Photo by Tomasz Sienicki
(LUXEMBOURG) – The European Court of Justice on Wednesday ruled against inaccurate and misleading advertising practices which compare prices between shops while using different formats and sizes.
Such advertising, the Court said, is also liable to be misleading if the consumer is not informed clearly in the advertising itself of the difference in format and size of the shops in respect of which the comparison is being made.
In December 2012, French retail giant Carrefour launched a television advertising campaign entitled ‘garantie prix le plus bas Carrefour’ (Carrefour lowest price guarantee). This compared prices of 500 leading brand products charged in Carrefour shops and in competitors’ shops (including the rival Intermarché shops), and offered to reimburse consumers twice the price difference if they found cheaper prices elsewhere. From the second TV ad onwards, all Intermarché shops selected for comparison were supermarkets, while all of the Carrefour shops were hypermarkets. This information appeared only in smaller letters beneath the name Intermarché.
Strategy and commercial policy company ITM, for the Intermarché retail chain, sought an injunction before the French courts to stop that advertising and damages in respect of misleading advertising.
The Paris Court of Appeal then asked the Court of Justice whether such advertising is lawful in the light of the directive on misleading and comparative advertising.
It also asked whether the fact that the shops concerned are of different sizes or formats constitutes material information which, in accordance with Directive 2005/29 concerning unfair commercial practices, must necessarily be brought to the knowledge of the consumer so that the latter can take a commercial decision in full knowledge of the facts.
The Court in its judgment points out, first of all, that under Directive 2006/114 all comparative advertising must compare prices objectively and must not be misleading.
However, where advertiser and competitors belong to retail chains with shops that are of different sizes and formats, and where the comparison does not relate to shops of the same size or format, objectivity is distorted if the advertising does not mention that difference: indeed, the prices of everyday consumer goods are likely to vary in relation to the format or size of the shop, with the result that an asymmetric comparison may have the effect of artificially creating or increasing the difference between the advertiser’s prices and the prices of competitors, depending on the selection of the shops used in the comparison.
The Court also notes that comparative advertising which omits or hides material information which the average consumer requires, according to the context, in order to take an informed transactional decision or which provides that information in an unclear, unintelligible, ambiguous or untimely manner, and which may consequently cause the average consumer to take a transactional decision that he would not otherwise have taken, is misleading.
Advertising such as that at issue in the present case is liable to influence the economic behaviour of the consumer by causing him to take a decision in the mistaken belief that he will benefit from the price differences claimed in the advertising when buying the products concerned in any of the shops in the advertiser’s retail chain rather than in shops belonging to the competing retail chains.
Nevertheless, the Court declares that such advertising will be misleading only if the consumer is not informed of the fact that the comparison is being made between the prices charged in shops having larger sizes or formats in the retail chain of the advertiser and the prices displayed in shops having smaller sizes or formats belonging to competing retail chains. In that regard, the Court points out that that information not only must be provided clearly but must also be contained in the advertisement itself. It is for the Cour d’appel de Paris (Court of Appeal, Paris) to determine whether that condition is met in the present case.
