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Issue 03, 2007 (09 February)
 Industry News

EU advertising laws consolidated into one official text

The Commission has combined legislation on comparative and misleading advertising to set out the do's and don'ts of advertising in one text: Directive 2006/114/EC. The previous legislation in this area had been subject to amendment on a number of occasions and the new Directive is being presented in the interests of providing a clear and rational text which marketers can follow. This is part of the Commission's process to have clearer and simpler legislation by publishing codified versions of legislation once they have undergone a significant number of amendments.

The text of the consolidated Directive combines provisions from the misleading advertising Directive, the comparative advertising Directive and the unfair commercial practices Directive. The rules set out in the Directive will impact on all those who make any representation in the EU in connection with the supply of goods or services.

Misleading advertising is conceived as any advertising which, in any way, either in its wording or presentation deceives or is likely to deceive the persons to whom it is addressed or whom it reaches, 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. Product labelling, information on websites, in catalogues or in instruction manuals can all be construed, in principle, as forms of advertising.

Comparative advertising, on the other hand, is defined as any advertising, that explicitly or by implication, identifies a competitor or goods or services offered by a competitor.

Harmonised rules on misleading and comparative advertising were seen to be necessary, as previously the Member States had adopted differing laws against these forms of advertising. The different laws throughout the EU on this subject were viewed as having a negative impact on the smooth running of the common market as, for example, they hindered the carrying out of pan-EU advertising campaigns. The new Directive deals with the setting of minimum and objective criteria for determining whether advertising is misleading or not.

Furthermore, unfair comparative advertising was considered to have a negative effect on EU competition, as it could potentially allow one competitor to gain an unfair advantage over another. Thus the Directive sets out standard conditions for fair comparative advertising which relies on material, relevant, verifiable and representative features without misleading the consumers. This fair comparative advertising is considered to be a stimulus for competition, which in turn is to the consumer's advantage.

Hong Kong traders should note that national and international provisions regarding copyright still apply when the results of comparative tests carried out by third parties are referred to or reproduced in comparative advertising. Thus, comparative advertising is permitted, amongst others, when:
  • it is not misleading;
  • it compares goods or services meeting the same needs or intended for the same purpose;
  • it objectively compares one or more relevant features of those goods and services;
  • it does not create confusion in the marketplace between the advertiser and a competitor's trademark, trade name or products;
  • it does not discredit or denigrate a competitor's trademark, trade name or products;
  • it does not take unfair advantage of the reputation of a competitor's trademark or trade name; and
  • it does not present goods or services as imitations or replicas of goods or services bearing a protected trademark or trade name.

Traders should be aware that it is still up to the Member States to decide on how to control misleading advertising and comparative advertising. National rules may allow persons or organisations with a legitimate interest in prohibiting misleading advertising, or controlling comparative advertising, to take legal action or go before an administrative authority.

The national courts or administrative authorities have the power to order that unlawful advertising cease. They can also order its prohibition if the advertising has not yet been published, but publication is imminent. A voluntary control by the national self-regulatory bodies can also be carried out.

Courts and administrative authorities may require traders to produce evidence as to the accuracy of factual claims they have made. Therefore, marketers should always be able to justify the validity of any claims they make and be able to provide evidence of the accuracy of their claims.