under what circumstances the demonstrated effects may be obtained by consumers must be set out in the advertisement; and (5) in the case that there is an unpredictable interest-based relationship between the recommender and demonstrator and the main advertiser, the relationship shall be fully disclosed in the advertising. The foregoing is based on the responses to the questionnaire from professor Jiin Yu Wu, National Chengchi University, Taiwan, jywu@nccu.edu.tw.

Although Japanese law permits comparative advertising it is very rarely used as a marketing practice since it does not correspond to the Japanese business culture and mentality.

See the contribution of Nozawa to this book. Compare with Nakata (2017), p. 288, who points out that ‘much better’-advertisements give rise to “cases where the level of exaggeration has exceeded that which is generally admitted in society” (p. 288).

See the contribution of Yang to this book.

See the contribution of Yang to this book.

See the contribution of Yang to this book.

“Persuant to art. 52 (1): “[n]o person shall, for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirectly, any business interest, by any means whatever, knowingly or recklessly make a representation to the public that is false or misleading in a material respect”.

“For the purposes of this section (see previous footnote), a representation that is (a) expressed on an article offered or displayed for sale or its wrapper or container, (b) expressed on anything attached to, inserted in or accompanying an article offered or displayed for sale, its wrapper or container, or anything on which the article is mounted for display or sale, (c) expressed on an in-store or other point-of-purchase display, (d) made in the course of in-store or door-to-door selling to a person as ultimate user, or by communicating orally by any means of telecommunication to a person as ultimate user, or (e) contained in or on anything that is sold, sent, delivered, transmitted or made available in any other manner to a member of the public, is deemed to be made to the public by and only by the person who causes the representation to be so expressed, made or contained.

The definition corresponds to the European definition in the UCPD. It encompasses all forms of means that may affect consumer judgment.

See the contribution of Arbour to this book.

See Sect. 2.2.2.

See the contribution of Arbour to this book.

Rather the Court “exposes the steps that shall guide judges in finding misleading practices: (1) the manufacturer violates provisions; (2) consumers actually saw the deceptive representation and (3) such prohibited practice impacted upon their decision to enter into a contract, and; (4) a sufficient nexus existed between the content of the representation and the products”. In those circumstances there exist an irrebuttable presumption of prejudice, as the consumer does not have to prove that the merchant intended to mislead.

See probation nr.28 in Annex I to the UCPD.

See more in the contribution of Donato Oliva to this book.

See more in the contribution of Arbour in this book.

Based on the responses to the questionnaire from professor Gary Low, Singapore Management University, garylow@smu.edu.sg.

See the contribution of Yang to this book.

See Report of the Fitness Check of EU Consumer and Marketing Law (2017), p. 147.

The Unfair Contract Terms Act of 1977 introduced control over the clauses of the contract which restricted or excluded liability and applied to both consumer contracts and non-consumer contracts.

See the contribution of Cartwright to this book.

When a contract term is deemed unconscionable it must be considered null and non-binding to the consumer.

The fact that one or more of the terms were subject to individual negotiation does not alter the qualification of the contract as a standard contract.

See the contribution of Donato Oliva to this book.

The consumer was not given the chance of previously getting acquainted with the terms of the contract.

The terms are drafted in such a manner that their precise meaning and content is difficult to grasp for consumers. Thus, the Brazilian Superior Court of Justice held in the domain of insurance that the use of vague contract terms or terms which demand technical and/or legal knowledge of a level inconsistent with the reality of the insured person, is abusive. See the contribution of Donato Oliva to this book.

Contract terms that do not comply with the requirements imposed by law or which were not sufficiently disclosed to the consumer are deemed unfair, even when they are drafted in clear wording.

See the contribution of Schinkels to this book.

See the contribution of Schinkels to this book.

The consumer’s ability to negotiate is assessed both objectively and subjectively. The objective capacity refers to the location, duration of negotiations, complexity of the transaction etc.., whilst the consumer’s subjective capacity refers to his experience, age, literacy,... See more in the contribution of Karampatzos and Kotios to this book.

Karampatzos and Kotios note that this also could lead to situations where the consumer is denied protection in case the negotiations turned out unfruitful for him.

See the contribution of Selucká, Staviková Reznicková and Loutocký to this book.

See the contribution of Nozawa to this book.

These are contracts whereby the essential stipulations are drawn up by one of the parties and are not negotiable.

See the contribution of Arbour to this book.

The incomprehensibility refers in the first place to the grammatical accuracy but also goes beyond the meaning of the words and the grammatical formulation.

A clause was held illegible because it was written on a document’s back in very pale grey on a white background. See the contribution of Arbour to this book.

This implies an explicit reference to another document, the back of a document or another regulation. In case of distance contracts the fact of having to click for further information does not necessarily point to an external term.

See the contribution of Arbour to this book. The Czech Civil Code also renders standard commercial terms which the other party could not have reasonably expected ineffective, unless they were expressly accepted by that party. The aim is to reduce the surprise factor. However, the Czech Supreme Court is rather reluctant to categorize commercial terms as ‘surprising terms’. Such classification necessitates a clear discrepancy between the content of the term and the expectation of the other party (it could not have been reasonably expected—subjective criterion) on the one hand and on the other hand the peculiar nature of the content of the commercial term (is the term unusual when assessed in the light of the contract as a whole—objective criterion). See the contribution of Selucká, Staviková Reznicková and Loutocký to this book.

In a striking parallel the CJEU defined good faith in the Aziz-case were it held that “the national court must assess for those purposes whether the seller or supplier, dealing fairly and equitably with the consumer, could reasonably assume that the consumer would have agreed to such a term in individual contract negotiations” and that ‘a significant imbalance’ is to be assessed in the light of the rules of national law that would apply in the absence of an agreement by the parties in that regard. “Such a comparative analysis will enable the national court to evaluate whether and, as the case may be, to what extent, the contract places the consumer in a legal situation less favourable than that provided for by the national law in force” (see CJEU 14 March 2013, C-415/11, Aziz, ECLI:EU:C:2013:164). In Constructora Principado the CJEU added that such imbalance “can result solely from a sufficiently serious impairment of the legal situation in which the consumer, as a party to the contract in question, is placed by reason of the relevant national provisions, whether this be in the form of a restriction of the rights which, in accordance with those provisions, he enjoys under the contract, or a constraint on the exercise of those rights, or the imposition on him of an additional obligation not envisaged by the national rules” (CJEU 16 January 2014, C-226/12, Constructora Principado, ECLI:EU:C:2014:10).

A similar interpretation rule can be found in the European UCTD.

The Act applies to standard terms in consumer contracts or where a party deals on the basis of the other’s standard terms.

Based on the responses to the questionnaire from professor Gary Low, Singapore Management University, garylow@smu.edu.sg.

Based on the responses to the questionnaire from professor Gary Low, Singapore Management University, garylow@smu.edu.sg.

See the contribution of Yang to this book.

See the contribution of Yang to this book.

See the contribution of Yang to this book.

See the contribution of Yang to this book.

Proof will often not be that easy. The Romanian High Court of Cassation for instance held that a clause in the contract wherein the consumer recognizes that the whole contract had been individually negotiated cannot reverse the burden of proof. That will neither be the case if the seller accords a reflexion period to the consumer. It must be demonstrated that the consumer effectively exercised an influence on the content of the contract, e.g. on the basis of written documents or an exchange of e-mails that shows that clauses have been reviewed. In the same vein, the Italian Court of Cassation held that only in case of specific, individual, serious and effective negotiation the unfairness control of consumer contracts may be avoided. The Brazilian Consumer Protection Code is less demanding; it reverses the burden of proof in favour of the consumer when his allegation is credible or when he is in a position of hyper dependency. Hyper dependency refers to the difficulty of the consumer to provide evidence of a certain fact. Whether a consumer’s allegation is credible is assessed on the basis of a probability criterion based on the arguments advanced during the proceeding. In Germany the burden of proof regarding the characterization of contractual stipulations as standard contract terms lies in principle with the party relying on special control of such terms. With regard to consumer contracts the business is deemed to have implemented previously drafted terms into the contract, unless they have been inserted by the consumer. It follows that the burden of proof lies with the business. However, the German BGB indicates that it is up to the consumer to proof the drafting in advance and its causation for the consumer’s inability to influence the substance of the term. See the contribution of Schinkels to this book.

If consumers claim that no negotiation took place, the burden of proof shifts to the seller. An exchange of e-mails with draft terms that were reviewed by the parties or meetings of the parties in person to that extent may constitute such proof. See the contribution of Karampatzos and Kotios to this book. German courts evaluate the factual indications already given by the parties. In case of contradiction between parties’ statements, a copy of the written contract can be of help: “if it is contained in a specially printed or designed form, this prima facie indicates pre-formulation and unilateral implementation. If one clause of a form has been individually altered, this may be taken as a sign that other terms of the form were also subject to negotiation”, see the contribution of Schinkels to this book.

For example, according to the Polish Civil Code terms in B2C-contracts which have not been negotiated individually are not binding on the consumers if rights and obligations are set in a way that is contrary to ‘good practice’, thereby grossly violating the consumer’s interests. See the contribution of Namyslowska and Jablonowska to this book.

See the contribution of Kelly to this book.

See Article 4(2) UCTD. This exclusion from unfairness has not been incorporated in Austrian, Danish, Greek, Latvian, Luxemburg, Slovenian, Spanish and Swedish legislation, see EC Consumer Law Compendium, 2007, 379, ec.​europa.​eu/​consumers/​archive/​cons_​int/​safe_​shop/​acquis/​comp_​analysis_​en.​pdf.

In Belgium the Unfair Contract terms Commission extended the transparency principle to oral terms, see C.O.B. 25, 19 November 2008, economie.​fgov.​be/​nl/​binaries/​COB25_​tcm325-74403.​pdf, 6. In the Netherlands the limitation to written terms has not been inserted in the transposing legislation, see Article 6:238, section 2 C.C.

See Article 5 UCTD.

In a rare Belgian case the judge concluded that the contract terms about the price for renting a house were not transparent now that the offer for rent on the website of the seller indicated a lower price; he concluded that the lower price on the website had to be applied and discarded the contract terms. See Vred. Grâce-Hollogne 25 mei 2012, JLMB 2012/40, 1917–1925. Schinkels indicates that German courts have already ruled that it is possible to assess a standard contract term simply repeating the wording of a statute as unfair for want of transparency, see BGH, Judgment of 9. 5. 2001—IV ZR 138/99, Neue Juristische Wochenschrift (NJW) 2001, 2012. See the contribution of Schinkels to this book.

See more extensively on that issue Howells and Straetmans (2017), E-180-E-215. Both transparency requirements in Article 4 and 5 UCTD must be interpreted equally according to the CJEU, see to this extent Case C-26/13, Árpád Kásler, ECLI:EU:C:2014:282.

See Case C-26/13, ECLI:EU:C:2014:282.

CJEU 21 March 2013, Case C-92/11, RWE Vertrieb, ECLI:EU:C:2013:180, para 44: “Information, before concluding a contract, on the terms of the contract and the consequences of concluding it is of fundamental importance for a consumer. It is on the basis of that information in particular that he decides whether he wishes to be bound by the terms previously drawn up by the seller or supplier“. Compare para 50: “With respect, in the first place, to the information to be given to the consumer, it is clear that that obligation to make the consumer aware of the reason for and method of the variation of those charges and his right to terminate the contract is not satisfied by the mere reference, in the general terms and conditions, to a legislative or regulatory act determining the rights and obligations of the parties. It is essential that the consumer is informed by the seller or supplier of the content of the provisions concerned”. Furthermore “the lack of information on the point before the contract is concluded cannot, in principle, be compensated for by the mere fact that consumers will, during the performance of the contract, be informed in good time of a variation of the charges and of their right to terminate the contract if they do not wish to accept the variation” (para 51).

CJEU 21 December 2016, Joined Cases C-154/15and C-307/15, Gutiérrez Naranjo e.a., ECLI:EU:C:2016:980, paras. 48–51. The CJEU did not contradict the Spanish court’s interpretation of the requirement of transparency, referred to in Article 4(2) of the directive, as not being limited to the requirement for formal transparency of contractual clauses in relation to the plain and intelligible nature of their drafting, but as extending to their substantive transparency linked to the adequacy of the information supplied to the consumer concerning the extent, both legal and economic, of the consumer’s contractual commitment.

CJEU 26 April 2012, Case C-472/10, Invitel, EU:C:2012:242, para 29.

CJEU 28 July 2016, Case C-191/15, VKI v Amazon, ECLI:EU:C:2016:612, para 68.

CJEU 28 July 2016, Case C-191/15, VKI v Amazon, ECLI:EU:C:2016:612, para 69 partim.

It is interesting to note that the CJEU automatically connected the sanction of unfairness to a term that misleads a consumer whereby the misleading impression of the consumer is caused by the lack of information provided by the supplier or the seller.

CJEU 9 July 2015, C-348/14, Bucura, EU:C:2015:447. See also infra.

CJEU 20 September 2017, Case C-186/16, Ruxandra Paula Andriciuc e.a., ECLI:EU:C:2017:703.

CJEU 20 September 2017, Case C-186/16, Ruxandra Paula Andriciuc e.a., ECLI:EU:C:2017:703, para 45.

Idem, para 48. It follows that financial institutions must provide borrowers with adequate information to enable them to take well-informed and prudent decisions. It follows that the borrower must be clearly informed of the fact that, in entering into a loan agreement denominated in a foreign currency, he is exposing himself to a certain foreign exchange risk which will, potentially, be difficult to bear in the event of a fall in the value of the currency in which he receives his income. Furthermore the seller or supplier, in this case the bank, must be required to set out the possible variations in the exchange rate and the risks inherent in taking out a loan in a foreign currency, particularly where the consumer borrower does not receive his income in that currency (see also paras 49–50).

Denmark, Finland, Portugal, Slovenia and Spain extend the unfairness control to core contract terms (see Report of the Fitness Check of EU consumer and marketing law, European Commission Staff Working Document, Brussels, 23 May 2017, SWD(2017)209final, 147).

Turkish law is also in other aspects aligned to the UCTD and requires for instance that consumers should be given the possibility to effective take notice of the terms. In the presence of ambiguous terms, an interpretation in favour of consumers applies. See the contribution of Baysal to this book.

This is the result of the minimum harmonisation set forth in the UCTD which nonetheless allows member states to adopt stricter standards. It must be submitted also that the (settled) case law of the CJEU when interpreting European legislation must be applied by national courts.

These courts require not only that the term be comprehensible for that consumer but also that the typical consumer can understand how the term affects the rights and obligations that he and the seller have under the contract.

See Lords Neuberger and Sumption in Cavendish Square Holding BV v Makdessi; ParkingEye Ltd v Beavis [2015] UKSC 67, 2015] 3 WLR 1373, at para 105. Lord Carnwath agreed. Yet, it must be noted that the vagueness of the requirement combined with the discretion accorded to national courts in applying the EU law as interpreted by the CJEU makes it hard to say the Supreme Court has wrongly applied the law. See more extensively on this subject, Howells and Straetmans (2017), pp. E-180–E-215. The Report of the Fitness Check of EU consumer and marketing law stated that the lack of clarity of some of the provisions of the UCTD could be addressed through specific Commission guidance (see Report of the Fitness Check of EU Consumer and Marketing Law 2017, p. 77).

In its report on the fitness check of EU marketing and consumer law The European Commission recognizes that the length of standard terms and conditions is found to be a considerable obstacle for consumers in identifying unfair terms. It also indicates that it is working with all stakeholders on voluntary principles for better presentation of both standard contract terms and pre-contractual information (see Report of the Fitness Check of EU Consumer and Marketing Law 2017, pp. 78 and 86).

According to the Polish Supreme Court the lack of transparency of a standard term can in itself constitute an unfair term, irrespective of whether it contributes to a significant imbalance of the parties’ rights and obligations to the detriment of the consumer. See Judgment of the Supreme Court in case I CSK 72/15 (n 27) and more in the contribution of Namyslowska and Jablonowska to this book.

Businesses must secure that contract terms correspond to those three principles assessed from the point of view of an average consumer, who is assumed to be a self-aware and responsible person. Dellios (2015), pp. 118–119.

See more extensively, Giorgianni (2009), p. 209 e.s. Also French case law condems the use of very complex and technical terms without any further explanation in insurance contracts; see Piazzon in this book. Also the High Court in Prague stated that a contract due to its legal constructions was completely incomprehensible: “Obviously, the text of the contract is deliberately designed so that by its complex constructions it prevents a person who does not have legal education and a certain economic overview from understanding the true meaning of the contract covenant”. See the ruling of the High Court in Prague, file No. 76 Cm 876/2010, referred to in the contribution of Selucká, Staviková Reznicková and Loutocký to this book.

See the contribution of Benacchio to this book.

See Rochfeld (2004), p. 981.

See Rita Illdiko Sik-Simon (2017).

See the contribution of Bercea and Caramidariu to this book.

Furthermore, the Finnish Consumer Protection Act introduces specific provisions regarding the adjustment of unfair contract terms which have been drafted without the consumer having been able to influence the contents thereof. The provisions regarding the adjustment of an individual consumer contract term applies to all terms used in a consumer contract—individually negotiated or standardised, and promotes solutions in which the contract remains in force despite the unfair term. The preference for adjustment of unfair contract terms contrasts with the nullity set forth in de UCTD and the deterrence sought by the CJEU. According to the Finnish legislator increased cancellation of contracts would not ensure the established level of consumer protection in Finland. See the contribution of Hyvönen to this book.

See on this point the contribution of Karampatzos and Kotios tot his book.

See the contribution of Yang to this book and the discussion that is taken place in China about the inclusion or exclusion of core contract terms.

See section 4 (a).

See the contribution of Donato Oliva to this book.

See the contribution of Kelly to this book.

The decision of the Constitutional Court of the Czech Republic of 11 November 2013, file no. I. ÚS 3512/11, was based on Section 1811 (1) of the Czech Civil Code: “all communications to the consumer must be made clearly and comprehensibly by the entrepreneur in the language in which the contract is concluded.”

Consumer authority with the competence to carry out proceedings against practices that infringe collective consumer interests and to impose fines or even the remedy of public compensation. A breach of the obligation to provide consumers with reliable, true and complete information is considered to be an infringement of collective consumer interests.

See the contribution of Namyslowska and Jablonowska to this book.

Based on the responses to the questionnaire from professor Gary Low, Singapore Management University, garylow@smu.edu.sg.

Based on the responses to the questionnaire from professor Gary Low, Singapore Management University, garylow@smu.edu.sg.

Based on the responses to the questionnaire from professor Jiin Yu Wu, National Chengchi University, Taiwan, jywu@nccu.edu.tw.

See the contribution of Nozawa to this book.

See the contribution of Nozawa to this book.

S. 64(4). The common law requirement that any particularly onerous terms are brought to a contracting party’s attention before the contract is concluded, applies only to onerous terms and requires that those terms have a prominent position in the contract and are not hidden away amongst a long list of terms and conditions. This is the so-called red hand rule which requires that in order to give consumers sufficient notice, these clauses need to be printed in red ink with a red hand pointing to it.

Finnish Law requires onerous and unusual terms to be specifically highlighted to the other contracting party. See the contribution of Hyvönen to this book.

The average consumer is the bench mark. There are no specific disclosure rules for particularly vulnerable consumers. The foregoing is based on the responses to the questionnaire from professor Jiin Yu Wu, National Chengchi University, Taiwan, jywu@nccu.edu.tw.

See the contribution of Yang to this book.

See the contribution of Yang to this book.

See more extensively on this point, the contribution of Yang to this book.

See the contribution of Yang to this book.

See the contribution of Yang to this book.

The sanction for breach of the duty to bring standard terms to the attention of the other party and to explain them is the exclusion from the contract, irrespective of whether they are core terms or not. See more on this point in the contribution of Yang to this book.

The European Commission points out that the use of black and grey lists of unfair terms tends to be more effective than the use of an indicative, non-exhaustive list, but that there does not appear any clear candidate for possible inclusion in a UCTD blacklist (see Report of the Fitness Check of EU Consumer and Marketing Law 2017, p. 77).

In the latter case also the proof that the term was the subject of individual negotiation may forestall the unfair character of the term in Italy. See the contribution of Benacchio to this book, who points out that the so-called free negotiation between consumers and businesses offers no guarantee whatsoever that balanced contract terms will be the result.

See the contribution of Nozawa to this book. See also Nakata (2016), p. 491.

See more extensively the contribution of Arbour to this book.

In the same vein, the Singaporean Unfair Contract Terms Act focuses on terms which serve to restrict or exclude liability on the part of the business, and also those which make liability or the enforcement thereof subject to restrictive or onerous conditions. Clauses which purport to do so are subject to a reasonableness test. The foregoing is based on the responses to the questionnaire from professor Gary Low, Singapore Management University, garylow@smu.edu.sg.

See the contribution of Yang to this book.

The Consumer Protection Act introduces an unfairness test for consumers whereas the Contracts Act holds an unfairness test for contracts in general.

See the contribution of Hyvönen to this book.

See above in point 4.1.

See the contribution of Schinkels to this book.

Report of the Fitness Check of EU Consumer and Marketing Law (2017), p. 84.

See for instance the SECCI (Standard European Consumer Credit Information—Consumer Credit Directive 2008/48/EC, O.J. 2008, L 133/86), the ESIS (European Standardised Information Sheet—Mortgage Credit Directive 2014/17/EU, O.J. 2014, L 60/34) and the KID (Key Information Document—Regulation 1286/2014 on PRIIPs, O.J. 2014, L 352/1). This evolution is generally welcomed for it also prevents that mandatory information is mixed with commercial information for marketing purposes. But despite the advantages the lists of information particulars that have to be disclosed to consumers remains long. Furthermore it remains unclear whether consumers are effectively able to absorb and understand the prescribed information. Compare with a national survey in South-Africa executed by Ramchander (2016), pp. 67–73. The findings of the survey were that consumers have a low to very low level of understanding of the features of basic insurance products (see p. 73). For a recent study on risk disclosure in corporate annual reports (capital markets) in a number of EU Member States, see Cordazzo et al. (2017), pp. 682–714. Disclosure effectiveness remains understudied. For a research with focus on identifying how the dimensions of a disclosure influence its efficacy, examining how different methodologies should best be deployed for disclosure testing and studying the market effects of mandatory disclosures, see Johnson and Leary (2017), pp. 184–191. See also Perry and Blumenthal (2012), pp. 305–312, who point out that the literature to date lacks conclusive evidence of the effects of disclosures on decisions and outcomes, such as loan choice or performance, and also that research examining the role of disclosures in light of other social, contextual, or informational influences is scarce. They conclude that a much more thorough analysis of the effects of disclosures on decision quality must be undertaken.

See more extensively, De Muynck (2010), pp. 1222–1230, who points to the omission to enlighten, on a clear and concise way a vast category of borrowers (those who are not capable of being careful readers) about some of the most essential characteristics of the pursued credit (at p. 1223). See also on this subject the contribution of Kelly to this book.

A recent study executed by Edwards favours even an extension of the prospectus obligation to professionals in professional services markets. The prospectus has already proven effective in the securities markets. See Edwards (2017), pp. 1457–1515. According to Edwards a professional prospectus would reduce information asymmetries and improve the market for professional services through disclosure and consumer choice. It would also make professional reputation a more potent force. “Self-regulating professions and occupational licensing bodies often fail to protect consumers because they tend to act like cartels - behaving more in the interests of their members than of the public” (p. 1462 and 1489–1492). Further, “consumers often struggle to recognize low-quality professional services because professionals sell credence goods” (p. 1485). A Professional Prospectus would then complement the existing occupational licensing systems. “Tailored disclosures delivered through a Professional Prospectus would put existing public information into consumer hands, allowing the market to more efficiently price professional services. This would discipline and deter professional misconduct and reward higher-quality service providers” (p. 1515), see Edwards (2017), pp. 1457–1515, who further indicates that “the most benefits seem likely to emerge from presenting the information in a short, standardized, and clear format” (p. 1496). Also Baisch argues that despite the information overload the provision of information must not be condemned; this would mean throwing the baby out with the bath water. Disclosure can be used and function’s also as a nudge; thus the way information is framed matters a lot. See Baisch (2016), pp. 217–243, who also argues that education could, at least partially, compensate negative outcomes of human flaws (at p. 242).

See specifically on this subject, the contributions of Piazzon and Baysal to this book. Addressing the new EU mortgage credit directive 2014/17/EU, cited above, also De Muynck and Bruloot indicate that the information credit intermediaries are required to provide consumers, for instance on remuneration, are unsatisfactory, because they assume “that consumers will (1) be both able and prepared (…) to disentangle the knot between different financial incentives and intermediary behaviour and (2) to act upon the disclosed information”, see De Muynck and Bruloot (2017), p. 35. Thus, the real impact of such information will be doubtful, ineffective and does not constitute a sufficient protection of consumers. As a result the authors believe that they should be complemented with targeted remuneration regulation specifically addressing the most hazardous remuneration practices. Compare with Jonker et al. (2017), pp. 136–138, who point out with regard to consumer credit that “a large percentage of consumers do not understand what the information provided” (136) and conclude that “the increasing complexity hollowed out the mandatory information duties to the point of becoming useless, resulting in an information paradox: consumers can only be considered responsible if they could be brought to stomach a mass of indigestible information” (p. 138). Also V. Colaert recently came to similar conclusions, see Colaert (2017), p. 10. She furthermore points out that “even improved information obligations indeed cannot deal with certain biases, such as for instance overconfidence or herd behaviour” and that “if the PRIIPs regulation wants to achieve its goals of easily accessible information and comparability of substitute products, its scope of application is still too limited” (11). She concludes: “Legislators in the EU have come to understand that for investors to absorb and compare information, there should not be too much of it (information overload), it should be well-structured in conformity with a standardized format, and it should be attractive and accompanied by visual aids where possible. A clear trend with respect to information as a tool of investor protection is indeed a focus on presentation and a tendency towards short, standardized key information documents. At the same time the legislator has understood that the “caveat emptor” principle, underpinned and reinforced by the information paradigm, has reached its limits in the financial services sector. Behavioural biases and flawed investor decisions cannot or only partially be solved by simpler, shorter and more standardized information. Information requirements are therefore increasingly complemented with two other building blocks of investor protection: service quality rules (conduct of business) and product regulation.” (p. 28). In the same vein D. Busch concludes: “Under MiFID II, the amount of information that must be provided to investors is set to increase rather than decrease and the information will also have to be more detailed. This is despite the fact that many people doubt whether the huge volume of information provided really helps investors to make informed and well-considered decisions”, in Busch (2017), p. 380. On a broader account Sah and Loewenstein (2014), pp. 575–584, argued that mandatory and voluntary disclosure can deter advisors from accepting conflicts of interest so that they have nothing to disclose except the absence of conflicts.

In Ireland for instance the Consumer Protection Code 2012 requires “that all information of regulated entities provided to a consumer is clear, accurate, up to date, and written in plain English. Key information must be brought to the attention of the consumer. The method of presentation must not disguise, diminish or obscure important information”. Furthermore, the information must be given in a timely manner, having regard for inter alia the time necessary for the consumer to absorb and react to the information provided. Also in Poland a code of conduct for consumer credit advertisements has been drafted by the key stakeholders in 2016. Find more information in the contribution of respectively Kelly and Namyslowska and Jablonowska in this book.

See the contribution of Hyvönen to this book. This results for instance in the obligation as regards insurance contracts to bring the major exclusions of coverage to the attention of the consumer or in investment services to take into consideration the previous investment experience of the consumer, his age or his possible medical condition which might lead to a lowered level of comprehension of significant features of the investment-type insurance policy. With regard to investment services the Financial Supervisory Authority developed guidelines which, although non-binding as such, function as good practices. Deviating from good practices could constitute a breach of the Market Securities Act in Finland. See e.g. the Supreme Court judgment in KKO 2015:93 where the Court found a marketing brochure misleading since it did not mention that the investment product in question included a so-called issuer risk related to the possible insolvency of the issuer even though the 217 pages prospectus included information on the issuer risk and had been approved by the authorities. In its judgment the Supreme Court emphasized the legislative history of the Market Securities Act and underlined that the correctness, coverage and method of presentation of disclosed information should be evaluated from the point of view of the investor.

See the contribution of Nozawa to this book. Compare with the council obligation imposed on financial professionals in Québec; see more on this subject in the contribution of Arbour to this book.

See the contribution of Nozawa to this book. See also on this point, Nakata (2016), p. 492, who questions whether the general suitability rule in the broad sense, “according to which the business operator must conduct his solicitation and sales in a manner that suits the consumer’s knowledge, experience and fortune etc., must be laid down as a general obligation”.

Based on the responses to the questionnaire from professor Jiin Yu Wu, National Chengchi University, Taiwan, jywu@nccu.edu.tw.

Also certain form requirements and requirements as to the content of the information are imposed. The foregoing is based on the responses to the questionnaire from professor Jiin Yu Wu, National Chengchi University, Taiwan, jywu@nccu.edu.tw, who further indicates that courts tend to formally assess the explanation obligation and the suitability test, often contenting themselves in verifying whether the consumer has personally signed the explanatory note and the risk attribution scale. Compare with the study of Yan et al. (2017), p. 53, who conclude with regard to recent health law reforms in Taiwan that “it may not be possible for outsiders to properly interpret the information provided by hospitals. Thus, when a hospital discloses information, it is necessary for the government to consider the information’s applicability. Toward improving medical expertise and information asymmetry, the government has to reduce the burden among health service consumers in dealing with this information, and it has to use the information effectively”.

Based on the responses to the questionnaire from professor Gary Low, Singapore Management University, garylow@smu.edu.sg.

Based on the responses to the questionnaire from professor Gary Low, Singapore Management University, garylow@smu.edu.sg.

See the contribution of Donato Oliva to this book.

A survey published in 2015 indicated that only 18.4% of the Chinese financial consumers was capable to fully understand their rights and duties after reading the terms and conditions of the financial services contracts. A survey issued by the people’s Bank of China in 2017 indicated that only 35.27% of the consumers believed that they had a good command of financial literacy.

See the contribution of Yang to this book.

See the contribution of Yang to this book.

See for instance the contributions of Piazzon, Benacchio and Arbour to this book who point out that information requirements have been spread over different laws and must be read together in order to find out whether the requirements are complementary or not. Arbour refers to the Canadian Supreme Court trilogy hinting at the existing limited intelligibility of information disclosures, despite the legislative efforts that have been made to that extent. Piazzon more specifically criticises the Annual Percentage Rate (APR) for credits as overly complex and incomprehensible for an average consumer. Also doubtful about the usefulness of APR, Ramsay (2005), p. 50 and Garcia Porras and Van Boom (2012), p. 28. Benacchio points to the fact that the risks of some financial transactions are insufficiently clarified to consumers and that information cannot make good for inappropriate conduct of financial professionals in the pre-contractual stage, which is difficult to document and thus to proof. As regards the APR, Benacchio seems to point out that this represents a good practice towards specific and simplified information indicators to the advantage of the consumer. In the same vein O. Bar-Gill sees a well-designed APR as part of a ‘smart disclosure’-policy, see Bar-Gill (2015), pp. 75–82. Also De Muynck (2010), pp. 1225–1226, pleads referring to Bar-Gill for a single APR disclosure in advertising. Schinkels, in his contribution to this book, sees the APR as an unidimensional yet meaningful criterion for the comparison of credit offers and thus a successful example of reducing complexity.

See the contribution of Kelly to this book.

In the context of e-commerce Québec law is reluctant towards the use of hyperlinks or multiple windows as they are likely to confuse consumers. The use of hyperlinks must therefore be avoided since a consumer too informed is also an uninformed consumer; see more on this point in the contribution of Arbour to this book.

See the contribution of Schinkels to this book, who refers to Koch (2012), p. 485, Köndgen (2011), p. 285; Klöhn (2006), p. 80 e.s.

See the contribution of Schinkels to this book, who refers to Institut für Verbraucherjournalismus (ifv) GmbH an der SRH Hochschule Calw, Fasel (2018), p. 48.

See Jonker et al. (2017), p. 137. Also Schinkels criticizes the voluntary character of laudable educational initiatives like the German Verbraucherzentrale Bundesverband e. V.’s web presentation for consumer education (www.​verbraucherbildu​ng.​de) which provides specially developed educational material for use in schools in order to improve consumer skills. The materials cover topics like finance, media, nutrition, sustainable consumption and consumer law. See the contribution of Schinkels to this book. In Belgium the Flemish government decided on 17 January 2018 to make a certain level of financial literacy part of the compulsory key competences that students of secondary schools must have attained before commencing higher education; see the proposal for a Flemish Decree, to be consulted at https://​www.​vlaamsparlement.​be/​dossiers/​vernieuwing-eindtermen.

See Domurath (2015), p. 163. Compare with Pearson (2008), p. 20; Garcia Porras and Van Boom (2012), p. 50; Ramsay (2016), p. 174. See also Trigg (2011), p. 876 and about the huge costs of financial education: Willis (2008), p. 197 and Osovsky (2013), pp. 925–931. Also P. Bongini, L. Colombo, M. Iwanicz-Drozdowska doubt the effectiveness of financial education but nevertheless conclude: “However, the ineffectiveness of financial literacy programs for those specific individuals does not imply that all financial education initiatives are useless and that policy makers should instead concentrate their actions on consumer protection regulation and, in particular, on the design of mandatory choices, as behavioral financial economists tend to propose”, in Bongini et al. (2015), p. 7.

Directive 2002/58/EC of July 2002 concerning the protection of personal data and the protection of privacy in the electronic communications sector, OJ 2002, L 201/37, as amended by Directive 2009/136/EC of 25 November 2009, OJ 2009, L 337/11. This Directive builds on Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (O.J. 1995, L 281/31) and Directive 97/66/EC of the European Parliament and of the Council of 15 December 1997 concerning the processing of personal data and the protection of privacy in the telecommunications sector (O.J. 1998, L 24/1) which translated the principles set out in Directive 95/46/EC into specific rules for the telecommunications sector. See also Directive 2016/680/EU of 27 April 2016 on the protection of natural persons with regard to the processing of personal data by competent authorities for the purposes of the prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties, and on the free movement of such data, O.J. 2016, L 119/89.

This is an individual using public electronic communication services, including also consumers.

Article 5(3) ePrivacy Directive, cited above.

See Van Eecke and Schellekens (2015), pp. 279–301. The user/consumer must give his consent to the use of most types of cookies.

In Greece and the Czech Republic, the existing European legislation is interpreted as an opt-in system whereby users must actively accept the use of cookies on their terminal devices. In absence of such consent, users should be enabled to freely browse the webpage they are visiting. See the contribution of respectively Karampatzos and Kotios, and Selucká, Staviková Reznicková and Loutocký to this book.

See the contribution of Kelly to this book. Compare with consent pop-ups: a clear banner notifying the consumer about the use of cookies and a ‘learn more’-link to further information.

According to Article 6 (1) GDPR processing shall be lawful only if and to the extent that at least one of the following applies: (1) the data subject has given consent to the processing of his or her personal data for one or more specific purposes; (2) processing is necessary for the performance of a contract to which the data subject is party or in order to take steps at the request of the data subject prior to entering into a contract; (3) processing is necessary for compliance with a legal obligation to which the controller is subject; (4) processing is necessary in order to protect the vital interests of the data subject or of another natural person; (5) processing is necessary for the performance of a task carried out in the public interest or in the exercise of official authority vested in the controller;(6) processing is necessary for the purposes of the legitimate interests pursued by the controller or by a third party, except where such interests are overridden by the interests or fundamental rights and freedoms of the data subject which require protection of personal data, in particular where the data subject is a child. Point (6) shall not apply to processing carried out by public authorities in the performance of their tasks.

According to introductory recital 43 of the GDPR, the assessment whether consent was freely given has to take into account a clear imbalance between subject and controller.

Article 7 of the Regulation further specifies the conditions for consent. Article 7 (2) for instance states: “If the data subject’s consent is given in the context of a written declaration which also concerns other matters, the request for consent shall be presented in a manner which is clearly distinguishable from the other matters, in an intelligible and easily accessible form, using clear and plain language. Any part of such a declaration which constitutes an infringement of this Regulation shall not be binding”. It follows that a banner on a website indicating the use of cookies with the only option to accept or acceptance as default option does not comply with these requirements (see also introductory recital 32 GDPR, which indicates that pre-ticked boxes are not sufficient to constitute consent). In absence of an option to refuse the processing of data not necessary for the service offered, the consent will not be given freely.

This standard is based on the following principles, further clarified in Article 5 of the Regulation: lawfulness, fairness and transparency; purpose limitation; data minimisation; accuracy; storage limitation; integrity and confidentiality; accountability.

See Article 6 (1) (a) GDPR. See also the five other lawful ways of processing personal data, for which no prior consent of the data subject is required, mentioned in Article 6 of the Regulation. According to introductory recital 30 of the GDPR, cookies which allow to identify an individual directly or indirectly are considered as covering personal data.

Proposal for a Regulation concerning the respect for private life and the protection of personal data in electronic communications and repealing Directive 2002/58/EC (Regulation on Privacy and Electronic Communications), Brussels, 10 January 2017, COM(2017) 10 final.

The rules are said to be more user-friendly as browser settings will provide for an easy way to accept or refuse tracking cookies and other identifiers. Furthermore the proposal clarifies that no consent is needed for non-privacy intrusive cookies improving internet experience (e.g. to remember shopping cart history) or cookies used by a website to count the number of visitors. See Articles 8, 9 and 10 of the proposal.

See the contribution of Benacchio to this book.

See again the contribution of Benacchio to this book.

See the contribution of Cartwright to this book.

See the contribution of Donato Oliva to this book.

See the contribution of Nozawa to this book.

Based on the responses to the questionnaire from professor Gary Low, Singapore Management University, garylow@smu.edu.sg.

The development of a data protection or privacy policy by which the consumers may be notified of the fact of and reasons for collection, use and disclosure of their personal data is categorised as a good practice, provided that the policy is drafted in sufficient detail. The notification of such policy drafted in too vague or general terms runs the risk that the notification and consent obligations are not met in specific cases. The foregoing is based on the responses to the questionnaire from professor Gary Low, Singapore Management University, garylow@smu.edu.sg.

Based on the responses to the questionnaire from professor Gary Low, Singapore Management University, garylow@smu.edu.sg.

Based on the responses to the questionnaire from professor Jiin Yu Wu, National Chengchi University, Taiwan, jywu@nccu.edu.tw, who also seems to indicate that since information about the collection, processing, storage and use of personal data is mandatorily disclosed in standard contracts, the use of personal data in accordance with the purposes indicated therein is automatically allowed.

See the contribution of Yang to this book.

See the introduction to this contribution. See additionally on the subject of bounded rationality Hacker (2016), pp. 300–301.

See e.g. Ben-Shahar and Schneider (2011), pp. 647–749; Ben-Shahar and Schneider (2014), p. 240; Ben-Shahar and Schneider (2015), pp. 83–93. They claim that “although mandated disclosure addresses a real problem and rests on a plausible assumption, it chronically fails to accomplish its purpose. Even where it seems to succeed, its costs in money, effort, and time generally swamp its benefits. And mandated disclosure has intended and undesirable consequences, like driving out better regulation and hurting the people it purports to help”, see Ben-Shahar and Schneider (2011), p. 651.

Ben-Shahar and Schneider (2014), p. 12.

Thaler and Sunstein (2009).

Also Sibony and Helleringer (2015), pp. 221–226 take a more paternalist approach with the focus of information disclosure shifted from content to context and directed to what matters for consumers. In line with choice architecture theories which emphasize the importance of opt-in, opt-out or required choice systems, they suggest the use of for instance opt-out systems and the use of grey lists instead of black lists (pp. 229–233).

See the book review of R.H. Thaler & C.R. Sunstein, Nudge: improving decisions about health, wealth, and happiness by Leonard (2008), pp. 356–360. It must be submitted that an important number of nudges echoes behaviourally informed regulation. The so-called information nudge for instance rests upon disclosure requirements, default rules and simplification. See more extensive on this point, on market failure nudges and on information-providing nudges as a natural corrective, Sunstein (2015), p. 427 and 435–438.

Ben-Shahar and Schneider (2011), p. 688. See also the critique of Marotta-Wurgler (2015), p. 66 and 70–73, who states that doing nothing about the failure of disclosure might not be desirable.

In the same vein Ben Shahar and Schneider argued that the autonomy rationales for mandated disclosure “assume that discloses and their circumstances, preferences, and choices are various. Given all this variety, how is a lawmaker to find language to guide each discloser to the disclosure most helpful to discloses?”, see Ben-Shahar and Schneider (2011), pp. 691 and 743. Also Schinkels, in his contribution to this book, points to German legal scholars that submitted that “where the state of being reasonably informed is not identified as status quo but as a future goal to be achieved via information obligations, there may be an opposing tendency to consumer education and the danger of paternalism” Möstel (2015), p. 908 e.s.

Thaler and Sunstein point out that inconsistent preferences explain why people smoke, eat and drink too much, or exercise and save too little. They illustrate inconsistent preferences via a self-model of intrapersonal conflict. This model is dichotomous with an impulsive, myopic Doer versus a farsighted, resolute Planner.

See the book review of R.H. Thaler & C.R. Sunstein, Nudge: improving decisions about health, wealth, and happiness by Leonard (2008), pp. 356–360.

See Bubb (2015), p. 1036. Also critical Hale Russell (2015), pp. 56–84 and Avishalom (2016), pp. 3–10. Also M.D. White disputes claims that paternalism of means can be meaningfully separated from paternalism of ends, and argues that modern paternalism does not respect people’s true interests but instead adopts a perfectionist or objective conception of well-being, see White (2016), pp. 36–37. In the same vein A. D. Steffen argues that a nudge requires an ex-ante value judgment, but facts and values are almost always inextricably entangled. He argues that the inherent normative choices must be made more transparent. See Steffen (2016), pp. 85–86. According to Alli et al. (2014), pp. 342–343, ‘nudging’ must be approached as a complementary tool of consumer protection.

Bubb (2015), p. 1023: “The right response to the important critiques of mandatory disclosure that Ben-Shahar and Schneider raise is not a presumption against disclosure but rather rigorous empirical assessment of which disclosures work and which do not, with an eye toward the pitfalls the authors document. About disclosure, there is still a great deal more to know”.

Bubb (2015), p. 1039. See also the very critical analysis of Hansen and Jespersen (2013), pp. 9–23. Also critical pointing at the three degrees of Nudge and their compatibility with other control devices, Baldwin (2014), pp. 835–844. Even C.R. Sunstein acknowledges that the central objective of nudging to influence choices in a way that will make choosers better off, as judged by themselves, raises normative, conceptual and empirical challenges, see Sunstein (2015), pp. 430–433.

Ben-Shahar and Schneider (2011), p. 746. “In any event, we need to abandon the idea that people’s autonomy is bolstered by supposedly empowering them to make choices through mandated disclosures” (p. 749).

See also on this point, Sibony and Helleringer (2015), pp. 209–233, who favour reform instead of revolution.

See also on this point Bubb (2015), p. 1041: Shahar and Schneider’s “analysis strongly suggests that presumptionless cost-benefit analysis of disclosure and its alternatives would lead to substantial repeal of existing disclosure mandates. But it may also lead to useful new approaches to mandatory disclosure, including through forms of summary disclosure (…) that (is…) based on realistic models of disclose psychology”.

“Several things impede simplification, and the cure for the ills of mandated disclosure is not merely ‘keep it simple’”, see Ben-Shahar and Schneider (2011), p. 744. They rather advocate peer ratings and expert advice (see pp. 746–747) and even for the most vulnerable consumers, to channel people’s choices by law, without mandating them. See however on this point Marotta-Wurgler (2015), pp. 71–72, who points out that individuals must also seek out ratings, rankings, scores, reviews etc., read them, understand them and act on them. They in other words suffer from the same problems and conflicts associated with disclosure.

The APR or annual percentage rate is for example a one-dimensional aggregator of the cost of credit. In the case of a cost score like the APR a consumer need to only understand that a lower score is better than a higher score. It also facilitates comparison-shopping among firms and products. See Bar-Gill (2015), pp. 75–82. In the same vein the results of an experiment conducted by Helleringer suggest that, from the perspective of the recipients of advice, problems of conflict of interest may not be as impossible to treat by means of mandatory disclosure as has been commonly suggested, see Helleringer (2016), pp. 153–163.

See Bar-Gill (2015), p. 76. Furthermore, Bar-Gill is also in favour of full disclosures, but full disclosures that are designed for consumption by sophisticated intermediaries, rather than directly by consumers. These intermediaries would then digest the disclosure and use it to provide beneficial advice for consumers (pp. 81–82). This requires another type of mandated disclosure so as to allow intermediaries to give consumers adequate advice.

See a.o. Trzaskowski (2016), p. 27; Purnhagen and van Herpen (2014); Duivenvoorde (2014). Also Schinkels for instance indicates that insofar as the abilities of average consumers are crucial, it is not a priori impossible to take into account empirical findings of behavioural psychology as regards systematic errors and biases in choices made by average “humans”, see the contribution of Schinkels to this book.

See Sibony and Helleringer (2015), p. 219: “Throwing out the ‘disclosure baby’ with the bathwater would not be a good idea”. For a plea to insert insights from neuroscience and behavioural knowledge in unfair commercial practices law, see Sibony (2013), pp. 496–501. According to the author those insights can help to produce acceptable generalisations that will allow courts to take better account of the context in which consumer decisions occur (p. 502).

More particularly with regard to warnings and information requirements in the field of product liability, reference is often made to the popular so-called C-HIP (Communication, Human Information Processing) model. This model distinguishes the four major phases of information processing, namely from (1) attention capture and maintenance, via (2) comprehension and memory, and (3) attitudes and beliefs, to (4) persuasiveness, see Wogalter et al. (1999), p. 864 and Wogalter (2006), p. 365. See extensively on this subject, Pape (2012), p. 473. See also on the LC4MP-model, Mangold (2017), pp. 75–87.

See on this particular point and the recent tobacco case which is pending before the Canadian Superior Court, the contribution of Arbour to this book.

See e.g. Better Regulation Executive and National Consumer Council (2007), p. 8, on maximising the positive impact of regulated information for consumers and markets. “Information can help consumers make decisions which work for them and enable them to take responsibility for making these choices. Regulated information can be a powerful tool in facilitating choice, especially when given to consumers at the point at which they make a transaction or decision”.

See on this point, Johnston et al. (2015), p. 26. The complexity and technicality of the language (official or legal-speak), the layout, the small print, dense text format and the length of the information provided impact on the comprehensibility of the information. Techniques to make information more accessible and comprehensible are the use of headings, highlighted key words, summaries, tables of contents etc.

See on this point, Johnston et al. (2015), p. 27. Comparative information contributes to transparency; it enables consumers to compare the legal situations and places him in a position to decide whether or not to purchase or to enter into a contract. Comparative information also has a competitive function in that it stimulates competition. Also Helberger et al. (2013), pp. 36–50, refer to the ultimate goal of consumer information which is to enable consumers to make informed choices: “To do so, consumer information regarding the different goods and services must be comparable. This again requires a certain level of standardization not only of the content but also of the form in which consumer information is supplied”.

If well designed, graphs and other visual representations can be beneficial in assisting comprehension. How information is formatted, its order, use of numbers, use of visual illustrations all contribute to the readability and understanding. See also Ayres and Schwartz (2014), p. 549.

The way the information is presented can have a significant impact on how consumers perceive and react to it.

Context can convey meaning and enables information to be more easily processed.

See on this point, Johnston et al. (2015), p. 22. Mandated disclosures are most easily remembered if a consumer can place them in some kind of context or a meaningful story. See also on the problem of remembering information, Ben-Shahar and Schneider (2011), pp. 719–729.

See also on this point, Helberger et al. (2013), p. 36:50.

See more extensively on this point, Straetmans (2016), pp. 199–210. This approach has also been endorsed recently by other Belgian scholars, see Terryn (2017), pp. 68–69.

For instance on communication in the digital sphere where consumers even being in possession of adequate literacy skills would still not have the resources to consciously process each and every piece of communication they are confronted with. See on this issue, Siegert et al. (2017), pp. 1–10. And for more about unconscious processing of commercial information, see R. Mangold, “Human processing of commercial information in digital environments”, in Siegert et al. (2017), pp. 75–87.

The twist of paternalism behind this proposal seems unavoidable. If we accept that the regulator is capable of imposing mandated disclosures, we inherently accept that he knows to a certain extent better than consumers what the core information should be to make decisions and what average consumers exactly need to make decisions well. Note also that Radlin (2015), p. 61, does not view this as ‘paternalism’. “Instead it is a recognition of the value of civil society to everyone, and to everyone’s liberty”.

The focus in a number of national reports on prominence of certain (core) standard clauses and avoidance of surprising clauses or clauses which limit the rights of consumers further point in that direction.

See more extensively on this issue, Straetmans (2016), pp. 199–210.

See Elshout et al. (2016). The Key findings of the study are that shortening and simplifying the terms and conditions results in improved readership of the T&Cs, a slightly better understanding of the T&Cs, and a more positive attitude towards the T&Cs. See already on the impact of simpler wordings and sentence structure on the intelligibility of a text, Masson and Waldron (1994), pp. 67–85. Also Schaub explores the question whether and how EU-information requirements can add value to consumer protection. He first recalls that information exchange is the basis of any contract, and that the general contract law imposes several information requirements (p. 32). However, these are mostly implicit, indirect and open-ended which makes it difficult for consumers to proof that the duty to inform of the offeror was violated. He consequently concludes that explicit and mandatory information requirements are capable of adding value where they are considered in relation to the general rules of contract law, which they strengthen, especially when the burden of proof with regard to the information provision is shifted to the trader. That way specific mandatory information requirements assist consumers in enforcing remedies under the general rules of contract law (p. 43). See Schaub (2017), pp. 25–44.

T.B. Gillis criticizes the way disclosures are tested in the financial sector. She concludes that the evaluation of the methodology of regulatory testing requires in the first place a clear understanding of how regulators view the goal of consumer financial regulation and the problem to which regulation needs to respond, see Gillis (2015), p. 40. See already on the costs of information disclosures, Hadfield et al. (1998), pp. 141–146.

Shahar and Schneider’s adherence to peer review and expert advice seems to indicate that they too start from the idea that consumers to a certain extent are capable of processing information. European countries experimented in the seventies with consumer law that protected the consumers outside the market place. It turned to be the wrong cure for the disease; see for a critique on those consumerist models, Straetmans (1998). Recent developments in e.g. Japanese consumer law confirm that consumer policy “should not be limited to the mere protection of consumer interests but should rather aim at operating a sound market system in the context of state regulation too”, see Nakata (2016), p. 505.

In contrast with the Obama Administration in the US and the Behavioural Insights Team in the UK, the EU only timidly embraces behaviourally informed regulation so that as of yet behavioural insights are not formally integrated into EU policy-making. Nevertheless the Staff Working Paper on Consumer Empowerment in the EU, SEC(2011)0469 of 22 May 2012 encourages national courts and authorities to take account of the actual state of scientific knowledge and points out that this includes the most recent findings of behavioural economics (see p. 32).

See e.g. the contributions of Namyslowska and Jablonowska; Selucká, Staviková Reznicková and Loutocký; Bercea and Caramidariu; Schinkels, Piazzon (with regard to financial services), Nozawa (who nevertheless refers to recent critical studies on the functioning of information models) to this book, and Yu Wu and Low based on their responses to the questionnaire (pockets of policy discussion on incorporating behavioural insights, but no impact on legislation).

See the contribution of Cartwright to this book.

PRICE Lab: An Investigation of Consumers’ Capabilities with Complex Products, study published in May 2016. Available at https://​www.​esri.​ie/​pubs/​BKMNEXT306.​pdf.

See the contribution of Namyslowska and Jablonowska to this book. Some legal scholars in France evaluate the current focus on information disclosures as too consumerist, turning average rational consumers into non-emancipated minors. Although they recognize that a certain formalism protects consumers, whereas too much formalism oppresses and spoils them. See more on this point in the contribution of Piazzon to this book.

Based on the responses to the questionnaire from professor Gary Low, Singapore Management University, garylow@smu.edu.sg.

See also in the financial services sector, the introduction of a toll-free telephone number for consumer information and increased information on ADR to solve problems in Romania, and on this subject the contribution of Bercea and Caramidariu to this book.

“Rather than focussing on law, it seems that consumer confidence is more likely to be enhanced by educating consumers about being a consumer — that is to make them much more aware of how different sectors operate, what to expect, and what to look out for. Consumer education is one of the Treaty-based objectives of EU consumer policy (Article 169 TFEU) and there are important initiatives in place, but it seems that the EU focusses too much on rights and not sufficiently on practical action”, see Twigg-Flesner (2016), p. 201, who further refers to the ‘Consumer Classroom’-website: http://​www.​consumerclassroo​m.​eu.

See e.g. the contribution of Kelly to this book. Also Bercea and Caramidariu refer to complementary educational measures in Romania, but there is no evidence about the effectiveness of those measures. In the same vein, Benacchio points to a number of initiatives in the financial services sector in Italy, but casts some doubt about the neutrality of those educational measures (as the financial sector seems too involved itself). He also seems in favour of shifting the debate towards the education of professionals in their relationship with consumers. Nozawa on his turn emphasizes the importance of consumer education in Japan and refers to legislative initiatives to that aim, but meanwhile also recognizes that it will be very difficult to educate young consumers via specific courses in schools.

In Brazil consumer protection policy is still very much focused on promoting healthy consumption among Brazilians so that information disclosure initiatives are mainly found with regard to tobacco products, alcoholic beverages, certain foodstuffs and medicinal products. See the contribution of Donato Oliva to this book.

See e.g. France, Poland, Italy etc.

See for instance the contribution of Namyslowska and Jablonowska, Bercea and Caramidariu, and Schinkels to this book.

See e.g. the contributions of Namyslowska and Jablonowska; Schinkels and Piazzon to this book. Also the Belgian practice points in that direction, see Straetmans (2016), pp. 199–210. The analysis may take a completely different turn if businesses mix voluntarily disclosed information with mandated disclosures and thereby deliberately confuse consumers.

Specifically with regard to complex contracts it is questioned whether an ever increasing amount of information would achieve a more balanced B2C-relationship. See particularly on this point, the contribution of Hyvönen to this book who refers to investment services and submits that the critique stems from a Finnish (or a Nordic) consumer law perspective where the model forms set by the EU seem quite formalistic with low influence on the consumer’s actual knowledge on the sold product or service. She further observes that in Finland, the duty to disclose is already quite vast in consumer contracts and the seller has a far-reaching responsibility regarding the comprehensibility of the information (e.g. his pedagogical duty; see already above). Karampatzos and Kotios point also to the marginal utility of excessive information (see his contribution to this book): the added value of a new information particular diminishes when compared with the invested time and energy-cost to accumulate and assess the additional information. Furthermore, an intricate torrent of technical information may overwhelm the consumer who often lacks time, experience and knowledge to understand and properly evaluate the information, especially in the case of financial services. Piazzon stresses that the accumulation of the general pre-contractual information duty and the mandatory disclosures, absence of contradiction, lead to an overload of information; see his contribution to this book.

See e.g. the contributions of Hyvönen and Namyslowska and Jablonowska to this book.

See especially on this point, the contribution of Piazzon to this book.

See Straetmans (2016), pp. 199–210. See also the contribution of Karampatzos and Kotios to this book: maximum information is not equal to optimal information. See also the contribution of Benacchio who is in favour of highlighting essential information per domain. Baysal on her turn advances that the consumer is to a large extent unable to understand the multiplicity of information which is disclosed to him. Hence, he is in favour of simplified information that is made easily accessible for consumers. Piazzon argues that limited information to consumers in a pre-contractual stage and detailed information to consumers in a later stage, notably after the conclusion of a contract, may be efficient only in those circumstances were the consumer has been given a right to withdraw from the contract, see the contribution of Piazzon in this book.

IGLU (2016), p. 15.

See the contribution of Schinkels to this book.

The OECD PISA-study of 2015 (worldwide assessment of 15-year-old students in reading, mathematics and science) indicates that 17% of Belgian secondary school students fail to attain the basic competences, see https://​www.​oecd.​org/​pisa/​pisa-2015-results-in-focus.​pdf.

For a critical view on this concept and the greater uniformity of legal rules it would entail, see Twigg-Flesner (2016), pp. 183–202. According to his analysis the ‘European confident consumer’ has the following characteristics: “First, a confident consumer is one who wishes to take advantage of the single market and is therefore, at least in principle, a consumer interested in cross-border shopping. Moreover, a confident consumer is aware of consumer protection law, in particular of the law in their jurisdiction, and also aware of the fact that there are differences in the laws of the various Member States. Further still, the confident consumer seemingly puts a great deal of weight on the law — for (…), ensuring that there are no (significant) variations in the consumer laws between the various Member States will boost consumer confidence. Finally, it seems that a confident consumer is also a consumer who will benefit from information to help him make the right decision about which goods and services to purchase, where, and on what terms” (pp. 185–186).

They often did so in advancing an opposite normative benchmark, namely that of the gullible consumer (in all circumstances).

Some scholars advocate more fundamental reforms of the EU’s consumer policy; see for instance Twigg-Flesner (2017), p. 185, who criticizes the coupling of consumer protection to the internal market objectives and concludes: “The “average consumer” concept bears little resemblance to reality, and it is becoming increasingly difficult to justify it as a useful benchmark for consumer legislation. Research on consumer behaviour and psychology tells us a lot more about the factors which influence consumers, which have weakened the credibility of the average consumer benchmark” (p. 189).

Open legal norms like general prohibitions of misleading advertising, unfair market practices and unfair contract terms further contribute to this tailoring.

This can be specified in terms of print size and contrast between font size and background of the information. For instance the French Court of cassation held that the use for restrictive clauses to the offer of a print size that was 12 to 25 times smaller than the other mentions in the advertising amounts to a misleading commercial practice. Also the medium used affects the readability of the information. Thus the Finnish Supreme Court pointed out that manner of marketing had not been clear or easy to understand when the price of the tickets was only given in unclear small print in the advertisements and even not verbally expressed in the television commercials. Recently also the CJEU seemed to conclude that the use of small print will be more harmful in TV adds than in for example an advertisement in a journal. It held that the time available to the consumer to assess information provided to him in a television advertisement is limited whilst the average consumer (reader) will have sufficient time to read the integral advertising (See Canal Digital Danemark case, cited above). See more extensively on this point Straetmans (2018).

The following parameters are used: exhaustiveness, accessibility, correctness and clarity of the information; the easiness to understand, the logical arrangement, the legibility (absence of technical, complex constructions) and the visibility of the information.

In its report on the fitness check of EU marketing and consumer law The European Commission recognizes that the length of standard terms and conditions is found to be a considerable obstacle for consumers in identifying unfair terms. It also indicates that it is working with all stakeholders on voluntary principles for better presentation of both standard contract terms and pre-contractual information (see Report of the Fitness Check of EU Consumer and Marketing Law 2017, pp. 78 and 86).

Report of the Fitness Check of EU Consumer and Marketing Law (2017), p. 86.

See on this topic, Report of the Fitness Check of EU Consumer and Marketing Law (2017), p. 86.

Proposals to adjust the benchmark of information rules towards more specific groups of vulnerable consumers must be addressed in this light. Despite all critiques based on the illiteracy, innumeracy and lack of salience of groups of consumers, one should be very careful in lowering the average benchmark (see however for a plea in that direction, Duivenvoorde (2014), pp. 213–224, who at the same time indicates that the German approach, well-known within the EU for adhering to a lower consumer benchmark, is over-protective. When set too low, the very existence of consumer information legislation might be called into question and consumerist paternalism luring. Also the precise cost a reform of this size entails for market participants is a convincing argument, especially since costs imposed on businesses are likely passed on to consumers in commercial relationships.

For instance linguistic studies on simplification and readability and psychological studies on human processing of commercial information in digital environments etc.

It must be noted that core issues and core terms of contracts are not (necessarily) the same.