The background to the complaint

1. In March 2004, the complainant's company, which is based in the Czech Republic, received a one-page personalised leaflet from Intercable Verlag AG ('Intercable'), a company based in Switzerland. This leaflet promised free listing in the 'European Internet Register'. It carried the name of the complainant's company, but indicated a wrong address. The leaflet contained an invitation to amend any data that might be incorrect, to sign it and to return it to the sender. Having done so, the complainant's company subsequently received an invoice from Intercable for an annual listing fee of EUR 690. The invoice referred to an agreement with the complainant's company that supposedly had been entered into for a period of three years. The complainant's company informed Intercable that, in its view, no such agreement had been concluded. However, Intercable successfully sued the complainant's company to obtain the said fee. According to the complainant, over 1 600 companies and other entities were affected by this scheme in the Czech Republic alone.

2. On 4 June 2008, the complainant turned to the European Commission, alleging that the Czech authorities failed to apply Directive 84/450/EEC of 10 September 1984 relating to the approximation of the laws, regulations and administrative provisions of the Member States concerning misleading advertising[1] ('Directive 84/450') or were incapable of doing so (the 'infringement complaint').

3. The present inquiry concerns the way, in form and substance, in which the Commission dealt with the complainant's infringement complaint against the Czech authorities.

4. Directive 84/450 has, in the meantime, been replaced by Directive 2006/114/EC[2] ('Directive 2006/114'). However, this change did not affect the substance of the provisions that are relevant to this case.

5. The provisions of Directive 2006/114 which are relevant to this case can be found in Articles 2 and 5.

6. Article 2 of Directive 2006/114 provides as follows:

"For the purposes of this Directive:

(a) 'advertising' means the making of a representation in any form in connection with a trade, business, craft or profession in order to promote the supply of goods or services, including immovable property, rights and obligations;

(b) 'misleading advertising' means any advertising which in any way, including its presentation, deceives or is likely to deceive the persons to whom it is addressed or whom it reaches and which, by reason of its deceptive nature, is likely to affect their economic behaviour or which, for those reasons, injures or is likely to injure a competitor;

…

(d) 'trader' means any natural or legal person who is acting for purposes relating to his trade, craft, business or profession and anyone acting in the name of or on behalf of a trader;

…"

7. Article 5 of Directive 2006/114 is worded as follows:

"1. [...]

[Adequate and effective means to combat misleading advertising] shall include legal provisions under which persons or organisations regarded under national law as having a legitimate interest in combating misleading advertising ... may:

(a) take legal action against such advertising;

or

(b) bring such advertising before an administrative authority ...

2. It shall be for each Member State to decide which of [the above options] shall be available ..."

8. In his infringement complaint, the complainant alleged that the Czech Republic failed to provide its citizens with the same rights as other EU Member States, notably as regards the implementation of EU directives. In this context, he mentioned Directive 84/450 in particular. Even though the Directive had been transposed into national law, the Czech authorities were, in the complainant's view, not prepared to implement it in practice or were incapable of doing so. The complainant pointed out that Intercable had been found guilty of misleading advertising in other EU Member States and criticised the decision of the Czech court in his case. He pointed out that he had turned to a number of Czech public bodies but that no investigation had ever been carried out. The complainant noted that, according to Czech law, the supervision of the implementation of Directive 84/450 had been delegated by the Czech Ministry of Trade to the Regional Trade Licensing Offices. He pointed out that one of these offices had informed him that he could not be considered to be a consumer and that, according to the Ministry of Trade, Intercable's practices did not qualify as 'advertising'. Consequently, they could not be regarded as misleading advertising. According to the Czech authorities, the letter addressed to the complainant constituted an offer, which was not covered by the rules on misleading advertising. The complainant also referred to a reply he had received from the Czech Ministry of Trade, in which the Ministry expressed the same view. According to the complainant, the Ministry of Trade had circulated its opinion on Intercable's practices to all regional offices, which made it practically impossible to pursue charges of misleading advertising against this company in the Czech Republic.

9. On 30 March 2009, the Commission's Directorate-General for Health and Consumers ('DG SANCO') informed the complainant that it had registered his infringement complaint within the so-called EU 'Pilot' project and that he would receive a reply directly from the Czech Republic. A copy of this reply would be sent to the Commission, which would then inform the complainant of its conclusions on the matter. The EU Pilot operated on a ten-week deadline, although he could receive a reply sooner.

10. On 18 May 2009, the Czech authorities provided DG SANCO with their views on the matter. They submitted that the preventive means of protecting businesses against advertising methods such as those used by Intercable were primarily laid down in the national rules transposing Directive 2006/114. These rules were mainly set out in the Czech Commercial Code[3] (the 'Commercial Code') and in the Act on the regulation of advertising[4]. In this context, they quoted the provisions of Articles 44[5] and 45[6] of the Commercial Code. Persons whose rights have been affected by unfair competition may rely on Article 53 of the Commercial Code[7] and turn to a court in order to request an injunction, restoration to the original state, as well as appropriate satisfaction, compensation for damages and the restitution of that which caused the unjust enrichment. Various directory companies such as Intercable which carried out activities of a misleading nature had been observed in the Czech Republic, but these differed in their specific marketing methods. It was not possible to make a uniform legal qualification of these practices since the concrete factual circumstances, such as the diligence of a businessman, had to be considered. On the basis of data provided by the Czech Ministry of Justice, it appeared that the Czech courts followed a case-by-case approach. Protection against misleading advertising depended on whether the person who considered his or her rights to have been violated took legal action. The Ministry of Industry and Trade and its subordinate entities furthermore encouraged the parties concerned to turn to a court in order to solve contractual disputes. Where a claim for payment of an amount allegedly owed by the party concerned was raised, the first question a judge had to decide was whether a valid contract had been concluded. In at least four out of the six cases for which information was available, the courts declared the contracts null and void on the basis of the provisions of the Czech Civil Code. Moreover, in legal proceedings brought by Intercable in order to protect its reputation, a regional court had ruled against the applicant on the ground that this company did not have a good reputation among its business partners. The Czech authorities concluded by stating that, in the Czech Republic, misleading advertising is forbidden by the above-mentioned rules of the Commercial Code and that protection against this form of unfair competition is provided by the courts.

11. On 8 June 2009, DG SANCO informed the complainant that it had completed its examination of his complaint and of the submissions of the Czech authorities. DG SANCO stated that it intended to propose to the Commission that infringement proceedings be commenced against the Czech Republic because the Regional Trade Licensing Offices, which were the competent bodies for the purpose of Directive 2006/114, interpreted too narrowly the term 'advertising' used in that directive.

12. On 13 July 2009, the Czech authorities provided the Commission with further information concerning this case. They clarified that, in the field of misleading advertising, businesses were protected from unfair competition by the Commercial Code. For this reason, it was only the courts that could decide on cases concerning protection against allegedly misleading advertising. Referring to the provisions set out in Articles 41 et seqq of the Commercial Code[8], the Czech authorities explained that misleading advertising falls under the provisions regulating unfair competition, which protect both businesses and consumers. Article 44 of the Commercial Code contains a general provision to the effect that unfair competition conflicts with the accepted practices of competition and is detrimental to other competitors or consumers. The Act on the regulation of advertising does not govern cases of misleading advertising in relation to businesses and it is thus not applicable in situations where businessmen are affected by misleading advertising. The only situation in which the said Act applies to misleading advertising is when the latter is to be considered an unfair commercial practice against consumers within the meaning of Directive 2005/29,[9] which was transposed mainly by the Act on consumer protection. Only in such cases may the Regional Trade Licensing Offices open an administrative procedure and impose fines. However, they cannot decide whether misleading advertising within the meaning of the Commercial Code has occurred. The Act on the regulation of advertising defines the notion of 'advertising' in its Article 1(2)[10], whereas the Commercial Code defines 'misleading advertising' in Article 45. The Czech authorities therefore took the view that the Czech Republic had correctly transposed Article 2(a) and (b) of Directive 2006/114.

13. On 1 October 2009, DG SANCO informed the complainant that, in view of the most recent information provided by the Czech authorities, it intended to propose closing his complaint. DG SANCO pointed out that it understood that, in so far as the Czech Republic was concerned, the competent bodies under Directive 2006/114 were the national courts, and that the Regional Trade Licensing Offices were not empowered to decide whether misleading advertising within the meaning of Directive 2006/114 had taken place. In these circumstances, there appeared to be no basis for infringement proceedings based on Article 258 of the Treaty on the Functioning of the EU ('TFEU'). DG SANCO added, however, that if the complainant had any additional information demonstrating an infringement of EU law, he should submit it within four weeks of receipt of its letter.

14. In October and November 2009, the complainant and the Commission exchanged a number of letters and e-mails. The complainant essentially demanded that the Commission further pursue his case, whereas the Commission took the view that there were no grounds for doing so.

15. On 8 November 2009, the complainant lodged a complaint with the Ombudsman against the European Commission.

16. On 18 November 2009, the Commission provided the complainant with copies of the submissions it had received from the Czech authorities in relation to this case.

The subject matter of the inquiry

17. The Ombudsman opened an inquiry into the following two allegations and the following claim:

Allegations

1) The Commission failed properly to address the complainant's infringement complaint, and closed it wrongly.

2) The Commission failed to ensure respect of the rules relating to the EU Pilot project, under which the correspondence from the Czech authorities should have been sent to the complainant directly and copied to the Commission.

Claim

The complainant claims that the Commission should address his infringement complaint properly, and open an infringement proceeding against the Czech Republic.

The inquiry

18. On 12 January 2010, the Ombudsman opened an inquiry into this complaint and asked the Commission to provide an opinion.

19. On 30 April 2010, the Commission provided its opinion.

20. On 27 May 2010, the complainant submitted his observations on the opinion.

21. On 25 November 2010, the Ombudsman asked the Commission to reply to a number of questions.

22. On 28 February 2011, the Commission sent its reply to the Ombudsman's questions.

23. On 15 March 2011, the complainant provided his observations on the Commission's reply.

24. On 18 November 2011, the Ombudsman made a proposal for a friendly solution in the above case.

25. On 27 November 2011, the complainant sent a letter to the Ombudsman, in which he put forward a number of observations concerning the proposal for a friendly solution. He also included certain new documents. On 24 January 2012, 2011, the Ombudsman informed the complainant that he would take into account the arguments and evidence contained in the latter’s letter dated 27 November 2011 together with his observations on the Commission's reply to the proposal for a friendly solution.

26. On 5 March 2012, the Commission submitted its reply to the Ombudsman’s proposal for a friendly solution.

27. On 18 March 2012, the complainant provided his observations on the Commission’s reply.

The Ombudsman's analysis and conclusions

Preliminary remarks

28. In his complaint and in his observations, the complainant made certain comments that could be understood as allegations against the Czech authorities, notably its courts. Bearing this in mind, the Ombudsman considers it useful to clarify that his mandate is limited to the investigation of instances of maladministration by the institutions, bodies, offices and agencies of the European Union. He is therefore not in a position to examine complaints directed at other bodies, such as national authorities. In addition, it must be underlined that Article 1(3) of the Ombudsman's Statute provides that the Ombudsman may not intervene in cases brought before courts or question the soundness of a court's ruling. It is thus useful to note that the present inquiry does not concern the Czech authorities and the Czech courts to which the complainant referred.

29. In his observations on the Commission's opinion, the complainant referred to the third title of the TFEU entitled 'Judicial co-operation in civil matters' and in particular Article 81(2)(e) and (f) of the TFEU. Given that the said provisions concern the adoption of EU legislation in that area, it is not clear how they could be relevant in the present context, which concerns a procedure regarding alleged violations of existing EU law. The Ombudsman therefore considers that there is no need to address the said provisions in his present inquiry.

30. In his observations on the proposal for a friendly solution, the complainant quoted point 10 above, which sets out the position taken by the Czech authorities in its submissions to the Commission during the EU Pilot. The complainant considered that the Czech arguments could be misconstrued and that they were not truthful. The Ombudsman notes, however, that, even if the complainant disagrees with the submissions of the Member State, he did not suggest that they were not correctly reflected in the Ombudsman's friendly solution proposal. In this context, the Ombudsman points out that they are, in any event, merely an element of contextual information for the better understanding of the factual background to this case.

31. In his observations on the Commission' reply to the proposal for a friendly solution, the complainant criticised the Commission's summary of facts as being inaccurate. This pertained notably to: (i) the background on how the complainant's company was approached by Intercable, (ii) whether he had himself approached a Regional Trade Licensing Office or was advised to turn there, and (iii) whether his company had lodged an appeal against the ruling of the Czech first instance court. In this respect as well, the Ombudsman considers it useful to recall that the complainant did not contest the facts as established in the Ombudsman's proposal for a friendly solution and that this proposal is based on that summary of facts, and not the Commission's.

32. In his letter of 27 November 2011, the complainant appeared to suggest that under the "Freedom of Information Act", the Ombudsman should ask the Commission on his behalf to provide him with the procedural rules applicable to the Member States under the EU Pilot project; he appeared to consider that separate rules applied to the Member States. Moreover, he appeared interested in the official documents by which the Czech Republic was invited to participate in the EU Pilot and agreed to doing so. It appears useful to note that, according to Article 228 TFEU, the Ombudsman carries out the inquiries, for which he finds grounds. However, the Ombudsman considers that he does not need the documents mentioned by the complainant to decide upon the present complaint. In any event, the complainant is of course free to turn to the Commission himself and, pursuant to Regulation 1049/2001 regarding public access to European Parliament, Council and Commission documents,[11] to request access to such documents, insofar as they exist.

33. Furthermore, in his observations on the Commission's reply to the proposal for a friendly solution, the complainant referred to the decisions of the Czech police and the Czech prosecutor not to pursue a criminal case against Intercable. However, considering that Directive 2006/114 does not contain any provisions on the harmonisation of provisions of criminal law, and that the aforementioned bodies were, in any event, not competent for the implementation of the said Directive in the Czech Republic, the decision not to pursue a criminal case against Intercable is not of relevance to the present case.

A. Allegation of having failed to properly address the infringement complaint and having wrongly closed it and related claim

Arguments presented to the Ombudsman

34. In his complaint to the Ombudsman, the complainant argued that, according to Article 44 of the Commercial Code, the term 'unfair competition' means conduct in economic competition which conflicts with the accepted practices of competition and which may be detrimental to other competitors or customers. Unfair competition includes misleading advertising and is prohibited. The complainant pointed out that the remedies provided for in Article 53 of the Commercial Code can be applied only if the parties subject to the dispute satisfy the essential criterion laid down in Article 44, namely, that the alleged conduct is committed in economic competition. However, his complaint with respect to the Czech Republic concerned unsolicited, misleading leaflets mailed by foreign-based companies, which are not registered in the Czech Republic. The complainant stressed that he believed that it was not possible to pursue these companies on the basis of Article 53 of the Commercial Code, because his company and the directory company which carried out activities of a misleading nature were not in economic competition.

35. The complainant noted that the Commission had itself expressed the view that the Regional Trade Licensing Offices, as the competent bodies under Directive 2006/114, interpreted the notion of 'advertising' too narrowly.

36. The reason why the Commission decided to close his complaint had nothing to do with his complaint, which alleged that even though the Czech Republic may have transposed Directive 2006/114 into national law, it was not prepared to apply it in practice or capable of doing so. The Commission had considered opening infringement proceedings on the basis of a failure to transpose correctly the term 'advertising' used in Article 2(a) of Directive 2006/114 into national law. The only reason for not pursuing the case was that the Regional Trade Licensing Offices were not competent to interpret the term 'advertising'. The Commission's follow-up responsibility would thus have consisted in presenting the same set of circumstances to the authority competent to interpret the term 'advertising'. Unless it could obtain a clear statement on the interpretation of the term 'advertising', the problem remained the same, namely, that no Czech authority was prepared to implement Directive 2006/114 or capable of doing so.

37. The complainant also pointed to a reply from the Czech Minister of Justice dated 11 November 2009 to a written question by a Czech Member of Parliament. The Minister expressly mentioned the complainant's case as well as his complaint to the Commission, and provided an overview of the remedy mechanisms available in the Czech Republic to victims of unfair business practices by companies such as Intercable. This letter did not refer to the term 'advertising' at all. This confirmed that the Czech Republic had failed to transpose the term 'advertising' in line with Article 2(a) of Directive 2006/114. Moreover, in this letter, the Minister described victims of companies such as Intercable as customers. The complainant wondered how it was possible to consider that a 'customer' was in economic competition with the supplier of services in a disputed transaction.

38. The complainant pointed out that his complaint did not only concern the case of his own company, but that he was the spokesperson for the more than 1 600 Czech victims of Intercable's practices. He disagreed with the Commission's view that no systematic failure to apply the directive could be established. In that context, he pointed out that he had provided concrete evidence to the Commission showing that all the relevant Czech authorities refused to grant protection against the illicit methods utilized by companies such as Intercable. The Czech authorities which had been contacted by the victims of such methods included the Minister of Justice, the Minister of Trade, the Prime Minister's Office, various police departments, various courts, the Ministry of the Interior, the Trade Licensing Office, Regional Trade Licensing Offices, the Czech Trade Inspection, the Supreme Court and the Supreme State Prosecutor. None of these authorities had applied sanctions against the relevant behaviour, provided relevant advice or at least provided information about the existence of the rights granted by the directive. In addition, he had provided the Commission with evidence that attempts by victims to obtain protection from courts had failed and that on more than 20 occasions Czech courts had allowed proceedings on the basis of claims brought by companies such as Intercable to take place.

39. The complainant further submitted that, in their reply to the Commission, the Czech authorities gave the impression that the courts had to deal with a broad spectrum of concrete cases and methods of marketing. However, this was not true. There were simply two relevant scenarios, namely, delivery by hand or by regular post of Intercable's leaflets. In fact, 99 % of all cases concerned two flyers that had been sent by post or delivered by hand by Intercable.

40. The complainant concluded by stating that, if the Czech authorities had fulfilled their obligations by properly implementing Directive 2006/114, it would not have been possible for Intercable to pursue its claims through the courts. Thousands of Czech entities would thus have been spared the distress of becoming victims of what turned out to be state-assisted fraud.

41. In its opinion, the Commission pointed out that the complainant's company had been ordered to pay Intercable as a result of a Czech court judgment which it did not seem to have appealed. However, the complainant brought the matter before a number of public authorities, including the Czech Ministry of Trade and its Regional Trade Licensing Offices, the Czech Ministry of Justice and the Cabinet of the Czech Prime Minister. These authorities informed the complainant that mail addressed to a particular recipient was not to be regarded as 'advertising' for the purpose of the Czech Act on the regulation of advertising and could thus not be considered as 'misleading advertising'. According to these authorities, what the complainant had received rather appeared to be a draft contract. In his infringement complaint, the complainant also pointed out that, unlike courts in other Member States, the Czech court which heard his case ruled that a valid contract had been concluded on the basis of the form he had received from Intercable.

42. The Commission pointed out that Directive 2006/114 was intended to protect traders against misleading advertising and its unfair consequences by establishing minimum and objective criteria for determining whether advertising is misleading. The directive defines the notions of a 'trader', 'advertising' and 'misleading advertising' (see paragraph 6 above). Article 3 of the directive lists a number of circumstances which are to be considered in determining whether advertising is misleading. Directive 2006/114 regulates advertising addressed by one business to another; misleading advertising addressed to consumers is covered by Directive 2005/29. Member States have to ensure that adequate and effective means exist to combat misleading advertising. This could be done either by bringing a case before the competent court (judicial control) or by submitting a complaint to a competent administrative body (administrative control). Each Member State was free to decide which of these possibilities should be available in their jurisdictions.

43. The Czech Republic communicated the main provisions of its national law transposing Directive 2006/114 on 5 March 2008. The communication indicated that the term 'advertising' was defined in Article 1(2) of the Act on the regulation of advertising. The term 'misleading advertising' was defined in Article 45 of the Commercial Code. Furthermore, and still according to the communication, both national courts (Article 53 of the Commercial Code) and the Ministry of Trade's Regional Trade Licensing offices (Article 7(1)(g) of the Act on the regulation of advertising) were designated as authorities competent to combat misleading advertising under Directive 2006/114. Based on these provisions, a business could thus challenge misleading advertising either by taking legal action before a competent court or by complaining to a Regional Trade Licensing Office.

44. The infringement complaint referred to statements made by different Czech authorities according to which mail addressed to a particular recipient was not regarded as 'advertising' for the purposes of the Act on the regulation of advertising; in their view, the leaflet in question could thus not be considered as 'misleading advertising'. The Commission was concerned that such an interpretation of the term 'advertising' could unduly reduce the scope of application of Directive 2006/114 in the Czech Republic. In particular, that interpretation seemed to be shared by the national authorities which were responsible for the application of this directive, that is, the Regional Trade Licensing Offices.

45. In their reply of 18 May 2009, the Czech authorities submitted that businesses in the Czech Republic were protected in an efficient and proportionate manner against misleading advertising. However, they failed to comment on the statements made by the Czech authorities to which the complainant had referred. The Commission noted that it had considered the reply unsatisfactory and contemplated opening infringement proceedings.

46. The Commission added, however, that in their letter of 13 July 2009, the Czech authorities had revised their communication of 5 March 2008 and declared that, in the Czech Republic, "the regulation of misleading advertising in relation to businesses is outside the scope of [the Act on the regulation of advertising].… Consequently, [no legal definitions,] no legal remedies and no legal surveillance authorities (such as Regional Trade Licensing Offices…), constituted by [the Act on the regulation of advertising] can be called upon [for the purpose of such regulation]." Given that only the courts had been entrusted with ensuring the enforcement of Directive 2006/114, the Czech authorities argued that the statements of the Regional Trade Licensing Offices had to be considered irrelevant in this context. The Commission noted that, in view of the above, it had concluded that it could not base infringement proceedings for the incorrect application of Directive 2006/114 on the statements of the Regional Trade Licensing Offices, to which the complainant had referred.

47. The Commission further stated that it is the role of the courts, in their capacity as the bodies responsible for the application of Directive 2006/114 in the Czech Republic, to consider individual cases of allegedly misleading advertising. Doing so involves an assessment of the relevant facts and the application of the relevant national rules to these facts. In determining whether a particular type of advertising used by a given trader is misleading, national courts are to have regard to the relevant provisions of Directive 2006/114. While it is part of the Commission's role to supervise the application of directives in the Member States, it is not its role to review and second-guess individual court rulings in a way that is reminiscent of appeals courts. It may only consider opening infringement proceedings if it notes systemic implementation problems. This could be the case, for instance, where national court decisions could be ascribed to an incorrect or unclear transposition of a directive or where the structures put in place for the implementation of particular rules are clearly inadequate. This is to be distinguished from a situation where national courts have to assess individual cases on the basis of general criteria and where different courts might come to different conclusions. The Commission stressed, however, that the complainant did not provide evidence of any systemic problems as regards the implementation of Directive 2006/114 in the Czech Republic. Moreover, it stressed that it enjoyed a discretionary power in the conduct of infringement proceedings, in particular when deciding whether or not to commence or continue such proceedings.

48. The Commission stated that it believed that its services had properly handled the complainant's complaint. They had exercised due procedural diligence in registering, processing and closing the complaint. In addition, the Commission stated that its services had undertaken an appropriate legal examination by assessing all the information provided by the complainant and the Czech authorities. In accordance with good administrative practice, they had adequately informed the complainant of their investigation and eventually of the reasons which led them to the conclusion not to open infringement proceedings. The Commission added that the complainant had had plenty of opportunities to voice his concerns.

49. In his observations, the complainant expressed the view that the Commission failed to take proper account of the range of evidence he had provided to demonstrate that, even though the Czech Republic might have transposed Directive 2006/114 into national law, this implementation was ineffective and was not being applied in practice.

50. The complainant stated that he had provided the Commission with information concerning more than 2 000 Czech victims of directory companies which carried out activities of a misleading nature. It noted that it was repeatedly pointed out to the national authorities that leaflets were being used to "extort" substantial amounts of money from thousands of Czech stakeholders and that Intercable had been found guilty of misleading advertising in several other EU Member States on the basis of Directive 2006/114. The Commission had been informed that judgments from other Member States were presented in several court hearings in the Czech Republic. Evidence made available to the Commission showed that none of the Czech authorities took action to offer proactive support or advice. Furthermore, it was shown that the Ministry of Justice, the Ministry of Trade and the Prime Minister's Office had all expressed the view that the leaflets in question could not be regarded as 'advertising' for the simple reason that they were addressed to named recipients. The evidence submitted to the Commission illustrated how Czech courts, when dealing with actions for payment brought by Intercable, contradicted the aforementioned statements and always referred to the leaflets as 'advertisements'.

51. As regards Czech judicial decisions, the complainant sent the Commission information concerning 15 cases brought by Intercable for the payment of its fee, nearly half of which had been successful. All these judgments concerned identical leaflets circulated by Intercable. It was thus not possible that all of these rulings were correct; at least half of them had to be wrong. The complainant stressed that he had highlighted the inconsistency of the relevant case-law in his infringement complaint.

52. The complainant reiterated that the Commission did not address the proper subject of his infringement complaint. It was the Commission that had chosen to focus on the Regional Trade Offices. Moreover, the complainant pointed out that his company had appealed the judgment condemning it to pay Intercable and that a 31-page transcript documenting this fact had been enclosed with both his infringement complaint and his complaint to the Ombudsman. The fact that the Commission failed to take note of this evidence merely confirmed the sloppy manner in which his infringement complaint had been examined.

53. Given the large number of entities claiming to have been defrauded, the complainant failed to understand how the Commission could take the view that he had not provided evidence of systemic problems as regards the implementation of Directive 2006/114 in the Czech Republic. He argued that the Commission and the Czech Republic had not provided any evidence that Directive 2006/114 was implemented or applied in practice.

54. The complainant noted that the Commission appeared to have fully accepted that Czech victims were protected by Article 53 of the Czech Commercial Code. He submitted, however, that, according to Article 44 of the Commercial Code, the term 'unfair competition' meant conduct in economic competition which conflicts with the accepted practices of competition and which may be detrimental to other competitors or customers. Misleading advertising was mentioned as one of these unfair practices in Article 44 and further elaborated on in Article 45. In the complainant's view, the remedies foreseen in Article 53 of the Commercial Code could therefore only be applied if the parties subject to the dispute satisfied the essential criterion in Article 44, namely, that the alleged conduct was committed "in economic competition". However, his company was not in economic competition with Intercable.

55. Finally, the complainant criticised a statement contained in the initial reply of the Czech authorities. The latter had stated there that the complainant had received the relevant flyer in March 2004, that is, before the accession of the Czech Republic to the EU and that therefore his case could not be dealt with on the basis of EU law. The complainant stressed that all of his complaints concerned matters that occurred after the court proceedings in June 2005, that is, after the accession of the Czech Republic to the EU.

56. Having examined these submissions, the Ombudsman considered that he needed further information and therefore asked the Commission for specific clarifications. First, the Ombudsman pointed out that, according to the Commission, the complainant did not put forward any evidence of systemic implementation problems concerning Directive 2006/114 in the Czech Republic. At the same time, the complainant had referred to 15 cases concerning Intercable that had been dealt with by Czech courts, of which Intercable had won about half and lost the others. In addition, he noted that the complainant had submitted a list of 1 600 entities in the Czech Republic claiming to have been misled by Intercable. Given that Intercable appeared to have used a standardised method when approaching its customers in the Czech Republic, the Ombudsman asked the Commission to comment on whether the different outcomes in the above-mentioned court cases could point to an inconsistent application of Directive 2006/114.

57. Second, the Ombudsman noted that the Czech authorities initially informed the Commission that interested parties could use two possible avenues of redress to combat misleading advertising, namely, the courts and the Regional Trade Licensing Offices. The Czech authorities later modified this information by declaring that only the courts were competent to deal with misleading advertising under Directive 2006/114. Considering the statements made by the Regional Trade Licensing Offices, which the Commission itself considered incorrect, it appeared logical to expect that when the Czech authorities informed the Commission that the Regional Trade Licensing Offices were not competent to deal with misleading advertising, the latter were also informed of this. The Ombudsman therefore asked the Commission to inform him whether that had been the case.

58. Third, the Ombudsman pointed out that the complainant stressed that his company was not in economic competition with Intercable and that it would thus be unable to bring a lawsuit against Intercable on the basis of the Czech Commercial Code.

59. In its reply, the Commission pointed out that the figure of 1 600 injured parties provided by the complainant denoted the extent of the effect that Intercable's practices had in the Czech Republic. However, it did not provide any indication in relation to a potentially inadequate practice by the Czech authorities. As regards the judgments to which the complainant referred, the Commission agreed that they showed inconsistencies in the position of the Czech courts and that this could be disheartening for affected parties. However, national courts have to assess allegations of misleading advertising on the basis of general criteria taking into account all the circumstances of each individual case. Under Article 2(b) of Directive 2006/114, they have to decide, in particular, whether a given document "...deceives or is likely to deceive the persons to whom it is addressed or whom it reaches and which, by reason of its deceptive nature, is likely to affect their economic behaviour...". Given the general nature of the test, including the assessment of the likely effect on (average) recipients, national judges have a certain margin of discretion, and they may therefore reach different conclusions even in similar cases. The Commission added that, in the complainant's case, the relevant court had applied Swiss law and not the Czech provisions transposing Directive 2006/114.

60. The Commission noted that its services did not know whether the Regional Trade Licensing Offices had been informed that they were not competent to deal with misleading advertising. The responsibilities of the various authorities were usually laid down in law and the Commission understood that, under Czech law, the Regional Trade Licensing Offices were not in charge of misleading advertising affecting businesses; this task had been exclusively entrusted to the Czech courts.

61. As regards the applicability of Article 44 of the Czech Commercial Code, the Commission replied that nothing in the file indicated that the Czech courts interpreted references to "other competitors and consumers" in the Commercial Code in a way that excluded businesses affected by potentially misleading advertising if they were not active in the same sector as the company responsible for the advertising. There was no evidence to show that court applications had been turned down on the basis of the argument that companies which had been recipients of questionable advertising were not competitors in the strict sense of this term. In the court cases mentioned in the complaint and by the Czech authorities, the misleading character of the advertising was considered under the Czech Commercial Code, albeit with divergent outcomes.

62. In his observations, the complainant submitted, with regard to the Commission's argument based on the application of Article 2(b) of Directive 2006/114 and on the courts' margin of discretion, that he had provided the Commission with information to show that, in the majority of the fifteen court cases, the defendants had provided ample evidence to show that there were hundreds of other victims who had been deceived and whose commercial behaviour had been affected by the misleading advertising. The Commission's explanations sounded reasonable on their own, but they were inappropriate in the context of the present case.

63. In the judgment on the appeal brought by the complainant's company, the court upheld the judgment of the court of first instance that was based on Swiss law, but reached its conclusion by reference to a combination of Czech, Swiss and EU law. Moreover, the complainant put forward that the appellate court had not found Intercable's behaviour deceptive by basing its reasoning on Directive 2005/29. However, that directive concerns business-to-consumer transactions and not business-to-business transactions.

64. The complainant submitted that he and the majority of Czech nationals attempting to safeguard their rights under Directive 2006/114 had been advised by various Czech authorities to submit their complaints to the Regional Trade Licensing Offices. His own case had started with the regional office of the Ministry of Trade, which had redirected his complaint to the Trade Licensing Office. Moreover, all government communications concerning this issue had been directed for opinion to the Government Minister in charge of Trade Licensing Offices and probably to the same person within that ministry with whom the Commission was communicating from the outset of this inquiry.

65. The complainant added that he did not understand the Commission's answer in respect of Article 44 of the Czech Commercial Code. He stressed that this provision clearly stated that it could only be invoked in relation to economic competitors.

The Ombudsman's preliminary assessment leading to a friendly solution proposal

66. The Ombudsman pointed out that issues with regard to the implementation of EU directives in Member States normally tend to arise either with regard (i) to the way in which the latter transposed the provisions of EU directives into national law, or (ii) to the subsequent practical implementation of a transposing provision.

i) With respect to the transposition of Directive 2006/114

67. The Ombudsman noted that the complainant did not explicitly allege that the Czech Republic failed properly to transpose Directive 2006/114 into national law.

68. Furthermore, it was not in dispute between the parties that the Regional Trade Licensing Offices are not the competent bodies for the enforcement of Directive 2006/114 in the Czech Republic. Although the Czech authorities had initially informed the Commission that both the national courts and the Regional Trade Licensing Offices had been entrusted with this task, they subsequently clarified that only the courts were competent to deal with this matter. The Regional Trade Licensing Offices are in charge of protecting consumers, but not traders, from misleading advertising.

69. The Ombudsman noted further that the complainant nevertheless asserted that, in view of the wording of Article 44 of the Czech Commercial Code, it was not possible for his company to bring a case against Intercable because it did not meet the requirement of being "in economic competition" laid down in that provision. This was so, because his company and Intercable were not competitors. In this context, it appears useful to note that Article 44 of the Commercial Code provides that unfair competition committed "in economic competition" is prohibited and that misleading advertising is mentioned as one example of such unfair competition. The Ombudsman agreed that the wording of this provision could create the impression that it only applied when the entity engaging in the allegedly misleading advertising and the entity wishing to invoke the said provision were competitors.

70. The Ombudsman noted, however, that in reply to a question to that effect put to it by the Ombudsman, the Commission has pointed out that (i) nothing in the file indicated that the Czech courts interpreted references to "other competitors and consumers" in the Commercial Code in a way that excluded businesses affected by potentially misleading advertising if they were not active in the same sector as the company responsible for the advertising and (ii) there was no evidence to show that court applications had been turned down on the basis of the argument that companies which had been recipients of questionable advertising were not competitors in the strict sense of this term. In his submissions, the complainant relied on a number of judgments delivered by Czech courts. These judgments were dealt with in more detail below. At this point, it was sufficient to note that only the first page of each one of these judgments had been provided to the Ombudsman. Nevertheless, it was clear that all these judgments were rendered in actions brought by Intercable against its purported customers, presumably on the basis of the Czech Civil code. The excerpts from these judgments did not provide any information on the application of Article 44 of the Czech Commercial Code. The complainant did not submit any other evidence that would conclusively prove that the Czech courts interpreted Article 44 of the Commercial Code in a way that was not compatible with Directive 2006/114.

ii) On the aspects concerning the implementation of Directive 2006/114

71. The Ombudsman noted that the complainant's infringement complaint mainly focused on the contention that the Czech Republic had failed to give practical effect to Directive 2006/114, despite having transposed it to national law. In this respect, the complainant referred to the allegedly inconsistent case-law of the Czech courts and the response given by the Czech authorities to complaints concerning misleading advertising.

72. The complainant put forward that the group of Intercable's victims in the Czech Republic had over 1 600 members. He further suggested that the overall number of Intercable's victims in the Czech Republic is even higher. However, the Ombudsman's inquiry concerned the question whether the Commission properly handled the complainant's infringement complaint. It was therefore only the information that was provided to the Commission during its inquiry into that infringement complaint that needed to be examined at the stage of the proposal for a friendly solution.

73. As regards the case-law of the Czech courts, the Ombudsman noted that the complainant stressed that he had provided the Commission with copies of 15 court cases brought by Intercable, which the latter had won and lost in almost equal numbers. It appeared useful to bear in mind that EU law, and notably its directives, became applicable in the Czech Republic only as of 1 May 2004, that is to say, the date of that Member State's accession to the EU. To the extent that the facts underlying the cases brought before the national courts predated the accession, the parties in these cases could not have relied on the rights conferred by Directives 84/450 and 2006/114[12]. In other words, if the misleading advertising in an individual case had taken place before the Czech accession to the EU, Directives 84/450 and 2006/114 would not have been applicable. The complainant provided the Ombudsman only with the first pages of the 15 judgments he referred to. It was thus not possible for the Ombudsman to ascertain with certainty whether the aforementioned directives were applicable to these court cases. However, it appeared that in a number of these cases, the misleading advertising indeed predated the accession of the Czech Republic to the EU.

74. The Ombudsman agreed with the Commission that it was not its role to review individual court rulings and that it could only consider opening infringement proceedings if there were systemic implementation problems. It followed that isolated or numerically insignificant instances of misapplication would not be sufficient to find an infringement of Directive 2006/114. However, and as noted above, all of the judgments referred to by the complainant were delivered in cases brought by Intercable against its purported customers. These were thus not cases brought by Intercable's victims on the basis of the provisions transposing Directive 2006/114. It was thus unclear whether Directive 2006/114 and the Czech rules implementing it were at all addressed in these judgments and what conclusions were drawn in this respect by the respective courts.

75. In view of the above, the Ombudsman considered that the evidence which the complainant submitted to the Commission was not sufficient to show or to suggest that there had been systemic implementation problems as regards the Czech courts' interpretation of the provisions transposing Directive 2006/114.

76. As regards the response given by Czech authorities to complaints concerning misleading advertising, it was clear that none of these authorities was in charge of ensuring the observance of Directive 2006/114 in the Czech Republic, given that this mission had been entrusted to the courts alone. It was not easy to see how the Commission could have initiated infringement proceedings against the Czech Republic with respect to an alleged failure to take action on the part of such authorities.

77. The Ombudsman considered, however, that the behaviour of these authorities may nevertheless have had some repercussions on the practical effect of Directive 2006/114. More specifically, it may have prevented it from developing its full practical effect in the Czech Republic. In fact, whereas an authority that is not competent to deal with a certain issue acts perfectly correctly when it rejects requests to become active in cases concerning that issue, it is otherwise if that authority fails to provide relevant advice, where such advice should have been given, or even provides incorrect advice.

78. In his observations on the Commission's further comments, the complainant stated that he had been directed by a particular Czech authority to turn to the Trade Licensing Office. Although the Ombudsman examined the evidence brought forward by the complainant, he did not find anything to document this assertion. The Ombudsman noted from an examination of the elements presented to him that the complainant also provided a translation of a letter by the Inspector for Olomouc and Ostrava to an individual which stated that her complaint against Intercable had been forwarded to a Regional Trade Licensing Office, which would examine the complaint under the Act on the regulation of advertising. If the individual concerned had wished to rely on the rights conferred by Directive 2006/114, it would obviously have been wrong to forward her complaint to a Regional Trade Licensing Office. However, the Ombudsman was not provided with a copy of the original letter sent by that individual to the Inspector. More importantly, the Ombudsman took the view that even assuming that that complaint was covered by the Directive 2006/114 and was thus wrongly forwarded to a Regional Trade Licensing Office, a single instance of such an administrative error would hardly be sufficient to justify opening infringement proceedings by the Commission.

79. Nevertheless, it was recalled that the Commission at one point envisaged bringing an infringement procedure against the Czech Republic because it considered that the interpretation given by the Regional Trade Licensing Offices to the notion of 'advertising' pursuant to Article 2(a) of Directive 2006/114 was too narrow. The Commission closed the complainant's case once it learnt that the only bodies competent to enforce that directive in the Czech Republic were the courts. The Ombudsman was only partially convinced by the Commission's approach. Obviously, if the Regional Trade Licensing Offices were not competent to enforce Directive 2006/114, they could not violate any positive obligations incumbent on the bodies competent to enforce the directive. However, it was a matter of fact that the Regional Trade Licensing Offices provided the public, and more particularly traders that were victims of misleading advertising, with an interpretation of 'advertising' that was contrary to that set out in the directive. Whilst these bodies might not have been competent to implement Directive 2006/114, the Ombudsman hoped that the Commission would agree with him that the Regional Trade Licensing Offices also had an obligation to abstain from actions that would prevent the directive from developing its full practical effect in the Czech Republic. It seemed only logical that, if the Regional Trade Licensing Offices knew that they were not competent, they should not have provided traders that were victims of misleading advertising with any kind of (incorrect) interpretations of 'advertising', but should have instead referred them to courts.

80. The above-mentioned advice provided by Regional Trade Licensing Offices might well point to a more general problem. In 2008, the Czech Republic informed the Commission that both the Regional Trade Licensing Offices and the national courts were entrusted with the task of safeguarding the rights flowing from Directive 2006/114. The communication of the transposition measures in the Czech Republic had in the meantime been rectified. However, if the Czech authorities informed the Commission that both the courts and the Regional Trade Licensing Offices were competent one year before that rectification, it could not be excluded that some confusion existed at the national level as to the division of competences between the two. It could not be excluded that traders who turned to Regional Trade Licensing Offices and received from the latter incorrect advice concerning the scope of the term 'advertising' were thus prevented from exercising their rights under Directive 2006/114.

81. In the framework of his further inquiries in this case, the Ombudsman asked the Commission whether the Regional Trade Licensing Offices had in the meantime been informed that they were not competent to enforce Directive 2006/114 in the Czech Republic. In response, the Commission merely stated that it had no knowledge of whether such a notification had been effected and referred to the division of competences between the courts and the Regional Trade Licensing Offices laid down in Czech national law. The Ombudsman did not consider this answer very convincing either. If the Commission considered that the interpretations given by Regional Trade Licensing Offices as to the scope of the term 'advertising' for the purposes of Directive 2006/114 were incorrect, it was not obvious why these authorities should have ceased to make such statements of their own motion; traders that had been victims of Intercable's practices may well have been dissuaded from enforcing their rights in courts based on the interpretations given by the Regional Trade Licensing Offices. In these circumstances, the Ombudsman considered that it would have been appropriate for the Commission further to investigate this matter.

82. The Ombudsman stressed that he fully respected the margin of discretion which the Commission enjoyed in carrying out investigations alleging infringements of EU law. However, he considered that the Commission was obliged to exercise these powers diligently. In the present case, the Ombudsman took the view that the Commission had not yet investigated the complainant's infringement complaint thoroughly enough. In this respect, he made a preliminary finding of maladministration and, in accordance with his statute, the following proposal for a friendly solution:

“Taking into account the Ombudsman’s findings, the Commission could, in light of the considerations set out in paragraphs 76-82 above, resume its investigation in order to examine the issues that still need to be clarified.”

The arguments presented to the Ombudsman after his friendly solution proposal

83. In its reply to the proposal for a friendly solution, the Commission underlined that, pursuant to Article 258 TFEU, it was not bound to bring proceedings against Member States for failure to fulfil obligations and pointed out that it had a discretionary power precluding the right of individuals to require it to adopt a particular position in that respect. The Commission maintained that the investigation of the complainant’s infringement complaint was undertaken with all the necessary diligence and, based on a thorough assessment carried out at the time, did not provide a basis for opening infringement proceedings under Article 258 TFEU against the Czech Republic.

84. In light of the information provided by the Czech authorities, it appeared that, in that Member State, only the courts were entrusted with ensuring the enforcement of Directive 2006/114. The Commission reiterated that there was no evidence that the courts in the Czech Republic had failed to interpret correctly terms such as 'advertising' or 'misleading advertising'.

85. With regard to paragraphs 79 to 81 of the Ombudsman's proposal for a friendly solution, the Commission pointed out that the Czech Regional Trade Licensing Offices gave their interpretation of the term "advertising" under specific legislation which existed in addition to the rules transposing Directive 2006/114. However, they had also advised affected businesses to turn to the courts. The Commission stated that a letter from the Government Office to the complainant also explained that affected businesses could invoke the provisions in the Commercial Code which transposed Directive 2006/114/EC and could take court action. Moreover, for businesses having signed the forms in question, the decisive question was whether they were able to avoid the contractual claims from companies like Intercable. However, this question was not regulated in Directive 2006/114 but in contract law, that is, national law, and could be addressed only by the national courts.

86. Considering the aforementioned circumstances and the fact that the authorities in question had no powers to enforce Directive 2006/114, it was not obvious that these statements had an appreciable impact on the practical effect of Directive 2006/114 in the Czech Republic. Therefore, a further investigation with a view to the possible opening of infringement proceedings against the Czech Republic was not necessary.

87. The Commission took the view that it had exercised its responsibilities diligently and had used its discretion in an appropriate way. However, the Commission admitted that, as the Ombudsman had highlighted, there was, nevertheless, scope for confusion as to the identity of the responsible authorities in the Czech Republic. In addition, it agreed that providing citizens with proper information on their rights under EU law was extremely important. Therefore, in order to ensure that traders would be correctly informed by the authorities on the rules applying to misleading advertising, the Commission intended to request information from the Czech authorities on the actions undertaken to improve the information given to traders, especially, by the Regional Trade Licensing Offices, in particular regarding the interpretation of the notions of 'advertising' and 'misleading advertising' and the relationship between the different pieces of legislation.

88. Noting the magnitude of questionable practices in relation to business directories and of possible deficiencies in the enforcement system under Directive 2006/114 in cross-border cases in the EU as a whole, the Commission carried out a public consultation on Directive 2006/114 and on unfair commercial practices affecting businesses between 21 October and 16 December 2011. The consultation aimed to gather views on the appropriate level of protection for businesses, and to act as a step towards a Communication on the review of Directive 2006/114. The Communication was intended to identify any problems in the application of Directive 2006/114, and explore options for its possible revision, including enhanced cooperation between national enforcement authorities in cross-border cases.

89. Therefore, even though the Commission maintained its position that the closure of the complainant’s infringement complaint did not constitute an act of maladministration, it intended to write to the Czech Republic in the near future, in particular with regard to the information its authorities provide to traders on the implementation of Directive 2006/114 in the Czech Republic.

90. In his observations on the Commission's reply, regarding the consultation on Directive 2006/114, the complainant stated that the Czech authorities had forwarded to him a questionnaire by the Commission, and asked him to fill it in. In his view, this corroborated his impression on the incompetence of the national authorities when it came to applying Directive 2006/114. The complainant asked the Ombudsman to forward his submissions on that questionnaire to the Commission.

91. In his observations, the complainant further referred to paragraph 73 above and, whilst admitting that in some of the cases the misleading advertising predated the Czech accession to the EU, stressed that all the victims at the time understood the relevant document (i.e., the leaflet) as being merely a form amending their previous information held by Intercable. Moreover, in his view, the relevant date for applying the Directive was 13 June 2005, date on which the judgment against his company was rendered. In his letter of 27 November 2011, the complainant enclosed copies of Czech court judgments, some in full length, and pointed out that they were all brought by Intercable (the company having misleadingly advertised) and rendered after the Czech accession to the EU. The complainant stated that each of the approximately fifteen trial judges described the leaflets as an advertisement, and that these court cases were decided upon within the legislative conditions that existed in the Czech Republic after 2006. The Czech authorities pointed out that some of the leaflets were mailed just a few weeks prior to the EU accession on 1 May 2004. According to the complainant, the Commission relied on this convenient argument in order to disregard the relevance of the judgements rendered against him and others.

92. The complainant reiterated his view that the Commission had not addressed his complaint by properly investigating whether Directive 2006/114 was being applied in practice in a way which will benefit those who were supposed to be protected by it.

93. Finally, in his letter of 27 November 2011, the complainant provided copies of letters advising his company and another company to turn to the Regional Trade Licensing Offices, which had not been made available to the Ombudsman prior to issuing the proposal for a friendly solution. Furthermore, the complainant referred to a letter, which he had already provided to the Ombudsman.

The Ombudsman's assessment after his friendly solution proposal

94. In his proposal for a friendly solution, the Ombudsman suggested that, taking into account his findings, the Commission could resume its investigation in order to examine the issues that still need to be clarified. In this respect, it should be stressed that the proposal for a friendly solution focused on the fact that the Regional Trade Licensing Office disseminated information concerning the notion of "advertisement" that was too narrow with regard to the way in which that notion was defined in Directive 2006/114, and that this could have impeded the said Directive from developing its full practical effect in the Czech Republic.

95. The Ombudsman is pleased to note that the Commission agrees that citizens should be correctly informed about their rights under EU law. To this end, the Commission expressed its intention to request additional information from the Czech authorities on the actions undertaken to improve the information given to traders, in particular by the Regional Trade Licensing Offices, on such issues as the interpretation of the notions of 'advertising' and 'misleading advertising' and the relationship between the different legislative acts.

96. The Commission stated that a further investigation with a view to opening infringement proceedings was not necessary. However, it might be useful to point out that what the Ombudsman had proposed was not for the Commission to open infringement proceedings, but to resume its investigation of the case brought forward by the complainant and to examine issues that still needed to be clarified.

97. Nevertheless, the Ombudsman notes that the complainant was not satisfied with the Commission's response and put forward a number of arguments that relate to the following issues: (i) the Commission's consultation on a possible revision of Directive 2006/114, (ii) the judgments rendered by Czech courts based on Intercable's applications, and (iii) the documents submitted by the complainant in his letter of 27 November 2011. These arguments shall be addressed in more detail below.

98. The complainant implicitly criticised the Commission's consultation on Directive 2006/114 by referring to a questionnaire which the Czech authorities asked him to fill. In this regard, the Ombudsman would like to point out that the present allegation relates to the alleged wrongful closure of the complainant's infringement complaint. The public consultation on Directive 2006/114 does not directly concern that matter and it is therefore not necessary for the Ombudsman to look into this issue further or to forward to the Commission a copy of the questionnaire filled out by the complainant.

99. Furthermore, the complainant referred again to the judgments which the Czech courts rendered on the basis of Intercable's applications and argued that, in his view, these judgments were all issued after the Czech accession to the EU.  As a result, he stated, Directives 85/440 and 2006/114 were applicable. However, upon an examination of the elements submitted by the complainant on 27 November 2011, the Ombudsman takes the view that these submissions were not such as to lead him to revise his conclusions as set out in paragraphs 73 and 74 above. In fact, the cases put forward by the complainant that gave rise to judgments by Czech courts (i) still appear to have mostly pre-dated the accession of the Czech Republic to the EU, and (ii) were all brought by Intercable and were consequently not court cases brought about by Intercable's victims on the basis of the provisions transposing Directive 2006/114.

100. More importantly, in his letter of 27 November 2011, the complainant submitted copies of three letters to show that Intercable's victims were instructed to go to the Regional Trade Licensing Offices. After a careful examination, the Ombudsman established that one of these letters, a reply by an official at the Ministry of Trade, had already been submitted to him before. It clearly transpires from the said letter that the ministry in question informed the addressee that the latter's relationship with Intercable stemmed from a trade agreement falling under the Czech Code of Commerce and advised it to turn to courts to resolve its dispute. To that extent, the relevant letter does not contain any new elements that would lead the Ombudsman to change his initial assessment. The situation differs however with regard to the remaining two letters. These appear to emanate from Czech trade inspectorates in two different geographical locations and are both dated November 2007. In both of these letters, the victims, who were legal persons (one of them the complainant), were advised that the competent bodies to deal with their complaint were the Regional Trade Licensing Offices. In fact, their complaints were forwarded to Regional Trade Licensing Offices.

101. This could indeed suggest that, in addition to incorrect information disseminated by the Regional Trade Licensing Offices - a fact already established in the proposal for the friendly solution - a certain amount of confusion might have existed among public authorities in the Czech Republic, in general, as to the division of competences with regard to the enforcement of Directive 2006/114. Given that the Czech Republic had initially communicated to the Commission that both the courts and the Regional Trade Licensing Officer were competent for the enforcement of Directive 2006/11 in the Czech Republic, this sort of confusion would not be that surprising. Although a handful of letters such as those submitted by the complainant could not suffice to establish a consistent, continuous and ongoing systemic pattern of misinformation, the Ombudsman considers that their contents are such as to merit the Commission's attention and justify a further investigation.

102. As already mentioned, the proposal for a friendly solution suggested that the Commission could resume its investigations and ask for clarifications from the Czech authorities based on the findings set out in the said proposal. The Ombudsman notes that the Commission has decided to do so. In light of the foregoing, the Ombudsman considers that the Commission has, in principle, committed itself to taking adequate steps to implement his proposal for a friendly solution as formulated with respect to the complainant's first allegation.

103. However, the complainant argued that it was not only the Regional Trade Licensing Offices which provided Intercable's victims with incorrect information with regard to Directive 2006/114.  Other Czech authorities have also wrongly instructed the aforementioned victims to turn to the Regional Trade Licensing Offices. The Ombudsman notes that the complainant provided him with the relevant evidence in this respect only after the proposal for a friendly solution had been made. To this extent, the Ombudsman cannot consider the new evidence in assessing the Commission's compliance with the proposal for a friendly solution.

104. This notwithstanding, it cannot be excluded that the documents concerning the advice given to Intercable's victims by Czech authorities other than the Regional Trade Licensing Offices could be of relevance to the Commission, in particular in assessing the clarifications provided by the Czech authorities concerning the effective application of Directive 2006/114. Thus, what the Ombudsman can and will do, is to forward the relevant submissions to the Commission, so that it may take them into account together with the replies it might have received in the meantime from the Czech authorities. Moreover, in the framework of a further remark below, the Ombudsman will ask the Commission to inform him of the replies it has received from the Czech authorities to its initial request for clarifications and of the new elements provided by the complainant.

105. In this respect, it would be citizen-friendly, if the Commission were not only to inform the Ombudsman, but also the complainant, of (a) its assessment of the replies it has received from the Czech authorities to its request for clarifications and, (b) having taken into account the new elements provided by the complainant,  its conclusions thereupon.

106. Given that the Commission's reply did not appear to satisfy the complainant, the Ombudsman finds that the complaint cannot be regarded as settled. Nevertheless, on the basis of the Ombudsman's findings set out under points 94-105 above, he considers that there are no grounds for further inquiries into this allegation at present.

B. Allegation of having failed to observe the rules of the EU Pilot project

Arguments presented to the Ombudsman

107. In his complaint, the complainant put forward that the Commission informed him that he would receive a reply directly from the Czech authorities within a ten week period and that a copy would be sent to the Commission, which would then inform him of its conclusions on the matter. However, these EU Pilot protocols were completely disregarded. He was not provided with a direct reply from the Member State and the ten week deadline had not been respected by the Commission or by the Member State[13].

108. The Commission put forward that the EU Pilot was in a test phase as regards the 15 Member States which had volunteered to participate in it. It underlined its commitment to ensure that, once a Member State's reply was received and assessed, the complainant would be informed of its conclusions on the matter. With respect to the present case, the Commission informed the complainant on 8 June 2009 of its assessment of the first reply from the Czech authorities. The Commission also provided a copy of a letter dated 1 October 2009, by which it informed the complainant of its intention to close the complaint on the basis of the second reply of the Czech authorities. It also provided him with copies of subsequent correspondence. Moreover, on 18 November 2009, the Commission sent the complainant a copy of the Member State's replies to its requests for information.

109. The complainant considered the Commission's replies disdainful and in some parts misleading. He stressed that the Commission had informed him that the Member State concerned would reply directly to him, and send a copy of its reply to the Commission. According to the complainant, similar information had been published via an EU Bulletin, which he quoted[14]. The Commission's response appeared to suggest that the EU Pilot protocols had no validity whatsoever, when it so suited the Commission and individual participating Member States. He had received the replies of an unnamed Czech authority from the Commission only on 18 November 2009, that is, six weeks after the Commission's services informed him of their intention to propose closing his complaint. These replies contained distortions of facts and if they had been transmitted to him directly, the outcome of the Commission's inquiry would have been different.

110. The Ombudsman asked the Commission to comment on why its promise that the complainant would receive a reply directly from the Czech authorities was not kept.

111. The Commission replied that, in the initial phase, it was its policy to encourage the Member States to respond directly to correspondents who did not require confidentiality for their complaints. However, in practice, it emerged that many Member States preferred sending their replies exclusively to the Commission. This practice was within their discretion and the Commission could not force Member States to communicate directly with citizens. The announcement that citizens would be informed directly by the authorities of the relevant Member State was contained in a standardised letter sent to the complainant explaining the EU Pilot's purpose. As it emerged that many Member States prefer not to contact complainants directly, this sentence has in the meantime been removed from the letter. The Commission regretted that this sentence created expectations which were not fulfilled in the complainant's case.

112. The complainant pointed out that in his case the Commission had not complied with a number of public commitments made in the EU Bulletin that he referred to. In particular, it failed to observe the ten week deadline, a reply from the Member State was not sent directly to him, while the Commission also disregarded its announcement that if the complainant were dissatisfied with the response, it could consider commencing infringement proceedings in the standard way. The complainant noted that he was surprised that the Commission apparently intended to change the procedure. He considered that the rules ought to be maintained as they were or the Pilot project could be scrapped altogether. He added that satisfying an argument by means of an autonomous act of changing a procedure and then enacting these changes retroactively appeared to him to be an "unprincipled" misuse of power.

The Ombudsman's assessment leading to a proposal for a friendly solution

113. The Ombudsman took the view that it was good administrative practice to act in accordance with procedures and, in particular, with the procedures that were communicated to the parties concerned. It is possible that certain occurrences may objectively justify an adjustment of existing procedures. However, in that event, it would be necessary to inform the parties concerned of the adapted procedures.

114. The Ombudsman noted that neither the Commission nor the complainant provided him with a copy of the letter by which the Commission promised that the Czech Republic would reply directly to the complainant within a period of ten weeks. However, it was not disputed that the Commission had given such undertakings to the complainant. In fact, it admitted that, in the complainant's case, it had created expectations that were not met with regard to receiving a reply directly from the Member State. Therefore, the applicable procedure appeared to have indeed been that a reply would be sent directly by the Member State to the complainant within a period of ten weeks and that the Commission would be put in copy. However, it was evident that the complainant did not receive a direct reply from the Czech authorities. In fact, it emerged that the Commission only provided the complainant with copies of the Czech authorities' replies in November 2009. The complainant also argued that the ten week deadline for a reply had not been met. The Ombudsman noted that the Commission failed to comply with the ten week deadline. However, given that it emerged from his complaint that the complainant's main contention related to the alleged failure to comply with rules according to which he was to receive a response directly from the Czech authorities, the Ombudsman considered that it was not necessary for him further to pursue the issue of compliance with the aforesaid deadline.

115. The reason cited by the Commission for not having acted in accordance with the EU Pilot procedures communicated to the complainant was that many Member States preferred not to have direct exchanges with complainants.

116. The Ombudsman understood that the Commission was not in a position to force Member States to reply to complainants directly. To that extent, the reason put forward by the Commission for the change in the EU Pilot procedure appeared reasonable. However, there was nothing to suggest that the Commission took any steps to inform the complainant of the change in its procedures. The Commission thus seemed to have unilaterally changed the procedure without informing the complainant thereof. Although the Ombudsman did not consider that proceeding in such a manner constituted an abuse of power, the failure to inform the complainant nevertheless was not in conformity with principles of good administration. Therefore, the Ombudsman made a preliminary finding of an instance of maladministration.

117. When maladministration occurred, the Ombudsman expected institutions to take appropriate steps to remedy it, or where this was no longer possible, to acknowledge that it has occurred and to apologise for it. The Ombudsman noted that the Commission expressed its regret that the complainant's expectations were not met in the present case. However, in the Ombudsman's view, an expression of regret was inadequate in such circumstances; what is required in the event of maladministration was a full and frank apology. In light of the foregoing, the Ombudsman made the following proposal for a friendly solution:

“Taking into account the Ombudsman’s findings, the Commission could apologise to the complainant for its failure to inform him in good time of the change it had made to the rules relating to the EU Pilot project.”

The arguments presented to the Ombudsman after his friendly solution proposal

118. In its reply to the proposal for a friendly solution, the Commission stressed that it could not be held responsible for the conduct of a Member State. The EU Pilot procedures were based on mutual trust and principles of good cooperation between the Commission and the authorities of the Member States. In the framework of infringement investigations, the Commission was not in a position legally to oblige a Member State to reply directly to a citizen. What is more, at the time of the investigation in question, the arrangements for the EU Pilot were in a testing phase. Nevertheless, the Commission admitted that the original letter sent to the complainant, informing him of the transfer of the complaint to the EU Pilot project, could have raised expectations that the Commission could not meet. The Commission had taken action to remedy this situation and has changed the information it gives to complainants on the operation of the EU Pilot. The Commission did not explicitly rectify the information it had originally given to the complainant. However, on various occasions, the Commission did inform him of its assessment of the case, including the information received from the Czech authorities.

119. Given that the original letter sent to the complainant wrongly suggested that he would receive a reply from the Czech Republic directly and, given the fact that this information was not corrected by way of an explicit communication to the complainant, the Commission stated that it would send a letter to the complainant apologising for misinforming him on the operation of the EU Pilot, and for not explicitly correcting this information at the relevant time.

120. In his letter of 27 November 2011 (submitted prior to the Commission's reply on the proposal for a friendly solution), the complainant stated that, according to his understanding, the Commission was claiming that there were two sets of EU Pilot procedural rules, one for the Member States and another for the citizens. However, it was not clear to him how he could have expressed his concerns, when he was not provided with any direct response and had received a copy of the reply by the Czech authorities only six weeks after the case was closed.

121. In his observations on the Commission's reply, the complainant stated that the Commission focused on the fact that the Czech authorities had not responded directly to him, while ignoring the fact that the EU Pilot deadlines had been disregarded. He also stated that the Commission applied different standards in that respect to him and to the Member State.

The Ombudsman's assessment after his friendly solution proposal

122. In his proposal for a friendly solution, the Ombudsman suggested that the Commission should apologise to the complainant for its failure to inform him in good time of the change it had made to the rules relating to the EU Pilot project.

123. The Commission acknowledged that it had not specifically informed the complainant of the change to the procedure of the EU Pilot and expressed its intention to remedy that omission by a letter of apology.

124. The complainant did not take an explicit position as to whether he accepted the Commission's reaction. He rather expressed the view that the Commission had disregarded its own deadlines of the EU Pilot project and applied different standards in that respect towards the Member State and the complainant.

125. The Ombudsman considers that the Commission's reply, and in particular its intention to apologise to the complainant for its failure to inform him in good time of the change it had made to the rules relating to the EU Pilot project, would seem to constitute an adequate response to the Ombudsman's proposal as regards the second allegation. As regards the issues concerning the respect for deadlines, the Ombudsman notes that the Commission changed its procedure so as to allow for replies to citizens prepared within the context of the EU Pilot scheme should no longer be sent within a ten week period by the Member State. Furthermore, the Ombudsman trusts that, in the future, the Commission will reply to infringement complaints within the deadlines it indicates and, where this should not be possible, send a holding letter indicating a new deadline.

C. Conclusions

On the basis of his inquiry into this complaint, the Ombudsman closes it with the following conclusions:

On the basis of his findings, the Ombudsman considers that there are no grounds for further inquiries into the first allegation at present stage.

The Commission has taken adequate steps to implement the Ombudsman's proposal for a friendly solution concerning the complainant's second allegation.

The complainant and the Commission will be informed of this decision.

Further remark

The Ombudsman considers that it would be citizen-friendly, if the Commission were not only to inform him, but also the complainant, of (a) its assessment of the replies it has received from the Czech authorities to its request for clarifications and, (b) having taken into account the new elements provided by the complainant, its conclusions thereupon.

 

P. Nikiforos Diamandouros

Done in Strasbourg on 17 December 2012

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[1] OJ 1984 L 250, p. 17.

[2] Directive 2006/114/EC of the European Parliament and of the Council of 12 December 2006 concerning misleading and comparative advertising, OJ 2006 L 376, p. 21.

[3] Act No 513/1991 Coll.

[4] Act No 40/1995 Coll.

[5] "Article 44

Fundamental Provisions

(1) 'Unfair competition' means conduct in economic competition which conflicts with the accepted practices of competition and which may be detrimental to other competitors or customers. Unfair competition is prohibited.

(2) Unfair competition under subsection (1) means in particular the following:

(a)  misleading advertising... " (translated by the Czech authorities).

[6] "Article 45

Misleading Advertising

(1) Misleading advertising is the dissemination of information about [one's] own or someone else's enterprise, its products or services, capable of creating misleading perceptions as to the advantage of its own or someone else's enterprise in the economic competition at the expense of other competitors or consumers.

(2) 'Dissemination of information' is deemed to be communication through spoken or written word, press, pictures, photographs, radio or television broadcasts or other communications media.

(3) A fact which in itself is true but which, owing to the circumstances or context in which it is presented, may be misleading, is also considered to be misleading" (translated by the Czech authorities).

[7] "Article 53

Persons whose rights have been violated or jeopardized as a result of unfair competition can demand that the offender desists from such conduct and eliminate the improper state of affairs (resulting from it). They can also demand appropriate satisfaction, which may be rendered in money, compensation for damage (i.e. damages) and the surrender of unjust enrichment" (translated by the Czech authorities).

[8] "Article 41

Individuals and legal entities taking part in economic competition (hereinafter referred to as 'competitors'), even though they are not entrepreneurs, have the right to freely develop their competitive activity in order to achieve economic benefits and to associate for the pursuit of such activity. However, they shall observe the legally binding provisions on economic competition and may not abuse their participation in such economic competition" (translated by the Czech authorities).

[9] Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council, OJ 2005 L 149, p. 22.

[10] "Article 1

...

(2) Advertising means any statement, representation/presentation disseminated through communication media, aiming to the promotion of business activity, especially promotion of consumption or supply of goods; development, lease or sale of real estates, sale or use of obligations, support of promoting services, promotion of trade mark, unless stated otherwise" (translated by the Czech authorities).

[11] Regulation (EC) No 1049/2001 of the European Parliament and of the Council regarding public access to European Parliament, Council and Commission documents OJ L 145, p. 43.

[12] See Case C-302/04 Ynos v Varga [2006] ECR I-371.

[13] The complainant submitted an infringement complaint in June 2008 and the Commission informed him of its intentions concerning his case in March 2009. However, the complainant did not express an intention to complain about this issue.

[14] "Since April 2008 the Commission has been running a pilot scheme with 15 Member States who volunteered to be involved. This scheme is aimed at improving the efficiency of the infraction process by providing an early opportunity to investigate claims of breached legislation, prior to formal infraction proceedings. Member States are given 10 weeks in which to respond directly to the complainant (who agrees to forego the usual right to anonymity), with a copy of that response also sent to the Commission. If the complainant is dissatisfied with the response or the Commission considers there is a genuine case to answer, the Commission can then consider commencing infringement proceedings in the usual way."