Comparative advertising law clarified in eye-opening decision

European Union

In Pippig Augenoptik GmbH & Co KG v Hartlauer Handelsgesellschaft mbH, Verlassenschaft nach dem verstorbenen Franz Josef Hartlauer, the European Court of Justice (ECJ) has clarified the law on comparative advertising set out in Council Directive 84/450, as amended by European Parliament and Council Directive 97/55. The court held, among other things, that it is for national courts to determine whether the omission of brand names in advertisements comparing branded and unbranded products is capable of being misleading.

Pippig, an Austrian chain of opticians, filed a complaint against Hartlauer for its use of an advertisement that included a price comparison of a number of Hartlauer's unbranded and parallel-imported spectacles with branded products sold by Pippig. However, the advertisement did not specifically name Pippig's brands. Pippig claimed that this constituted misleading advertising. It also took issue with a test purchase of its products by Hartlauer's representatives prior to the advertising campaign.

The case reached the Austrian Supreme Court, which referred a number of questions to the ECJ for a preliminary ruling to determine the scope of comparative advertising allowed under Council Directive 84/450.

The ECJ analyzed Council Directive 84/450 (as amended) and its judgment included the following points:

  • Although Article 3a(1)(a), which establishes the criteria for lawful comparative advertising, must be interpreted to mean that an advertiser is free to state or not to state the brand name of rival products in comparative advertisements, it is for the national court to determine whether, in the particular circumstances of the case, the advertiser's omission of the better-known brand name is misleading. The court should consider the importance of the brand to potential buyers and the difference in reputation of the names of the compared products.

  • As long as the conditions for lawful comparative advertising are complied with, Article 3a(1) does not preclude comparisons of products purchased through different distribution channels (ie, goods purchased for the Austrian market and parallel-imported goods). Neither does it prevent an advertiser from carrying out a test purchase of a competitor's products before commencing its advertising campaign.

  • Pursuant to Article 3a(1)(e), a price comparison that (i) notes that the difference in price between compared products is greater than the average price difference in this field, and/or (ii) makes a large number of price comparisons, does not necessarily have the effect of discrediting the competitor involved. Comparative advertising that cites the competitor's name, reproduces its logo or displays a picture of its shop front is allowed, as long as the advertisement complies with EU law.

  • The purpose of the directive is to harmonize misleading comparative advertising law across the internal market. Article 7(2), in particular, prevents EU member states from using their own stricter standards of protection regarding the form and content of a comparison.

Pietro Pouchè, Carnelutti Studio Legale Associato, Milan

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