Supreme Court ruling offers comprehensive guidance on comparative advertising rules

Eoin Molloy (Content Editor) Ireland

August 12, 2019

Introduction:

In the recent Supreme Court case of Aldi v Dunnes Stores [2019] IESC 41, O'Donnell J cleared up the deficit of understanding around the oft-misinterpreted European Communities (Misleading and Comparative Marketing Communications) Regulations 2007, and laid down a test to be used in the ascertainment of what constitutes misleading comparative advertising.

 

Facts:

At issue here was a small, largely unsuccessful advertising campaign ran by Dunnes Stores in June 2013 which drew comparisons between prices in Dunnes and its main competitors - of whom the plaintiff is one, along with Lidl, Supervalu and Tesco. This was a clear case of a comparative advertising campaign, which is permitted under Irish law provided it complies with SI 774/2007 - the European Communities (Misleading and Comparative Marketing Communications) Regulations 2007.

The promotional material which formed the campaign was as follows: (i) 15 shelf-edge labels which drew specific comparisons with Aldi products; (ii) in-store banners containing phrases indicating a lowest price guarantee or that the prices matched Aldi's; and (iii) a larger number of other shelf-edge labels which used more generic slogans together with an arrow and the phrase 'Aldi match' - again, indicating that the price offered was the same as their competitor's.

A thorough consideration of the factual background to this case can be found in the High Court decision delivered on 9 June 2015 by Cregan J (see [2015] IEHC 495). Aldi were successful at the High Court, but this determination was then reversed by the Court of Appeal (see [2017] IECA 116). In the present case, O'Donnell J allowed the appeal and found that the advertising carried out by Dunnes was not permitted comparative advertising under the 2007 Regulations. 

 

The Test:

In holding in Aldi's favour, Mr Justice O'Donnell laid down a useful test to be deployed in the ascertainment of whether or not a particular campaign or advertisement is permitted under the 2007 Regulations. He noted:

'Within the field of comparative advertising, an advertisement may be misleading where it falsifies or undermines the implicit comparison made, and the implicit equivalence asserted, notwithstanding the fact that the products are compared in the advertisement by reference to one or more objective features of the products, thus satisfying Regulation 4(2), and they are broadly targeted at the same need or purpose and so comply with Regulation 4(2)(c).'

Central to the reasoning of O'Donnell J here is the idea that there is a difference between a consumer who is prompted to compare products objectively alongside one another, gleaning a distinction between the two based on different qualities, and a consumer who has simply been deceived into buying one product over the other on spurious grounds.

 

Comment:

In a recent article published in the Commercial Law Practitioner, Dr Cliona Kelly notes that several aspects of this decision are worthy of consideration, including the decision of Aldi to bring forward an expert to adduce evidence as a means of explaining the intricacies of comparative labelling. O'Donnell J was critical of the reliance placed on this by the High Court as 'the test for misleading advertising is not a mechanical one based on percentages, but rather based on the perception of the average consumer.'

Dr Kelly concludes by noting that while certain areas in need of reform have been once again cast into light - ie, the need for an interim relief mechanism - the issue of comparative advertising and what is permissible under the 2007 Regulations is now clearer as a whole. 

 

 


Note: This is intended to be a fair and accurate report of a decision made public by a court of law. Any errors should be notified to the editor and will be dealt with accordingly. The decision may be accessed in full here.