Unfair commercial practices – such as misleading or aggressive marketing – are prohibited because they harm the economic interests of both consumers and bona fide competitors.
Fake discounts or glowing reviews from fictitious users, for instance, may cause a consumer to buy a product that they would not have bought in the absence of these misleading practices. This may be because the product was in fact not a ‘bargain’ at all, and may even have been more expensive than a comparable product – or because the product was wrongly given too high a rating. The bona fide trader competing with this dishonest seller loses sales as a result. The same applies to a manufacturer that incurs high costs for the development of a sustainable product but loses sales because consumers opt for a competitor that falsely claims that its products are ‘sustainable’ and is able to charge a lower price by not making the necessary investments.
The Netherlands Authority for Consumers and Markets (“ACM”) has been designated as the supervisory authority and can impose heavy fines on market parties that engage in unfair commercial practices. However, the ACM has limited capacity and fails to address many complaints about misleading commercial practices.
But companies that are harmed by unfair commercial practices of a competitor are not solely dependent on administrative enforcement by ACM (fines): they can also take action themselves by applying to the civil courts. There are several successful examples of this in case law. In this blog, we explain the civil-law options available to aggrieved companies.
What are unfair commercial practices?
The Unfair Commercial Practices Directive (“UCPD”) has been in force in the EU since 2005. It prohibits unfair business-to-consumer commercial practices. The UCPD has been implemented in the Netherlands in Book 6 of the Dutch Civil Code (the “UCP Act”).
The UCP Act distinguishes between unfair commercial practices, misleading commercial practices, and aggressive commercial practices. ‘Unfair commercial practices’ is a broad concept and requires, among other things, breach of the requirements of professional diligence. This may cover a wide range of practices by companies.
In sum, ‘misleading commercial practices’ involve providing (incorrect) information that might deceive the average consumer in some way – including by the overall presentation – and may induce them to take a decision about a transaction that they would not otherwise have taken. The incorrect information may relate, for instance, to the price of the product, its benefits, its availability, or the seller’s qualifications (including any recognition or certification).
The omission of essential information may also constitute an infringement, known as a ‘misleading omission’. The same applies to ‘aggressive commercial practices’, such as contacting consumers in an unsolicited and coercive manner in order to sell a product (e.g., repeated phone calls or emails). Separate rules furthermore apply to the announcement of price reductions (discounts).
Below, we list a number of examples of unfair commercial practices that regularly occur in practice and may be detrimental to bona fide businesses:
- Fake discounts: a store (online or brick-and-mortar) displays a product with a “from €20 for €10” discount while the product never cost €20 (see also this and this (Dutch only) blog for other variations).
- Fake customer reviews: an online store allows fake reviews to be posted (see here (Dutch only), for instance).
- Fake countdown clocks: an online store displays a countdown clock with the text “only 2 minutes left before the promotion ends” while the offer is still available or even better after that time.
- False scarcity: an online store states that the product is scarce (for instance: “only 3 products left”) while the retailer actually has more products in stock.
- Bait and switch: an online store advertises a (branded) product, but when the consumer clicks on the advertisement, the product is unavailable and a (cheaper) alternative is offered.
- Misleading sustainability claims (greenwashing): an online store claims that products are more sustainable than they actually are (see also this and this (Dutch only) blog).
Although almost all of the above examples involve the misleading of consumers in e-commerce (see also this earlier blog on digital manipulative practices), the prohibition of unfair commercial practices also applies offline. In 2024, for instance, the Amsterdam District Court ruled (Dutch only) that certain physical advertisements (billboards) by an airline with environmental claims were misleading because the advertisements were based on vague and general statements about environmental benefits (e.g., “join us in creating a more sustainable future”).
ACM has its hands full enforcing consumer rules
ACM closely monitors compliance with consumer rules (see here). In recent years, 70% to 80% of all the investigations initiated by ACM have been related to consumer protection (in addition to investigations into cartel violations, among other things). ACM’s enforcement practice also shows that it is particularly strict on unfair commercial practices in e-commerce (see also this blog).
- In September 2022, H&M, Greenchoice and two other companies reached a settlement with ACM for a total of more than €2 million, following the use of sustainability claims and logos on their websites.
- In November 2022, ACM imposed a €100,000 fine (Dutch only) on TrendX for fake reviews. ACM’s investigation revealed that no fewer than 184 reviews had been left using a single email address belonging to a TrendX employee. TrendX also used a system to hide bad reviews from consumers.
- In May 2024, ACM imposed a fine (Dutch only) of over €1 million on Epic Games for unfair commercial practices targeting children in the Fortnite game. This included advertising that pressured children to make purchases (e.g., by using misleading countdown timers and taking advantage of children’s FOMO (fear of missing out).
- In June 2024, ACM imposed fines (Dutch only) totalling €621,000 on five online stores for using fake discounts. One company, for instance, presented a product ‘from’ €699 ‘for’ €629, while four days earlier the product cost €539. Another company misled consumers by artificially increasing the ‘from’ price of a product. First, the product was offered ‘from’ €149.99 ‘for’ €99.99, but the next day ‘from’ €199.99 ‘for’ €99.99 (see also this blog).
ACM’s enforcement capacity is limited, however, which means that it cannot deal with all complaints about unfair commercial practices. Competitors may submit a signal or enforcement request about a competitor but, to the dissatisfaction of many complainants, ACM has considerable discretion not to act in response, citing its prioritisation policy.
Civil actions against competitors that engage in unfair commercial practices
But businesses are not solely dependent on administrative enforcement by ACM: they may also ask the civil court to take measures against competitors that violate the Unfair Commercial Practices Act. Aggrieved businesses may furthermore join forces against the rogue competitor, which also allows them to share the costs of legal assistance, among other things.
Although the Unfair Commercial Practices Act relates to advertising by companies aimed at consumers, it is now widely accepted that competitors may also invoke it. The courts have repeatedly ruled that the Act also serves to protect the interests of competitors, not only consumers.
This is illustrated by the judgment of the Amsterdam District Court of 27 January 2016, in which it found (Dutch only):
“[...] that misleading advertising by a business aimed at consumers may be negligent towards a competing company within the meaning of Article 6:162 of the Dutch Civil Code [i.e. a wrongful act] [...] The (indirect) protection of businesses was expressly mentioned when the European Unfair Commercial Practices Directive was introduced, for instance.”
The District Court of The Hague arrived at a similar conclusion in its judgment of 14 December 2021, in which it found (Dutch only):
“Although Article 6:193c of the Dutch Civil Code relates to business-to-consumer (B2C) communication, that provision is an elaboration of Directive 2005/29/EC, which expressly states that competitors must also be protected against unfair B2C commercial practices. In the Court’s opinion, it must therefore be assumed that Boehringer may be protected by this provision of the law.”
In practice, businesses are therefore increasingly invoking the Unfair Commercial Practices Act to challenge the use of unfair commercial practices by competitors in the civil courts. In recent years, some 20 judgments have been handed down in such disputes. To name a few examples:
- On 15 July 2022, the Amsterdam District Court handed down a judgment (Dutch only) in preliminary relief proceedings between two chewing gum manufacturers. The question at issue was whether the defendant’s advertising and other statements about its product – “natural” and “plastic-free” chewing gum – were factually incorrect and therefore constituted a misleading commercial practice. But the court disagreed – partly because of conflicting investigations and the far-reaching consequences of an award for the defendant’s business operations – and dismissed the claim.
- On 12 May 2021, the Amsterdam District Court issued a judgment (Dutch only) in proceedings between two businesses concerning the use of the term ‘water softener’ for a product of the defendant. The claimant disputed that the defendant’s product could be considered as a water softener. The court agreed and ruled that the defendant was guilty of misleading commercial practices by using this term. The court therefore prohibited the defendant from using that designation, while also ordering the defendant to reimburse the loss incurred by the claimant.
- On 19 April 2021, the District Court of Midden-Nederland handed down a judgment (Dutch only) in preliminary relief proceedings between hearing care professionals concerning an advertising campaign by the defendant relating to hearing aids. In that advertising campaign, various statements were made about the reimbursement by health insurers for hearing aids supplied by the claimants and the defendant. The court found that the defendant’s advertising campaign contained misleading and unfair comparative advertising towards the claimants. The defendant was also found guilty of misleading commercial practices. The court therefore ordered the defendant to discontinue the advertising campaign.
- On 9 May 2019, the Amsterdam District Court issued a judgment (Dutch only) in preliminary relief proceedings concerning advertising and other statements about energy drinks. The claimant had argued that the defendants were guilty of unfair commercial practices, misleading advertising and unlawful comparative advertising in various advertising and other statements. The court largely subscribed to that argument and ordered the defendant to cease those statements.
In sufficiently urgent cases, the civil court may take measures in preliminary relief proceedings, such as ordering the offender to cease the unlawful commercial practice, possibly subject to a fine. This allows for swift intervention and the rapid restoration of the competitive position or the level playing field. It also enables bona fide companies to prevent any further loss of customers and turnover to the rogue competitor.
The complainant may furthermore claim in proceedings on the merits that the offender be ordered to pay damages (possibly in the form of surrender of profit) if the complainant can prove that it has suffered damage as a result of the offender’s unfair commercial practices. But other claims are also conceivable, such as a rectification or product recall. Practice shows, however, that in some cases, a letter of demand threatening civil proceedings suffices to put an end to the unfair commercial practices.
In order to successfully rely on the Unfair Commercial Practices Act before a civil court, it is important that a company can demonstrate that a competitor has engaged in unfair commercial practices that could be detrimental to that business’s competitive position. This threshold is not high: imminent loss suffices, as various court rulings have shown.
Conclusion
A business that is harmed by a competitor’s unfair commercial practices has various options for taking action. In addition to filing a complaint or enforcement request with ACM, they may also take action themselves through the civil courts. This means that the business is not dependent on ACM’s limited capacity and can control the timeline itself. Case law shows that Dutch courts do not shy away from allowing well-founded claims, such as those aimed at stopping misleading practices.
More blogs and practical tips on consumer rules can be found at consumentenrecht.info.
Information on dawn raids by ACM and the European Commission can be found at invalacm.nl.
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