Consumer Protection, Advertising, Competition

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The former term “misleading advertising” has been replaced by a more general one: “advertising that constitutes unfair commercial practice”.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.
Other articles
KŠB Assisted with the Refinancing of the BigBoard Group, a leading player in the premium outdoor advertising market
Our team provided legal advice to BigBoard Praha, a leading player in the premium outdoor advertising market in the Czech Republic, in connection with its refinancing. Founded in 1993, the BigBoard Group is the largest provider of premium outdoor advertising in the Czech Republic, with an approximately 70% market share and annual turnover of around CZK 2 billion. Its advertising media cover key locations across the country, including the Prague metro and major transport hubs.
KŠB Assisted Sandberg Capital with a Majority Investment in HotelTime Solutions
The KŠB team provided legal advice to the investment group Sandberg Capital on the completion of a majority investment in HotelTime Solutions, one of the leading providers of cloud-based software for hotel operations management.
KŠB assisted Seyfor with the extension of its financing provided by Raiffeisenbank, Tatra banka and, newly, Slovenská sporiteľňa.
The KŠB team provided legal advice to its long-standing client Seyfor in connection with the continuation and expansion of its syndicated financing. The existing lending banks, Raiffeisenbank Czech Republic and Tatra banka, decided to continue supporting Seyfor’s growth, with Slovenská sporiteľňa joining the financing as a new lender.