Revamping Advertising with "Buy Now, Pay Later" - EU Court Bolsters Transparency
Boosting Advertisement Transparency: ECJ Enforces Disclosure Requirements for 'Buy on Invoice' Services - Enforcing Transparency in 'Buy Now Pay Later' Advertising - ECJ Upholds Strict Standards
In a heated legal row over "Buy Now, Pay Later" (BNPL) advertisements, the European Court of Justice (ECJ) has bolstered consumer rights. The matter at hand concerns the conspicuousness with which online retailers must disclose a creditworthiness assessment when promoting a "convenient BNPL" offer.
According to EU law, sales promotion offers require special transparency guidelines. The fine print must clearly outline the conditions under which consumers can avail of such promotions. The judges in Luxembourg have now interpreted this EU legislation expansively, potentially including offers for special deals and BNPL within the purview of these guidelines. Yet, the German Federal Court of Justice (BGH) will ultimately weigh in on the case.
Bonprix pitched the "Convenient BNPL"
At the center of this drama was an advertising statement by fashion retailer Bonprix, a subsidiary of the Otto Group. The Consumer Center Hamburg voiced concerns that the proposal of "convenient BNPL" was misleading because it failed to make it clear that a creditworthiness assessment would still be carried out. The case escalated to the BGH, which sought clarity from the ECJ.
"We're thrilled the European Court of Justice has designated BNPL as a sales promotion offer, and now, we're optimistic that the Federal Court of Justice will rule in favor of consumers," says Julia Rehberg of the Consumer Center Hamburg.
Bonprix asserts that it had adequately communicated its stance in this 2021 case, according to a company spokesperson. We await the BGH's final decision on the matter. "We're also eagarly awaiting the final resolution of the issue," the representative added.
A New Era of Advertising Transparency
The search results do not directly address the EU Court of Justice's ruling on BNPL advertising or the most recent EU transparency requirements for BNPL. Nevertheless, there are recent advancements in EU advertising transparency and data protection worth noting:
- Transparency and Consent Framework (TCF): The Belgian Court of Appeal recently found the TCF, employed for tracking-based online advertising, to be illegal in Europe due to GDPR violations. This ruling underlines the need for more effective consent mechanisms and data protection in online advertising[1][5].
- Digital Services Act (DSA): The EU's Digital Services Act mandates platforms like Amazon to deliver transparency reports, which could reshape broader transparency standards in advertising[3].
- Google's Transparency Policy Updates: Google has revamped its Ads Transparency policy, now exhibiting additional information about the entity funding ads. This update intends to boost transparency in advertising by displaying the payment profile name as the payer name for verified advertisers[2][4].
These developments hint at a growing emphasis on advertising transparency in the EU, with stricter regulations and policies geared toward safeguarding consumer privacy and ensuring clear disclosure of advertising practices. However, specific updates related to BNPL advertising post the Handel Werbung ruling are not found in the available search results.
In light of the European Court of Justice's decision, there might be an increased emphasis on vocational training to equip businesses with the skills necessary to comply with the expanded EU legislation on transparency in sales promotion offers, such as "Buy Now, Pay Later" (BNPL) offers. Financial institutions may need to provide more comprehensive and clear information about their creditworthiness assessment processes in their advertising strategies to maintain consumer trust and comply with the law.
As the Digital Services Act (DSA) and Google's Transparency Policy Updates focus on reshaping transparency standards in advertising, it is important for businesses to adapt their employment policies to include training on advertising transparency best practices, ensuring they remain in compliance with EU regulations.
