Unfair advertising in the context of unfair competition

Polish competition law protects customers and entrepreneurs from unfair competition in unfair advertising, i.e. prior to advertising contrary to law or good manners, misleading advertising, non-practice advertising, hidden advertising/scripturing advertising, burdensome advertising and comparative advertising.

However, the provisions on unfair advertising are quite vague. Numerous case-law and literature come to the aid, which clarifies the scope of the standards set out in the Anti-Unfair Competition Act, helping to understand and apply this law on a daily basis.

Polish competition law is mainly created by the Act on combating unfair competition dated 16 April 1993[1] (hereafter as: u.z.n.k.), which regulates the prevention and combating of unfair competition in economic activities, in particular in industrial and agricultural production, construction, trade and services, in the public interest, entrepreneurs and customers.

one of the acts of unfair competition mentioned in the Act is unfair advertising. Principles of market competition, after systemic changes, in the field of advertising have been regulated 1 January 1995, when the bill came into force.

However, in view of the changing market environment, including the wide entry into the Internet market, the law seems insufficient in this respect.

Definition of advertising

The importance of advertising in the era of the capitalist economy is increasing year by year. Freedom to conduct business after the period of the centrally planned economy system poses challenges for the entrepreneur. In order to gain a competitive position, it forces it to apply new market practices.

In this matter, advertising has proved effective. Entrepreneurs compete not only in the quality of services and products offered but also in the field of advertising. Advertising is a widely available promotional tool. In the last 30 There have been a number of providers of advertising services for years.

In addition, the Internet through social networks and websites has become a new medium for advertising in recent years, creating a new field for legal interpretations in this area. Thanks to the development of smart technology and universal internet access, advertising is literally at your fingertips.

Entrepreneurs are spending increasing budgets on marketing campaigns.

According to the dictionary, advertising is "an action aimed at encouraging potential customers to buy specific goods or to use certain services". The same dictionary also uses the definition of negative advertising as: ‘reclamation based on the negation of the value of goods proposed by competitors’[2].

The Supreme Court tried to define the legal concept of advertising in its judgment dated 26 January 2006, according to which advertising is addressed to potential consumers relating to goods, services and to an entrepreneur offering goods or services to encourage and encourage the addressees to purchase goods or use services.

The incentive may be expressed directly, e.g.

by using terms corresponding to specific activities resulting in the disposal of goods or services, or indirectly, by creating a suggestive picture of the goods and services, as well as by the trader himself, to the extent that the addressees are irresistibly willing to acquire goods and services[3] .

Unfair advertising may be involved in unfair competition, but the scope of this correlation is often legally questionable, and the settlement of doubts requires not only a law against unfair competition, but also a law against unfair market practices.[4] whether competition and consumer protection laws[5] .

In addition, the laws on copyright and related rights have an indirect influence on advertising activities.[6] , Personal Data Protection Act[7] together with GDPR[8] whether the Electronic Services Act[9] 10.

Unfair competition

Act to combat unfair competition under Article 3 it considers an act of unfair competition contrary to law or good manners if it infringes or threatens the interests of another trader or client. The article indicates a catalogue of open acts that constitute an act of unfair competition i.e.: misleading the designation of an undertaking, false or fraudulent indication of geographical origin of goods or services, misleading the designation of goods or services, breach of business secrecy, prompting the termination or failure of a contract, imitation of products, pronunciation or unfair commendation, hindering access to the market, bribery of a person acting in a public capacity, as well as unfair or prohibited advertising, organising an avalanche sales system, conducting or organising activities in a syndicated system, and unjustifiably extending payment periods for goods or services supplied.

This recipe performs various functions. The literature assumes that it constitutes a defining function for acts considered unfair and complementary by indicating a catalogue of acts of unfair competition. Where there is an act contrary to law or good manners and at the same time the act threatens or violates the interests of another trader or client, Article 3(1) u.z.n.k. may be a standalone basis for the determination of the delicacy. This function is broadly recognised in the case law[11].

This is confirmed by the Supreme Court in its judgment dated 22 October 2002 III CKN 271/01, in which it notes that the recognition of a specific act as an act of unfair competition requires the determination of what a particular action was and the legal classification of it by attributing to it the characteristics of a specific specific item contained in the Chapter 2 Act on combating unfair competition (Acts of unfair competition), Article 5-17) or a delicacy not included, but corresponding to the hypothesis Article 3(1) Act[12].

According to E.

Nowińska, ‘this provision also allows the assessment to be corrected when a given factual condition formally meets the conditions set out in the detailed part of the Act, but due, for example, to the low degree of dishonesty or to the minimum degree of risk or breach of the interests of another market participant, it is justified to depart from the negative assessment of the action (amendment function).

An example is the situation in which the use of an individual designation of an entrepreneur is carried out Article 5, However, due to the fact that no damage has been caused or the interests of another trader have not been compromised, the rules of fair competition have not been infringed"[13].

The Supreme Court also believes that Article 3 u.z.n.k. has both a complementary and a corrective function.

This means that unfair competition is an act of conduct which cannot be qualified according to Article 5-17 u.z.n.k., if it is contrary to law or good manners, and also violates or threatens the interests of an entrepreneur or client. It may also be a specific behavior under Article 5-17 u.z.n.k.

(which in itself means a contradiction with the law or good manners) and which also constitutes a threat or a breach of the interests of the entrepreneur[14].

The act of unfair competition must be met third conditions:

• 1) the act to be assessed must be committed in the course of an economic activity;
• 2) this action must be contrary to law or good manners;
• 3) This action threatens or violates the interests of another trader or client[15].

It is assumed that, in order to prove that an act of unfair competition has been committed, it is not necessary to show the wrongdoer's fault, but merely the illegality of his action.[16]. The burden of proof of the veracity of the indications or information on the goods or their packaging or statements contained in the advertising shall lie with the person who is accused of acting unfairly in competition with misleading. Action of unfair advertising according to Article 16(1) The act of unfair competition in advertising is, in particular:

• 1) advertising contrary to the law, good manners or a lack of human dignity;
• 2) an advertisement introducing a client to the error and thus likely to affect his decision to purchase the goods or services;
• 3) advertising referring to customer feelings through fear, abuse of superstition or child credulity;
• 4) a statement that, by encouraging the acquisition of goods or services, gives the impression of neutral information;
• 5) advertising, which constitutes a significant interference in the sphere of privacy, in particular by solicitation in public places, sending at the client's expense unsolicited goods or misuse of technical media.

The list of acts to be considered in the context of unfair advertising is an open directory given above.

The contradiction of advertising with the law means that the source of the prohibition is a legal norm which, in a complete (absolute) or partial manner (by excluding certain means), prevents advertising of marked products or services[17].

An example of advertising contrary to the law is publicity for medicinal products which are subject to prescription or advertising for medicinal products containing narcotics and psychotropic substances. The same is true of tobacco products.

According to Article 8(1) Act dated 9 November 1995 on health protection against the consequences of the use of tobacco and tobacco products, advertising of tobacco products, electronic cigarettes, spare containers or tobacco props and promotion of tobacco products, electronic cigarettes, spare containers or tobacco props, and advertising and promotion of imitation products, or symbols related to the use of tobacco, tobacco products, electronic cigarettes or spare containers shall be prohibited.

A commercial contrary to good morals and a lack of human dignity will contain elements considered offensive, vulgar, degrading, striking at race, gender, nationality, or religion[18].

According to the District Court – the Competition and Consumer Protection Court, advertising must be within the framework of good morals adopted in a given society as an assessment criterion. The essence of the concept of good morals is widely understood respect for second Man.

In relations with consumers, it should express appropriate information on the powers conferred, the non-use of the privileged professional position and the fair treatment of contract partners.

Actions aimed at misinformation, confusion, misconception with the consumer and the use of its ignorance or naivety may be considered contrary to good habits.[19].

The provision of false information, which presents the goods or services advertised in a better light than in reality, may affect customer decisions.

An advertising misleading the customer and thus likely to affect his decision to purchase a product or service, as an act of unfair competition, may consist in misleading the customers, for example, as regards the quality, quantity, durability, manner of performance, characteristics, suitability, as well as the manufacturer of the goods.

In such cases, in order for advertising to be regarded as an act of unfair competition, it must affect the customer's decision to purchase the goods or services. This advertising will also constitute an act of unfair competition[20].

Unfair competition is also advertising referring to customer feelings by causing fear, exploiting superstition or exploiting child credulity. In the doctrine, this act is called an unprincipled advertising, because instead of referring to the characteristics of a product or service, it refers to the emotions of the audience[21].

Under Article 16(1)(3) U.z.n.k. has been indicated three factors that may affect the recipients of advertising. However, it is assumed that unspeakable advertising can be based on other feelings such as hope, mercy, or faith. Advertising that exploits human emotions or child's credulity is an act of unfair competition. According to M.

Modrzejewska, “the danger of using this type of advertising means that they affect the psychological sphere of man in such a way that it prevents consumers from freely deciding whether to buy the goods or use the service.

The characteristics of the product itself are secondary or even irrelevant to the use of this type of advertising’[22].

Another example of unfair competition is the statement that, encouraging the acquisition of goods or services, gives the impression of neutral information. This type of advertising is treated as a hidden advertising/cryptoreklam.

In this case, advertising is presented in such a way that the recipient has the impression that he is familiar with neutral information. For example, the entrepreneur uses representatives of the professions of public trust or scientists to make this message credible.

In the case of this type of advertising, it does not matter whether the presented characteristics of the product actually occur, it is more important how it is presented and whether it seems credible[23].

The definition of cryptreclam is set out in the Act on countering unfair market practices. Article 7(11) that law indicates that crypto-advertisement, is an advertisement that involves the use of publicist content in the mass media to promote a product when an entrepreneur has paid for that promotion, and this does not result clearly from the content or images or sounds easily recognisable by the consumer.

The last type of unfair advertising is the so-called onerous advertising, which in the anti-unfair competition law has been defined as advertising, which constitutes a significant interference in the privacy sphere, in particular by burdensome solicitation for customers in public places, sending at the client's expense unsolicited goods or abuse of technical media.

Solicitation in a public place, which can take the form of aggressive handing out leaflets or forcing customers to their store or premises, should therefore be considered a nuisance.

Where unsolicited goods are transferred at the customer's expense, the practice of unfair competition is also to charge the customer at the expense of the goods transferred, to send them and to store them.

On the other hand, misuse of technical media may take the form of sending spam to e-mail, calling the customer and presenting the offer without ordering it or sending unwanted SMS messages.

In assessing misleading advertising, account should be taken of all its elements, in particular those relating to the quantity, quality, components, manner of performance, suitability, applicability, repair or maintenance of the goods or services advertised and the behaviour of the customer.

A separate type of unfair advertising is an advertising which enables a competitor, or goods or services offered by a competitor, to be identified directly or indirectly, as a comparative advertising which constitutes an act of unfair competition if it is contrary to good manners. In order not to be considered contrary to good manners, comparative advertising must meet together the following conditions:

• 1) is not misleading advertising,
• 2) in a reliable and verifiable manner on the basis of objective criteria, compares goods or services which meet the same needs or are intended for the same purpose;
• 3) objectively compares one or several relevant, distinctive, verifiable and typical characteristics of those goods and services to which the price may also belong;
• 4) does not make mistakes on the market, as between the advertiser and his competitor, or between their goods or services, trade marks, business marks or other distinguishing marks;
• 5) does not discredit goods, services, activities, trade marks, business marks or other distinguishing indications, and the circumstances concerning the competitor;
• 6) for goods with a protected geographical indication or a protected designation of origin, it shall always refer to goods with the same designation;
• 7) does not unfairly exploit the reputation of the trade mark, the designation of an undertaking or another distinguishing mark of a competitor or the protected geographical indication or protected designation of origin of competing products;
• 8) does not present goods or services as imitation or imitation of goods or services bearing a protected trade mark, a protected geographical indication or a protected designation of origin or another distinguishing mark.

Comparative advertising relating to a special offer should, depending on its conditions, clearly and unequivocally indicate the date of expiry of that tender or indicate that the tender is valid until the stock of goods or the cessation of the provision of services is exhausted and, if the special tender is not yet in force, should also indicate the date from which the special price or other special terms of the tender will apply.

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1 Act dated 16 April 1993 combating unfair competition (Journal of Laws of 2020, item 1913.)

2 https://sjp.pwn.pl/szukaj/Reklama.html 17 June 2021.

3 Supreme Court Judgment dated 26 January 2006 V CSK 83/05.

4 Act dated 23 August 2007 to counter unfair market practices (Journal of Laws of 2017, item 2070).

5 Act dated 16 February 2007 on competition and consumer protection (Journal of Laws of 2021, item 275.).

6 Act dated 4 February 1994 about copyright and related rights (Journal of Laws of 2021, item 1062).

7 Act dated 10 May 2018 on the protection of personal data (Journal of Laws of 2019, item 1781).

8 Regulation (EU) 2016/679 dated 27 April 2016 on the protection of individuals with regard to the processing of personal data and on the free movement of such data and repealing Directive 95/46 (General Data Protection Regulation).

9 Act dated 18 July 2002 on the provision of electronic services (Journal of Laws of 2020, item 34).

10 M. Modrzejewska, Commentary to the Act: Combating unfair competition Article 3 i.e. of 8 October 2020 [in:] Commercial contract law, 2020, Legalis.

11 Judgment SA in Lublin with 30 September 1998, And ACa 281/98, Appeal.-Or. 1999, No 1, p. 45; judgment of the Supreme Court of 11 July 2002, And CKN 1319/00; judgment of the Supreme Court of 9 January 2008, II CSK 363/07, the position of the Supreme Court contained in the ruling with 22 October 2002 (III CKN 271/01).

12 Supreme Court Judgment dated 22 October 2002 III CKN 271/01.

13 E. Nowińska [in:] K. Szczepanowska-Kozłowska, E. Nowińska, Act on combating unfair competition. Commentary, Warsaw 2018, Article 3.

14 Supreme Court Judgment dated 4 November 2011 I CSK 796/10.

15 E. Nowińska, op. cit.

16 Supreme Court Judgment dated 1 December 2004 III CK 15/04.

17 I. Wiszniewska, Polish law of advertising, p. 25 and n.; A. Swistowska, Unfair Advertising, p. 25; R. Skubasz, in: Act on combating unfair competition (ed. J. Swiss), 2006, p. 656.

18 M. Modrzejewska, Laws most commonly applied in contractual advertising practice [in:] Commercial Contract Law System of Commercial Law Volume 5b, Legalis.

19 Judgment of the District Court — Court of Competition and Consumer Protection dated 23 February 2006 XVII Ama 118/04

20 M. Modrzejewska, Laws most often... op.cit..

21 V. M. du, E. Nowińska [in:] V. M. du, E. Nowińska, Act on combating unfair competition. Commentary, Issue VI, Warsaw 2013, Article 16, E. Nowińska [in:] K. Szczepanowska-Kozłowska, E. Nowińska, Act on combating unfair competition. Commentary, Warsaw 2018, Article 16., M. Sieradzka [in:] Act to combat unfair competition. Commentary, ed. II, ed. M. Zdyb, Warsaw 2016, Article 16.

22 M. Modrzejewska, Legislation most often...op.cit.

23 Ibid