After the summer recess, the European Court of Justice delivered a number of judgements aimed at guaranteeing a high level of consumer protection without greatly tilting the balance against traders and businesses.
In one judgement, delivered earlier this month, the court was faced with a dispute between two Austrian newspaper publishers. One of these publishers organised a competition for the election of “the footballer of the year” and invited the public to join. Participation in that competition carried the prize of dinner with the most voted footballer.
Austrian law lays down a general prohibition on sales with bonuses, which is aimed at ensuring both the protection of consumers and the maintenance of effective competition. Considering whether these promotional campaigns constitute unfair commercial practices, the ECJ noted that the competition in itself might distort the economic behaviour of consumers, leading them on to purchase the newspaper for the competition that it contains.
The court however ruled that a sale with a prize competition does not in itself constitute an unfair commercial practice, even though participation in a competition may represent the factor which determines the purchase by some consumer of the newspaper.
In a second judgement, also delivered this month, the court considered the circumstances in which advertising could be considered as misleading or deceptive. As advertising has the potential to persuade people into commercial transactions that they might otherwise avoid, the ECJ has dealt with this subject with great care in a bid to keep such advertising in check. In the dispute in question, Lidl accused Vierzon of publishing a misleading advertisement in a French newspaper. According to Lidl, the advertising was misleading as it compared prices of food products in a few supermarkets without naming the brands of the goods compared, and without taking into account the varied characteristics of these products.
In its judgement, the court ruled that EU comparative advertising rules also apply to food products, and thus the prices of food products could be compared in an advertisement provided that these food products fulfill the requirement of a sufficient degree of interchangeability. The court however maintained that comparative advertising of food products is allowed only when it is not misleading. In analysing the concept of misleading advertising, the court held that the perception of an average consumer of the food products in question must be considered.
If the normal consumer who is reasonably well-informed fails to be deceived by a particular advert, the advert could be deemed to be misleading. An advert may be rendered misleading either by a statement made in the advert or, equally, by an omission. The latter covers those cases where the advertising seeks to conceal a fact which, had it been known, would have deterred a significant number of consumers from buying it.
This deception may occur, if for instance, the advert convinces consumers that if by regularly purchasing their everyday consumer goods from the advertiser rather than from the competitor, they will save money or if it makes them believe that all of the advertiser’s products are cheaper than those of its competitor.
Similarly an advertiser would be considered as placing a misleading advertisement if the food products compared are objectively different and the differences are capable of affecting the consumer’s choice. The deception arises insofar as the consumer would be convinced that he will in fact obtain an economic advantage because of the competitive nature of the advertiser’s offer, barely noticing the objective differences between the products being compared.
Of particular interest is the fact that both these cases were instituted by traders against their competitors, traders as well, with the ultimate beneficiary of each judgement being none else but the consumer.
Dr Grech is an associate with Guido de Marco & Associates and heads its European law division.