Insuring Clarity On Comparative Advertising – Advertising, Marketing & Branding

The Court of Justice of the European Union has recently
published a ruling in which it said that the rules on comparative
advertising in the Misleading and Comparative Advertising Directive
(2006/114/EC) do not apply to a comparison website that ranks
various competing goods or services but does not compete with them
itself.

The Directive includes criteria for comparative advertising to
be lawful. It is implemented in the UK by the Business Protection from Misleading Marketing
Regulations 2008. Comparative advertising is defined as
advertising which expressly or impliedly identifies a competitor or
goods or services offered by a competitor.

HUK-COBURG is the parent company of a large German insurance
group whose subsidiaries offer insurance in various fields,
including motor insurance. Check24 operates an online comparison
website allowing users to compare various products, including
insurance packages, free of charge. The comparisons are based on
various grades, including price. Consumers can also use the website
to enter into contracts with the various insurers.

HUK took issue with the grading system and said that the
comparisons were contrary to German laws on unfair competition. The
case reached the CJEU with the German courts asking if Article 4(c)
of the Directive means that the conditions of permitted comparative
advertising may also be satisfied where the comparison is performed
by a grading or points system.

The CJEU made the point that the Directive does not actually
define who a competitor is. Therefore, it took a look at the
previous case law, especially the decision in De Landtsheer
Emmanuel SA v Comité Interprofessionnel du Vin de Champagne
Veuve Clicquot Ponsardin SA. In that case, it held that an
advertisement that does not refer to a specific undertaking or
product might fall under the Directive’s scope if it is
possible to identify that undertaking or the goods it offers as
being actually referred to by the advertisement.

The CJEU said that the relevant national court has to decide on
the existence of any competitive relationship. However, it
considered that a provider of insurance products and a provider of
online comparison services for insurance products do not offer
substitutable services, and so they operate in different markets.
Although the comparison website allowed consumers to conclude
contracts with insurance companies, it did not offer insurance
services itself.

The CJEU concluded that the concept of comparative advertising
under the Directive does not include an online comparison service
for goods or services provided by an undertaking which is not a
competitor, ie it does not itself offer the goods or services which
it compares and which therefore operates in a market for separate
goods or services. The same applies where that undertaking acts as
an intermediary and allows consumers to conclude contracts with
undertakings which offer the goods or services concerned, without
itself operating in the market for those goods or those
services.

The case is of interest for those making advertising comparisons
in the EEA, and may also be taken into account by courts in the
UK.

Back in 2017, the CMA completed a market study considering
comparison websites’ impact on consumers and found that
although there were a few problems, they were useful for consumers.
Therefore, they should not be regulated out of existence.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.