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Advertising to businesses and comparative advertising

Advertising to businesses and comparative advertising are regulated by the Business Protection from Misleading Marketing Regulations 2008 (“BPMMR”). As noted in the section on Advertising Codes, if an advertiser/marketer complies with the Advertising Codes, by and large he will comply with the BPMMR which in effect  are one of the legal backups to the Advertising Codes.

The BPMMR implement an EU directive (Directive 2006/114/EC of the European Parliament and of the Council concerning misleading and comparative advertising: OJ No L376 27.12.2006, p 21.) The regulations imported legal concepts of misleading advertising which were in force under some European jurisdictions.

Misleading advertising


The BPMMR prohibit misleading advertising. Advertising is misleading if in any way, including its presentation, deceives or is likely to deceive the traders to whom it is addressed or whom it reaches; and by reason of its deceptive nature, is likely to affect their economic behaviour; or for those reasons, injures or is likely to injure a competitor.

The regulations set out detailed factors to be taken into account in determining whether advertising is misleading. Account must be taken of all the features of the advertising, and in particular the:


* characteristics of the product (as defined);


* price or manner in which the price is calculated;


* conditions on which the product is supplied or provided; and


* nature, attributes and rights of the advertiser (as defined).

Comparative advertising


The BPMMR permit the comparison element in any advertising only if it meets strict requirements:


* it is not misleading in the above sense;


* it is not a misleading action or a misleading omission under the Consumer Protection from Unfair Trading Regulations 2008;


* it compares products meeting the same needs or intended for the same purpose;


* it objectively compares one or more material, relevant, verifiable and representative features of those products, which may include price;


* it does not create confusion among traders:
- between the advertiser and a competitor, or
- between the trade marks, trade names, other distinguishing marks or products of the advertiser and those of a competitor;


*  it does not discredit or denigrate the trade marks, trade names, other distinguishing marks, products, activities, or circumstances of a competitor;


* for products with designation of origin, it relates in each case to products with the same designation;


* it does not take unfair advantage of the reputation of a trade mark, trade name or other distinguishing marks of a competitor or of the designation of origin of competing products;


* it does not present products as imitations or replicas of products bearing a protected trade mark or trade name.

Food price comparisons

Lidl v Vierzon [2011] 2 CMLR 10 Court of Justice of the European Union

 

On a reference from a French commercial court, the Court of Justice of the European Union ruled that the fact that there are differences in the extent to which you might like to eat certain food products depending on their place of production, the ingredients and who produced them, does not, preclude the possibility that an advertisement comparing such products (by reference to price alone, as opposed by reference to any of their other attributes) will fall within the boundaries of permitted comparative advertising, provided the advertisement is not misleading.

Enforcement of BPMMR


Civil enforcement:  the OFT, trading standard departments or other enforcement authorities may apply to the court for an injunction to stop a trader from infringing the BPMMR. The authority may accept an undertaking from the trader instead of seeking an injunction.


Legaleze comment: Breach of the regulations does not affect the validity of any agreement. it is unlikely an individual trader would have a right to take action against an advertiser under the BPMMR. However, because an advertisement which infringes the BPMMR is almost certainly in breach of the Advertising Codes, such a trader has the remedy of making a complaint about the advertiser to the Advertising Standards Authority.

Criminal enforcement: Misleading advertising which is in breach of the BPMMR is an offence punishable by a fine and/or imprisonment up to two years. There is Director’s criminal liability in the case of companies. A due diligence defence is available.
Comparative advertising in breach of the regulations is not an offence.

What's new:

12/11/2014 Sainsbury's fail in court challenge to ASA ruling on Tesco's price comparison http://www.bailii.org/ew/cases/EWHC/Admin/2014/3680.html
R (on the application of Sainsbury's Supermarkets Ltd) v Independent Reviewer of Advertising Standards Authority
Adjudications [2014] EWHC 3680 (Admin) Hearing Date: 10 November 2014 Queen's Bench Division, Administrative Court (London) Sainsbury's sought judicial review of the decision of the decision by the Independent Reviewer of Advertising Standards Authority Adjudications that there had been no substantial flaw in a decision of the Advertising Standards Authority (the ASA) with respect to Tesco's price comparison scheme. The High Court ruled that the Independent Reviewer had not been wrong in law or unreasonable (in the sense of the leading Wednesbury case) in concluding that the ASA's decision had not been substantially flawed.
Comment: this case relates more to the Advertising Codes but the background law is also considered.

 

18/07/2013: ECJ rules advertising directive applies to use of domain names and metatags
Belgian Electronic Sorting technology NV v Peelaers and another Case C‑657/11
On a request from the Belgian Hof van Cassatie, the ECJ ruled that Article 2(1) of Directive 84/450 and art 2(a) of Directive 2006/114 should be interpreted as meaning that the term 'advertising', as defined by those provisions, covered, in a situation such as that at issue in the main proceedings, the use of a domain name and that of metatags in a website's metadata. By contrast, the registration of a domain name, as such, was not encompassed by that term.

[Page updated: 14/11/2014]

 

More information>
The basics: contract for sale
Legal tender
Limitation and exclusion clauses
Sale of goods
Supply of services
Inertia selling to businesses
E-commerce
Sales to consumers
Unfair terms
Sales to consumers, distance selling
Doorstep selling
Marketing and advertising regulation    introduction
Advertising Codes
Advertising to businesses and    comparative advertising
Advertising to consumer regulations
Approved trader schemes
Direct marketing by telephone, email,    text message, fax and post
Data protection in relation to marketing