The sale of SIM cards on which services that can incur fees have been pre-loaded and pre-activated constitutes an aggressive unfair commercial practice when the consumers are not informed of that fact in advance

13 september 2018

On September 13, 2018, the Court of Justice of the European Union issued its judgment in Joined Cases C-54/17 Autorità Garante della Concorrenza e del Mercato (‘AGCM’) v Wind Tre SpA and C-55/17, AGCM v Vodafone Italia Spa and affirmed that the sale of SIM cards on which services that can incur fees have been pre-loaded and pre-activated constitutes an aggressive unfair commercial practice when the consumers are not informed of that fact in advance. Such conduct constitutes, in particular, ‘inertia selling’, which may be penalised by a national authority other than the authority provided for by EU law on electronic communications.

According to the Court, for a service to be solicited, the consumer must have made a free choice. When the consumer has been neither informed of the cost of the services in question nor even of the fact that they were pre-loaded and pre-activated on the SIM card that he bought (which is for the national court to verify), it cannot be considered that he freely chose the provision of those services. In that regard, it is irrelevant that the use of the services in question required, in certain cases, conscious action on the part of the consumer. Similarly, it is irrelevant that the consumer could have had the services deactivated or deactivated them himself, since he had not been informed of their existence.

The Court noted that, although it is for the national court to establish the typical reaction of the average consumer, it is not clear that the average buyer of a SIM card might be aware of the fact that it contains pre-loaded and pre-activated services which can incur additional fees or of the fact that applications or the device itself may connect to the internet without his knowing, or that he is sufficiently technically capable of deactivating those services or those automatic connections on his device.

The Court concluded from this that, subject to verifications by the national court, conduct such as that of which the telecommunications operators are accused constitutes ‘inertia selling’ and, therefore, according to the Unfair Commercial Practices Directive, a practice — and more precisely an aggressive practice — that is in all circumstances unfair.

In addition, the Court stated that there is no conflict between the Unfair Commercial Practices Directive and the Universal Service Directive as regards the rights of end-users. The latter directive requires the provider of services to include certain information in the contract while the former directive contains rules regulating specific aspects of unfair commercial practices, such as ‘inertia selling’.

As a result, the Court declared that EU law does not preclude national legislation under which ‘inertia selling’ must be assessed in the light of the provisions of the Unfair Commercial Practices Directive with the result that, according to that legislation, the ARN, within the meaning of the Framework Directive, is not competent to penalise such conduct.

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