Comparative price-based advertising could be prohibited – Carrefour Case
In the case at hand Carrefour ran an extensive television advertising campaign »Carrefour lowest price guarantee« in which it compared the prices of 500 leading brand products charged in its own shops and in shops of its competitors in France. Products offered by the competing retailer Intermarché have been routinely more expensive than those sold by Carrefour, whereby the comparison between the prices of selected goods was made between shops of various sizes and formats. Although both retailers have been selling products in retail chains, the comparison was deliberately made between prices charged in larger Carrefour shops (prices were for this reason lower) and prices charged in smaller Intermarché shops (for this reason prices were higher). That information appeared only in small print on the Carrefour website, but not in the advertisements themselves.
The CJEU holds that comparative advertising contributes to demonstrating, in an objective manner, the advantages of various compared goods and thus stimulate competition between suppliers of goods and services to the consumer’s advantage, such advertising (i) should nevertheless objectively compare prices and (ii) should not be misleading.
In the Carrefour case, the objectivity of the comparison has been clearly distorted due to differences in sizes and formats of the shops, which resulted in artificially created price differences. Moreover, such comparison could deceive the average consumer, because it gives the consumer the impression that all shops forming part of the retail chains have been taken into consideration in making the comparison and that thus the difference in prices is not based on the size of the shop where the goods are sold. According to the CJEU, the information on size and format of shops is material information, which is why the consumer must be aware of the fact that prices from shops of different sizes and formats have been compared. Although the legislation does not prescribe the manner in which consumers should be notified of this fact, the CJEU decided that it is not enough that such information is provided clearly and that Carrefour should have communicated it in the advertisement itself. All material information and explanations of such information must be disclosed in the same manner and using the same media as the advertisement broadcast to consumers.
The final decision in this case is for the national courts to take. So far, Carrefour has already been ordered to pay damages of EUR 800,000 to Intermarché.
