OMNITEL UAB FINED TO LTL 30 000 FOR MISLEADING ADVERTISING

The advertising statements published by Omnitel UAB in the press, on TV, outdoor billboards, the internet website www.omnitel.lt, as well as sale rooms of Omnitel UAB and its partners specifying the exact price for telephone sets applicable upon signing with Omnitel UAB a service agreement were recognised by the Competition Council to constitute misleading advertising.  The company was obligated by the Competition Council to discontinue the use of the misleading statements where such actions were still continued.  For the infringement of the requirements of Article 5 of the Law on Advertising, the use of misleading advertising Omnitel UAB was subjected to a fine of LTL 30,000.

The investigation by the Competition Council was initiated on the basis of a complaint lodged by a consumer. The Competition Council established that the advertising statements by Omnitel UAB offering to acquire telephone sets for the exact price specified in the ads subject to conclusion of a service agreement with Omnitel UAB was intended to encourage consumers to conclude service agreements with the company and purchase a telephone set for the specific price indicated in the advertising statements. However, where customers wishing to acquire a telephone set for the indicated price called or arrived at a customer service store, they would be informed that in order to conclude a service agreement and acquire a telephone set they would be additionally charged a monthly installation fee. The advertising statements were incomplete as the additional terms were not indicated, therefore a consumer, having familiarised himself with the advertising statement with the specific price for a telephone set could rightfully assume that he will be able to acquire a set for the price indicated in the statement without incurring any additional expense.

Although, as claimed by Omnitel UAB, consumers were informed of the additional terms in the Internet website of the company, or upon arriving at a store or by telephone (a charged call), the very fact that consumers had to make additional inquiries regarding the public advertising statements shows that the economic behaviour of the customers was affected. Although the company indicated that the installation fee was charged not in all cases, and that the amount of the fee was dependent upon the terms of the promotion sale selected by a customer, this does not eliminate the fact that in other cases the installation fee was imposed, although no information of the fee had been provided in the advertising statements.

It is highly probable that provided the customer was made aware of complete information, i.e., that in order to conclude a service agreement with Omnitel UAB and acquire a telephone set for the price indicated in the advertising statement a customer would incur an additional monthly installation fee, an advertising user would have opted for another mobile telephone service provider, or a telephone set.

Having assessed the findings of the investigation the Competition Council concluded that by publishing an incomplete information on the services provided by the company Omnitel UAB infringed the requirements of the Law on Advertising.  When imposing the fine the Competition Council considered as alleviating circumstance the company's acknowledgment of its infringement.  However, the competition authority also considered as an aggravating circumstance where the company impeded the investigation and refused to submit to the Competition Council the information it requested.