Price Comparisons Must Not Mislead Consumers

European Directives on comparative advertising based on price differences have been clarified, following preliminary rulings from the European Court of Justice (ECJ) in a case referred by the French commercial courts.

The case was brought before the French courts by supermarket chain Lidl when, in September 2006, Vierzon (trading under its ‘Leclerc’ brand) placed an advertisement in a local newspaper, which showed till receipts comparing a basket of 34 mainly food products bought from a Leclerc store with the same products bought from a neighbouring store operated by Lidl.

The advertisement showed a total cost of €46.30 for the products from Leclerc and €51.40 for the basket of products from Lidl. Lidl complained that the advertisement was unfair and misleading because the products selected by Leclerc were not comparable and were selected specifically to place Leclerc in an advantageous position.

Lidl told the court that the reproduction of till receipts alone in the advertisement showing the list of the products compared did not enable consumers to perceive the specific characteristics of those products or to understand the reasons for the differences in prices claimed in the advertisement.

Vierzon disputed these claims, submitting that two products that are not the same may be compared as long as they meet the same needs or are intended for the same purpose and are sufficiently interchangeable. Vierzon also submitted that the differences between the products at issue were sufficiently clear from the till receipts to prevent consumers from being deceived.

The ECJ’s ruling is divisible into three parts:

Firstly, the ECJ ruled that price comparison in advertisements where the products being compared differ is permissible under the relevant Council Directives, where the products display ‘a sufficient degree of interchangeability’.

Secondly, such an advertisement would be misleading if a significant proportion of consumers could be mistaken into believing that the prices of the products compared is representative of the general price difference between the competitors.

Thirdly, it must be possible to identify the goods in question on the basis of information contained in the advertisement.

The ECJ held that it is up to the national courts to determine each case on its merits but objective price comparisons should be received favourably.