§3.4 Use of the claim ‘free’ – No 20

Point No 20 of Annex I ‘Describing a product as ‘gratis’, ‘free’, ‘without charge’ or similar if the consumer has to pay anything other than the unavoidable cost of responding to the commercial practice and collecting or paying for delivery of the item.’ This ban is based on the idea that consumers expect a ‘free’ claim to be exactly that, meaning they receive something without giving money in exchange. This means that an offer can be described as free only if consumers pay no more than: — the minimum, unavoidable cost of responding to the commercial practice (e.g. the current public postage rates, the cost of telephoning up to and including the standard national rate or the minimum, unavoidable cost of sending a text message); — the true/real cost of freight or delivery; — the cost, including incidental expenses, of any travel involved if consumers collect the offer. As a consequence, traders should not charge for packaging, handling or administration of a product marketed as free. When traders make ‘free’ offers, they should also state clearly in all material what the consumer’s liability is for any unavoidable costs, as referred to above. It is harder to determine whether the commercial practice is unfair when the claim ‘free’ is used in combined offers, which are commercial offers involving more than one product or service. Combined offers are usually conditional purchase promotions or package offers. The following are some principles which national authorities could take into account when assessing combined offers. They are already largely reflected in some advertising regulatory codes: — Traders must not try to recover their costs by reducing the quality or composition or by inflating the price of any product that must be bought as a pre-condition for obtaining a separate, free item. — Traders should not describe an individual element of a package as ‘free’ if the cost of that element is included in the package price. For example: — In a combined offer for a mobile phone with a subscription, a telecom operator marketed the price as ‘0 kr’. However, once consumers accepted the offer, the monthly instalments for the subscription increased. A national court considered that this fell under point No 20 in Annex I to the UCPD (256). — In the case of an offer for a ‘free credit’, a consumer authority found that it falls under point No 20 in Annex I to the UCPD if the consumer may have to sign a credit insurance contract with additional costs to get the loan granted. The ban does not prevent traders from using the claim ‘free’ in conditional purchase promotions where customers are required to buy other items (i.e. ‘buy one get one free’-type offers), provided that: — it is made clear to consumers that they have to pay all costs; — the quality or composition of the paid-for items has not been reduced; and — the price of the paid-for items has not been inflated to recover the cost of supplying the free item. For example: A trader launched a promotional campaign on the internet and in newspapers offering two free car tyres when buying two new ones. In reality, the price stated for the two tyres in the campaign was twice as high as the previously applied retail price. A national authority ruled that this conditional purchase promotion was prohibited under point No 20 of Annex I (257). The key distinguishing feature of a conditional purchase promotion is that the item described as ‘free’ must be genuinely separate from and additional to the item(s) that the customer is required to pay for. Hence, in such conditional purchase promotions, traders must be able to show: — that the free item is genuinely additional to the item(s) usually sold for that price or that the free item is genuinely separable from the paid-for item(s); — that they only supply the ‘free’ item with the paid-for item(s) if the consumer complies with the terms of the promotion; and — that consumers are aware of the stand-alone price of the item(s) they are paying for and that that price remains the same with or without the free item. For example: — A ‘free wall-chart when you buy Thursday’s paper’ claim is legitimate if the paper is sold without a wall-chart on other days for the same price. — A claim of ‘free travel insurance for customers who book their holiday online’ is legitimate if customers who book the same journey by telephone are offered the same price but not offered free insurance. — A claim that consumers can get a ‘free subscription to a streaming service for a certain number of months’ together with their purchase of a good, such as a television, is legitimate if the consumer is not required to pay for that subscription and the price of the good is not increased due to the added subscription. Point 20 of Annex I prohibits the use of the claim ‘free’ to describe an individual element of a package offer if the cost of that element is included in the package price. A ‘package offer’ here means a pre-arranged combination of features offered for a single, inclusive price where customers cannot exercise genuine choice on how many elements of the package they receive for that price. For example: If a car is advertised with leather seats, air conditioning and a multi-media system for a standard price of EUR 10 000, that combination of features is a package. The consumer pays one all-inclusive price for the car as advertised. If any of the advertised features were to be removed, the quality and composition of the car the customer is paying EUR 10 000 for would be diminished. In order to claim that the multi-media system is free and that the EUR 10 000 relates to the other elements, the trader needs to demonstrate either (a) that the requirements of a conditional purchase promotion are satisfied, or (b) that the multi-media system was a new additional feature and that the price of the car had not increased. However, traders sometimes add new elements to existing packages without increasing the overall price of the package or reducing the quality or composition of the elements included. In those circumstances, consumers are likely to regard the element that has been added to the package as additional to the established package for a period after its introduction. However if the price of a package increases or its quality or composition is reduced after a new element is added, the new element may not be described as ‘free’. One-off up-front costs incurred, for example, to buy or install equipment, do not negate claims that products or services supplied without subscription are ‘free’ within the meaning of No 20 of Annex I. For example, digital free-to-air television channels are available only to consumers who have the necessary digital receiving equipment; similarly, call packages are available only to consumers who have a telephone line. Likewise, connection fees payable to a third party to activate an internet service will not negate claims that the internet service is free, provided the connection fee has not been inflated to recover the cost of supplying the free internet service. Traders must always adequately inform consumers about the requirement for any of such up-front payments. Products presented as ‘free’ are especially common in the online sector. However, many such services collect personal data of users such as their identity and email address. Importantly, the UCPD covers all commercial practices concerning ‘free’ products and does not require payment with money as a condition for its application. Data-driven practices involve an interplay between EU data protection legislation and the UCPD. There is an increasing awareness of the economic value of information related to consumers’ preferences, personal data and other user-generated content. The marketing of such products as ‘free’ without adequately explaining to consumers how their preferences, personal data and user-generated content are going to be used could be considered a misleading practice in addition to possible breaches of data protection legislation. In addition, Directive (EU) 2019/770 (258) applies to contracts where digital content or digital services are provided to consumers and the consumers provide or undertake to provide personal data. The Digital Content Directive applies regardless of whether personal data is provided to the trader at the time of concluding a contract or at a later time, for example where the consumer gives consent for personal data processing. Following the amendments introduced by Directive (EU) 2019/2161, also the Consumer Rights Directive applies (as from 28 May 2022) to contracts for the supply of digital services and content where the consumers provide or undertake to provide personal data. For example: — A consumer authority fined an online platform for misleading information on the basis of Article 6 UCPD for its claim that its service is ‘for free’ or ‘without charge’, because the company derives its revenues from analysing users’ private data and providing the information to third party traders (259). — A consumer authority fined an online platform for misleading users (under Articles 6 and 7 UCPD) into registering and not immediately and adequately informing them during the creation of the account that the data provided would be used for commercial purposes and, more generally, of the remunerative purposes underlying the service, emphasising instead the free of charge nature of the service (260).

← 3.3 · All articles · 3.5 →

Source: EUR-Lex (Cellar) · retrieved 2026-09-07