Unfair Trade Practices National Training Workshop on Competition

What are ‘Unfair Trade Practices’? • Cause economic injury to others, including through practices

Some Types of Unfair Trade Practices • Infringement of intellectual property rights (protection of

Some Definitions of Unfair Practices • World Bank/OECD Model Law (1998) Prohibits unfair competition

Consumer Protection (1) • Availability of advertised goods & services - no ‘bait advertising’

Consumer Protection (2) • • • ‘Fine print’ conditions Origin of goods Pictorial representations

False Claims on Price (1) • • • Comparative pricing ‘Duty free’ ‘Free’ goods

False claims on price (2) • • Price ranges Quotes and estimates Sales and

Unfair sales techniques (1) • • • Debt collecting methods Delivery terms Inertia selling

Unfair sales techniques (2) • • • Offering gifts and prizes Deceptive packaging False

Conclusions • Competition in markets promotes fairness • Need to reflect national attitudes in

Slides: 11

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Unfair Trade Practices National Training Workshop on Competition Policy and Law Gaborone, Botswana: 25 -27 July 2007 Presenter: John Preston 1

What are ‘Unfair Trade Practices’? • Cause economic injury to others, including through practices designed to confuse buyers • No universal definition • ‘Lay’ views vary between cultures and individuals, reflecting philosophies and ethics • Legal definitions specific to countries, reflecting local views of appropriate moral conduct in business (no free gifts in Germany!) • Some UTPs covered by specific legislation • Competition promotes fairness in markets: prices reflect costs; best deals rewarded 2

Some Types of Unfair Trade Practices • Infringement of intellectual property rights (protection of trade marks, brand names, patents, indications of origin) • Contracts in restraint of trade • State aid – an important issue in the EC • Comparative advertising – practice varies • False or misleading advertising that harms consumers 3

Some Definitions of Unfair Practices • World Bank/OECD Model Law (1998) Prohibits unfair competition including false or misleading information harming another firm, or misleading consumers • Commonwealth Model Competition Law (2005) prohibits unfair practices in consumer transactions involving false or misleading claims • New Zealand Fair Trading Act (1986) prohibits misleading or deceptive claims. Details of scope in slides 5 to 9 worth considering. 4

Consumer Protection (1) • Availability of advertised goods & services - no ‘bait advertising’ • Claims on qualifications and skills • Claims on success • Comparative advertising • Condition: new or used? • Claims on quality • Employment advertisements 5

Consumer Protection (2) • • • ‘Fine print’ conditions Origin of goods Pictorial representations must not mislead Sponsorships and endorsements Words with special meanings 6

False Claims on Price (1) • • • Comparative pricing ‘Duty free’ ‘Free’ goods or services Additional taxes Hidden or additional costs Price displays 7

False claims on price (2) • • Price ranges Quotes and estimates Sales and promotions Special offers 8

Unfair sales techniques (1) • • • Debt collecting methods Delivery terms Inertia selling ‘Interest free’ claims Harassment and coercion 9

Unfair sales techniques (2) • • • Offering gifts and prizes Deceptive packaging False billing Pyramid selling Guarantees and warranties 10

Conclusions • Competition in markets promotes fairness • Need to reflect national attitudes in legislation and enforcement • Give importance to consumer protection (helps small businesses too) 11