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MEMO/01/306

Brussels, 2nd October 2001

Proposal for a Regulation to remove restrictions on sales promotions frequently asked questions

How would this proposed Regulation work?

Once adopted by the European Parliament and the EU's Council of Ministers under the so-called co-decision procedure, the Regulation would be directly applicable in the Member States without the need for national implementing measures and would override any national laws in the areas it covers.

Would this mean that certain national bans on sales promotions would no longer be applicable?

Yes. General (non-sectoral) bans on sales promotions that currently exist in some Member States would no longer be applicable. Examples of sales promotion bans that would be removed by the proposed Regulation include:

  • bans on sales below cost (e.g. in France)

  • bans on certain forms of premiums. (e.g. in many Member States, the premium has to be associated with the promoted product or service - this would no longer be the case

  • maximum limit values on discounts (e.g. the 33% limit in Belgium)

  • bans on making entry into promotional games subject to purchase.

How would this proposal protect consumers' interests?

It would replace outdated and disproportionate bans with modern, effective information requirements that ensure that consumers benefit from a high level of protection and are able to make informed decisions. First, the proposed Regulation would impose two detailed sets of information requirements that promoters will have to adhere to (see below). Second, it would impose specific conditions to protect minors and young adults. In particular, a promoter, when making a sales promotion, could not collect personal data from a child without the verifiable prior consent from that child's legal guardian. Moreover, promoters would be prohibited from providing directly to a child a free gift or a premium if it was of a nature that could harm its physical health. Finally, promoters would be prohibited from providing a free gift consisting of an alcoholic beverage to individuals under the age of 18.. The proposed Regulation would also make it easy for consumers to take action against sales promotions that did not comply with the provisions of the Regulation.

In particular, promoters would be obliged to:

  • provide evidence, if so requested by a court or administrative authority, as to the accuracy of information provided to consumers

  • provide, free of charge, an address to which complaints can be directed to them and, where a promoter provided a telephone advice service in connection with a sales promotion, the promoter would have to ensure that this was provided free of charge and that appropriate resources were dedicated to its operation.

  • respond to an initial complaint relating to a sales promotion within six weeks of the promoter's receipt of that complaint. The initial complaint and the response would have to be in writing (including by electronic means) and the response would have to be in the language of the communication of the sales promotion.

Moroever, promoters would be obliged to:

  • indicate in the commercial communication relating to the sales promotion any out of court dispute settlement system or code of conduct that he/she subscribed to and

  • make available upon request information concerning any such dispute settlement system or code of conduct.

What are the information requirements proposed?

    All sales promotions:

    • Information to be provided in the commercial communication:

      • an indication of the discount, free gift, premium, promotional contest or promotional game

      • the price (inclusive of taxes) of the promoted good or service and any additional costs associated with freight, delivery or postage

      • the promoter's identity

      • the duration of the offer including the start and end date and

      • where the offer is subject to conditions, an indication of where these conditions or any other information can be obtained.

    • Information to be made available on request unconditional on purchase of the promoted product or service:

      • the name and geographic address of the promoter and

      • the terms and conditions relevant to the sales promotion.

      Discounts:

    • Information to be provided in the commercial communication:

      • the exact amount of the discount represented as either a percentage or a unit cost and

      • an indication of a sale below cost.

    • Information to be made available on request unconditional on purchase of the promoted product or service:

      • any conditions or limitations applicable to the discount and

      • the preceding price of the promoted good or service and the length of time (including dates) that this preceding price was applied.

    • Information to be made available on a coupon or voucher:

      • the cash value of the coupon or voucher

      • any limitation on its use including its expiry date and

      • the goods or services against which the coupon or voucher may be redeemed.

    • Information to be made available on request of a manufacturer or a service provider from whom goods or services have been purchased:

      • information of a sale below cost in conformity with prior contractual agreements.

      Free gifts and Premiums

    • Information to be provided in the commercial communication:

      • the actual value of the free gift or premium and

      • any costs associated with obtaining the free gift or premium.

    • Information to be made available on request unconditional on purchase of the promoted product or service:

      • any conditions or limitations applicable to the free gift or premium.

      Promotional contests and promotional games

    • Information to be provided in the commercial communication:

      • the value and nature of the prize;

      • the closing date for receipt of entries;

      • any geographical or personal restrictions such as location or age;

      • any requirements for proof of purchase;

      • the need to obtain permission to enter from an adult or employer;

      • any associated costs other than the purchase of the promoted good or service in the participation in the promotional contest or promotional game; and

      • in the case of a promotional game, the actual or estimated odds of winning the prize.

    • Information to be made available on request unconditional on purchase of the promoted product or service:

      • any conditions applicable to the promotional contest or game including any limitations on entries or prizes

      • the number of prizes which may be won and the number of prizes of any one type if more than one type of prize is on offer

      • the rules governing who is eligible to participate and the award of prizes

      • whether a cash alternative can be substituted for any prize

      • the criteria for judging entries

      • the selection procedure for the award of prizes and, where the selection is made by jury, the composition of the jury

      • the date of the results and the manner in which they are to be announced

      • the means by which prizes may be delivered or collected and any associated costs

      • the time period during which prizes must be collected

      • any intention and conditions to use winners in post event publicity; and

      • details of prize-winning entries subject to the agreement of prize winners and data protection rules.

What would happen to sectoral restrictions that exist in the Member States and that have not been harmonised at EU level?

These would remain in force in those Member States that have them but would be made subject to mutual recognition. In other words, the Member States will not be able to apply these sectoral restrictions to sales promotions from other Member States.

What sort of restrictions would the proposed Regulation tackle?

There are a variety of sales promotions services that are currently restricted by differing national laws. It is these restrictions that the Regulation would remove. Examples would include: restrictions on exports of sales promotion, design and other advertising agency services; restrictions to media planning or media sales services; restrictions to direct marketing services as well as restrictions on media services. All these result from differing laws on sales promotions and all have been recognised by the Member States in the context of the Expert Group that considered these problems over the past three years. Current differences in national laws also have an indirect restrictive effect on the free movement of goods in so far as these benefit from sales promotions. Thus, the free movement of goods should also benefit from this proposal.

Why propose a Regulation at the same time as launching a Green Paper on consumer protection?

The proposed Regulation takes account of consultations on a previous Green Paper on commercial communications adopted in 1996 by the Commission and a subsequent Commission Communication in 1998 (see IP/98/211). Clear restrictions were identified in this field at that time and this Regulation is a targeted or specific response to those clearly identified restrictions. It represents a specific measure that would be compatible with any of the options presented in the Green Paper on consumer protection that has just been adopted by the Commission (see IP/01/11354 and MEMO/01/307).

Why does the proposed Regulation not include specific rules to ban sales promotions for tobacco?

Because any form of commercial communications with the aim or indirect effect of promoting a tobacco product would already be prohibited (except for publications intended exclusively for professionals in the tobacco trade and publications from non-EU countries not principally intended for the EU market) by the May 2001 proposal for a Directive on tobacco advertising and sponsorship (see IP/01/767).

Would the proposed Regulation's rules on promotional games apply to gambling services?

No, gambling services are excluded from the scope of this proposal.


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