The Enforcement of Competition Law in Europe The Common Core of European Private Law

Abbreviations including legislationGeneral including European and international law CMLR Common Market Law Review law journal CPL Competition Policy Newsletter EIPR European Intellectual

The Enforcement of Competition Law in Europe

In the debate on the enforcement of competition law, many takethe view that Europe should avoid the traps US law has fallen into

by admitting excessive litigation European law should not pavethe way for judicial proceedings which ultimately serve theinterests of lawyers or other agents rather than injured parties.This inquiry describes the state of remedies in competition law

in fifteen European countries, analyses the underlying nants, and proposes ways of improving the enforcement ofcompetition law The international and European legal frame-works are presented, as is the approach of US–American law It isargued that efforts to strengthen private enforcement of anti-trust law should benefit from the rich European experience inunfair competition law The divergence between the two fields oflaw is not so huge that a completely different treatment is justi-fied Thus, a specifically European way of competition lawenforcement could be developed

determi-T H O M A S M.J.M O ¨ L L E R Sholds a Chair in Civil Law, Business Law,European Law, Comparative Law and International Private Law atthe University of Augsburg

A N D R E A S H E I N E M A N Nis Professor of Commercial and EconomicLaw at the University of Z ¨urich

C O N T R I B U T O R S T O T H E V O L U M E:

Antti Aine, Jesu´s Alfaro Aguila-Real, Torbjo¨rn Andersson, LiaAthanassiou, Katalin Cseres, Rikard Englund, Sofia Englund,Helmut Gamerith, David Gerber, Arie¨nne Gommers, AndreasHeinemann, Sarah Johnson, Luı´s Menezes Leita˜o, AdelaideLeita˜o, Zso´fia Lendvai, Fayna Leo´n, Cornelia Marin, Thomas M.J.Mo¨llers, Siu´n O’Keeffe, Sune Troels Poulsen, Izabela Raiwa,Giuseppe Rossi, Peter Rott, Jeremy Scholes, Manola Scotton,David Townend, Pertti Virtanen

General EditorsMauro Bussani, University of TriesteUgo Mattei, University of Turin and University of California,

Hastings College of LawHonorary EditorRodolfo Sacco, University of Turin

Editorial BoardJames Gordley, Cecil Turner Professor of Law, University of California,Berkeley; Editor in Chief of the American Journal of Comparative LawAntonio Gambaro, Professor of Law, University of Milan; President of the

Italian Society of Comparative LawFranz Werro, University of Freiburg and Georgetown University Law CenterRodolfo Sacco, President of the International Association of Legal

Science (UNESCO)For the transnational lawyer the present European situation is equivalent tothat of a traveller compelled to cross legal Europe using a number of differentlocal maps To assist lawyers in the journey beyond their own locality TheCommon Core of European Private Law Project was launched in 1993 at theUniversity of Trento under the auspices of the late Professor Rudolf B.Schlesinger This is its seventh book published by Cambridge University Press.The aim of this collective scholarly enterprise is to unearth what is alreadycommon to the legal systems of European Union Member States Case studieswidely circulated and discussed between lawyers of different traditions areemployed to draw at least the main lines of a reliable map of the law of Europe

Books in the Series

The Enforcement of Competition Law in Europe

Edited by Thomas M J Mo¨llers and Andreas HeinemannCommercial Trusts in European Private Law

Edited by Michael Graziadei, Ugo Mattei and Lionel SmithMistake, Fraud and Duties to Inform in European Contract LawEdited by Ruth Sefton-Green

Security Rights in Movable Property in European Private LawEdited by Eva-Maria Kieninger

Pure Economic Loss in Europe

Edited by Mauro Bussani and Vernon Valentine PalmerThe Enforceability of Promises in European Contract LawEdited by James Gordley

Good Faith in European Contract Law

Edited by Reinhard Zimmermann and Simon Whittaker

The Enforcement of Competition Law in Europe

Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São PauloCambridge University Press

The Edinburgh Building, Cambridge CB2 8RU, UK

First published in print format

ISBN-13 978-0-521-88110-4

ISBN-13 978-0-511-37128-8

© Thomas J Mollers and Andreas Heinemann 2007

2008

Information on this title: www.cambridge.org/9780521881104

This publication is in copyright Subject to statutory exception and to the provision of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press

ISBN-10 0-511-37128-4

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Published in the United States of America by Cambridge University Press, New Yorkwww.cambridge.org

hardback

eBook (NetLibrary)eBook (NetLibrary)hardback

Part I Remedies in Unfair Competition and

II The legal background in the different

III The European context of unfair

IV Enforcement and sanctions under

Case 1 Risky bread: order to cease and desist,

Case 2 Watch imitations I: interim injunction 130

Case 4 Children’s swing: attracting

Case 5 Discontinued models: misleading

advertisement – the consumer as plaintiff 253

Case 6 Child labour: civil and criminal law 281

vii

Case 7 Recycled paper: advertising agencies

Case 8 Watch imitations II: pre-trial measures 327

C Results and conclusions for remedies in unfair

III Instead of closing words – methods of

B Private enforcement of competition law:

a comparative perspective

II Competition law in Europe: administrative

III Incorporating private enforcement into

European competition law: comparative

Case 9 Predatory price undercutting

agreements – forbearance (cease-and-desist

Case 10 Abuse of a dominant market position

Case 11 Boycott – pre-trial measures and

II Plaintiffs and defendants 564

Case 12 Horizontal restraints of

competition – consumer claims against

Case 13 Horizontal restraints of

competition – validity of subsequent contracts 583

Case 14 Vertical restraints of competition –

Case 15 Selective distribution and refusal

I The overall results of the country reports 637

II Measures for the strengthening of private

IV European harmonization of remedies in

Outlook: the link between unfair competition law

I Reasons for the different weight of private

enforcement in unfair competition and

II Unfair competition law remedies as a

2 Standing of consumer protection associations 662

C O N T E N T S ix

From the very beginning the Treaty of Rome included basic rules oncompetition law However, these rules only covered restraints of com-petition (‘antitrust law’), not unfair competition law Since then, thesituation has considerably changed The fundamental freedoms of thetreaty as well as secondary community legislation have heavily influ-enced both fields of law Even if this development led to an importantharmonization of competition law in the Member States, one aspect hasstayed rather untouched: the legal consequences of a competition lawviolation have been left to a large extent to the disposal of the nationallegislature As far as the legal consequences in private law are con-cerned every national legal order has tried to integrate competitionlaw violations into its national tort law (or in some respects contractlaw) system In this process, private remedies for violations of unfaircompetition law have gained a greater practical importance in Europethan those for violations of antitrust law But even in the latter branch

of law, public enforcement is increasingly complemented by privatelaw mechanisms

The wide variety of solutions which are proposed by national lawwere the reason for the editors to start the comparative venture withinthe Trento project on the Common Core of European Private Law Based onthe Common Core methodology (elaborated by Ugo Mattei and MauroBussani in the tradition of Rudolf B Schlesinger and Rodolfo Sacco), i.e

on a questionnaire containing several cases which are discussed andanswered by national reporters pursuant to their respective nationallegal systems and taking into account all legal and extra-legal formants,

we have compared the state of the law in fifteen EU Member States.Based on the weak points and gaps resulting from the comparativeanalysis, we submit proposals which could lead to an improvement of

xi

private remedies in unfair competition law (Thomas M J Mo¨llers) aswell as in private antitrust enforcement (Andreas Heinemann) Recentinitiatives on the European level for the improvement of Europeanantitrust law triggering corresponding reforms in many member stateswere taken into account.

The project that has been running several years would not have beenpossible without the support of so many colleagues and friends First ofall, we would like to thank Wolfgang Fikentscher, who at the Trentoannual meeting in 2000 inspired the birth of the competition lawproject Walter van Gerven, the author of a draft EC regulation onprivate remedies, supported the project with his invaluable advice.David Gerber, the leading scholar in comparative competition law,drew our attention to so many aspects of the subject and contributed

to this volume a comparative essay on private remedies in antitrust law

We would like to thank the country reporters for their constant ment and the patience with which they responded to the numerousquestions we had And finally, we are deeply indebted to the partici-pants of the Trento torts group (subsequently chaired by MathiasReimann and Franz Werro) with whom we intensively discussed thequestionnaire and the comparative details The Common Core projecthas thus become a forum for us which has produced interculturalinsights far beyond law

engage-We would also like to thank James Faulkner, Matthew Firth, JacquesGroßkreuz, Thomas Wenninger and Georg S M ¨unzenrieder for theirsupport in the preparation of the manuscript

Finally, we are very grateful to Cambridge University Press for itstremendous contribution in presenting the Common Core project tothe interested public

Thomas M J Mo¨llersUniversity of AugsburgAndreas HeinemannUniversity of Z ¨urichOctober 2006

Contributors to the volume

The case studies and other parts of the book have been prepared by:1

A N T T I A I N E, Researcher LL.Lic., University of Turku (report Finland)

J E S U ´ S A L F A R O A G U I L A-R E A L, Professor Dr, Universidad Auto´noma deMadrid (report Spain)

T O R B J O ¨ R N A N D E R S S O N, Professor Dr, University of Uppsala (reportSweden)

L I A A T H A N A S S I O U, Assistant Professor, University of Athens, Faculty ofLaw, Greece (report Greece)

K A T A L I N C S E R E S, Assistant Professor of Law, University of Amsterdam(report Hungary)

R I K A R D E N G L U N D, EKN – The Swedish Export Credits Guarantee Board,Stockholm (report Sweden)

S O F I A E N G L U N D, Lawyer – Senior Associate, Hammarskio¨ld & Co,Stockholm (report Sweden)

H E L M U T G A M E R I T H, Professor Dr, former Vice-president of the AustrianSupreme Court and Professor at the University of Innsbruck (reportAustria); in collaboration with Univ.-Ass DrK A T H A R I N A M U R S C H I T Z,LL.M., (King’s College London)

D A V I D G E R B E R, Distinguished Professor at Chicago Kent College of Law,USA (essay antitrust law)

A R I E¨ N N E G O M M E R S, LL.M., Senior Member of Staff, Netherlands

Competition Authority (report Netherlands)

A N D R E A S H E I N E M A N N, Professor Dr, University of Z ¨urich (editor,

comparative part antitrust law, report Germany)

1

The contributions reflect the personal opinions of their authors and are not necessarily the views of their employers or institutions.

xiii

S A R A H J O H N S O N, LL.B (Trinity College), LL.M (Bruges), Solicitor, Dublin(report Ireland)

L U I´ S M E N E Z E S L E I T A˜ O, Professor Dr, University of Lisbon (report Portugal)

A D E L A I D E L E I T A˜ O, Lisbon (report Portugal)

Z S O ´ F I A L E N D V A I, Ministry of Justice, Budapest (report Hungary)

F A Y N A L E O ´ N, LL.M (Bruges), Lawyer, CMS Albin˜ana & Sua´rez de Lezo,Madrid (report Spain)

C O R N E L I A M A R I N, Ass iur., Compie`gne (report France)

T H O M A S M.J.M O ¨ L L E R S, Professor Dr, University of Augsburg, Institute ofEuropean Legal Orders (editor, comparative part unfair

competition law, report Germany)

S I U ´ N O’K E E F F E, B.C.L., LL.B (N.U.I.), LL.M (Bruges), Barrister, Seniorofficer, Netherlands Competition Authority (report Ireland)

S U N E T R O E L S P O U L S E N, PhD, Associate Professor, Department of

Public and International Law, University of Aarhus (report

P E T E R R O T T, Professor Dr, University of Bremen (report unfair

competition law England)

J E R E M Y S C H O L E S, Solicitor, Lecturer, Department of Law, University

of Sheffield, Director of Competition Law, Walker Morris,

Solicitors, Leeds (report antitrust law England)

M A N O L A S C O T T O N, Attorney, PhD Student, University of Amsterdam(report Italy)

D A V I D T O W N E N D, Lecturer, University of Sheffield (report unfaircompetition law England)

P E R T T I V I R T A N E N, Judge in the Finnish Market Court (report Finland)

Abbreviations (including legislation)

General (including European and international law)

CMLR Common Market Law Review (law journal)

CPL Competition Policy Newsletter

EIPR European Intellectual Property Review (law journal)

ECJ European Court of Justice

ECR European Court Reports (official journal of the ECJ)

EU (Treaty of the) European Union

GATT General Agreement on Tariffs and Trade

ICLQ International and Comparative Law Quarterly (law journal)IIC International Review of Intellectual Property and

Competition Law (law journal)

PC Paris Convention for the Protection of Industrial Property

of 1883/1984

TCE Treaty of a Constitution of Europe

TRIPS Agreement on Trade-Related Aspects of Intellectual

Property Rights

Austria

ABGB Allgemeines B ¨urgerliches Gesetzbuch (Civil Code)

xv

BGBl Bundesgesetzblatt

BMJ Bundesministerium f ¨ur Justiz (Ministry of Justice)

ecolex Fachzeitschrift f ¨ur Wirtschaftsrecht (Law Journal)

GRUR Int Gewerblicher Rechtsschutz und Urheberrecht

Internationaler Teil (law journal)

JBl Juristische Bla¨tter (law journal)

KartG 1988 Kartellgesetz 1988 (Antitrust Code 1988)

KartG 2005 Kartellgesetz 2005 (Antitrust Code 2005)

MR Zeitschrift f ¨ur Medien und Recht (law journal)

O¨ Bl O¨ sterreichische Bla¨tter f ¨ur Gewerblichen Rechtsschutz

und Urheberrecht (law journal)

O¨ Bl-LS O¨ Bl-Leitsa¨tze

O¨ JZ-LSK O¨ sterreichische Juristenzeitung – Leitsatzkartei (law journal)

Zivilsachen (official journal of decisions of the HighestSupreme Court, civil cases)

(Federal Act against Unfair Competition)

WBL Wirtschaftsrechtliche Bla¨tter (law journal)

DRN Dansk Reklame Neve (council for advertising self-regulation)

MFL Lov om Markedsføring / Markedsføringslov (Marketing

Practices Act)

England

ADR Alternative Dispute Resolution

All ER All England Reports

ASA Advertising Standards Authority

CAP Committee of Advertising Practice

CMAR Control of Misleading Advertisements Regulations 1988/2000Code British Codes of Advertising and Sales Promotion

DGFT Director General of Fair Trading

EMLR Entertainment and Media Law Reports

EWCA England and Wales Court of Appeals Decisions

EWHC England and Wales High Court Decisions

IRLR Industrial Relations Law Reports

JCP Journal of Consumer Policy (law journal)

OFT Office of Fair Trading

UTCCR Unfair Terms in Consumer Contract Regulations 1994/1999

L I S T O F A B B R E V I A T I O N S xvii

KSL Kuluttajansuojalaki (Finnish Consumer Protection Act)

SopMenL Laki sopimatoomasta menettelysta¨ elinkeinotoiminnassa

(Finnish Unfair Trade Practices Act)

France

Bull.civ Bulletin des arreˆts des chambres civiles de la Cour

de Cassation

BVB Bureau de Ve´rification des Publicite´s

BVP Bureau de Ve´rification de la Publicite´

CNP Conseil National de Publicite´

DGCCRF Direction Ge´ne´rale de la Concurrence, de la Consommation

et de la Re´pression de Fraudes

PIBD Proprie´te´ industrielle – Bulletin documentaire (law journal)RTDcom Revue de droit commercial (law journal)

Trib.com Tribunal commercial

Germany

AcP Archiv f ¨ur die civilistische Praxis (law journal)

BGB B ¨urgerliches Gesetzbuch (Civil Code)

BGBl Bundesgesetzblatt (official journal of the Federal

Legislature)

BGHSt Amtliche Sammlung des Bundesgerichtshofs (official

journal of the Federal Supreme Court, criminal cases)

BGHZ Amtliche Sammlung des Bundesgerichtshofs (official

journal of the Federal Supreme Court, Civil cases)

BKartA Bundeskartellamt (Federal Cartel Office)

BR-Drs Bundesrat-Drucksachen (official journal of the Federal

(official journal of the Federal Constitutional Court)

EuZW Europa¨ische Zeitschrift f ¨ur Wirtschaftsrecht (law journal)EWS Europa¨isches Wirtschafts- und Steuerrecht (law journal)

GPR Zeitschrift f ¨ur Gemeinschaftsprivatrecht (law journal)

journal)

GRUR Int Gewerblicher Rechtsschutz und Urheberrecht,

Auslands-und internationaler Teil (law journal)

Restraints of Competition – Antitrust Code)

NJW-RR Neue Juristische Wochenschrift – Rechtsprechungsreport

(law journal)

PreisAngV Preisangabenverordnung

RabelsZ Rabels Zeitschrift (law journal)

(Act against Unfair Competition – Unfair CompetitionCode)2

Ex-UWG Gesetz gegen den unlauteren Wettbewerb (UWG until

WuW Wirtschaft und Wettbewerb (law journal)

ZEuP Zeitschrift f ¨ur Europa¨isches Privatrecht (law journal)ZGS Zeitschrift f ¨ur das gesamte Schuldrecht (law journal)ZHR Zeitschrift f ¨ur das gesamte Handels- und Wirtschaftsrecht

(law journal)

ZWeR Zeitschrift f ¨ur Wettbewerbsrecht (law journal)

Greece

CFI Court of First Instance

DEE Dikaio Epicheirisseon kai Etairion (law journal)

EEmpD Epitheorisis Emporikou Dikaiou (Commercial Law Review)EllDni Elliniki Dikaiossini (Greek Justice)

HCA Versenyto¨rve´ny (Hungarian Competition Act: Act No LVII of

1996 on the Prohibition of Unfair and Restrictive MarketPractices)

HCC Hungarian Civil Code: Act IV of 1959

HCP Hungarian Civil Procedure: Act III of 1952

OEC Gazdasa´gi Versenyhivatal (Office of Economic Competition)

Ireland

App Cas Appeal Cases

ASI Code of Advertising Standards for Ireland

EIPR European Intellectual Property Review

Ir Jur Rep Irish Jurist Reports

ILRM Irish Law Reports Monthly

ODCA Office of the Director of Consumer Affairs

SGSSA Sale of Goods and Supply of Services Acts 1893 and 1980

Italy

Arch civ Archivio civile (law journal)

Autorita` Garante Autorita` Garante della Concorrenza e del Mercato

(Antitrust authority)

Self-Control of Advertising)

Cons Stato Consiglio di Stato (highest administrative court)

Danno e resp Danno e responsabilita` (law journal)

Foro it Il Foro italiano (law journal)

Giur.ann.dir.ind Giurisprudenza annotata di diritto industriale

(law journal)Giur it Giurisprudenza italiana (law journal)

Giurı` Giurı` dell’Autodisciplina Pubblicitaria (panel of

Self-Control of Advertising)Giust civ Giustizia civile (law journal)

of Self-Control of Advertising)

Riv.dir.ind Rivista di diritto industriale (law journal)

(administrative tribunal)

Netherlands

BRv Burgerlijke Rechtsvordering (Code of Civil Procedure)

BW Burgerlijk Wetboek (Dutch Civil Code)

L I S T O F A B B R E V I A T I O N S xxi

DCA Dutch Competition Act

RCC Reclame Code Commissie (Advertising Code Commission)NCA Netherlands Competition Authority

NRC Nederlands Reclame Code (Dutch Advertising Code)

Sr Wetboek van Strafrecht (Penal Code)

Poland

k.p.c Kodeks Postepowania Cywilnego (Code of Civil Procedure)k.p.k Kodeks Postepowania Karnego (Criminal Procedure Code)

u.o.k.k Ustawa o ochronie konkurencji i konsumentow (Act on

Competition and Consumer Protection of 2000)

u.z.n.k Ustawa o zwalczaniu nieuczciwej konkurencji (Act on

Fighting Unfair Competition of 1993)

Portugal

Code)

DGCC Direcc¸a˜o Geral do Come´rcio e da ConcorreˆnciaInstituto do

LDCons Lei de Defesa do Consumido (Consumer Protection Act)

Spain

AAP Asociacio´n de Autocontrol de la Publicidad (Association for

the Self-Regulation of Commercial Communication)

CC Co´digo Civil (Civil Code)

CC.AA Communidades Autono´mas (autonomous regions)

LCD Ley 3/1991 de Competencia Desleal (Unfair Competition Act)LDC Ley 16/1989 de Defensa de la Competencia (Act for the

Defence of Competition)

LEC Ley de Enjuiciamiento Civil (Code of Civil Procedure)

LECr Ley de Enjuiciamiento Criminal (Code of Criminal Procedure)LGDCU Ley 26/1984 General para la Defensa de los Consumidores

y Usarios (Act for the Defence of Consumers and Users)LGP Ley 34/1988 General de Publicidad (Advertising Act)

LMa Ley de Marcas (Spanish Trademark Act)

LOCM Ley de Ordenacio´n del Comercio Minorista (Act of Retail

ARN Allma¨nna Reklamationsna¨mnd (Public Complaints Tribunal)

KL Konkurrenslagen (Competition Act)

MFL Marknadsfo¨ringslagen 1995:450 (Act on Marketing)

Switzerland

BBl Bundesblatt der Schweizerischen Eidgenossenschaft (official

journal of the Legislature)

OR Obligationenrecht (contract and torts law)

SJZ Schweizer Juristenzeitung (law journal)

UWG Lauterkeitsgesetz (Unfair Competition Law)

USA

C.F.R Code of Federal Regulations

RICO Federal Rackeeter Influenced and Corrupt Organzisation

provisions of the Organzied Crime Control Act of 1970

L I S T O F A B B R E V I A T I O N S xxiii

TCPA Telephone Consumer Protection Act 1991

U.S.C United State Code

U.S.C.A United States Code Annotated

U.S.P.Q United States Patent Quarterly

UDAP Unfair and Deceptive Acts or Practices (abbreviation

for State Unfair Trade Act)

In December 2005, the European Commission published a Green Paper

on Damages Actions for Breach of the EC Competition Rules This ment has provoked a discussion on the role of private actions whichgoes far beyond competition law Many take the view that Europeshould avoid the traps into which US law has stepped by admittingexcessive litigation due to a system of class actions, punitive damages,pre-trial discovery and contingency fees European law should notpave the way for judicial proceedings which ultimately do not servethe interests of the injured parties but rather those of their lawyers,consultants or other agents According to the methodology of theCommon Core of European Private Law project, this inquiry gives adescription of the state of remedies in competition law in fifteenEuropean countries and analyses the underlying determinants Onthis basis, proposals are developed showing how the enforcement ofcompetition law could be improved The flaws can be fixed withoutrunning the risk of abusive litigation To this end, it has been instructive

docu-to include two fields of law which are normally treated separately, i.e.unfair competition law and antitrust law Although the two branchesshare common goals, their enforcement has taken completely differentpaths Whereas in many reporting countries unfair competition law isendowed with effective private law (and in some countries also withpublic law) remedies, the implementation of antitrust law is in practicealmost completely entrusted to administrative enforcement This is not

so much a question of legislative principles – all reporting countriesprovide for private remedies for violations of antitrust law – but ofcertain legal and factual obstacles and of a lack of incentives

The present inquiry aims at analysing the enforcement componentsand the different weight given to them in both fields of law The legal

1

framework on the international and European level is presented, as isthe approach of US–American law The cases are structured in groupsconcerning on the one hand the sanctions available and on the otherhand the potential plaintiffs and defendants Eight cases concern unfaircompetition law, seven are on antitrust law All cases are solved accord-ing to the fifteen legal systems involved After a comparative analysis,shortcomings and strengths are analysed Reform proposals are basedupon this result It will be shown that efforts to strengthen privateenforcement of antitrust law should benefit from the rich Europeanexperience in unfair competition law The divergence between the twofields of law is not so huge that a completely different treatment isjustified Thus, a specifically European way of competition law enforce-ment could be developed.

P A R T I R E M E D I E S I N U N F A I R

C O M P E T I T I O N A N D C O N S U M E R

P R O T E C T I O N L A W

T H O M A S M.J. M O ¨ L L E R S

A Setting the basics – the legal

framework

I Approach of this comparative study

1 The status quo of legal harmonization in unfair competition law a) Lack of a ‘European unfair competition law’

European integration is making progress; the European ConstitutionTreaty has been passed1 and scholars are discussing a European CivilCode.2In the field of unfair competition law only few directives existand one is tempted to use F Rittner’s words which he once used todescribe the law of contract: European directives create only ‘islands’ ofharmonized law3within each national law that exist without any con-nection between them.4Accordingly the law of unfair competition isstill based on many origins and very often overlaps with the law ofconsumer protection, contract and intellectual property

Nowadays all modern legal systems offer protection against unfaircompetition, i.e against ‘any act of competition contrary to honest

1

Draft Treaty Establishing a Constitution for Europe, adopted by consensus by the European Convention on July 18, 2003, OJ C 169, 1 The negative referenda in France and the Netherlands led to immediate frustration again In the following the terms of the TCE are cited in parenthesis.

2 European Parliament of June 26, 1989, OJ C 158, 400, (1992) 56 RabelsZ 320, (1993) 3 ZEuP 613 et seq as well as European Parliament of May 6, 1994, OJ C 205, 518, (1995) 3 ZEuP 669, (1994) 3 EuZW 612; Commission of July 11, 2001, COM (2001), 398 final, cf europe.eu.int/comm/off/green/index_de.htm; cf H Schulte-No¨lke, (2001) 56 JZ 917 et seq.; T Mo¨llers, European Directives on Civil Law – Shaping a new German Civil Code, (2003) 18 Tulane European & Civil Law Forum 1, (2002) 57 JZ 121; W Wurmnest, Ansa¨tze zur Privatrechtsvereinheitlichung (2003) 11 ZEuP 714 et seq See Action Plan of the European Communities COM (2003), 68 final.

practices in industrial or commercial matters’,5in short against ‘dirtytricks’.6 Because of the differing traditions in the Member States theenforcement of infringements of unfair competition law has only beenharmonized marginally In the different European directives courts andadministrative agencies are equally named as competent for enforce-ment Moreover, an additional self-control is allowed.7 This form ofharmonization leaves everything as it was before The sanctions arenumerous and as disparate as the provisions dealing with materialaspects.8

b) Shortcomings in the enforcement against unfair

advertisement

In everyday life it is common to be without protection against unfairmeasures: deceptive prize draws, direct marketing of bogus slimmingagents, deceptive advertisements for summer resorts are only someexamples Sweepstakes that convey that the addressee has alreadywon and only has to invest a small handling fee, wholehearted adver-tisement for panaceas that promise to reduce the gasoline consumption

by 40 per cent or make your hair grow again are examples taken fromeveryday life.9Lately the opinion arguing that the system of remediesinstituted in art 4–6 Misleading and Comparative Advertising Directive84/450/EEC is ‘insufficient’ is becoming stronger Because of the differ-ent bodies that are competent to deal with infringements, legal scholarsraised the reproach that in some Member States no sufficient legalprotection is offered This has been explicitly stated for English lawbecause the Office of Fair Trading hardly ever brings proceeding againstinfringements.10

An example: in Germany over the last few years consumers have beenflooded by unwanted fax machine messages; cold-calling is widespread

5 For art 10bis Paris Convention see below A.II.1(a)

6 Z Chaffee, Unfair Competition ( 1940 ) 53 Harv L Rev 1289; see below for the attempts to develop a definition, A.I notes 74 et seq.

7 See for the status quo of the European law of unfair competition A.III

8 A Beater, Unlauterer Wettbewerb ( 2002 ), x 8 note 104.

9 Green Paper on EU Consumer Protection of October 2, 2001, COM (2001), 531 final

at 2.1; J Glo¨ckner, in H Harte-Bavendamm and F Henning-Bodewig, UWG ( 2004 ), Einl B note 203.

10 G Schricker and F Hennig-Bodewig, Elemente einer Harmonisierung des Rechts des unlauteren Wettbewerbs in der Europa¨ischen Union, comparative law research on behalf of the Ministry

of Justice, July 2001 (2001) 47 WRP 1367 (1375) Unfortunately, the authors do not follow

up this thesis.

and the abuse of 190-numbers is common Even the federal governmentconceded when it amended the German Unfair Competition Act in 2004that there are some minor infringements that will not be penalized.11German consumers’ associations ascertain that they are able to record

up to 80 per cent of the relevant cases;12this figure is likely to be toopositive This strongly opposes the widely held view that in Germanyinfringements of unfair competition law will always be stopped bycompetitors or by associations That view is, at least in cases of nuisance

or misleading advertising, not completely true

The principle that ‘An infringement of unfair competition law reapsrewards’13proves true All legal harmonization remains l’art pour l’art if

it remains ‘law in the books’14and only pretends to harmonize this area

of law Actions for an injunction are directed towards the future.15Thisindicates that it will be worthwhile to examine whether further rem-edies should be introduced that sanction the first infringement Onewill also have to discuss whether it is reasonable to institute an exclu-sive means of legal recourse, either through a public agency or thecourts

c) Creation of an internal market

This study examines the law of unfair competition in Europe (withsome remarks concerning the law of the USA) To an extent it intends

to pay heed to the demands of a European theory of legislation TheEuropean Union is aiming towards the abolition of borders, an inter-nal market as it is defined in art 14 para 2 EU (art I-3 para 2 TCE) Forthe purpose of harmonization it has developed different measures:either the approximation of law or mutual recognition The principle

of subsidiarity in art 5 para 1 EU (art I-9 para 3 TCE) burdens the EUwith the proof that the measure is necessary for the completion ofthe internal market Legal harmonization is thus no aim in itself If the

11 See below B.II.4(c) and Begr RegE, UWG, BT-Drs 15/1487, for x 10 p 23.

12 Statement of the Federal Association of Consumers’ Assoctions (Verbraucherzentrale Bundesverband e.V.) before the Committee on Legal Affairs of February 19, 2004; See www.thomas-moellers.de/materialien.

13 See G Schricker (1979) 81 GRUR 1; R Sack, Der Gewinnabscho¨pfungsanspruch von Verba¨nden

in der geplanten UWG-Novelle ( 2003 ) 49 WRP 549, 554.

14 R Pound, Law in Books and Law in Action ( 1910 ) 44 American L Rev 12 The Commission also emphasizes that clear and reliable provisions have to be enforced effectively, Green Paper on EU Consumer Protection, COM (2001), 531 final at 5.

15

Begr RegE, UWG, BT-Drs 15/1487, x 10 p 23.

measure is not necessary for the completion of the internal marketthe competition between the different legal systems of the MemberStates is preferable.16

The euro as a common currency has deepened the internal marketsince it creates price transparency The advent of e-commerce has facili-tated cross-border trade Different legal systems and different enforce-ment of provisions could result in the consumer abstaining from cross-border transactions since he is unable to enforce infringements of hisrights.17

In a market economy, advertisement is of greatest importance for acompany to survive competition or to enter into competition with othercompanies As the ECJ has stated, advertisement fulfils an essentialfunction in the ‘opening of markets’.18Failing to implement Europeanunfair competition provisions restricts competition as it has the sameeffect as state aid It gives the Member State’s companies an advantageover foreign companies that have to obey the implemented rules

If companies are forced to develop different marketing conceptsbecause of varying legal requirements this results in additionalcosts.19Ultimately, differences in the legal requirements can even barcompanies from entering a market altogether.20Consequently, smalland medium-sized companies are still excluded from cross-bordertrading.21

16 A Ogus, Competition Between National Legal Systems A Contribution of Economic Analysis to Comparative Law ( 1999 ) 48 ICLQ 405; P Glenn, Comparative Law & Legal Practice On Removing the Borders ( 2001 ) 75 Tulane L.Rev 977; P Neuhaus and J Kropholler, Rechtsvereinheitlichung – Rechtsverbesserung ( 1981 ) 45 RabelsZ 73; H Ko¨tz,

Rechtsvereinheitlichung – Nutzen, Kosten, Methoden, Ziele ( 1986 ) 50 RabelsZ 1; E.M Kieninger, Wettbewerb der Privatrecthsordnungen im Europa¨ischen Binnenmarkt (2002).

17

Studies show that consumers are less confident when entering into cross-border transactions, see follow-up Communication to the Green paper on Consumer Protection, COM (2002), 289 final 25; Regulation (EC) No 2006/2004, OJ L 364, 1, 2nd reason for consideration.

18

ECJ C-34/95, C-35/95 and C-36/95, (1997) ECR I-3843 note 43, (1997) 45 GRUR Int 912 (917) – ‘De Agostini and TV-Shop’; ECJ C-405/98, (2001) ECR I-1795 note 21, (2001) 49 GRUR Int 553 – ‘Gourmet’ See also A Wiebe, Die ‘guten Sitten‘im Wettbewerb – eine europa¨ische Regelungsaufgabe? (2002) 48 WRP 283 (284).

19 See e.g ECJ C-30/89, (1990) ECR I-691 – ‘GB-INNO-BM’; ECJ C-315/92, (1994) ECR I-317, (1994) 76 GRUR 303 – ‘Clinique’; ECJ C-470/93, (1995) ECR I-1923, (1995) 41 WRP

677 – ‘Mars’.

20 A Wiebe, (2002) 48 WRP 283 (284).

21 Green Paper on EU Consumer Protection, COM (2001), 531 final at 3.1; Regulation (EC)

No 2006/2004,OJ L 364, 1, 2nd rationale.

d) Reactions to these shortcomings

The European Union has offered three new acts to harmonize the law ofunfair competition.22 Surprisingly, these new acts did not attempt toharmonize the sanctions against infringements.23 The Directive 2005/29/EC concerning Unfair Commercial Practices does not introduce anypreviously unknown remedies.24 Only the Regulation on ConsumerProtection Cooperation No 2006/2004 is more courageous in demanding

an agency that is competent to sanction cross-border infringements.25

In recent years many member states have developed their law of unfaircompetition; very often blanket clauses have been introduced And thereare good reasons why Member States such as the United Kingdom,26Germany27or Portugal have amended and modernised their law of unfaircompetition The German legislature amending its UWG in 2004 to make

it ‘fit for Europe’ has also refrained from harmonizing its sanctions.28Iteven claims its legislation to be a ‘model for a future European law ofunfair competition’.29If confidence in this claim can be sustained, onewill have to examine it by comparing the different legal systems

In the last few years a couple of studies have been devoted to acomparison of the substantive provisions in the law of unfair competi-tion.30 The legal consequences are either excluded31 or dealt with

22 See Directive Proposal Concerning Unfair Commercial Practices, COM (2003), 356 final and Regulation Proposal concerning Sales Promotions, COM (2001), 546 final; amended

in COM (2002), 585 final; see below A.III.2(c) , 3(d) and ( e

25

Regulation (EC) No 2006/2004 of the European Parliament and of the Council of October 27, 2004 on Cooperation between National Authorities Responsible for the Enforcement of Consumer Protection Laws (Regulation on Consumer Protection Cooperation), OJ L 364, 1; see A.III.3(g)

26 Enterprise Act 2002 and below A.II.2(o)

27 Amendment of the UWG in 2004 and below A.II.2(e)

28 This is especially emphasized by H Ko¨hler, J Bornkamm and F Henning-Bodewig, Vorschlag f ¨ur eine Richtlinie zum Lauterkeitsrecht und eine UWG-Reform (2002) 48 WRP 1317; K.H Fezer, (2001) 47 WRP 989 and below A.III

29 See E Keller, in H Harte-Bavenkamm and F Henning-Bodewig, UWG ( 2004 ), Einl A note 11; cf http://www.bmj.bund.de/enid/fad884c433728e8a7d340bfd7b6efd49,0/al.html.

30 Deserving special mentioning for its unique scope are the country reports by

G Schricker (ed.), Recht der Werbung in Europa, vol 2 (supplement 1995 ) But some parts

of the book are already ten years old and some important Member States like Spain or Portugal are still missing.

31

Remedies are completely left out by H.-W Micklitz and and J Keßler (eds.), Marketing Practices Regulation and Consumer Protection in the EC Member States and the US ( 2002 ); very

summarily.32In scholarly writing, proposals for the legal consequencesare rare or rather short Thus one can find the demand to introduce

on the European level an action for the confiscation of unlawfulgains,33the right to sue for consumers or associations,34a harmoniza-tion taking the TRIPS-Treaty as a role model35or in general to ‘clearlydefine the borderline of unlawful and lawful behaviour where admin-istrative and penal sanctions are conceivable’.36

e) Methodical requirements of comparative law and the

European harmonization of law

The Common Core Project

This study would like to examine the different remedies in Europeanunfair competition law on a comparative law basis and deliver answers

to the above-mentioned questions Its ultimate aim is thus to remedythe above-mentioned shortcomings

The starting point is the law of the individual Member States Beforeany proposals are made the state of the law in fifteen different states isexamined Originally, comparative law aimed at introduction of a uni-versal law.37The same underlying idea can be found if one examineswhich provisions of another state can be introduced in one’s ownstate.38The Common Core Project follows the approach of Schlesinger

short even in its most current parts F Henning-Bodewig, in H Harte-Bavendamm and

F Henning-Bodewig, UWG ( 2004 ), Einl E.

32

Only a short summary is offered by R Schulze and H Schulte-No¨lke, Analysis of National Fairness Laws Aimed at Protecting Consumers in Relation to Precontractual Commercial Practices and the Handling of Consumer Complaints by Businesses ( 2003 ); J Maxeiner and P Schottho¨fer (eds.), Advertising Law in Europe and North America (2nd edn 1999 ).

33 H Ko¨hler and T Lettl, Das geltende europa¨ische Lauterkeitsrecht, der Vorschlag f ¨ur eine EG-Richtlinie ¨uber unlautere Gescha¨ftspraktiken und die UWG-Reform, (2002) 48 WRP 1019 (1047).

34 See art 7 of the draft of H.-W Micklitz and J Keßler ( 2002 ) 50 GRUR Int 885 (901).

35 G Schricker and F Hennig-Bodewig, (2001) 47 WRP 1367 (1375), and H Ko¨hler and

T Lettl (2002) 48 WPR 1019 (1047).

36 F Bultmann, G Howells, J Keßler, H.-W Micklitz, M Radeideh, N Reich, J Stucek and

D Voigt, The Feasibility of a General Legislative Framework on Fair Traiding, Proposal for a General Legislative Framework on Fair Trading ( 2000 ), p 68; H.-W Micklitz and J Keßler ( 2002 ) 50 GRUR Int 885 (896 et seq.) demand European mechanisms for supervision.

37

E Lambert, Opening address, in: Congre`s international de droit compare´ – Proce`s-verbaux des se´ances et documents, vol I, 26 (40) (1905); R Saleilles, Conception et objet de la science du droit compare´, in Congre`s international de droit compare´ – Proce`s-verbaux des se´ances et documents, vol I, 167; R Michaels, Im Westen nichts Neues (2002) 66 RabelsZ 97 (101).

38

K Zweigert and H Ko¨tz, Einf ¨uhrung in die Rechtsvergleichung (3rd ed 1996 ), p 43, lated as Introduction to Comparative Law (3rd edn 1998 – translation by T Weir).

trans-by first analysing without any prejudice the different solutions offered

in the Member States (Level 1: Operative Rule) The search for an idealsystem of regulation is thus not the ultimate purpose.39This approachsheds light on the different legal traditions with its legal formants40andits cultural diversity.41Other comparative law scholars also emphasisethe necessity to heed the mentality and the underlying decisions ofwhat is considered fair and just.42 In the summary the reasons for acertain solution are given (Level 2: Descriptive Formants), as well aspolicy considerations, economic and social factors (Level 3: MetalegalFormants).43

This is also aimed at refraining from the temptation to overstretchthe possibilities of a common European law of unfair competition.44Inthis context it will be shown that the remedies in the law of unfaircompetition could not be more diverse Though an overlap betweencivil law, public law, penal law and mechanisms for out-of-court set-tlements45can be found in all Member States, the details vary signifi-cantly from state to state: civil law is preferred by Germany andAustria, public law by Scandinavian countries like Sweden, Finlandand Denmark, penal law by France, Ireland and earlier by Portugal andout-of-court settlements are favoured by England Great differencescan also be found in the objectives of claims and the parties to theseclaims

Comparative law can thus, especially for international and national organizations, offer a possible mean of coordination.46

Colum.J.Eur.L 339 (344).

41 Ibid (346); based on R Sacco, Legal Formants A Dynamic Approach to Comparative Law, ( 1991 ) 39 Am.J.Comp.L 1.

42 P Legrand, Le droit compare´ ( 1999 ); K Zweigert and H Ko¨tz, Einf ¨uhrung in die

Rechtsvergleichung (3rd edn 1996 ), translated as Introduction to Comparative Law (3rd edn

1998 – translation by T Weir); recently H Ko¨tz, Alte und neue Aufgaben der

f) Purpose and examined questions in this comparative law study

The status of common remedies in the Member States of the EU

In accordance with the approach of Schlesinger, this study will start with

a description of law as it is applied now, the status quo on a Europeanand a national level The starting point will be the directives in forcesince 1984 that set the aims of protection and their enforcement.Common remedies of European law were either introduced by legalharmonization or exist independently from legal harmonization by theEuropean legislature Therefore we will have to examine whether theclaim is true that in some Member States insufficient remedies exist.This means that deficits of implementation shall be made clear.47

Possible legal harmonization – in small steps

For both the substantive law and remedies in the law of unfair tion, only a minimum harmonization can be found This naturally leads

competi-to the question as competi-to whether this status quo should be altered and inwhich areas further harmonization is desirable This will include thesearch for a way between the maintenance of the status quo and a fullharmonization.48 Some argue that the problems occurring in somemember states could be remedied if a full harmonization is achieved,since a minimum harmonization still allows for more stringentnational rules The new approach of the Commission aims at full har-monization49 including, as demanded in the literature, remedies forinfringements This study tries not to evaluate the problems from anational point of view and to offer the export of one’s own nationallaw as the sole solution The study rather asks whether there is enoughcommon ground justifying further harmonization Legal harmoniza-tion in small steps is feasible if the Member States possess differentremedies that are nevertheless comparable Under these circumstancesharmonization is possible by giving the Member States the possibility tochoose between two alternatives Furthermore, cautious steps towardsfurther harmonization can be taken if, for example, all Member States,except for one or two, favour one solution Legal harmonisation isnormally adopted according to the rules in art 95 EC (art III-65 TCE).This allows a majority vote Harmonization is thus also achievable if aspecific solution is favoured by a majority of Member States

Legal traditions too diverse

Finally, some areas of the law of unfair competition are too diverse to beharmonized In this case any further attempts at harmonization aredoomed to fail

2 The ‘Network of Excellence’ and the development of a ‘Common Frame of Reference’ for European contract law

On a European level, for more than fifteen years efforts have been made

to develop proposals for a harmonized European contract law Bynow many study groups are working on this subject The LandoCommission has drafted the Principles of European Contract Law50which, similarly to the American Restatements, are not a precise codi-fication but rather an attempt to draft principles of European contractlaw.51Further endeavours are afoot to formulate these principles as acode.52These include the Unidroit Principles of International ContractLaw53 which correspond significantly with the results of the LandoCommission, the Common Core Project inspired by Schlesinger,54which meets annually in Trento,55 and the initiatives of the PaviaAcademy56 and the newly created Society for European Law ofObligations.57 The most comprehensive initiative was started by the

50 O Lando and H Beale, Principles of European Contract Law, Part 1 (1995), translated in: (1995) 3 ZEuP 864 et seq.; O Lando and H Beale, Principles of European Contract Law, Part 1 and Part 2 (2000) translated in: (2000) 8 ZEuP 675 et seq ¼ R Schulze and

R Zimmermann, Basistexte zum Europa¨ischen Privatrecht ( 2000 ), III.10; also available under http://www.jura-uni-augsburg.de/moellers.

51

On the task of the Lando Commission see O Lando, (1983) 31 Am.J.Comp.L 653 et seq.;

O Lando, (1992) 56 RabelsZ 261 et seq.; H Beale, in G Weick (ed.), National and European Law on the Threshold to the Single Market (1993), p 177 et seq.; O Remien, (1988) 87 ZvglRWiss 105 et seq.; J Basedow, (1996) 33 CMLRev 1169 et seq

52

A.S Hartkamp and M.W Hesselink et al., Towards a European Civil Code (2nd ed 1998).

53 Unidroit, International Institute for the Unification of Private Law (ed.), Principles of International Commercial Contracts (1994), translated in: (1997) IPRax 205 et seq ¼ (1997) 5 ZEuP 890 et seq ¼ R Schulze and R Zimmermann, Basistexte zum Europa¨ischen Privatrecht, (2000), III.15; see A S Hartkamp, (1994) 2 Eur.Rev.Priv.L 341 et seq.;

R Zimmermann, Konturen eines Europa¨ischen Vertragsrechts, (1995) 45 JZ 477 et seq.

54 M Bussani and U Mattei, (1997) 3 Columbia J.Eur.L 339 et seq.; see http://www.jus.unitn.it/ dsg/common-core.

55 A first volume has been published, others to follow: R Zimmermann and S Whittaker (eds.), Good Faith in European Contract Law ( 2000 ); see also the Common Core-Projekt von Hinteregger, Environmental Liability and Ecological Damage.

56 Accademica dei giusprivatisti europei (ed.), Code europe´en des contrats (1999); see

G Gandolfi, Rev trimistrielle de droit civil (1992) 707 et seq.

57

S Grundmann/G Hirsch, SECOLA: Erste Diskussions- und Informationsplattform f ¨ur das Recht des Binnenmarkthandels (2001) 54 NJW 2687; http://www.secola.de.

European Commission in 200358 that resulted in the creation of the

‘Network of Excellence’ to which the Common Core of European PrivateLaw is a party This work is supported by the 6th EU Framework Programmefor Research and Technological Development The aim is to develop a

‘Common Frame of Reference’ (CFR) which can be used as a so-called

‘optional instrument’ for contracting parties who can choose it as ble law.59

applica-This study has numerous points of contact with the project for aEuropean contract law It is not without reason that in many MemberStates, e.g France and Italy, competition law is considered to be a part ofconsumer protection law and is thus codified together.60Actually adver-tisement is very often the first step in entering a contract, so that pre-contractual obligations and tort law claims are very often involved TheStudy Group on a European Civil Code61under its chairman C von Barhas drafted principles of tort law which also briefly address unfair com-petition law But von Bar does not provide any material rules, onlyproposing that infringements of unfair competition rules can constitute

a damage for consumers if European or national law so provides.62Competition law as well as classic contract law intend to protect thefree decision making of the consumer.63 Consequently in Europeandirectives the same problems are regulated in directives dealing withconsumer protection and in directives dealing with competition law.This is the case with, for example, the regulation of cold-calling.64

58

European Commission, A More Coherent European Contract Law – an Action Plan, COM (2003) 68 final; European Commission, European Contract Law and the Revision of the Acquis: the Way Forward, COM (2004) 651 final; a first progress report has now been published: European Commission, First Annual Progress Report on European Contract Law and the Acquis Review, COM (2005) 456 final.

59

European Commission, A More Coherent European Contract Law – an Action Plan, COM (2003) 68 final; European Commission, European Contract Law and the Revision of the Acquis: the Way Forward, COM (2004) 651 final.

60 See below for France A.II.2(e) and for Italy A.II.2(j)

For download under: http://www.sgecc.net/media/downloads/text_of_articles_final.doc

63 H Ko¨hler, in H Hefermehl, H Ko¨hler and J Bornkamm, Wettbewerbsrecht (24th ed 2006), x 1 notes 14 et seq.

64

See Art 10 Directive 97/EC on the protection of consumers in respect of distance contracts; Art 10 Directive 2002/65/EC on the distance marketing of consumer financial service and Art 5 and Annex 1 no 26 Directive 2005/29/EC on unfair commercial practices.