ROYAL AMBASSADOR LTD
Proceedings were started against Royal Ambassador Ltd because of consumer fraud. In its direct mails the mail order service suggested that in the case of ordering goods its customers would obtain valuable prizes. The party involved applied aggressive methods taking advantage of the consumers` passion of gambling and it concealed facts that make clear that gaining prizes is preceded by drawing. The rules of participation were indicated in very small letters on the inner part of the envelope. In the expert`s opinion the "wonderful" gifts promised (two diamonds and a crimson garnet) were of small value.
The party involved referred to the circumstance that it undertook for its products a taking back guarantee (usually for 15 days), in similar cases the court made only two final judgments, in one case the court reduced the fine imposed by the competition authority, in the other case it repealed the reasoning of the decision of the competition authority nearly completely. In the view of the party involved the proportion of the complaints is below 1%, in such a way proceedings are not of public interest.
The method applied by the party involved in the course of actions "Hifi Video Comfort", "Birthday", "Prize category" and "Win a fortune" were qualified by the Competition Council as an unlawful one, these actions were prohibited and the Competition Council imposed a fine amounting to HUF 20 million (cca ECU 94. 700) on the party involved.
The Competition Council ordered the immediate enforcement of the decision.
The decision points out: the party involved has committed the infringement for 5 years, since its establishment. Each consumer is vitally interested in the reliable work of mail order companies. Deception of consumers shall be presumed, in particular, if a false impression of especially advantageous purchase is created. (Section 2/d. Article 8 of the Act No. LVII of 1996 on the Prohibition of Unfair and Restrictive Market Practices).
Assessing all circumstances of the case the Competition Council imposed a considerable fine on Royal Ambassador Ltd. and in the interest of consumers it ordered the immediate enforcement of the decision since court proceedings may drag for years.
May 20, 1997. Budapest
dr. Lénárd Réka sk. előadó
dr. Bodócsi András sk.
Fógel Jánosné dr. sk.