Unlawful advertising comparing the prices of products offered in shops of different formats
The subject of the dispute before the Court of Appeal in Paris (Cour d’appel de Paris) was misleading nature of the advertising campaign of the hypermarket Carrefour. The television advertisements broadcast compared prices of goods offered in Carrefour hypermarkets with the prices of goods offered in the shops belonging to the Intermarche chain. Carrefour offered to reimburse consumers twice the price difference if they found cheaper prices elsewhere than the price indicated in the advertising.
An important factor affecting the assessment of the advertising used was the omission of the information that Intermarche shops belong to the supermarkets category while Carrefour shops are hypermarkets, so having larger formats. Therefore the competitor sought the prohibition of dissemination of advertising and compensation for the harm sustained by the misleading advertising.
The Court of Justice of the EU was supposed to evaluate the established practice in the light of the directive concerning misleading and comparative advertising and directive concerning unfair business-to-consumer commercial practices in the internal market. After considering the case, the Court stated that the advertising comparing the prices of goods offered in shops of different size or different formats if they belong to retail chain which each have a range of shops of different sizes and formats and where the advertiser compares the prices charged in shops in its retail chain having larger sized and formats with those identified in shops having smaller sizes and formats, may be considered unlawful.
This kind of comparative advertising may be permissible provided that it was made clear to consumers in the advertising that the comparison was being made between shops of different size or format.
It is obvious that the prices of consumer products may vary according to the format or size of the shop, with the result that an asymmetric comparison may have the effect of creating or artificially increasing the difference between the advertiser’s prices and the prices of competitors, depending on the selection of shops being subject to comparison.
The Court stressed that it is for national courts to assess the lawfulness of the advertising that need to ascertain whether the advertising at issue satisfied the objective comparison requirement or if it is misleading. In order to do that national courts must take into account the perception of the advertising by an average, well informed, reasonably observant and circumspect consumer of the products in question. On the other hand, national courts must also take into consideration the information contained in the advertisement at issue, i.e. in the discussed case in particular information concerning shops in the advertiser’s retail chain and those in the retail chains of competitors whose prices have been compared and elements of that advertising in general.
- Judgment of the Court of Justice of the European Union of 8th February, case C-562/15