Following ESA’s reasoned opinion on the Norwegian ban on the use of lotteries or prize competitions in connection with purchase of goods or services, the Government has announced it will change the Marketing Control Act.
Section 18 of the Norwegian Marketing Control Act 2009 provides for a general prohibition for traders to make the participation of consumers in a lottery or prize competition conditional on the purchase of goods or the use of services. A complaint was made to the EFTA Surveillance Authority in December 2011 by the Norwegian supermarket chain Bunnpris which had purposely challenged Norwegian law by organizing a prize draw conditional on purchase of some of the chains own brands.
ESA sent a preliminary opinion to Norway in January 2012 that the Marketing Control Act section 18 was in violation of the Unfair Commercial Practices Directive (2005/29/EC). In its reply Norway stated that it wanted to maintain the ban. The Government argued that the European Commission was expected to review the Directive, i.a. in respect of sales promoting measures including prize draws conditional on purchase. However, in June 2012 ESA maintained its position and pointed out that maintaining the ban in section 18 of the Marketing Control Act would involve breach of Norway’s obligations under the Commercial Practices Directive, in particular Articles 4 and 5.
Under Norwegian law there has been a strict regime to prevent sales promoting measures with the capacity of moving focus away from the product or service. The struggle by Norwegian authorities to maintain this regime has been losing support in the rest of Europe. The Norwegian ban on promotional gifts had to be repealed when the Marketing Control Act was enacted in 2009 whereas the ban on lotteries or prize draws conditional on purchase was retained.
In its reasoned opinion ESA pointed to section 17 of the preamble to the Commercial Practices Directive, stating that it is desirable to identify all those commercial practices which are in all circumstances unfair and that Annex 1 to the Directive therefore contains the full list of all such practices. These practices are the ones which may be considered unfair without assessment in each case. National legislation cannot contain more restrictive provisions than the Directive.
ESA found that the general ban on lotteries and prize competitions in section 18 of the Marketing Control Act was not comprised by the exhaustive list of all such practices in Annex 1 to the Directive and that, hence, Norway was in breach of its obligations pursuant to the Commercial Practices Directive. The European Court’s judgment in case no C-304/08 (Plus Warengesellschaft) was a key element in ESA’s opinion. Pursuant to the EEA Agreement rulings by the European Court are not binding on ESA and the EFTA Court, nor on the EFTA states who are parties to the EEA Agreement. However, the provisions of the EEA Agreement shall in so far as they are identical in substance to corresponding rules of EU legislation be interpreted in conformity with the relevant rulings of the European Court of Justice.
The Norwegian government could have challenged ESA’s opinion, the result of which would very likely have been ESA bringing the matter before the EFTA Court. The fact that Norway has signalled that it will accommodate ESA, seems to indicate that the Government has been fairly convinced that ESA’s opinion is correct. Nonetheless, it remains to be seen whether or not the Government will capitulate altogether in its struggle against such practices. The Commercial Practices Directive does not prevent member states from intervening against practices which on a case to case basis may be unfair even though they are not comprised by the list of practices in Annex 1 which are in all circumstances unfair.
