Comparative advertising has been permitted in France in the case law since 1980 (implicitly at first in a judgment handed down on 19 October 1983 and explicitly thereafter after a landmark decision of the Court of Cassation on 22 July 1986). That new case law eventually led to the adoption of the Law of 18 January 1992, which is now codified in Articles L. 121-8 to L. 121-14 of the French Consumer Code and expressly authorizes comparative advertising. More recently, France has transposed into national law the European directive on comparative advertising by the Ordinance of 23 August 2001 which further liberalized the rules in particular by removing the obligation placed on advertisers to disclose the comparative advertisement, before running it, to the competitors concerned by its content
However, in practice, comparative advertising is still a highly dangerous practice. The courts have sanctioned numerous companies for it and ultimately few are prepared to take the risk. Why is this and what precautions should be taken if attacked for comparative advertising?
Comparative advertising covers any advertising which explicitly or by implication identifies a competitor or goods or services offered by a competitor. Although European law wises to promote comparative advertising, the truth is that any advertiser hoping to inform consumers by comparing itself to them will very frequently be exposed to legal action and a high risk of losing in the courts. The reasons for this are legal and sociological.
Under positive law, comparative advertising is subject to fairly strict conditions:
· it must not be misleading;
· it must compare goods or services meeting the same needs or having the same objective;
· it must objectively compare one or more essential, pertinent, verifiable and representative characteristics of these goods or services;
· it must not be disparaging;
· it must neither be parasitic nor lead to confusion.
Taking account of that combination of legal constraints, it is no wonder that comparative advertisements are so rarely seen. It is estimated that in France and Europe they represent fewer than 3% campaigns, compared with 7% in the USA, especially in light of the fact that the courts tend to apply those conditions rigorously and that competitors will not hesitate in bringing summary or fast-track proceedings to ensure that any crossing of the strict boundaries of comparative advertising is penalized.
Although in France and in Europe we should not go to the extremes found in some very liberal countries in respect of comparative advertising, a more relaxed regime would be welcome insofar as comparative advertising fosters the interests of consumers and promotes competition and the development of new entrants. Too much rigidity in the matter hinders economic development.
With that in mind, advertisers wishing to carry out comparative advertising must be cautious and should:
1. Have any such project examined by their legal department and company lawyers. Lawyers should play devil’s advocate and imagine in what way the comparative advertisement in question could be challenged. The imaginations of communications departments will have to be kept in check and employees should be warned of the consequences of non-compliance with the act.
2. Use a narrow version of comparative advertising in order to limit the scope for criticism.
3. Assert the lack of legitimate interest in bringing proceedings for competitors who purport to have an advertisement prohibited, when they carry out the same practice themselves. If a competitor makes use of a particular advertising concept, he cannot then claim that a comparison of the very concept he is promoting in his own ads is without value.
4. Highlight in an objective manner the advantages of the various products being compared.
5. Prepare a documented file to be able, if and when necessary, to justify the veracity of the claims made.
6. Be very careful not to disparage competitors. Of course, the point of comparative advertising is to compare products or services, so stating that a competitor charges high or excessive prices would not constitute disparagement. On the other hand, it is prohibited to suggest that a competitor is charging usurious prices (ECJ, Case C-44-01 Pippig Augenoptik GmbH & Co. KG , point 78).
7. In the case of an interim relief application, assert the absence of any “manifestly unlawful disturbance” related to a comparative advertisement which has run over a long period (or that of a competitor). The manifestly unlawful disturbance is the element that must cease immediately. It therefore would seem contrary to the requirements for interim applications to allow such action for an ad that has been running over several months.
8. Take into account any technical delays for the withdrawal of contentious advertisements. In the event of a dispute, it should be recognized that the implementation of an order for the withdrawal or modification can be required within a very short period of time and be subject to penalties for non-compliance. It is therefore important to be prepared to quickly modify the advertisements and to be able to replace them within the given time-limit. Where penalties are imposed, it is important to make every effort to comply with the decision and to be in a position to justify such compliance to the court with a view to having the penalty reduced pending its dismissal