Article 6 2.
Article 6 2. (a)
|Common name||Decision type||Court decision in appeal|
|Court||Hof van Beroep (Gent)||Plaintiff(s)||Carrefour Belgium NV|
|Court translation||Court of Appeal (Ghent)||Defendant(s)||Vermago NV|
|Keywords||false impression, misleading advertising, price comparison, publication of decision, similar product|
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Comparing prices of a limited amount of non-similar products, while raising the impression that a trader applies lower prices than its competitor on the totality of its assortment, constitutes a form of misleading advertising.
Both plaintiff and defendant run a supermarket in the Belgian city of Tielt, which makes them direct competitors.
At the end of October 2005 the plaintiff purchased 21 articles in the store of the defendant. From these articles, plaintiff selected 13 products and compared their prices with the prices applied in plaintiff's own store for the same products. Plaintiff displayed this price comparison on a large panel at the cash desk number 8 of its store, mentioning the prices of the products purchased in both stores in two column next to each other. Plaintiff also mentioned that adding up all the prices, this resulted in a saving of 4,49 EUR or 10,39% for the consumer in plaintiff's store. The plaintiff finally advertised: "GB Supermarkt is 10% cheaper than De Weerdt" on the mentioned panel.
The President of the commercial court of Bruges ruled in the first instance that the presentation of the price comparison was misleading and not objective. However, it was also ruled that no judgment can yet be pronounced until the European Court of Justice decides on the preliminary ruling referred to it by the Commercial Court of Brussels in its judgment of 29 July 2004 (NV Lidl vs. NV Colruyt).
Plaintiff lodged an appeal against this judgment, requesting the annulment of the judgment of the first instance, based on the claim that plaintiff's advertising is not misleading and that the products concerned are comparable.
While plaintiff claimed the annulment of the judgment of the first instance, the defendant requested that the judgment of the first instance is confirmed and more specifically requested the court to :
(i) declare that the actions of the plaintiff infringe article 94/1 and 94/2 (replaced by article 19 of the new Belgian act on market practices), since the comparative advertising as carried out by the plaintiff does not meet the requirements set forth in the article and is therefore illegal;
(ii) order plaintiff to refrain from infringing the aforementioned article and more specifically to refrain from (a) any comparative advertising, whereby plaintiff raises the impression, based on the price comparison of a limited number of products, that it is cheaper than defendant on the totality of its assortment; (b) any comparative advertising whereby non-similar products are being compared; and (c) any comparative advertising whereby plaintiff fails to mention the current applicable prices of the defendant;
(iii) to impose on the plaintiff a prohibition to further use posters, folders, pamphlets, or any other means for advertising whereby plaintiff raises the impression, based on the price comparison of a limited number of products, that it is cheaper than defendant on the totality of its assortment, and to order an additional penalty payment of 50.000 EUR per breach; and
(iv) order plaintiff to display and publish a public apology for the unfair comparative advertising in its supermarket.
Is it a misleading commercial practice to base a comparison of trader's overall prices with a competing trader on a selection of only limited number of products, while not taking into account objective differences in the products compared?
In its reasoning, the court held that although a comparative advertising is not prohibited as such, it is prohibited when the conditions set forth by article 19 of the Belgian Act on market practices (which stipulates that comparative advertising is allowed only when certain conditions are met, e.g. objectively comparing verifiable features of comparable products) are not met. According to the court, this was the case in this dispute. Especially by advertising: "GB Supermarkt is 10% more cheaper than De Weerdt", plaintiff raised the impression that it is in general (i.e. on the totality of its assortment) 10% cheaper than its competitor, the defendant. Moreover, the requirement that the comparison needs to occur objectively, i.e. between comparable or similar products, was not met.
The court therefore found, that the plaintiff by its conduct committed a misleading advertising. The court ordered to immediately refrain from further pursuing the illegal practice, and ordered plaintiff to display posters, saying that the price comparison made by plaintiff was judged to be illegal by the court of appeal of Ghent, in its supermarket.
|URL Decision||Decision full text|
Appeal of the plaintiff was dismissed.
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