Unfair advertising actions are not just for big business

[Updated 5/4/11 re. Cork Independent] What can a business do if a competitor engages in unfair advertising? The Competition Acts 2002 and 2006 deal with anti-competitive practices but these mostly involve cartel operations and abuse of dominance.

In the past, trade mark and passing off actions have been used to stop comparative advertising, but this had the unsatisfactory result of often blocking any form of comparative advertising, rather than just unfair comparative advertising. Most businesses are still very cautious when it comes to comparative advertising, but the trade mark problem was resolved somewhat by the ECJ decision in the O2 bubbles case: a competitor can use another’s trade mark once it does not confuse the public.

The European Communities (Misleading and Comparative Marketing Communications) Regulations 2007 updated Irish advertising law and supplement the unfair marketing provisions in the Consumer Protection Act 2007 and the non-statutory ASAI Code. A summary of the Regulations and available remedies is available here. The Regulations are not widely known among Irish SMEs, but that is changing fast.

Last year, Tesco sought an injunction under the Regulations against Dunnes Stores. The Irish Times reported:

Tesco had sought to stop Dunnes from running allegedly misleading price comparison advertisements in the run-up to the lucrative Christmas shopping spree. Tesco claimed Dunnes promotional advertisements made direct and unexplained comparisons with Tesco’s standard prices and misled customers by failing to compare like with like. Dunnes argued that its advertising campaign, in which it highlighted its lower prices, was incapable of misleading consumers.

Tesco failed to get an injunction because the High Court cannot grant a temporary injunction in this type of case (ironically, this is due to an earlier Supreme Court judgement in a case taken by Dunnes Stores). Miss Justice Laffoy’s decision does not mean that Tesco has lost or that Dunnes’ ads were not misleading: it only means that Tesco must pursue their complaint to trial of the full action.

Remedies under the Regulations can also be sought in the Circuit Court, where costs are lower. Recently, the Cork News took a case against rival paper the Cork Independent under the Regulations. As reported by the Phoenix (28(11) p.7 (11/06/10)):

THE freesheet Cork Independent was forced to admit in the Cork Circuit Court recently that it had been boasting false circulation figures to advertisers and was ordered by Judge Con Murphy to publish corrective figures. … The Cork Indo had been boasting circulation increases of 10,000 up to 65,000 in a series of full page adverts for the best part of two months up to January last. But the Cork News argued that the Cork Indo’s actual print run was only 43,000 for certain parts of the same period.

Judge Murphy ordered the Cork Indo to inform its advertisers via the newspaper of its real circulation figures last November and also ordered both papers to publish its current circulation figures.

[Update: There have been further developments in the dispute about circulation figures between the two newspapers, with the Cork Independent successfully defending a circulation challenge from the Cork News. The exact nature of the challenge is unknown.]

Tesco v. Dunnes Stores was an intensification of an existing battle between two enormous companies, but the Cork newspapers case suggests smaller Irish companies are now paying more attention to the legislative rules applicable to advertising, especially when it comes to advertising by competitors.

[Incidentally, an advertisement published by a solicitor can neither reflect unfavourably on other solicitors nor suggest specialist knowledge superior to other solicitors, which removes any real possibility of comparative advertising.]

Advertisements

One thought on “Unfair advertising actions are not just for big business

Comments are closed.