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Brussels, 2 October 2001

Internal Market: Commission proposes Regulation to remove restrictions on sales promotions

The European Commission has proposed a Council and European Parliament Regulation to remove restrictions on sales promotions within the Internal Market that have been identified by the Commission. It will remove barriers to cross-border sales promotions erected through national provisions on discounts, premiums, free gifts, promotional contests and promotional games and replace them with transparency and information requirements to allow for free movement. Since these promotional tools are used by all companies (particularly SMEs), the proposed Regulation represents a key instrument to facilitate commercial communication across borders within the Union. There is an urgent need for a common set of ground rules for these price related promotional instruments due to both the introduction of the euro and the implemention of the e-commerce Directive into national laws in January 2002.

"This proposal would not only establish a level playing field of European businesses wishing to use and communicate sales promotions across the Union", commented Internal Market Commissioner Frits Bolkestein, "but it would also ensure that consumers benefit from increased choice and the greater price transparency that the introduction of the euro heralds".

This proposal complements the Commission's plans, as set out in the Green Paper on Consumer Protection adopted today (see IP/01/1354 and MEMO/01/307), to modernise consumer protection in the Internal Market so that consumers can fully benefit from a wider choice of goods and services offered from throughout the EU. The proposal could complement either of the options set out in the Green Paper which envisages a new approach to consumer protection within the Internal Market.

The instrument would achieve free movement of marketing services by setting a uniform and very high level of protection of public interest objectives such as consumer protection, the protection of minors and the protection of public health.

The Regulation has four main features:

First, it would remove outdated general bans and restrictions found in various Member States applied to the use and commercial communication of these promotional tools. For example, national bans on premiums, national value limits on discounts, bans on making participation to promotional games subject to purchase are removed and replaced with stronger transparency requirements.

Secondly, it would lay down modern and appropriate information requirements to ensure a higher level of consumer protection.

Two sets of information requirements are foreseen. The first set are transparency provisions applicable to the commercial communication of the sales promotion. For example, the text allows for the use and communication of premiums (which are currently banned in principle in a number of Member States) by ensuring that the value of the premium is indicated in the commercial communication associated with it. Likewise, the possibility of allowing participation to a promotional game to be linked to purchase would be accompanied by the condition that the actual or estimated odds of winning the relevant prize should be indicated in the relevant commercial communication.

The second set of information requirements are those that must be made available to the client on request. For example, all discounts would be subject to the condition that the promoter will, on request, indicate to the client the preceding price of the promoted good or service and the length of time (including dates) that this preceding price was applied.

Third, the Regulation provides for high protection of minors and public health.

The Regulation ensures that promotional games cannot be designed in such a manner that they encourage minors to reveal personal data. It also lays down rules to ensure that free samples are of a nature that they cannot harm children and it bans the offering of free gifts of alcoholic beverages to minors and adolescents across Europe. Restrictions on commercial communications of sales promotions for tobacco are already addressed in the Commission's proposal for a Directive on advertising and sponsorship of tobacco products (see IP/01/767).

Fourth the Regulation ensures full legal certainty and a true Internal Market in this field by making remaining residual national restrictions subject to the principle of mutual recognition so that operators lawfully established in one Member State will be able to provide this service freely in other Member States.

A Regulation has been chosen, rather than a Directive, so that legal certainty will characterise the Single Market for sales promotions and in order to be consistent both with the Commission's drive towards better regulation and with the approach to use of legislative instruments advocated in the recent White Paper on Governance.

The full text of the proposal will be available on the Europa Website: (look under What's New)

See also MEMO/01/306

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