Comparative Advertising in the Food Industry: Recent Case-Law

Gregory Sorreaux's picture
Published: 25/04/17 - Country: Belgium

Two recent decisions of the Court of Justice and the Belgian Court of Cassation have recently completed the existing case law on comparative advertising in the food industry.

In the first case, decided by a ruling of the Court of Justice of February 8, 2017, a preliminary ruling was brought before the Court of Justice by the Court of Appeal of Paris in a dispute between Intermarché and Carrefour concerning a television advertising campaign in which Carrefour compared the prices of products of major brands marketed by them with those marketed by their major competitors, including Intermarché. The Court of Appeal of Paris asked the Court of Justice whether such advertising, comparing the prices of products sold in stores of different sizes or formats, is permissible under the Directive on misleading advertising and comparative advertising (Directive 2006 / 114 / EC) and whether this information concerning the difference in size and format of the stores constituted substantive information under Directive 2005/29 / EC.

The Court highlights, first of all, that the lawfulness of comparative advertising must be assessed solely taking into account the criteria laid down in Directive 2006/114 / EC and that Article 4 does not require that the stores in which the products are sold must be of identical sizes. However, the Court notes that, in order to be lawful, a comparison must be objective and cannot be misleading.

It points out, first, that the difference in size or format of the stores may distort objectivity considering the fact that the prices charged may vary according to the size of the store and thus it might artificially create a gap between the prices of the advertiser and those of the competitors according to the selection of the stores compared.

The Court also reminds that, in order to be lawful, an advertisement cannot mislead the consumers to whom it is addressed neither it can influence their economic behavior. It states that any omission or concealment of substantive information that the average consumer needs to make a commercial decision makes that advertising misleading. According to the Court of Justice, advertising such as the one in question is likely to have an influence on the economic behavior of the consumer by leading the consumer to make a decision in the mistaken belief that he will benefit from the price differences advertised if he/she purchases the concerned products from any of the stores of the advertised retailer rather than buying them from the competing retailer stores. The situation would be different if the consumer is informed that the advertisement in question compares the prices charged in stores of different sizes and formats, provided that such information is not provided in an unclear, unintelligible, ambiguous or mismatched manner, taking into account the limits of the media used since it could impose some space and time limits.

Finally, the Court concludes that an advertisement comparing "the prices of products sold in stores of different sizes and different formats, where those stores are part of different retailers each with a range of stores of different sizes and formats and the advertiser compares the prices charged in their own stores of larger sizes or formats with those charged in stores of smaller sizes or formats of their competitors, unless the consumers are informed in a clear manner and through the advertisement itself is liable to be unlawful".

Behind the second case, resolved by a judgment of the Belgian Court of Cassation of September 15, 2016, are the competing companies in the large-scale distribution sector Cora and Carrefour. Following an advertisement of a Cora store in which the store claimed to offer the "lowest guaranteed price in the region" and asked the question "Who can top that? ", a nearby Carrefour store made a comparison of prices and at the end of it they replied: "Carrefour, of course!". During this advertising campaign, Carrefour sent letters to their customers, including a comparison of prices between Cora's products and competing products from Carrefour. Three material errors were made during this campaign, for which Cora brought an action for injunction, which was declared admissible but unfounded by the Commercial Court of Brussels. Cora appealed this decision to the Brussels Court of Appeal, which reformed the judgment.

Carrefour appealed against that decision on the basis of a single plea relating to the fact that it had ordered the cessation of advertising without taking into account the actual impact of these material errors on the economic behavior of the consumer to whom the advertisement was addressed. According to Carrefour, that condition was certainly not required by the condition of objectivity of comparative advertising transposed into Belgian law, since the conditions laid down in that article must be interpreted in the most favorable way to the advertiser.

The Court dismissed the appeal. According to the Court, two types of requirements relating to the objectivity of comparative advertising must be taken into account in assessing its lawfulness. First, the cumulative criteria of the essential, relevant, verifiable and representative nature of the characteristics of a product must help to ensure the objectivity of the comparison, but also the characteristics which comply with the four criteria mentioned above are to be compared objectively.

The Court concludes by deciding that "if the compared characteristics are not essential, relevant, verifiable and representative or if the comparison is not objective, advertising is unlawful even it does not affect the economic behavior of the persons to whom it is addressed, which constitutes a distinct condition".

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Gregory Sorreaux's picture

Grégory provides strategic, business-oriented advice and has litigation skills under IP law, food law, market practices, product regulation and commercial disputes.

Grégory regularly advises and represents clients before national and EU courts in these matters. This practice includes administrative negotiations and procedures. He has gained experience in advising clients in a range of business sectors including food, pharma, cosmetics, fast-moving consumer goods, telecommunications and media.

Grégory has written numerous articles on Belgian and EU food law and IP law, including an authoritative book in 2016 on advertising and labelling of foodstuffs under Belgian and EU law. He is general reporter of the International League of Competition Law and the Belgian Association on competition law and gives regularly lectures at conferences and universities.