Ius Comparatum – Global Studies in Comparative Law

Gert Straetmans Editor

Information
Obligations and
Disinformation
of Consumers


Ius Comparatum – Global Studies
in Comparative Law
Volume 33

Series Editors
Katharina Boele-Woelki, Bucerius Law School, Hamburg, Germany
Diego P. Fernández Arroyo, Institut d’Études Politiques de Paris (Sciences Po),
Paris, France
Founding Series Editors
Jürgen Basedow, Max Planck Institute for Comparative and International Private
Law, Hamburg, Germany
George A. Bermann, Columbia University, New York, USA
Editorial Board
Joost Blom, University of British Columbia, Vancouver, Canada
Vivian Curran, University of Pittsburgh, USA
Giuseppe Franco Ferrari, Università Bocconi, Milan, Italy
Makane Moïse Mbengue, Université de Genève, Switzerland
Marilda Rosado de Sá Ribeiro, Universidade do Estado do Rio de Janeiro, Brazil
Ulrich Sieber, Max Planck Institute for Foreign and International Criminal Law,
Freiburg, Germany
Dan Wei, University of Macau, China

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Gert Straetmans
Editor

Information Obligations and
Disinformation of Consumers



Editor
Gert Straetmans
Faculty of Law
University of Antwerp
Antwerp, Belgium

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Preface

To combat market inefficiencies resulting from the information asymmetry that
exists between businesses and consumers, an increasing number of mandated information disclosures are imposed on businesses to give consumers the means to
protect their own interests by making autonomous, informed choices. Prohibiting
misleading information and informing consumers with correct information lies at the
core of the so-called information paradigm which resulted in consumer information
models across the world.
In those models, consumers are often perceived as benefit-maximising creatures.
Information requirements allow consumers to make decisions themselves, decisions
which are supposedly better than anyone else can make for them. According to the
economic theories underlying those models, informed consumer decisions are efficient. It follows that if consumers are given full information, they will consistently
make decisions that maximise their welfare. As a consequence, the disclosure of
correct information and information in general cannot have a negative impact on the
purchase decision of consumers. Being rational creatures consumers are supposed to
ignore information that is ineffective or irrelevant.
Pre-contractual information duties and labelling requirements for foodstuffs
range among the earliest information obligations that have been adopted in view
of protecting consumers. Together with the prohibition of misleading commercial
practices and transparency requirements for contract terms, these measures seek
respectively to prevent and to combat the deception of consumers.
The last decade models based on mandatory disclosures increasingly became the
subject of criticism not in the least by behavioural economists. More particularly, the
continuous accumulation of information requirements begs the question whether the
‘inundation’ of information does not risk to disinform the consumer rather than
inform. Furthermore, the benchmark of the rational consumer which serves as the
basis for the design of protective measures is increasingly criticised. Also, new
communication technologies pose new threats to consumers and might cause new
forms of information asymmetries.


v


vi

Preface

This book focuses on these recent developments in consumer law and specifically
addresses mandatory disclosures and the topical problem of information overload. It
provides an in-depth comparative analysis based on national reports from countries
with common law and civil law traditions in Asia, America and Europe. More in
particular, it bundles contributions originating in founding countries of the European
Union (France, Germany and Italy), in member states that at a later stage acceded to
the European Union (Finland, Greece, Ireland, Poland, Romania and the Czech
Republic), in the United Kingdom that initiated the process to leave the European
Union, in countries of the Asian continent (China, Japan, Singapore and Taiwan) and
furthermore in Brazil, Canada (Québec province) and Turkey which echo views
from respectively the North- and South-American and the Euro-Asian region. The
book further benefits from the Belgian experience with consumer information rules.
The national reports follow the structure of the questionnaire which is annexed in
English and in French to this book. It allows readers in a user-friendly manner to
compare the subparts of the chapters of their preference. Also, the general report in
this book applies the same order of treatment as the questionnaire. It offers comparative insights based on the national reports in the most relevant developments of
consumer information law.
The main themes dealt with in the book are the following. At first the main
characteristics of the current consumer protection models and the basic assumptions
underlying those models such as the information paradigm and the average consumer benchmark are examined.
The analysed legal systems start traditionally from the assumption that
contracting parties are more or less in an equal bargaining position and enjoy the

freedom of contract. As is well known, new market circumstances (mass products,
standardised contracts) made increasingly clear that market failures occurred and
consumers could no longer be considered in an equal position with traders. Hence,
consumer protection rules responded in the first place to failures in the market
economy like increasing information asymmetries and provided for corrections to
restore real equality between traders and consumers. Besides increased information
requirements in line with the economic pace of the market, the conviction gradually
grew that consumers must be considered weaker parties in some circumstances,
deserving extended protection for instance in the context of distance selling,
off-premises contracts and e-commerce. The characterisation as a weaker party
justified more intrusive consumer protection measures like withdrawal rights, rules
on delivery in conformity with the contract and consumer guarantees. More recently,
consumers are increasingly approached as the weaker party by definition, especially
when concluding standard or adhesion contracts. As a consequence, the fairness of
contract terms is enforced by a multitude of measures among which are the nullity of
unfair contract terms, the impact of pre-contractual information on the fairness of a
contract term, the transparency of core contract terms and terms in general, the duty
to explain contract terms, etc.
It follows that consumer models in markets that become more global can no
longer be reduced to pure corrections of the information asymmetry that occurs.
Market fairness towards consumers is no longer necessarily linked to a demonstrated


Preface

vii

inferior information or even bargaining position of the consumer, but increasingly
connected with the assumption that the consumer is a weaker party as such given the
economic environment in which he makes transactional decisions. It is further

examined in this book how consumer models adapt to the new market circumstances
and whether consumer models tend anew towards consumerist approaches as experienced in the 1970s or retain, albeit maybe with varying degrees of intensity, their
overall economic orientation. In the same vein, the analysis seeks to investigate
whether the consumer seen as a rational, benefit-maximising creature still holds as
the benchmark of consumer protection measures and whether the information
paradigm is there to last as foundation of consumer protection models.
In the second part of this book, the information obligations themselves are the
subject of analysis, starting with the general pre-contractual information rules and
the role of good faith in contracting. A grand variety of rules exist as regards
pre-contractual information with countries imposing a general pre-contractual information duty and countries where such a duty is absent. The book highlights the
existing differences in this regard and focuses more particularly on countries with a
general pre-contractual information duty. Countries with such a duty almost always
also impose transparency requirements. It follows that pre-contractual information
must be clear, intelligible and comprehensible. These transparency requirements
incorporate in general two obligations. The first relates to the form and the presentation of the information which must be easy to read. The second refers to the content
of the information and its comprehensibility. Transparency measures often lack
clarity due to the absence of further guidance by legislators. The book studies
whether that is the case and if such a lack of clarity would occur, how courts cope
with that shortcoming. It is further analysed whether common rules on transparency
can be deduced from the existing national systems. In this regard also the heavy
regulated field of food labelling is briefly analysed in view of extracting overall rules
on the readability and intelligibility of information.
With these analyses as background, the focus of the book in the third part shifts
towards the relationship of the transparency requirement in general information
obligations and the prohibition of misleading commercial practices on the one
hand and the fairness of (standard) contract terms on the other hand.
With regard to the misleading character and comprehensibility of the information,
a remarkable evolution takes place in the European Union. Recent case law of the
European Court of Justice seems to suggest that an average consumer who is
provided with correct and comprehensive information in advertisements, nevertheless, may have a mistaken perception of the offer due to the presentation of that

information taken as a whole. The Court’s approach first took place in a case relating
to food labelling but was extended later to misleading commercial practices cases.
Although the European Court of Justice does not as such renounce that the average
consumer serves as a benchmark for the assessment of misleading practices in
labelling and in advertising, it clearly mitigates the consumer’s obligation to internalise the information which is disclosed in the market for his benefit. It follows that
even when the trader satisfies the information requirements imposed by the law, that
does not automatically rule out that the information may be presented in such a


viii

Preface

manner that the average consumer remains misled, notwithstanding the correct and
comprehensive information he received. Hence, the Court accepts that in some
circumstances correct and comprehensive information may no longer be capable
of correcting the consumer’s erroneous or misleading impressions based on other
informational elements. This will be especially so in the case of price information
provided to consumers in TV advertising for rather complex products and in the case
of advertising for or information on the package of a daily product. In those
circumstances, the European Court of Justice seems to accept that the level of
attention of consumers may be lower and hence their capability to absorb the
disclosed information due to either the reduced time to internalise the information
(e.g. in the case of a TV ad) or the fact that the consumer (sometimes hastily) buys a
daily product (e.g. products from the range of basic consumables in supermarkets).
With regard to contract terms, the European Court of Justice has given some very
strong guidance on what is required for terms to be plain and intelligible. In doing so,
the Court strengthened the bond between pre-contractual information on the one
hand and the unfairness of contract terms on the other hand, which it considers as
closely intertwined. In its recent case law, the European Court of Justice held that the

requirement of transparency should not be restricted to mere formal and grammatical
intelligibility but should extend to the precise content of the terms. According to the
Court, the consumer must be informed in such a manner that he is in a position to
evaluate on the basis of clear, intelligible criteria the economic consequences for him
which derive from a term. More specifically, the consumer must be provided with all
the information likely to have a bearing on the extent of his commitment so that he is
enabled to estimate in particular the total cost of his contract. Furthermore, consumers must be expressly informed of their rights that flow from mandatory national
law of which they are beneficiaries, even though they are deemed to know their
national legislation. Hereby the fundamental importance of pre-contractual information for consumers is emphasised since consumers decide on that basis to be bound
by a contract.
The book specifically analyses these new developments in food labelling, commercial practices and unfair contract terms law and examines whether similar traits
of these developments can be found in non-European jurisdictions.
The analysis in this book is further complemented with a fourth part wherein
sector-specific information rules are analysed. Two sectors were selected to that aim:
the financial services sector and the e-commerce sector, the first because legislatures
increasingly impose specific information obligations on businesses in the financial
services sector due to the often complex, sophisticated and highly technical nature of
those services and the latter because new communication technologies pose new
threats to consumers in terms of information and consequently force legislatures to
enact specific rules to protect the digital consumer. Especially the fact that legislators
are experimenting with different forms of summary disclosures in the financial
services sector retained attention. Also, recent initiatives to make use of the new
technological environment with the aim of presenting information in a more digestible way for consumers are highlighted in this part of the book. It is more particularly


Preface

ix

examined whether the tendency towards rationalisation of information in this

domain also has led to simplification of the information.
The analysis in the preceding parts gives the reader the necessary background to
understand that consumer protection models based on mandatory disclosures are not
free of criticism. As was pointed out above, they increasingly became the subject of
criticism the last decade, not least by behavioural economists. Especially the excessively detailed rules on advertising and information are increasingly criticised as
counterproductive if they lead to constantly extended lists of information catalogues.
This part of the book particularly focuses on the topical problem of information
overload that results from the continuous accumulation of information requirements.
Here, the question is raised whether this evolution risks to disinform rather than
inform the consumer? The book examines how countries with different legal backgrounds respond to this emerging problem. More in particular, the focus of the
analysis is placed on the impact, if any, of those criticisms on the national consumer
information policies in the reporting countries and whether legislatures react to the
highlighted critiques and drawbacks of the information models. Also, the degree to
which countries address more particular problems relating to overload of information is discussed in this part of the book.
The concluding and final part of the book provides a critical appraisal of the
recent developments in consumer protection models based on information obligations. More in particular, the question is addressed whether the multiple criticisms on
the existing consumer information models necessitate the abandonment of those
models in favour of new forms of more adequate and thus better consumer protection. In this context also the multiple initiatives to educate consumers will be taken
into account.
Finally, the book concludes with some suggestions on how consumer law could/
should evolve in the future, based on the comparative analysis of the national reports
originating in different continents.
Antwerp, Belgium
6 February 2019

Gert Straetmans


Contents


Part I

General Report

Information Obligations and Disinformation of Consumers . . . . . . . . . .
Gert Straetmans
Part II

3

National Reports: European Union

Information Obligations and Disinformation of Consumers: English
Law Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
John Cartwright

99

Information Obligations and Disinformation of Consumers: German
Law Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Boris Schinkels

131

L’information et la désinformation des consommateurs : Rapport
français . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thomas Piazzon

157


L’information et la désinformation des consommateurs : Rapport
italien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gian Antonio Benacchio

205

Information Obligations and Disinformation of Consumers: Greek
Law Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Antonios G. Karampatzos and Charalampos A. Kotios

237

L’information et la désinformation des consommateurs : Rapport
roumain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Raluca Bercea and Dan Adrian Cărămidariu

275

Information Obligations and Disinformation of Consumers: Polish
Law Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Monika Namysłowska and Agnieszka Jabłonowska

301

xi


xii

Contents


Information Obligations and Disinformation of Consumers: Czech
Law Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Markéta Selucká, Iva Šťavíková Řezníčková, and Pavel Loutocký

339

Information Obligations and Disinformation of Consumers: Irish
Law Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cliona Kelly

365

Information Obligations and Disinformation of Consumers: Finnish
Law Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Salla Hyvönen

407

Part III

National Report: Euro-Asian Region

L’information et la désinformation des consommateurs : Rapport
turc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Başak Baysal
Part IV

431


National Reports: Asia

L’information et la désinformation des consommateurs : Rapport
japonais . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Masamichi Nozawa

447

Information Obligations and Disinformation of Consumers: Chinese
Law Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shaolan Yang

457

Part V

National Reports: North and South America

Information Obligations and Disinformation of Consumers: Quebec
Law Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marie-Eve Arbour

485

Information Obligations and Disinformation of Consumers:
Brazilian Law Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Milena Donato Oliva

523


IACL Questionnaire: Information/Disinformation Consumers
Including Negotiation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

549

Questionnaire AIDC: Information/désinformation des consommateurs,
y compris le pouvoir de négociation des consommateurs . . . . . . . . . . . .

555


Part I

General Report


Information Obligations
and Disinformation of Consumers
Gert Straetmans

Abstract To combat market inefficiencies resulting from the information asymmetry that exists between businesses and consumers, an increasing number of mandated
information disclosures are imposed on businesses to give consumers the means to
protect their own interests by making autonomous, informed choices. Prohibiting
misleading information and informing consumers with correct information lies at the
core of the so-called information paradigm which resulted in consumer information
models across the world.
Pre-contractual information duties and labelling requirements for foodstuffs range
among the earliest information obligations that have been adopted in view of protecting
consumers. Together with the prohibition of misleading commercial practices and
transparency requirements for contract terms these measures seek to respectively

prevent and to combat the deception of consumers. The different forms such measures
may take are the subject of an in-depth comparative analysis in this general report.
The last decade models based on mandatory disclosures increasingly became the
subject of criticism not in the least by behavioural economists. More particularly the
continuous accumulation of information requirements begs the question whether the
‘inundation’ of information does not risk to dis-inform the consumer rather than
inform. Furthermore the benchmark of the rational consumer which serves as the
basis for the design of protective measures is increasingly criticised. In this general
report the impact, if any, of those criticisms on the national consumer information
policies in the reporting countries is examined.

The text has been finalised in September 2018.
G. Straetmans (*)
Economic, Consumer and Commercial Practices Law, Research Group Business and Law,
University of Antwerp, Antwerp, Belgium
Consumer Law Institute, University of Antwerp, Antwerp, Belgium
Consumer Law Institute, University of Ghent, Ghent, Belgium
Court of Appeal, Antwerp, Belgium
e-mail:
© Springer Nature Switzerland AG 2019
G. Straetmans (ed.), Information Obligations and Disinformation of Consumers,
Ius Comparatum – Global Studies in Comparative Law 33,
/>
3


4

G. Straetmans


Finally new communication technologies pose new threats to consumers. The
general report examines whether those developments cause new forms of information asymmetries.

1 Introduction
Consumers deserve legal protection on account of their inferior position. This is the
well-known rationale for adopting special rules for consumers. To combat market
inefficiencies resulting from the information asymmetry that exists between businesses
and consumers, an increasing number of mandated information disclosures are
imposed on businesses to give consumers the means to protect their own interests
by making autonomous, informed choices. Prohibiting misleading information and
informing consumers with correct information lies at the core of the so-called information paradigm which resulted in consumer information models across the world.
In those models consumers are often perceived as benefit maximizing creatures.
Information requirements allow consumers to make decisions themselves, decisions
which are supposedly better than anyone else can make for them. It follows that if
consumers are given full information, they will consistently make decisions that
maximise their welfare.1
Pre-contractual information duties and labelling requirements for foodstuffs are
well-known illustrations of such mandatory information obligations. In a number of
legal systems they range among the earliest information obligations that have been
adopted in view of protecting consumers. Together with the prohibition of misleading commercial practices and transparency requirements for contract terms these
measures seek to respectively prevent and to combat the deception of consumers.
The different forms such measures may take will be the subject of further analysis in
this general report.
New communication technologies pose new threats to consumers and financial
services are traditionally seen as complex with their inherent technicalities. Some
specific rules enacted to protect respectively the digital and the financial consumer
will therefore complement the analysis.
The last decade models based on mandatory disclosures increasingly became the
subject of criticism not in the least by behavioural economists. Without going into
too much details behavioural economics scholars mark as major critiques on consumer information policies based on disclosures, the bounded rationality, planning

fallacy, overconfidence and loss aversion of consumers,2 the fact that consumers

1

According to economic theory informed consumer decisions are efficient. If the information is
ineffective or irrelevant, it will simply be ignored by consumers and businesses. Economic theory
thus presupposes that information in general cannot have a negative impact. See also on this point
Better Regulation Executive and National Consumer Council (2007), p. 9.
2
See e.g. “The total capacity that is available in the human mental architecture for the processing of
input information is limited” Mangold (2015), p. 142 and see A Lang on LC4MP ‘Limited Capacity


Information Obligations and Disinformation of Consumers

5

often lack the time to read information,3 the absence of rules on the presentation of
the information, the length of the information and the comprehensibility of information for consumers in general and for vulnerable consumers in particular.4 More
particularly the continuous accumulation of information requirements begs the
question whether the ‘inundation’ of information does not risk to dis-inform the
consumer rather than inform. In this general report the impact, if any, of those
criticisms on the national consumer information policies in the reporting countries
will be examined.
This general report builds on the valuable contributions and national experiences
of national reporters. It bundles contributions originating in founding countries of
the European Union (France, Germany and Italy), in member states that at a later
stage accessed to the European Union (Finland, Greece, Ireland, Poland, Romania
and The Czech Republic), in the United Kingdom that initiated the process to leave
the European Union, in countries of the Asian continent (China, Japan, Singapore

and Taiwan), and in Brazil, Canada (Québec province) and Turkey which echo
views from respectively the North- and South-American and the Euro-Asian region.
The general report further benefits from the Belgian experience with consumer
information rules.
Thanks to the expertise of the well-recognised national scholars contributing to
this book, the general report provides significant insights on different aspects of
consumer law in different continents. These insights will be highlighted hereafter in
accordance with the structure of the questionnaire which is annexed to this book.

model of mediated motivated message processing’ Lang (2000), pp. 46–70 and Lang (2009),
pp. 193–204. A central assumption in the LC4MP-model is that processing of information needs
capacity and that the total amount of capacity is limited: if one process gets more capacity for
operation, other processes being executed at the same time will get less. See also Mangold (2017),
pp. 75–87: “the demands of different processes for a variable level of capacity are strongly related to
the kind of processing (deep and rule-governed or superficial or heuristic). Processes not receiving
the capacity they would require for thorough operation will only attain superficially computed
results” (p. 79). Motivation (the information relates to the consumer’s interests, needs, goals or
expected gratifications) turns out to be one of the dominant factors for the allocation of capacity
(p. 80). However, customers tend not to be consciously aware of their own needs. Yet, to date, it has
never been shown and according to Mangold could never be shown that unconscious priming
“allows the creation of new and previously non-existing needs or motivates subjects to make
decisions that are contrary to their general intentions” (p. 87). Compare with Kahneman (2011),
p. 477, who refers to the “planning fallacy” as one of the manifestations of our pervasive optimistic
bias. Planning fallacy is our tendency to overestimate benefits and underestimate costs, and hence
foolishly to take on risky projects.
3
See e.g. Bakos et al. (2014), p. 1. See recently Wagner (2017), p. 1027.
4
The lack of transparency is an important factor that impedes consumers to read disclosed
information and contract terms, but also a considerable number of cognitive and social factors as

well as rational and economic factors play a crucial role in here; see to that extent respectively Stark
and Choplin (2009), p. 659 and also Barnes (2007), pp. 228–272 and Becher and Unger-Aviram
(2010), pp. 199–210.


6

G. Straetmans

2 General Characteristics of the Consumer Information
Model
2.1

Economic Orientation of Consumer Models

Consumer protection in all legal systems is a modern, twentieth century, phenomenon. In the analysed legal systems contract law starts from the assumption that
contracting parties are more-or-less in an equal bargaining position and enjoy the
freedom of contract.5
Freedom of contract pairs well with a free market economy based on liberal
paradigms and fair competition. The thriving market economy based on fair competition also brought mass production. The standardisation of contracts resulting
thereof and the introduction of new sales techniques gave rise to new market failures
such as increasing information asymmetry (both quantitative and qualitative)
between a trader and a consumer and marketing techniques that impact the consumer’s decision making process.6 These new market circumstances made increasingly clear that consumers could no longer be considered in an equal bargaining
position with traders, especially in the presence of pre-formulated contracts.
These findings triggered the development of consumer protection rules, as a
response to failures that occurred in the market economy.7 These rules mainly
consist of information requirements as they are the least intrusive to the economy
and capable of restoring the balance between traders and consumers.8 But, subsequently, also more intrusive rules like the prohibition of unfair contract terms,
cooling off periods and withdrawal rights were introduced.
It follows that in the European countries consumers nowadays are almost automatically perceived as weaker parties in terms of legal and economic bargaining

powers. Their need for protection is based on the perception that commercial actors

5

Courts in common law systems are, more than in civil law systems, reluctant to intervene in the
terms of the contract, nor even generally to define forms of “weakness” of one party, or “inequality”
between the parties, that deserve their protection. For instance, in the United Kingdom Lord
Denning’s plea in 1985 to devise a common law principle of ‘inequality of bargaining power’
was rejected. See more on this issue in the contribution of Cartwright to this book.
6
The emergence of industrial giants and correlative depersonalisation of relations between traders
and consumers also contributed to these market failures.
7
Markets becoming more open almost automatically result in increased attention for the (weaker)
position of consumers; see extensively on this subject, Straetmans (1998), p. 242 e.s.
8
See e.g. Baldwin et al. (2011), pp. 118–119 and Ramsay (2007), pp. 61–71 and 119 e.s. By
impairing the consumer’s ability to make choices which are informed, unfair commercial practices
generate a market failure.


Information Obligations and Disinformation of Consumers

7

possess a greater negotiating power due to their economic and informational upper
hand.9 However, the economic orientation of European consumer law makes it a
balancing exercise between conflicting aims, namely providing the necessary protection of the weaker contract party and ensuring the proper functioning of the
(internal) market.10
A similar economic orientation, albeit with different degrees of intensity, underpins consumer protection rules in the non-European countries analysed in this report.

For example consumer law in Brazil aims at protecting the ‘homo economicus’ and
in Singapore, which has to date less elaborated consumer protection rules than in the
European Union, the consumer is also placed in the larger context of a free market
economy where regulation is light-touched, and a belief in the invisible hand is
prevalent.11
The economic orientation is also present in Turkish consumer law where the rules
are gradually being adapted to bring them in line with European law as part of the
accession process. Also Québec’s private law copied French contract law so that the
consumer protection rules equally rely on the rationality paradigm in the free market
with its inherent economic orientation to which it provides a correction to ensure real
equality between traders and consumers.12

9
See also the contribution of Hyvönen and Schinkels in this book. Schinkels further submits that the
informable consumer more easily fits as an explanation for market-complementing information than
as an explanation for market correction. Also Rott expressly differentiates between informed and
informable consumers, whereby the latter are seen as a benchmark for consumer contract law (see in
that sense Rott 2015, p. 164).
10
In this regard, Piazzon distinguishes subjective consumer law (weaker party protection) and
objective consumer law (proper functioning of the internal market); see his contribution to
this book.
11
Based on the responses to the questionnaire from professor G. Low, Singapore Management
University, : “The emphasis in Singapore has been on encouraging competitive processes and raising consumer awareness . . . as active competition policy is seen as a more
efficient way to deliver benefits . . . to end-user consumers . . . [and] business consumers”. With
regard to Japan, Nakata (2016), pp. 481–482, points out that consumer law reforms in 2004 aimed at
converting the existing law from a consumer that needs protection towards a consumer who is selfreliant, namely “an independent subject, acting so as to ensure its interests” (p. 482). The law reform
entailed the creation of an environment tailored to a self-reliant consumer with ex post regulation
based on market rules instead of ex ante controls and the promotion of information disclosure. Also

these elements reflect an economic orientation of consumer law with the emphasis on deregulation
and self-responsibility as marketplace principles. Also the Japanese Consumer Contract Act of 2001
reflects this idea: “The purpose of this Act is to ensure self-determination of consumers, and to
provide an environment which will support it”, o.c., 487.
12
See the contribution of Arbour to this book.


8

2.2
2.2.1

G. Straetmans

The Consumer Concept
A Codified General Definition of Consumer, But No Unified
Definition

In most of the reported countries the consumer is a creature of statute. Though
normal in civil law systems, it is much more peculiar in case based, common law
systems.13
In the European member states national legislative texts mainly literally transpose
the definition of consumer stemming from European instruments. In those instruments the consumer is generally defined as “any natural person who is acting for
purposes which are outside his trade, business, craft or profession”.14 This definition
represents the common core which is equal to all reported countries. That way, it can
be seen as a factor of convergence, but differences in interpretation remain to exist.
For instance in all the member states of the European Union a variety of functional
consumer definitions15 are used in function of the precise underlying aims of the
legislation,16 not in the least because the European legislature itself within its

legislative enactments did not advance a single definition of consumer.17 The
national reports of the non-European countries in this book present a similar finding.
It may thus be concluded that despite the existence of a generally accepted
common core definition of consumer, there is no unified definition of consumer
that is to be used within the consumer protection legislation generally. Hereafter we
will point to some differences in scope.

Mainly Natural Persons Protected, Sometimes Also Legal Persons or Even
Final Users
The aforementioned common core definition limits the protection to natural persons
acting for purposes which are outside their trade, business, craft or profession. Even
13

Furthermore, it must be stressed that in common law systems individualised definitions of
consumers are approached differently than in civil law systems “as there is no general expectation
that legislation will be dovetailed to form a coherent, systematic whole”, see the contribution of
Cartwright to this book.
14
See e.g. Article 2 (b) Unfair Commercial Practices Directive 2005/29/EC, O.J. 2005, L 149/22.
15
In the UK for instance the parliament has defined the circumstances in which consumers should
receive protection. Courts will read these statutes by reference to the normal, objective meaning of
their words, and will not look behind the text to find the “intended” meaning from the travaux
préparatoires to give an interpretation beyond the text itself or to provide a conceptual unity
amongst discrete legislative provisions. See the contribution of Cartwright to this book.
16
The personal scope of legislation is often adapted to its particular purposes.
17
The European Commission recognizes that Member States’ approaches are different and
fragmented, but also found that there is no consensus on the stakeholders on how to reduce legal

uncertainty generated by the fragmentation (see Report of the Fitness Check of EU Consumer and
Marketing Law 2017, p. 109).


Information Obligations and Disinformation of Consumers

9

though in most of the reported countries consumer law is limited to natural persons,
member states within the European Union as well as states outside the EU have
experimented with broader definitions.18
Some states straightforwardly apply a broader definition. For instance Greek
consumer law extends the protective scope to legal persons and a union of persons.
A consumer may be “any natural or legal person or union of persons without legal
personality, for whom the goods or services offered in the market are intended and
who make use of those products or services, as long as they are the final receivers of
such goods or services”.19
In the same vein the Brazilian Consumer Protection Code defines the consumer as
any individual or legal entity that acquires or uses a product or service as a final
user.20 To be characterized as a consumer, the individual or legal entity does not
need to have a contractual bond with a supplier, since the provision expressly refers
in general to acquirer or user. Furthermore, the Consumer Protection Code, despite
the reference to final users, also applies specific consumer rights to ‘consumers by
comparison’ in an attempt to ensure equal treatment to every person who is in a
similar vulnerable position, irrespective of whether he is a final recipient.21
Some countries provide for an extension of the definition in certain subdomains
of consumer law. For instance Finland provides smaller businesses in certain areas
consumer-like protection.22 Thus the domain of unfair contract terms benefits from
such extension if the business contracts involved are concluded by consumer-like
small businesses and policy holders equal to consumers.23

Also French law has a longstanding tradition in protecting ‘non-professionals’. It
follows that professionals could benefit as non-professionals from the protective
18
The UK for instance evolved from a broader to a narrower conception of consumer in the field of
unfair contract terms where ‘consumer’ protection was initially extended to corporations as long as
the transaction in question was neither an integral part of their business, nor conducted with a
sufficient degree of regularity to make it part of the business. Also, Poland briefly experienced with
an extension of the notion to ‘persons’ but it was quickly abandoned as it was believed that the
inclusion of non-governmental organisations and micro-, small- and medium-sized undertakings
would negatively affect the national traders in the internal market. See respectively the contribution
of Cartwright and Namysloswka and Jablonowska to this book.
19
See the contribution of Karamptzos and Kotios to this book.
20
See Head of Article 2 of the Consumer Protection Code.
21
Read more on this scholarly debate in the contribution of Donato Oliva to this book, who submits
that vis-à-vis a legal entity the liability of a supplier may be limited.
22
A concrete example is the protection provided by the Insurance Contracts Act which not only
protects the consumer but also a legal person who in terms of the nature and scope of its business
can be compared to a consumer vis-à-vis the insurer. See more in the contribution of Hyvönen to
this book.
23
However, it must be pointed out that the unfairness of a term is evaluated differently in the case of
a consumer or a small business. “Consumer protection is much broader and includes the protection
provided for in the national Consumer Protection Act (Sections 1–2 of Chapter 4) or the EU
directives on consumer protection. In the case of a small business, unfairness is evaluated on the
basis of general contract law (Section 36 of the Contracts Act)”, see the contribution of Hyvönen to
this book.



10

G. Straetmans

rules in the domain of unfair contract terms when they find themselves in a position
equal to consumers, for instance if they lack any competence in the subject matter of
the contract.24 It comes as no surprise that this gave rise to divergent interpretations
in case law.25 In 2016 the French legislator (tried to) cut the discussion short
introducing a new definition whereby any legal person that acts for purposes that
do not enter within the framework of his commercial, industrial, artisanal, liberal or
agricultural activity must be regarded as a ‘non-professional’. Likewise with regard
to unfair contract terms the French case law excludes natural or legal persons
(non-professionals) who conclude contracts that present a direct link (interpreted
broadly) with their professional activity from the protective scope.

Acting for Private, Mixed or Business Purposes
The second part of the common core definition refers to non-professional purposes.
Also this part has been the subject of debate in Europe and beyond where numerous
variations exist on how ‘acting for non-business, non-professional purposes’ must be
understood.
In Japanese law the consumer is defined as a natural person who does not exercise
a function within a business, whereas the professional is defined as an individual
who contracts for business purposes.26 Also Chinese law makes the purpose of
purchase, namely to meet consumption needs in daily life, the key factor to distinguish between a consumer and a business operator, but the definition is criticised
because also legal persons may have consumption needs for their daily operations.
Hence legal persons would qualify as consumers whereas it is believed that legal
persons are not as weak as natural persons in market transactions. Chinese legal
doctrine therefore advised to exclude legal persons from consumer protection and to

amend the definition so as to focus on the non-professional, non-profit and dependent on business operators characteristics of consumers. In 2013 legal persons were
excluded by law from consumer protection measures but so called professional fake
commodities buyers were not.27
24

For instance, trade unions may benefit as non-professionals from protective rules provided that the
subject matter of the contracts they conclude does not present a direct link with their professional
activity. See the contribution of Piazzon to this book.
25
Thus, commercial companies were generally excluded from the protection whereas case law was
divergent with regard to the classification as consumers of civil companies.
26
See the contribution of Nozawa to this book. Compare with Nakata (2016), p. 489, who adds that
“there are situations in which consumers might appear as ‘business operators’ due to special
characteristics of the transaction, or business operators are put in similar positions of those
consumers” (p. 489).
27
Professional fake commodities buyers are persons who deliberately and repeatedly buy substandard commodities with the intention to obtain punitive damages since those commodities do not
correspond to the national safety and quality standards. Chinese Courts tend to be receptive towards
such claims initiated by fake commodities buyers. Yet recent statements in 2017 from the Supreme
People’s Court will restrict the professional fake buyer’s exploitation so that more disqualifications


Information Obligations and Disinformation of Consumers

11

The Québec Consumer Protection Act defines a consumer as a natural person
“except a merchant who obtains goods or services for the purposes of his business”,
without however defining the notion of merchant.28 Romanian law provides for

another variation on the same theme. Here, the consumer is generally defined as any
natural person or group of natural persons in an association who acts for purposes
that exceed his commercial, industrial, producing, artisanal or liberal activity. Yet,
with regard to unfair contract terms the definition is slightly different since it refers to
a natural person or group of natural persons who act for purposes that do not enter
within the framework of their professional activity. The latter definition can also be
found in France29 and in slightly different wording in Italy.30
The broad wording does not exclude dual purpose (private and business) contracts from consumer protection. How far a dual purpose contract might be mixed so
as not to forfeit the categorization of consumer contract, is debated in Europe. In the
Consumer Rights Directive, recital 17 states broadly that “in the case of dual purpose
contracts, where the contract is concluded for purposes partly within and partly
outside the person’s trade and the trade purpose is so limited as not to be predominant in the overall context of the contract, that person should also be considered as a
consumer”.31 Yet, in the Gruber- case32 the European Court of Justice gave a more
restrictive reading of the consumer concept holding that the notion of consumer
contract must be confined to contracts wherein the element of business use is
negligible. As a result, the UK legislator defined the consumer as an individual
acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession. The UK legislator preferred ‘wholly or mainly’ to extend
the definition beyond the interpretation of the Court of Justice of the European Union
(hereafter: CJEU) in Gruber. Also the Polish Civil Code allows courts a certain
margin of discretion. It defines the consumer as a natural person who performs a
legal act33 with a trader for purposes not directly related to his or her business or
professional activity. It follows that courts can bring dual purpose contracts into the
protective scope in accordance with the broader interpretation in the Consumer

as consumers may be expected in case law. See more extensive on this point, the contribution of
Yang to this book.
28
Court practice shows that a natural person who sells his services or products obtained from
professional activities in an organised fashion, is no longer a consumer. See the contribution of
Arbour to this book.

29
Consumer is a natural person who acts for purposes that do not enter the framework of his
commercial, industrial, artisanal, liberal or agricultural activity. See already supra.
30
In Italy the consumer is defined as any person who buys products or services from a business to
satisfy his proper needs, those of his family and partially also his professional needs, provided that
he acts for purposes that do not enter the framework of his commercial, industrial, artisanal, liberal
or professional activity. See the contribution of Benacchio to this book.
31
Directive 2011/83/EU of 25 October 2011 on consumer rights, OJ 2011, L 304/64.
32
CJEU 20 January2005, Johann Gruber v. Bay Wa, case C-464/01, ECLI:EU:C:2005:32.
33
The reference to legal act does not severely limit the scope of the definition, see more in the
contribution of Namyslowska and Jablonowska to this book.


12

G. Straetmans

Rights Directive. Also the Belgian wording of the definition allows for such
stretched reading as applied by some courts with respect to consumer sales contracts.

Irrespective of the Consumer’s Level of Knowledge
In most of the reported countries the actual level of (technical) knowledge of the
consumer, his bargaining power, his concrete legal skills or observant or financial
capacities are irrelevant for the application of abovementioned definition of consumer. A natural person who is acting for purposes outside his business or profession
is considered automatically to be the weaker person vis-à-vis a trader, seller or
merchant.

This is however not the case in countries where a broad consumer definition is
applied referring to persons acting as final users. Thus the Brazilian Superior Court
of Justice extends the protective scope on the basis of a so-called ‘deepened
finalism’. This interpretative method allows the application of the Consumer Protection Code in all cases were the vulnerability is established, even if from the finalist
perspective the final destination is not known and the person concerned is no final
user. According to the Brazilian Superior Court of Justice this vulnerability can have
multiple origins: it can be of a “technical (lack of specific knowledge regarding the
product or service being consumed), legal (lack of legal, accounting or economic
knowledge and its reflections in the consumer relation) or even factual (situations in
which the economic, physical or even psychological insufficiency of the consumer
puts him in a disadvantageous position vis-à-vis the supplier) nature”.34 More
recently, the vulnerability with regard to information (insufficient data about the
product or service that is able to influence the buying decision-making process) has
also been included.35
It has already been mentioned above that also the Greek definition of consumer
refers to the broad notion of final user. The definition includes legal persons and does
not limit the scope to persons acting for purposes outside their business, trade or
professional activity. It follows that natural or legal persons are worthy of the law’s
protection even when they obtain goods or services for professional use, as long as
they can demonstrate that they acted as final recipients. The more narrow common
core definition of consumer highlighted above, is in Greece only applied in cases
where European law imposes to do so.
A similar vulnerability-approach creeps in in Singapore’s consumer law, when
the evaluation of relative bargaining positions regarding the reasonableness of
otherwise onerous terms is at stake or with regard to the statutory requirement
obliging businesses to take care not to take undue advantage of the peculiarities of

34
See Brazilian Superior Court of Justice, REsp 1195642/RJ, 3aT., Rel. Min. Nancy Andrighi, julg.
13.11.2012.

35
See the contribution of Donato Oliva to this book.


Information Obligations and Disinformation of Consumers

13

their customers,36 and in Taiwan where the consumer is automatically approached as
the weaker party, disadvantaged in terms of experience and knowledge vis-à-vis a
trader.

2.2.2

The ‘Average Consumer’ Is the Benchmark for Information
Duties, Unfair Commercial Practices and Unfair Terms

The common core definition of consumer referred to above serves as the general
benchmark to identify the beneficiaries of protective measures. Within the European
Union the maximum harmonisation of the Directive on unfair commercial practices37 together with the case law of the Court of Justice of the EU had the effect of
advancing the so-called ‘average consumer’ as the more concrete general benchmark
for the assessment of the adequacy of information disclosures and the unfairness of
commercial practices. This European standard of an ‘average consumer’ is a person
who is reasonably well informed, reasonably observant and circumspect, taking into
account social, cultural and linguistic factors.38 It is an somewhat idealized image of
how consumers behave or should behave.39
The idea of an average or typical consumer has been used by most of the
European member states’ courts as a benchmark even in cases where it is not
specifically referred to in legislation. It follows that the ‘average consumer’ is also
used by national courts in the member states of the EU as the general benchmark to

assess the unfair character of contract terms. In Ireland for instance the average
consumer is referred to as a benchmark in relation to the transparency requirement
for unfair terms or in cases of passing off. Also in Greece contracts must be drafted in
such a manner that the average person reading the terms is able to fully understand
their meaning.40 The same applies in Poland were the average consumer gains full
weight, despite the fact that consumers prior to accession to the EU were perceived

36

Based on the responses to the questionnaire from professor G. Low, Singapore Management
University, , who submits: “Although these requirements are aimed at
ameliorating the probability of pressure sales, they also and necessarily go towards what information is shared with the consumer and how it is shared. The same may also be said regarding
disclosure in financial products or services contracts, where although there is a mandatory minimum
disclosure, the manner and extent of disclosure of information beyond that hinges on the assessment
of the savviness of the consumer. As with much in the common law, everything turns on its facts”.
37
Directive 2005/29/EC, cited above.
38
See the national reports of The Czech Republic, France, Germany, Greece, Ireland, Italy, Poland,
Romania, The United Kingdom. This is also the case in Belgium. Also Finnish consumer law
applies this average consumer benchmark, but concentrates on top of that also on individual
measures after a conflict has arisen with a consumer; see the contribution of Hyvönen to this book.
39
It follows that the expected behaviour of the consumer is to be determined in abstracto. See more
extensively on this point, Duivenvoorde (2014), pp. 63–75, more specifically on pp. 64 and 73.
40
In Greece courts tend to rely on a relatively well informed but inexperienced consumer who is not
specifically careful, suspicious or observant, but who at the same time is not a gullible, completely
indifferent or careless person. The average consumer is not expected to have legal expertise in



14

G. Straetmans

as forgetful and not careful at all. The benchmark of an ‘average consumer’ applies
in Poland in areas such as unfair competition, trademark law, unfair terms control,
pre-contractual information and even general tort law.41 There is no reason to believe
that the CJEU would deviate from the general standard of the average consumer
when it comes to the assessment of contract terms.42
Yet, this increasing adherence to the European standard of an average consumer
does not rule out the national traditions in which the consumer concept is embedded.43 These traditional consumer standards continue to play an important role in the
assessment of law provisions.
The most prominent example in that regard is Finland where psychologically
inspired assessments by the Market Court remodel the average consumer, stating for
instance that the value of the giveaway should not be used to distract a consumer
from the price of the main product and that reporting prices to consumers in an
inconsistent way may be considered to be inappropriate or otherwise unfair conduct
in marketing consumer goods.44 It brings Finnish scholars to the conclusion that the
general benchmark for the Finnish national consumer legislation remains the
weaker, less rational consumer.45

contract drafting but is supposed to read the contract terms which should allow him to understand
his rights and duties. See the contribution of Karampatzos and Kotios to this book.
41
See the contribution of Namyslowska and Jablonowska to this book.
42
This is all the more so since the Directive on Unfair Contract Terms states that “the unfairness of a
contractual term shall be assessed, taking into account the nature of the goods or services for which
the contract was concluded and by referring, at the time of conclusion of the contract, to all the

circumstances attending the conclusion of the contract and to all the other terms of the contract or of
another contract on which it is dependent”(own emphasis), see Article 4(1), Directive 93/13/EEC,
O.J. 1993, L 95/29. The overall assessment implies that also pre-contractual information and
advertisements must be taken into account and their possible impact on the contract terms. Also
the misleading character of those commercial practices may play a role in this assessment. It would
then be odd if the average consumer used for the assessment of the misleading character of those
practices would be different from the benchmark used for the unfair character of the term. Also the
fact that several European law instruments impose to inform the consumer prior to the conclusion of
the contract about at least some of the general conditions and clauses of the contract, strengthens
this analysis. The most extensive obligation is imposed on service providers by Article 22 (1f) and
1g)) of Directive 2006/123/EC on services in the internal market, O.J. 2006, L 376/36.
43
The European Commission concludes in its Fitness Check Report that Member States rather apply
the average consumer implicitly than explicitly (see Report of the Fitness Check of EU Consumer
and Marketing Law 2017, p. 109).
44
See the contribution of Hyvönen to this book. In Finland contractual liability is at stake when the
content of a contract does not correspond to what the consumer expected. The consumer expectation
test with regard to informational defects is based on the general level of expectations and not the
consumer’s personal level of expectations, but the price of the contract is taken into account when
evaluating the defect (see Finnish Supreme Court Decision 1992:86).
45
In this regard Hyvönen notes that “the Finnish (and the Nordic) average consumer is not similar to
the EU consumer image. Nonetheless, when the UCPD is applicable, the EU benchmark is as well.
Duty to disclose information has not played a similar role in Nordic consumer law as it has in EU
consumer law. Consumer protection after the conclusion of a consumer contract, e.g. by adjusting
an individual term, has been regarded as being equally as important as a company’s duty to disclose