Nailing Down Advertising Transparency with "Buy Now, Pay Later" - ECJ Sets the Stage
Enhanced Account-Based Advertising Transparency - ECJ Reinforces Clarification Requirements - Strengthened Transparency Requirements for 'Buy on Account' Advertising – ECJ Ruling
In a bustling battle over advertising for "Buy Now, Pay Later," the European Court of Justice (ECJ) has amplified consumer rights. The controversy revolves around how prominently online retailers should highlight creditworthiness checks when promoting a "convenient buy."
When it comes to "promotional offers," EU law imposes stringent transparency requirements. These offers must be plainly obvious under what conditions consumers can claim them. The judges in Luxembourg have now thoroughly interpreted this EU law, extending its application to special offers and buy now, pay later offers. Yet, the final call lies with the Federal Court of Justice (BGH).
Bonprix faced the heat for its "convenient buy" advertisement
The drama unfolded when the fashion retailer Bonprix, part of the Otto Group, advertised a "convenient buy." The Consumer Center Hamburg accused its offer of a "convenient buy" as misleading due to the lack of clarity regarding creditworthiness checks. The case escalated to the BGH, which sought clarification from the ECJ.
"We're thrilled that the European Court of Justice has classified Buy Now, Pay Later as a promotional offer and we now trust the BGH will rule in favor of consumers," beams Julia Rehberg from the Consumer Center Hamburg.
Bonprix maintains that it communicated appropriately in the 2021 case, as a company spokeswoman stated, "We're keeping our fingers crossed for the BGH's final decision."
- ECJ
- Legal Dispute
- Advertising
- Transparency
- Federal Court of Justice
- Luxembourg
- EU
- Consumer Center Hamburg
ECJ's Take on Transparency in Advertising
The EU, through regulations like the General Data Protection Regulation (GDPR) and the Digital Services Act (DSA), has been hopping on trampolines to address transparency and consent in advertising. The GDPR underscores the importance of informed consent for data processing, including in advertising, while the DSA mandates transparency in who pays for advertisements.The Transparency and Consent Framework (TCF), developed by IAB Europe, aims to standardize consent collection for tracking-based advertising, but it's been called out for lacking transparency and informed consent under GDPR.
In a nutshell, while the ECJ's specific clarification on Handel Advertising with "Buy Now, Pay Later" remains unclear, it aligns with the EU's broader focus on transparency and informed consent in advertising practices. This would generally involve providing detailed information about payment terms, any fees, and the conditions under which the offer is extended. However, specific legal interpretations and requirements would hinge on the details of the case and relevant EU consumer protection laws.
- The European Court of Justice (ECJ) has established that Buy Now, Pay Later offers, like those from Bonprix, should adhere to stringent transparency requirements in EU law, making it essential for clear and obvious disclosure of the conditions under which consumers can claim such offers.
- In light of the ECJ's ruling, the employment of finance, particularly in business matters such as advertising transparency for Buy Now, Pay Later, could potentially involve new policies within companies, be it community policy, employment policy, or any other relevant guidelines, to ensure compliance with EU laws and consumer rights protections.
