law & legistlation

On December 1, 2008, an amendment to the Telecommunications Law came into effect. This amendment prohibits the sending of commercial advertising by e-mail, fax, SMS or automated dialing systems, without the recipient’s consent. The aim of the law is to put an end to the phenomenon of mass distribution of unwanted advertising, called “spam” (or “junk mail”) through telecommunications networks. In recent years this phenomenon has become a nuisance to both businesses and consumers throughout the world. It is also related to other issues, such as data security, illegal access to computers, distribution of viruses and breaches of privacy. It also has significant economic costs.

 

Covert advertising in children’s tapes – class action suit
The Israel Consumer Council recently applied to the District Court in Tel Aviv, to join as a class action plaintiff in a case filed against producers and marketers of children’s recordings. The Council argued that the recordings, which are directed at children, include advertising content that constitutes covert advertising.

The Council’s application was made possibe as a result of the Israel Consumer Council Law, adopted by the Knesset in August 2008, which grants the Consumer Council standing to submit class action suits in the name of the consumer public.

The subject of the suit was the covert inclusion of commercial advertising in recordings aimed principally at children, in a manner which allegedly, in the view of the Consumer Council, contravenes the law. According to the Consumer Protection Law, “any advertisement that may lead a reasonable person to believe that the contents thereof are not an advertisement” is deemed as “deceptive advertising, even if the content is not deceptive.”

Parents are not aware of this advertising, since the target audience is young children. The covert advertising may influence children and their consumption habits, without their parents’ being able to monitor them, since they are not aware of the promotional nature of the recordings.

Silicon in Milk
The Israel Consumer Council welcomes the decision of the District Court in Tel Aviv, in what has become known as the “Silicon Case”, in which Tnuva was sued for having added silicon to UHT (long life) milk.

The decision is a major victory for consumers, and strengthens the consumer’s constitutional right to “autonomy of will,” meaning the right of the consumer to receive complete, trustworthy, and relevant information regarding the products that he purchases. The penalties awarded by the court reflect the consumer’s constitutional right to decide for himself what to purchase, what to put in his mouth, and what to avoid.

The class action proceedings, in which the Consumer Council took part, emphasized the importance of class action litigation as a tool to protect the consumer public in Israel. By comparison, under the criminal charges faced by Tnuva for the same addition of silicon to the milk, the company was fined approximately 28,000 shekels, which went to the public purse, while the class action suit led to Tnuva being “fined” 55 million shekels, which will go to the public.

CEO of the Consumer Council, Adv. Ehud Peleg, notes that one would have expected Tnuva to have taken responsibility for its actions, that which would have shortened the process significantly. Peleg also said that the court’s unequivocal ruling indicates that those who choose to hide information from consumers will be held responsible for their failures, and will ultimately compensate consumers for the harm done to them.

Petition to the High Court against the Insurance Companies
The Israel Consumer Council, the Israel Loss Adjusters Association, and the Israel Garage Association submitted a High Court petition against the insurance companies (members of the Association of Life Insurance Companies) and the Supervisor of Insurance in the Ministry of Finance, asking for a conditional order instructing the Supervisor to amend the Loss Adjusters Arrangement so as to create a balance between the consumer considerations of the insured public and those of the insurance companies.

In the petition, the High Court was asked to instruct the Supervisor of Insurance to cancel the insurance companies’ list of external loss adjusters, and replace it with a list that includes all licensed loss adjusters in Israel. The petitioners argued that this would prevent an inherent conflict of interests, created as a result of the tension between the objectivity to which an external loss adjuster is obligated, and the current situation in which the insurance companies control the lists of loss adjusters, and effectively their livelihoods as well. Cancellation of the lists, the petitioners argued, would allow each insured person to choose the loss adjuster he wishes, without interference from the insurers. This would protect his interests as a consumer, while preserving the objectivity of the loss adjuster and of his appraisal.

A new order* by the Ministry of Industry, Trade and Labor will require producers to mark the maximum price of food products subject to price control.
The initiative is a joint effort of the Israel Consumer Council and MK Orit Noked, Deputy Minister of Industry, Trade and Labor, who is responsible for consumer issues.
According to the order, the producer will be required to mark food items subject to price control with the text “The maximum legal price for this product – X shekels,” with the marking to be printed clearly and prominently on the packaging.
If the food product is not sold packaged, the producer will have to provide the retailer with a sign carrying the text, and will have to ensure that the sign is displayed in an appropriate location.
CEO of the Israel Consumer Council, Adv. Ehud Peleg, said, “The consumer is entitled to know about the range of basic, essential products that are available to him at prices that are officially controlled, and to identify them easily.”

 

* The order is subject to the approval of the Knesset’s Economics Committee.