News & Views

Finnish Supreme Court on Price Guarantees in Consumer Marketing − the "Average Consumer" Just Became Smarter

11 December 2017

Author: Ilona Tulokas

Traditionally, Finnish marketing legislation has been amongst the most consumer protection friendly in Europe. However, in recent years, the Finnish consumer authorities have been faced with the need to take the more liberal EU case law into account in the interpretation of marketing issues. The latest hot discussion concerning Finnish consumer protection law has been about price guarantees in marketing, which basically have been categorically forbidden in Finland.

Last week, the Finnish Supreme Court gave a decision concerning price guarantees (KKO 2017:83). The sports equipment chain XXL Sports & Outdoor Oy ("XXL") had in its marketing given consumers a certain kind of price guarantee, according to which XXL claimed that it aims to have the best prices on the market. XXL promised, under certain conditions, to refund the difference if a consumer finds an equivalent product at a cheaper price elsewhere. The court pondered on whether the marketing of XXL had lead consumers to believe that XXL actually had the cheapest prices on the market and whether XXL gave consumers a misleading perception of the possibility of finding the marketed products from other stores as well.

In November 2015, the Market Court ruled, contrary to the view of the Finnish Consumer Ombudsman, that XXL’s price guarantee did not mean that XXL claimed to have the cheapest prices and that a well-informed, reasonably observant and careful average consumer, as defined by the EU case law, would not understand XXL's marketing in this way. Therefore, the Market Court rejected the Consumer Ombudsman's requirement to forbid the use of the price guarantee in XXL’s marketing.

The Supreme Court in turn investigated the concept of an "average consumer" and how the content of XXL's marketing is understood by the average consumer. The Supreme Court upheld the Market Court's view, according to which an average consumer shall not be regarded to be as weak as traditionally viewed in Finland, and ruled that the "average consumer" interpretation of EU case law shall apply in Finland as well. Contrary to the Market Court, the Supreme Court viewed that XXL's marketing gave the average consumer the impression that XXL has in general the best prices on the market. Hence, if XXL cannot show that it has the best prices on the market, its marketing is misleading and contrary to the Consumer Protection Act, concluded the Supreme Court. Since the Market Court had not examined whether XXL actually had the best prices on the market, the case was returned to the Market Court for reassessment.

Even if the assessment of XXL's marketing will continue in the Market Court, there were at least two interesting takeaways from this Supreme Court ruling. First of all, the average Finnish consumer might have become a bit smarter as a result of the ruling. Secondly, the ruling established that it is still very difficult to give price guarantees legally in marketing in Finland.