1. 1 Unfair Trade Practices National Training Workshop on Competition Policy and Law Gaborone, Botswana: 25 -27 July 2007 Presenter: John Preston

2. 2 What are ‘Unfair Trade Practices’? Cause economic injury to others, including through practices designed to confuse buyers No universal definition ‘Lay’ views vary between cultures and individuals, reflecting philosophies and ethics Legal definitions specific to countries, reflecting local views of appropriate moral conduct in business (no free gifts in Germany!) Some UTPs covered by specific legislation Competition promotes fairness in markets: prices reflect costs; best deals rewarded

3. 3 Some Types of Unfair Trade Practices Infringement of intellectual property rights (protection of trade marks, brand names, patents, indications of origin) Contracts in restraint of trade State aid – an important issue in the EC Comparative advertising – practice varies False or misleading advertising that harms consumers

4. 4 Some Definitions of Unfair Practices World Bank/OECD Model Law (1998) Prohibits unfair competition including false or misleading information harming another firm, or misleading consumers Commonwealth Model Competition Law (2005) prohibits unfair practices in consumer transactions involving false or misleading claims New Zealand Fair Trading Act (1986) prohibits misleading or deceptive claims. Details of scope in slides 5 to 9 worth considering.

5. 5 Consumer Protection (1) Availability of advertised goods & services - no ‘bait advertising’ Claims on qualifications and skills Claims on success Comparative advertising Condition: new or used? Claims on quality Employment advertisements

6. 6 Consumer Protection (2) ‘Fine print’ conditions Origin of goods Pictorial representations must not mislead Sponsorships and endorsements Words with special meanings

7. 7 False Claims on Price (1) Comparative pricing ‘Duty free’ ‘Free’ goods or services Additional taxes Hidden or additional costs Price displays

8. 8 False claims on price (2) Price ranges Quotes and estimates Sales and promotions Special offers

9. 9 Unfair sales techniques (1) Debt collecting methods Delivery terms Inertia selling ‘Interest free’ claims Harassment and coercion

10. 10 Unfair sales techniques (2) Offering gifts and prizes Deceptive packaging False billing Pyramid selling Guarantees and warranties

11. 11 Conclusions Competition in markets promotes fairness Need to reflect national attitudes in legislation and enforcement Give importance to consumer protection (helps small businesses too)