EUROPE, MIDDLE EAST AND AFRICA: AUSTRIA

STRICT BAN ON PREMIUMS VIOLATES EUROPEAN LAW
Author: Stefan Kofler, Greiter Pegger Kofler & Partners

The Austrian Act Against Unfair Competition provided for a strict ban on premiums. Under Austrian Law it was generally forbidden to offer or grant premiums to consumers in connection with the distribution of goods and services. Also offering the possibility to participate in sweepstakes or in other games that were qualified as a premium, if this was somehow connected with the distribution of goods and services.

With a recent decision the European Court of Justice decided that this strict ban on premiums is in contradictory to the EU-Directive on Unfair Commercial Practices. The Austrian strict ban on premiums, therefore, is not applicable. Austrian courts will have to examine in any specific case, whether or not the offering or granting of a premium to consumers is an unfair commercial practice in the sense of the EU-Directive on Unfair Commercial Practices.