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Comparative Advertising in the European Union

Published online by Cambridge University Press:  17 January 2008

Paul Spink  and
Ross Petty
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Extract

More than 20 years after the measure was first proposed, the European Union has finally succeeded in adopting a directive designed to harmonise disparate national laws relating to the use of comparative advertising in the single market.1 In this article the authors examine the background, rationale and substance of the new legislation, before considering its impact on the current UK law. With a view to the possibility that implementation may contribute to the transatlantic harmonisation of advertising law, the new regime is measured against the liberal benchmark of US case law and recent Federal Trade Commission policy.

Type
Articles
Information
International & Comparative Law Quarterly , Volume 47 , Issue 4 , October 1998 , pp. 855 - 876
Copyright
Copyright © British Institute of International and Comparative Law 1998

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References

1. Directive 97/55/EC (1997) O.J. L290/18 (23 Oct.).Google Scholar

2. In fact it has been claimed that comparative advertising amounts to almost 50% of all advertising in the US; see Schmitz, B., “Advertising and Commercial Communications—Towards a Coherent and Effective EC Policy” (1993) 16 J.C.P. 387, 403.Google Scholar See also Robert, Levy, “Big Resurgence in Comparative Ads” (1987) 129 Dun's Business Month 56–58Google Scholar; Rogers, John C. and Williams, Terrell G., “Comparative Advertising Effectiveness: Practitioners' Perceptions Versus Academic Research Findings” (1989) 29 J. Advertising Research 22–37.Google Scholar

3. Petty, R. D., “Advertising Law in the United States and European Union” (1997) 16(1) Public Policy and Marketing 2.Google Scholar

4. S.10(6); for fuller comment see below.

5. See Bourgoignie, Th., “Comparative Advertising and the Protection of Consumer Interests in Europe: Reconcile the Irreconcilable?” [1992] E. Consum. L.J. 3, 4.Google Scholar

6. Case 120/78 Rewe-Zentral v. Bundesmonopolvenvaltung für Brannnvein (“Cassis de Dijon”) [1979] E.C.R. 649.Google Scholar

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8. Joined Cases C-267 and 268/91 Keck and Mithouard [1993] E.C.R. 1–6097.Google Scholar

9. Doc.N.XI/C/94/75–E and Memorandum No.XI/C/93/75–E, Nov. 1975.Google Scholar

10. For an interesting discussion of the issue see Rijkens, R. and Miracle, G. E., European Regulation of Advertising (1986).Google Scholar

11. Directive 84/450/EEC (1984) O.J. L250/17 (19 Sept.).Google Scholar

12. (1991) O.J. C180/14 (11 June).Google Scholar

13. EC Draft Instrument 6591/94 COM(94)151, 21 Apr. 1994; (1994) O.J. C136/4 (19 May).Google Scholar

14. Petty, R. D. and Spink, P. M., “Comparative Advertising Law in the European Community: Will the Proposed Directive Harmonize Across the Atlantic?” (1995) 14(2) J. Public Polky and Marketing 310–317.Google Scholar

15. See supra n.1.

16. On a qualified majority vote, at least 62 of the available 87 votes must be cast in favour of a measure: Art.148(2) EC.

17. Sec the 15th recital of Directive 97/55/EC.

18. Inserting as Art.7(5) of Directive 84/450.

19. See idem, Art.7(2) and note the 18th recital of Directive 97/55.

20. For comment see Howells, G. and Wilhelmsson, T., EC Consumer Law (1997). p.145.Google Scholar

21. See supra n.13.

22. This is the most common way to challenge a comparison in the US. See Petty, , op. cit. supra n.3. at p.7.Google Scholar

23. Ibid. See Directive 84/450, Art.6.

24. Toyota Motor Sales, USA, Inc. (1994) NAD Case Reports, Nov.Google Scholar

25. [1992] F.S.R. 93.Google Scholar

26. See Petty, Ross D., “The Evolution of Comparative Advertising Law; Has the Lanham Act Gone Too Far?” (1991) 10(2) J. of Public Policy and Marketing 161–175;Google Scholar and Beck-Dudley, Caryn L. and Williams, Terrell G., “Legal and Public Policy Implications for the Future of Comparative Advertising: A Look at U-Hual v. Jartran” (1989) 8 J. Public Policy and Marketing 124–142.Google Scholar

27. Van Den Bergh Foods Co. (1993) NAD Case Reports. July.Google Scholar

28. (1994) US Dist. LEXIS 10944, 94 Civ. 0367 (MGC) (S.D.N.Y. 5 Aug.).Google Scholar

29. Art.3a(1)(g).

30. Consider the impact of an advert that showcases a new model BMW against the benchmark of a Skoda or Lada.

31. 104 P.L. 98 (16 01 1996).Google Scholar

32. Art.3a(1)(f).

33. (1992) O.J. L208/1 (24 July).Google Scholar

34. See op. cit. supra n.10.

35. Petty, and Spink, . op. cit. supra n.14, at p.315.Google Scholar

36. By way of example, however, although it may be acceptable to compare apples with oranges, a similar comparison with bananas may be prohibited! In Case 27/76 United Brands v. Commission [1978] E.C.R. 207.Google Scholar having considered detailed studies of the fruit market the ECJ ruled that bananas were not interchangeable with other fruit for the purposes of defining the relevant market in the context of an Art.86 EC investigation into the behaviour of the United Brands Company.

37. Campbell Soup Co. (1991) NAD Case Reports. Oct.Google Scholar

38. Carnation Co. (1970) 77 F.T.C. 1547.Google Scholar

39. See supra n.9.

40. See Rijkens, and Miracle, , op. cit. supra n.10. at p.285.Google Scholar

41. See Richards, J. “A ‘New and Improved’ View of Puffery” (1990) 11 (2) J. Public Policy and Marketing 35–56.Google Scholar

42. Gillette Co. v. Wilkinson Sword, Inc. (1992), 1992 US Dist. LEXIS 12276, 89 Civ. 3586 (KMW) (S.D.N.Y. 18 Aug.).Google Scholar In this case Wilkinson Sword claimed the lubricating strip on its razor was six times smoother than that produced by Gillette. The plaintiff was able to show that consumers wrongly concluded they would receive a noticeably smoother shave by using a Wilkinson Sword razor, and thus succeeded in prohibiting the claim. Under the new Directive the relevance of the claim would be under scrutiny at the outset.

43. (1934) 51 R.P.C. 110.Google Scholar

44. Directive 89/104/EEC (1989) O.J. /L40/1 (11 Feb.).Google Scholar

45. The Times, 8 Feb. 1996.Google Scholar

46. Cornish, W. R., Intellectual Property (3rd edn, 1996), p.626.Google Scholar

47. The Times, 31 Aug. 1996.Google Scholar

48. See http://www.lovellwhitedurrant.com/NewSite/PUBS/IP/SEP1996/IP.F.HTM for further comment.

49. Petty, , op. cit. supra n.26. and see e.g. Villa Maria Wines (1984) 4 I.P.R. 65, 67.Google Scholar

50. [1986] F.S.R. 45.Google Scholar

51. See e.g. Invicta Plastics (USA) Ltd v. Mego Corp. (1981) 523 F.Supp. 619 (S.D.N.Y.).Google Scholar

52. Conopco Inc. v. May Department Stores Co. (1994) 46 F.3d 1556 (Fed. Cir.).Google Scholar

53. See e.g. Chanel, Inc. v. Smith (1976) 528 F.2d 284 (9th Cir.) and Sherrell Perfume v. Revlon Inc. (1980) 483 F.Supp. 188 (S.D.N.Y).Google Scholar

54. S.21(2) CPA 1987 establishes a similar provision to cater for an advert that is misleading as to the method of determining the price of goods etc.

55. The Code of Guidance for Traders on Price Comparison, published by the Department of Trade and Industry under s.25 of the Act.

56. Similar rules are contained in the ITC and Radio Authority Codes of Advertising Standards and Practice.

57. See In re Kroger (1982) 100 F.T.C. 573.Google Scholar

58. It seems that an advertiser will be permitted to compare e.g. the market-leading Kellogg's brand, with an economy own-brand, which may be half the price. Comparison between essentially similar products which vary in ingredients or precise technical specification should also be possible.

59. Especially in the context of such a controversial and hard won provision. Implementation of the 1984 Directive on Misleading Advertising also led to disparity between member States. See Petty, Ross D., “European Regulation of Misleading Advertising: A Conceptual Analysis” (1995) 16(4) J. Media Law and Practice 23–26.Google Scholar

60. For comment on this phenomenon see “The Role and Future of the European Court of Justice”, a report of the EC Advisory Board of the British Institute of International and Comparative Law, chaired by the Rt Hon. the Lord Slynn of Hadley (1966), p.95.Google Scholar

61. See, inter alia, Joined Cases C-6 and 9–90Google Scholar, Francovich and Bonifaci v. Italy [1991] E.C.R. 1–5357Google Scholar and Ross, , “Beyond Francovich” (1993) 56 M.L.R. 55.Google Scholar

62. See e.g. Case C-333/94P Tetra Pak International SA v. Commission (No.2), 14 Nov. 1996, as criticised by Korah, V., “Tetra Pak II—Lack of Reasoning in Court's Judgment” (1997) 2 E.C.L.R. 98.Google Scholar

63. The US FTC supports comparative advertising for similar reasons.

64. However, again it would be prudent to sound a note of caution. Recently, in Case C-333/94P Commission v. United Kingdom [1997] All E.R. (EC) 481Google Scholar, the ECJ was offered the opportunity to rule on whether the so-called “state of the art defence” contained in s.4(1)(e) of the Consumer Protection Act 1987 is in conformity with Directive 85/374/EEC on the apportionment of liability for defective products. For some ten years the defence has been criticised as an unduly generous interpretation of the formula adopted by the Directive. The UK provision was condemned as a transparent attempt to attenuate the scheme envisaged by the European Council. The ECJ, however, took a different view, endorsing the UK provision in a surprisingly expansive ruling that will serve to limit the scope of product liability at the point of exploitation of technology thresholds. Significantly perhaps, in the light of the above comments regarding the modus operandi of the ECJ, the judgment handed down was terse and formalistic, confined to a barren extrapolation of basic principle and largely devoid of supportive reasoning. See Spink, P., “The Consumer Protection Act 1987—The State of the Art Defence” (1997) 42(10) J. Law Soc. of Scotland 416–418.Google Scholar

65. Sir Leon Brittan, Vice President of the European Commission, set out the Commission's proposals for a new bilateral trade agreement at Harvard University on 19 Mar. 1998.

66. Many itinerant stand-up comedians can testify to this.

67. International problems aside, regional differences alone dictate that three or four different versions of the same national advert may be running in the UK at any one time.