Judges C Toader (Rapporteur), M Safjan
Advocate General M Szpunar
The claimant (“P&C Hamburg”) and the defendant (“P&C Düsseldorf”) were clothing retailers trading under the same company name (“P&C”) through various subsidiaries in different regions of Germany. They were, however, legally and economically separate and independent of each other in all respects, including the advertising of their businesses. The defendant trader launched a nationwide advertising campaign in a popular fashion magazine by means of an article inviting readers to a joint event organised by both the trader and the magazine’s publisher with a view to promoting the products of both businesses. The article showed images of the trader’s stores with the company name above the entrances, together with images of the trader’s products. The defendant trader did not pay any money to the magazine’s publisher in return for the promotional article. The claimant trader brought proceedings seeking an order that, inter alia, the defendant be prohibited, as a competitor, from having advertisements published which were not clearly identifiable as such on the ground it constituted “unfair commercial practice” under German law transposing point 11 of Annex I to Parliament and Council Directive 2005/29/EC, contrary to the prohibition against the use of editorial content to promote a product where the trader had paid for that promotion without the link with the trader being clearly identifiable by the consumer, a practice known as an “advertorial”. On the defendant’s subsequent appeal, the German Federal Court of Justice stayed the proceedings and referred to the Court of Justice of the European Union for a preliminary ruling the question, in essence, whether the condition of payment laid down in point 11 of Annex I to Directive 2005/29 encompassed any form of service and any economic advantage provided by the trader for the purposes of the publication of an article and, if so, whether such a service had to be provided as consideration for that publication.
On the reference—
Held, although the existence of a commercial practice within the meaning of Directive 2005/29 concerned both a trader and a consumer, the fact that the two parties in the present dispute were traders did not preclude the application of the Directive and, where the conditions for an unfair commercial practice were met, it was possible for a competing trader to challenge such a practice before a national court. One aim of point 11 of Annex I to the Directive was to protect the consumer against covert advertising, in particular, against editorial content for which the advertising trader provided benefits without indicating that fact. The specific form of the benefits or payment provided by the trader, whether money or any other consideration having an asset value, was irrelevant. However, in order to come within point 11, the payment had to relate to the promotion of a product by means of media editorial content, which implied a definite link, in the sense of consideration, between the material benefit provided by the trader and that editorial content. The supply by the trader to the media operator, free of charge, of images protected by copyright, could constitute direct payment for the publication of the editorial content, where the trader’s premises and products were visible in those images, since the provision of those images had an asset value and was intended to promote the trader’s products. Accordingly, the promotion of a product by the publication of editorial content was “paid for” by a trader, within the meaning of point 11 of Annex I to Directive 2005/29, where that trader provided consideration with an asset value for that publication, whether in the form of money or in any other form, provided that there was a definite link between the payment and that publication, which would be the case where that trader made available, free of charge, images protected by copyright on which were visible its commercial premises and products which it sold (paras 28, 30, 31, 35, 36, 41, 42, 45, 46, 49, operative part).
A Auler for the defendant trader, legally represented by Peek & Cloppenburg Düsseldorf Komplementär BV.
A Renck and M Petersenn for the claimant trader, legally represented by Van Graaf Management GmbH.
MZ Fehér and Z Biró-Tóth, agents, for the Hungarian Government.
B-R Killmann and N Ruiz García, agents, for the European Commission.