Recent developments in European Consumer Law: Editorial content: paid for?
Let us look at another, more recent, case concerning activities of newspapers. On June 24 AG Szpunar delivered an opinion in the case Peek & Cloppenburg (C-371/20), which looked into practices of Grazia magazine and a possibility of an unfair commercial practice, as defined in Point 11 of Annex I to the Unfair Commercial Practices Directive (UCPD).
Point 11 of Annex I to UCPD specifically prohibits the use of editorial content in the media to promote products, when a trader paid for the promotion without clarifying this fact in the content/images/sounds. A consumer should be able to easily identify any paid for/advertorial content.
Peek & Cloppenburg Düsseldorf (P&C Düsseldorf) company arranged with the Grazia fashion magazine to publish a double-page article inviting Grazia’s readers to an exclusive shopping event called ‘GRAZIA StyleNight by Peek & Cloppenburg’. This has been published under the title ‘reader offer’. Their competitors – Peek & Cloppenburg Hamburg – claimed that there was an infringement of the prohibition resulting from Point 11 of Annex I UCPD (and as we all know, as long as consumers’ interests are exposed to harm alongside the interests of the trader’s competitors, UCPD framework may be used by competitors, too – para 33).
In preliminary remarks AG Szpunar first considers the character of the above-described commercial practice. He decides that it qualifies as a commercial practice as the trader – P&C Düsseldorf – initiated the practice and used it to promote its sales (para 22). The fact that they cooperated in organising this activity with the magazine and that magazine could benefit from the activity, as well, does not impact that assessment (para 23). AG Szpunar mentions further that it could be possible for the claim to be raised against both operators, as well as Grazia magazine would qualify as a trader, as well (para 24).
Question 1 – nature of payment
First, AG Szpunar considers whether the payment made by a trader for a promotional editorial content could be non-monetary. As literal interpretation does not provide a clear answer (para 45), AG Szpunar looks at systematic, teleological and historical interpretation next. From the point of protecting consumers against deceptive commercial practices (unidentified advertorial content), it should not matter in what form a trader paid for the editorial content. The possibility of consumer’s harm is not influenced by the form of the payment (paras 49-50). Further, if it were possible to pay with non-monetary assets, it would be easy to circumvent the protection of the UCPD framework (para 60) and the scope of the prohibition in Point 11 of Annex I UCPD would be significantly restricted (para 58). The preparatory version of the Annex actually referred to payments or ‘other reciprocal arrangement’ (para 62) and AG Szpunar does not consider its removal from the final text as opposing a broad interpretation of payment (paras 64-66).
Question 2 – is a non-monetary payment consideration for the advertorial?
In the case at hand P&C Düsseldorf made available to Grazia magazine the rights to use images of its stores in the promotional content, which is what AG Szpunar perceives as the non-monetary payment that qualifies as consideration in the case (paras 73-74). It does not matter here, what was the percentage of the costs of publishing the editorial content that was paid for by a trader vs by a media operator as Annex I UCPD does not require any equivalence (para 75).
AG Szpunar then proceeds to consider whether a definite link between a benefit and promotion that needs to be found needs to be direct or could be indirect. It seems that there is some scope for flexibility in this assessment (para 78). Interestingly, AG Szpunar draws attention to the fact that the notion of ‘editorial content’ has not yet been interpreted by the CJEU (para 84), which is something for the national court to keep in mind.
One of the interesting elements of this opinion is that it promotes a broad understanding of the notion of ‘payment’ in the interpretation of yet another provision of European consumer law. Moreover, we should remember current debates on the misleading character of many promotional online activities, where the promotional/advertorial character thereof is not clearly identified (e.g. think of practices of digital influencers). Despite the possibly narrow scope of Point 11 Annex I UCPD (which scope will depend on the interpretation of the notion of ‘editorial content’), this opinion and the forthcoming judgment may play a significant role in shaping the response to other promotional practices that could harm consumers.