Size may be relevant in comparative advertising, says ECJ
Is not very common to find European Court of Justice decisions concerning comparative advertising cases, and this makes even more interesting the recent ECJ Judgement on the Case C-562/15 “Carrefour”, answering a preliminary ruling request from the cour d’appel de Paris.
The Court of Appeal from Paris asked the ECJ if when comparing prices, it may be illicit to compare prices of the same products in shops having different sizes or formats, and, if it was the case, what would be the level of dissemination to consumers of this fact.
In December 2012, Carrefour launched a promotion called “Carrefour lowest price guarantee” in which it compared the price of certain selected products (up to 500) with some competitors’ ones, Intermarché among others, offering to reimburse consumers twice the price difference if they found cheaper prices.
On one hand, said advertising campaign was limited to Carrefour’s big size shops – Carrefour y Carrefour Planet- and consequently excluded Carrefour’s supermarkets and convenience stores. Such limitation was not explained on TV spots, it was only included within the “small print” terms on the website version.
On the other, the prices selected from competitors´were referred to Intermarché’s mid-size shops, such fact was only mentioned on TV adverts with the inclusion of the word “super” in relatively small characters.
Intermarché sued Carrefour on the basis of art. 121-8 of the French Consumers’ Code, closely similar to arts 10 (and 5) of the Spanish Unfair Competition Law, which sets the conditions under which comparative advertising should be deemed licit:
- Not misleading or likely to deceive;
- Related to goods or services meeting the same needs or intended for the same purpose;
- Objectively compare one or more material, relevant, verifiable and representative features of them.
By interpreting article 4 of Directive 2006/114/EC, read in conjunction with article 7 of Directive 2005/29/EC, that are the basis of the above-referred articles, ECJ finds that price comparison may be illicit if such comparison is done on the basis of prices coming from different size/format shops except if consumers are clearly informed of this fact on the advert itself.
Otherwise, advertising may be considered misleading and is very likely to fail to comply with objectivity requirement.
Such findings seem coherent with the relative weight that consumers give the price when buying in each one of the shops. In the case of big size shops, price is a key factor together with the wide range of products availability, whereas in mid and small formats, price loses part of its weight in favour of closeness – supermarkets- and time availability- convenience stores.
With this Judgement ECJ has bring to light that when using the price as a matter of comparison, all its circumstances, namely those that may affect it, should be taken into account. It is advisable therefore to be cautious when comparing prices whose circumstances are not comparable e.g. prices with and without financing.
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