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Reply by State Secretary Janez Lenarčič on behalf of the EU Council to Oral Question Regarding Misleading 'Directory Companies'

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Dear Members of the European Parliament,

I would like to thank the Honourable Member of the Parliament, Ms McCarthy, and the Committee on the Internal Market and Consumer Protection for the question regarding the rogue 'directory companies'.In my answer, I will proceed according to the sets of sub-questions as formulated by the Honourable Member.

As regards the first sub-question – what action have the Member States taken to close down the rogue 'directory companies' – allow me to inform you that the Council has not received any proposal from the Member States for resolving this issue yet.Likewise, the Council has not been informed about any action taken by the Member States to close down the rogue 'directory companies' or about their intentions regarding the exchange of information about such companies between their relevant authorities.

As far as your enquiry about the steps undertaken to close loopholes created in the transposition of the Misleading Advertising Directive (No 84/450/EC) is concerned, I have to say, on behalf of the Council, that the implementation of this Directive is within the remit of the European Commission as stipulated by Article 211 of the Treaty establishing the European Community.Therefore, this question should be referred to the Commission.

In the context of the first two questions, I would like to add that the Council has not been informed about any measures put in place by the Member States to warn the business community about the threat of fake 'directory companies'.  

In relation to the last sub-question concerning the extension of the Directive on Unfair Commercial Practices (No 2005/29/EC) I can only agree with you that the Directive does not cover cases described by the IMCO Committee, i.e. fraudulent business practices towards SMEs, because its scope is limited to business-to-consumer relations.As regards the possible extension of the UCP Directive to business-to-business transactions, I can only say that the Council will take a position on this issue when he receives an adequate legislative proposal.   However, a political debate on the question whether the Directive should include business-to-business transactions was conducted during its adoption procedure in the Council.Not only the Commission, also the majority of Member States were against incorporation of the unfair commercial practices which directly harm consumers into the Directive.Regardless of the mentioned facts – I wish to stress this particularly – the businesses have not remained without protection.The protection of traders has namely been regulated by the Directive concerning Misleading and Comparative Advertising (No 2006/114/EC).

We share the opinion of the Committee that unfair and fraudulent practices are unacceptable in any economic sector and that measures should be taken against them.Member States deal with unfair commercial practices in accordance with their national legislations.Thus, the European City Guide mentioned in your question was a law case brought before the court in at least one Member State.I would like to thank you again for the question you have raised.I am looking forward to hearing your discussion.

Thank you very much.


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Date: 20.05.2008