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First ever cross-border court action by OFT

63/04    5 April 2004

The OFT has initiated landmark court action against Belgian company D Duchesne SA trading as TV Direct Distribution and Just 4 You.

Court proceedings (see note 1) have been issued to stop the mail order company sending what the OFT considers to be misleading mailings to UK consumers. This is the first time the OFT has used its new cross border powers to take court action in another European Member State (see note 2).

D Duchesne SA trading as TV Direct Distribution and Just 4 You has been sending unsolicited mailings to UK residents offering household goods by direct mail. The OFT believes that the mailings are misleading since they appear to notify UK consumers of a large prize win, typically £10,000. To receive the prize the consumer is requested to make a purchase from an accompanying catalogue. However, respondents are in fact only entered into a prize draw – they may not have won anything.

Currently it is not known whether D Duchesne SA will dispute the OFT's action. A hearing is scheduled before the Commercial Court in Brussels in September to decide the merits of the case.

Court action has been initiated because D Duchesne SA have failed to comply with the OFT's requests to sign Undertakings that they will stop sending UK consumers misleading mailings and that they will comply with the Misleading Advertising Directive (see note 3).

Penny Boys, OFT Executive Director, said:

'This landmark case demonstrates the OFT's commitment to using its cross-border powers on behalf of UK consumers.'

NOTES

1. A writ has been laid before the commercial court in Brussels for breaches of the Belgian implementation of the Misleading Advertising Directive (see note 3).

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 certain 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. 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 will be taking over presidency of the International Consumer Protection Enforcement Network from 1 August. 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. The Network operates under a rotating presidency.

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