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16 July 2015
Established case law provides that the Marketing Act is generally applicable to cross-border marketing activities that target or have an effect in Sweden. EU legislation provides exceptions to this rule regarding, for example, online marketing, stating that the applicable law in the marketer's country of establishment should apply instead. The Market Court recently examined the applicability of this EU legislation and the question of whether alcoholic beverages may be advertised in Sweden through direct marketing by mail.
A German company advertised wine in Sweden to selected consumers through direct marketing by mail. The Swedish Consumer Ombudsman considered the marketing to be intrusive and unduly personal and to advocate alcohol use in breach of the Alcohol Act's general requirement of moderation in the marketing of alcoholic beverages. In addition, the direct marketing of alcoholic beverages by mail violated the Consumer Agency's guidelines on the marketing of alcoholic beverages.
The advertiser challenged the ombudsman's ruling on several grounds. Most interestingly, the advertiser argued that since EU legislation such as the EU E-commerce Directive (as implemented in Sweden) applied to the advertiser's business in general, the Market Court should apply the choice of law principles established by EU legislation. According to the E-commerce Directive, the applicable law in the advertiser's country of establishment should apply, rather than the applicable Swedish law. Thus, the advertiser claimed that the Market Court should assess the marketing under German marketing law.
However, the advertiser argued that if Swedish law in fact applied, the marketing complied with the Alcohol Act.
With reference to established case law, the Market Court held that the Swedish Marketing Act generally applies to cross-border marketing activities that target or have an effect in Sweden, even if the marketing was made or otherwise directed from abroad. EU legislation such as the E-commerce Directive limits the territorial scope of the Marketing Act as concerns certain types of marketing (eg, online marketing). However, in order to be covered by such EU legislation, the marketing activities in question must be attributable to subject matter that falls under that legislation.
The Market Court found that the advertiser's marketing did not constitute online marketing and that no EU legislation applied to this marketing activity. Therefore, the advertiser's marketing should be assessed under the applicable Swedish marketing law, including the Alcohol Act.
The purpose of the Alcohol Act's requirement of moderation in the marketing of alcoholic beverages is to protect public health. It is not permitted to encourage the use of alcoholic beverages through marketing or to target consumers under the age of 25.
Whether a marketing activity complies with the Alcohol Act is assessed from the perspective of the consumers to whom the marketing is directed, and takes into account the marketing's form and content. In this case, the advertiser had sent letters containing marketing materials in the mail to Swedish consumers over the age of 25. The envelopes were clearly labelled as containing marketing materials concerning alcoholic beverages. The marketing recipient could not choose whether to receive the envelope, but importantly could, based on the form of the marketing and the envelope's labelling, choose not to open the envelope and read the marketing material.
The Market Court found that the fact that the marketing was sent by mail in this form did not in itself violate the Alcohol Act, the Marketing Act or the International Chamber of Commerce International Code of Advertising Practice, even though this finding departed from the Swedish Consumer Agency's guidelines.
Regarding the contents of the marketing, the material in the envelope included general information about the wines advertised and the advertiser's business. Although the marketing had a friendly tone that was perhaps unusual in this type of marketing, the contents of the marketing were found not to encourage the use of alcohol or otherwise to violate the Alcohol Act's requirement of moderation in the marketing of alcoholic beverages.
The decision clarifies and cements the long-held view that the Marketing Act is generally applicable to marketing activities that target or have an effect in Sweden. Although EU legislation offers exceptions to this rule, a marketing activity must be unambiguously attributable to subject matter covered by such EU legislation in order for other choice of law principles to prevail before the Market Court.
As a result of this discrepancy between the choice of law principles in member states' national marketing laws and EU legislation, and since these choice of law principles may differ even between member states' national marketing laws, the perennial question of whether broader harmonisation in this field could be beneficial has been raised once again.
The Market Court's decision to depart from the Consumer Agency's guidelines on the marketing of alcoholic beverages is also significant. It signals a healthy independence and reliance on an objective assessment of the relevant facts of each case. Such a stance seems entirely prudent in a world where marketing is increasingly international and in a field where national laws are comparatively far reaching.
For further information on this topic please contact Hans Eriksson at Westerberg & Partners Advokatbyrå Ab by telephone (+46 8 5784 03 00) or email (firstname.lastname@example.org). The Westerberg & Partners Advokatbyrå Ab website can be accessed at www.westerberg.com.
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