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OFT wins first ever European cross-border court action

208/04    15 December 2004

In the first ever cross-border court action taken in Europe to stop a trader in one country deceiving consumers in another, the commercial court in Brussels has ruled in favour of the OFT, preventing Belgian company D Duchesne SA sending misleading mailings to UK consumers.

D Duchesne SA, trading in the UK as TV Direct Distribution and Just 4 You, has been sending unsolicited mail order catalogues to UK residents along with notification of a large prize win, typically £10,000. Many consumers were led to believe that they had to make a purchase from the catalogue in order to secure their alleged win. However, prize winners were pre-selected and the vast majority of recipients were unlikely to receive the cash prize they thought they had won.

The OFT claimed that D Duchesne SA's prize notifications are misleading and are used to induce consumers to purchase its products. Approximately a million mailings a month were sent to UK consumers, with D Duchesne SA receiving 4,000 orders a day from its TV Direct Distribution and Just 4 You catalogues.

The OFT action came after hundreds of consumers complained that they had been misled into believing they had won a large cash prize.

The court injunction will prevent D Duchesne SA from making similar misleading claims in connection with its home shopping catalogue business.

Welcoming the judgment, John Vickers, OFT Chairman, said: 'This is a ground-breaking court action. Consumers in the UK are increasingly being targeted from abroad and this case demonstrates the OFT’s commitment to using its cross-border powers to protect the interests of consumers.'

NOTES

1. The OFT commenced proceedings in the commercial court in Brussels for breaches of the Belgian and English implementation of the Misleading Advertising Directive (see note 3) on 10 March 2004 (see press release 63/04).

2. Part 8 of the Enterprise Act 2002 gives effect to the Injunctions Directive in the UK and gives the OFT, other general enforcers and designated enforcers which are public bodies, the power to take action against businesses in other European countries that are infringing certain European-based consumer protection legislation. When a business based in another EU country harms the collective interests of UK consumers, the OFT will normally ask the relevant community enforcer to take enforcement action. However, the OFT is able to take action in other EU member states if no community enforcer can act.

3. Council Directive 84/450/EEC on Misleading Advertising provides protection against misleading and unacceptable comparative advertisements. Under the Injunctions Directive 98/27 the OFT is empowered to enforce the misleading advertising laws of another member state and apply to their courts for an injunction to end continued publication of misleading advertisements in the UK. Under the directive, an advertisement is misleading if it 'in any way, including its presentation, deceives or is likely to deceive the persons to whom it is addressed or whom it reaches and which, by reason of its deceptive nature, is likely to affect their economic behaviour or which, for those reasons, injures or is likely to injure a competitor'.

4. The ASA adjudicated against TV Direct Distribution in July 2001 and formally referred the case to the OFT in June 2003. Hampshire Trading Standards Department also formally referred the case to the OFT in June 2003.

5. The OFT is currently president of the International Consumer Protection Enforcement Network (ICPEN). ICPEN is a membership organisation consisting of the trade practices law enforcement authorities of more than two dozen countries. The mandate of the Network is to share information about cross-border commercial activities that may affect consumer interests, and to encourage international cooperation among law enforcement agencies.

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