General framework of prohibited commercial and advertising practices

Illegal commercial practices to avoid

Whether you are a professional or private supplier, it is important to be aware of the rules governing advertising, offers and sales in Switzerland, which are as follows: 

1. Every sale is preceded by considerable marketing and advertising efforts. 
2. The law protects buyers, especially consumers, against unfair commercial practices. 
3. Breach of trade rules results not only in loss of reputation or customers, but also in damages and fines. 
4. When it comes to e-commerce, Swiss law is more restrictive than we are used to in some countries, and the sales and advertising practices of the e-commerce giants are often illegal, so we must not blindly follow their “success model”. 
5. Some unfair clauses in the general terms and conditions are totally null and void, and do you more damage and confusion than protection. 
6. The law against unfair competition also protects the free and fair market, and gives injured competitors the right to compensation. 

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Main legal rules 

In what follows, we will outline the main legal rules to be aware of in terms of unfair commercial practices to be avoided in Switzerland. Here are the most important points to remember: 

Unfair competition 

To talk about unfair competition, the following three cumulative conditions must be met: 

• ault: an intentional act intended to harm a competitor, or an unintentional act (negligence). 
• Damage: the existence of certain damage suffered by the competitor. Presumed or alleged damage is not sufficient, and ricochet damage is not taken into account either. 
• The causality link: the competitor’s damage must be the result of the fault, i.e. a necessary causal link (without the fault there would be no damage) and adequate (according to general life experience, such a fault is reasonably likely to cause such damage). 

Common unfair practices that harm competitors 

The most common unfair practices that harm competitors are as follows: 

• Imitation: using the same distinctive signs as a competitor. This technique is unfair when it creates confusion between companies in the mind of the consumer. It therefore concerns the essential elements that identify a company (company name, acronym, logo are good examples). It does not matter whether a competitor’s trademark is protected. 
• Parasitism: this more subtle commercial technique involves taking advantage of a competitor’s efforts without participating in them. It is a global behaviour and not an isolated or specific act. For example, a competitor takes advantage of the reputation of a product already known to the public and manufactured by a competitor. 
• Denigration: consists of openly and publicly criticising a competitor’s products. The criticism may also relate to its work or methods. However, the criticism must clearly identify the target company. The public nature of the criticism is essential: without it, denigration cannot be characterised. 
• Disorganisation: this form of unfair competition can take several forms. In the majority of cases, it involves the mass and abusive poaching of employees. It can also involve revealing company secrets (manufacturing secrets, organisational secrets, etc.). 

Common unfair practices that harm consumers 

The most common unfair practices that harm consumers are as follows: 

• Inaccurate or misleading price indications or comparisons. 
• Spam: it is forbidden to send or forward mass advertising messages by e-mail, SMS or any other telecommunications channel without the consent of the recipients (opt-in principle). On the other hand, if you have given your address to a seller when making a purchase, the seller may send you advertising for similar products. The name of the recipient must be correctly indicated and the recipient must have the option of refusing the mail (opt-out). 
• Opaque e-commerce: a site that is attractive to the eye does not necessarily mean that the seller is serious. All too often, information about the company or its contact details is missing, making it impossible, for example, to tell whether it is based abroad. This can increase the risk of mistakes being made when placing an order or over-clicking. 
• Non-respect of the asterisk: This is one of the recurring complaints received by consumer protection associations. These include commercial calls to the home, which some people experience as harassment. From now on, all companies must strictly comply with the statement in the directory indicating that a customer does not wish to receive advertising messages. What’s more, their details may not be passed on for direct marketing purposes. 
• Promises of a win linked to a purchase: these are considered unfair if the lucky prospect depends on a call to a premium rate number, the payment of a fee, or the purchase of an item or service. Furthermore, the promise of a prize must not be linked to participation in an advertising trip, a commercial event or another prize draw. 

Recent reform on unwanted calls: From 2021, operators must filter unwanted calls. Legislation has also been strengthened to penalise advertising calls on mobile phones, spoofing and brokers working with call-centres that do not comply with the law. 

Recommendations 

To avoid the risks associated with unfair commercial and advertising practices, here are a few recommendations: 

• Take care when using direct mail or telemarketing services, as you may be held liable for their failure to comply with unfair competition law. 
• Don’t send mass spam to people you don’t know. You can still send advertising to your former customers, but only if you offer them the quick and easy option of refusing it, in which case respect their choice. 
• Be careful when using comparative marketing, both to avoid concealing the facts and to avoid denigrating other competing companies. 
• Even in the absence of a protected trademark or copyright, be careful not to copy and paste your competitors’ work product without another. Even if this content is not protected as intellectual property, its misuse is illegal. 
• When using brokers or sales agents other than your employees, make sure you delimit the liability they assume if they violate unfair competition rules by offering your products.

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