Consumer Protection, Advertising, Competition15/04/08 / cata_legal-tax-update

Act No. 634/1992 Coll., the Consumer Protection Act, as amended

The newly formulated provisions of Section 4 include a general prohibition of unfair business practice; this prohibition applies to all entities operating on an internal market, including financial services providers, insurance providers, etc. At the same time, this Act must be applied not only to the very sale of goods or services but also to the offering thereof, including advertising; the amendment to the provisions of Section 1, subsection 3 substantially increased the powers of the entire Act. Any entrepreneur’s conduct toward a consumer in conflict with the requirements of due professional care and capable of substantially influencing the consumer’s decision-making so that the consumer makes a decision that they otherwise would not make is generally deemed to constitute unfair practice. The average consumer is, for the purpose of the quoted Directive, a consumer who is reasonably well-informed and reasonably observant and circumspect; however, if consumers whose characteristics make them particularly vulnerable to unfair commercial practices are involved, such as children, it is desirable that the impact of the commercial practice be assessed from the perspective of the average member of that group. In addition to the general definition of unfair commercial practices, the provisions of Sections 5 and 5a define the major forms - misleading commercial practices and aggressive commercial practices. The schedules to the Act contain a list of forms of commercial behaviour that are at all times deemed to constitute misleading or aggressive commercial practices. The Act also newly includes administrative delinquencies in this area; the top penalty rates are more differentiated (mostly reduced as compared to the former prevailing rate of up to CZK 50 million) depending on the severity of the delinquency committed.

Act No. 40/1995 Coll., concerning advertising regulation and amending Act No. 468/1991 Coll., concerning operation of radio and television broadcasting, as amended

The former term “misleading advertising” has been replaced by a more general one: “advertising that constitutes unfair commercial practice”. As a result of this, the assessment whether advertising is misleading or not is subject to the criteria defined in the Consumer Protection Act. The former legislation was made stricter in terms of the periods prescribed for archiving advertising samples – it  was extended from 12 months to 5 years following the last distribution (Section 7a, subsection 1).

Commercial Code

This is a detailed addition to the terms and conditions for admissibility of comparable advertising in connection with, inter alia, misleading commercial practices in the provisions of Section 50a, subsection 2.