EU Competition Law

EU Competition Law

- The Paris Convention imposes a general obligation to offer protection against
unfair competition and it does so on the basis of the broad concept of honest
practices in industrial and commercial matters
- Directive 2006/114/EC
o The context is predominantly B2B
o Advertising: one of the market
activities commonly used. The
directive deals with misleading and
comparative advertising and on unfair commercial practices affecting
businesses
o Why is advertising regulated?  because responsible ads are good for
people, society and advertisers
 Responsible advertising is an essential part of modern life
 Provides consumers with value and choice
 Entertains, informs and educates
 Encourages social responsibility eg not drinking and driving
 Has economic value by funding media, sports and culture
 Helps consumers to trust and be confident

o Comparative advertising
 Any advertising which: a) identifies a competitor, b) identifies a good
or service offered by a competitor EITHER by explicitly naming or by
implication
 Conditions: permitted by EU law under Article 4 of the Directive
when the following conditions are met:
 Ad is not misleading
 Ad compares ‘like with like’ – objective comparison
 Ads must objectively compare important feature of the
products or services concerned
 Ads must not discredit other companies’ trademarks
 Ad does not take unfair advantage of the reputation of
distinguishing marks of a competitor
 It does not create present goods as imitation or replicas of
goods bearing a protected trademark
 Ads must not create confusion among traders
 COMPARATIVE ADVERTISING WHICH DOES NOT COMPLY
WITH ANY OF THE INDICATED CONDITIONS IS PROHIBITED
BECAUSE IT DISTORTS COMPETITION

, o Definitions: Article 2 (Directive)
 ‘misleading advertising’ means any advertising which in any way,
including its presentation, deceives or is likely to deceive the persons
to whom it is addressed or whom it reaches and which, by reason of
its deceptive nature, is likely to affect their economic behaviour or
which for those reasons, injures or is likely to injure a competitor
 ‘comparative advertising’ means any advertising which explicitly or by
implication identifies a competitor o goods or services offered by a
competitor

o Examples:
 Generic comparison = fairy lasts 2x longer than the next best-selling
brand
 Aggressive US markets = big mac vs whopper / pepsi vs coca-cola

 Misleading advertising is prohibited  it may lead the consumer to
take decisions prejudicial to him when buying goods or other property
or using services
 Key elements:
 The capacity to deceive the person to whom it is addressed
 The capacity to distort the economic behaviour
 The capacity to harm the interest of competitors

 When is advertising misleading? Key features to take into account
 Execution
 Method and date of manufacture
 Quantity
 Geographical origin
 Price
 Conditions on which the goods are supplied, and services
provided
 Nature
 Attributes and rights of thee advertiser
 Identity
 Qualifications
 Ownership rights or awards and distinctions received by the
advertiser

 How to avoid misleading advertising
 Ads must be obviously identifiable as being ads
 Ads must not materially mislead or be likely to do so
 Ads must not mislead thee consumer by omitting material
information
 Advertisers must hold documentary evidence to back up those
claims that a consumer can expect to be proven

 Examples: