Comparative advertising is a powerful commercial communication tool, attracting interest from advertisers and suspicion from competitors alike. By comparing the characteristics or prices of goods or services with those of a rival company, comparative advertising can help consumers make the right choice, but it can also lead to unfair or misleading practices. Navigating this field requires a precise understanding of the rules laid down, in particular by the Consumer Code, so as to exploit the advantages of comparison shopping without falling foul of the law. This delicate exercise involves complying with a set of strict conditions, on pain of potentially heavy penalties. This article details the applicable legal framework and the precautions to be taken.
What is comparative advertising?
Before looking at the nuts and bolts of the law, it is important to understand exactly what is meant by comparative advertising in French law. Its definition and primary objective are essential to understanding the limits set by the law.
Legal definition (French Consumer Code, L. 122-1)
Article L. 122-1 of the French Consumer Code explicitly defines comparative advertising. It is any advertising that, explicitly or implicitly identifies a competitor or goods or services offered by a competitor. This broad definition therefore encompasses any form of advertising message, whatever the medium, as long as it establishes an identifiable comparison between the advertiser's offer and that of one or more specific competitors. The competitor may be identified directly (by quoting the name or brand) or indirectly, provided that it enables the average consumer to recognise the company or product in question.
Objective: to inform consumers through comparison
The primary objective, and the justification for authorising this potentially conflictual practice, is consumer information. By highlighting the objective differences between competing offers, comparative advertising is supposed to enable consumers to make more informed choices, based on factual elements such as price, quality or performance. It also stimulates competition by encouraging companies to improve their products or services and adjust their prices. However, this information objective can only be achieved if the comparison is fair, truthful and relevant, hence the strict framework provided by law. Visit general advertising rules of course apply, but the comparison introduces additional requirements.
The cumulative conditions under which comparative advertising is lawful
To be considered lawful, comparative advertising must comply with the following requirements all the conditions set out in article L. 122-1 of the French Consumer Code. Failure to comply with even one of these conditions is sufficient to render the comparison illegal. These conditions are designed to ensure that the comparison is fair and to protect both consumers and the competitors concerned.
Not be misleading or likely to mislead
This is the fundamental condition, in line with the general ban on misleading commercial practices. The comparison must not convey any false information or be presented in an ambiguous manner likely to distort the consumer's judgement. All claims must be accurate and verifiable. A spurious comparison on prices, characteristics or performance would immediately render the advertising unlawful. Misleadingness is assessed from the point of view of the average consumer, who is reasonably well-informed and reasonably observant.
Relate to goods or services that meet the same needs or objectives
The comparison is only relevant and fair if it concerns substitutable products or services, i.e. those capable of satisfying the same expectations or achieving the same ends for the consumer. Comparing fundamentally different products, even if they belong to the same general category, would be unfair because it would be irrelevant. For example, comparing an electric city car with a diesel saloon car on the basis of cost per kilometre could be deemed unlawful if the needs covered are too far apart.
Objectively compare one or more essential, relevant, verifiable and representative characteristics
The comparison must be based on objective and measurable criteria. It must relate to characteristics that are :
- Essential : They must be important for consumer choice (e.g. price, composition, performance, durability).
- Relevant : They must be significant in relation to the products or services being compared.
- Verifiable : The data used must be provable by the advertiser in the event of a dispute. The source of the data (independent tests, price quotes) must be reliable.
- Representatives : The characteristics chosen must not give a biased image of the competing offer by omitting other important aspects where the competitor would be more advantageous.
- Sub-point: Price comparison Price comparisons are frequent but must be particularly rigorous. The prices compared must correspond to identical products sold under similar conditions (or the differences in conditions must be clearly explained). Prices must be recorded for the same period and be accurate at the time of publication. Any ambiguity regarding taxes, delivery charges or purchase conditions may make the comparison misleading.
- Sub-point: Other characteristics (quality, performance...) Comparing qualitative elements or performance requires objective and recognised test protocols, or irrefutable factual data. Subjective claims ("better taste", "better design") should be avoided if they are not backed up by objective data (results of standardised consumer tests, for example).
Do not discredit or denigrate the competitor's brands, trade names, etc.
Even if the comparison highlights the competitor's weak points, it must not tip over into denigration. Denigration consists of discrediting a competitor or its products or services by making malicious or pejorative statements, or by going beyond an objective comparison. Criticising the quality of a product on the basis of verifiable facts is permitted; attacking the general reputation of the company or using an abusive tone is prohibited. The line can sometimes be very fine, and is assessed by the courts on a case-by-case basis.
Do not cause confusion between the advertiser and a competitor
Comparative advertising must not create confusion in the mind of the consumer between the advertiser and the competitor, or between their respective brands, products or services. The consumer must be able to clearly identify who is the advertiser and which products belong to which company. The use of logos, visual presentations or slogans that are too similar to those of the competitor may be penalised on this basis.
Not taking undue advantage of the reputation of a competitor's brand (parasitism)
The purpose of this condition is to prevent the advertiser from unduly appropriating the competitor's reputation or brand image to promote its own products. Following in the footsteps of a well-known brand without objective justification linked to the comparison itself can be qualified as parasitism. For example, using the competitor's brand prominently and repeatedly without it being strictly necessary for the objective comparison could be considered wrongful.
Not to present goods or services as an imitation or reproduction of goods or services bearing a protected trademark
Comparative advertising may not be used to promote copying or counterfeiting. Presenting a product as being "the equivalent of", "the same as" or "of the [competing brand] type" is prohibited if the aim is to market an unlawful imitation. The comparison must relate to original and distinct products, even if they meet the same needs.
Specific case of products with a designation of origin
When the comparison involves products with an appellation of origin (such as certain wines or cheeses), it may only involve products entitled to the same appellation. It is forbidden to compare a product with a PDO/AOC with a generic product or a product with another designation, as their value and characteristics are intrinsically linked to their protected origin.
Comparative advertising and use of another's trademark
One of the most sensitive issues concerns the use of a competitor's trademark in comparative advertising. Trade mark law confers a monopoly on its owner, but comparative advertising is a regulated exception.
The principle of conditional authorisation
In principle, using a third party's trademark without their permission constitutes an infringement. However, the European directive on comparative advertising, which has been transposed into French law, provides for a specific exception.
The exception to trade mark law in the case of lawful comparative advertising
Article L. 713-6 of the French Intellectual Property Code states that registration of a trademark does not prevent its use in the course of trade if such use is in accordance with honest practices in industrial or commercial matters. Both European and French case law have confirmed that the use of a competitor's brand in comparative advertising is lawful, and therefore does not constitute an infringement, if and only if this advertising respects all the conditions governing the legality of comparative advertising set out in Article L. 122-1 of the Consumer Code. In other words, if the comparison is fair, objective, not misleading, etc., the advertiser has the right to quote the competing brand, as this is essential for the identification required for the comparison. If even one of the conditions of lawfulness is lacking, the use of the trademark becomes wrongful and may be punished as an infringement.
Risks and penalties for unlawful comparative advertising
Companies that dare to engage in comparative advertising that does not comply with the legal conditions are liable to legal action and significant penalties. The legal grounds may vary depending on the nature of the illegality.
Action for unfair competition and/or parasitism
This is the most common ground. If the comparative advertising is disparaging, creates confusion, or takes unfair advantage of the competitor's reputation, the competitor can sue for unfair competition (article 1240 of the Civil Code) or parasitism. The aim is to put a stop to the practice and obtain compensation for the damage suffered (damage to image, loss of customers, etc.).
Action for trade mark infringement if the conditions are not met
As we saw earlier, if the comparative advertising is unlawful (for example, misleading or disparaging), the use of the competitor's brand is no longer covered by the legal exception. The trade mark owner can then bring an infringement action, which is governed by specific rules (Intellectual Property Code) and can result in civil penalties (sometimes lump-sum damages) and potentially criminal penalties.
Penalties for misleading commercial practices if the comparison is spurious
If the advertising is found to be misleading within the meaning of articles L. 121-2 et seq. of the French Consumer Code, specific penalties may be imposed. These include criminal fines (up to 300,000 euros for an individual and 1,500,000 euros for a legal entity, which can be increased to 10% of average annual sales), as well as additional penalties. The Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes (DGCCRF) can also intervene.
Cessation of broadcasting, judicial publication, damages
Whatever the cause of action (unfair competition, counterfeiting, misleading practices), the courts can order :
- Immediate cessation of unlawful advertising, often subject to a fine (penalty per day of delay).
- Publication of the court decision in newspapers or on the advertiser's website, at the advertiser's expense, to inform the public.
- The award of damages to the injured competitor to compensate for the material and moral loss suffered.
Best practices for sound comparative advertising
In view of these risks, a cautious and rigorous approach is essential before launching any comparative advertising campaign.
Rigorous collection of comparative data
Make sure that all the data you use (prices, technical specifications, performance) is accurate, up to date and comes from reliable and verifiable sources. Keep proof of this data (dated price statements, test reports, technical data sheets). Anticipate the need to justify each statement in the event of a dispute.
Objectivity and fairness of comparison
Adopt a factual and neutral approach. Avoid unfounded superlatives, personal attacks or innuendo. Make sure that the comparison relates to elements that are genuinely comparable and relevant to the consumer. Don't select only those criteria that are to your advantage, ignoring those where the competitor is better. Transparency is essential.
Legal validation before distribution
Given the complexity of the rules and the potential severity of the penalties, it is strongly recommended that any comparative advertising project be validated by legal counsel before it is published. A lawyer for advertising validation can analyse the compliance of your message with legal requirements, assess the risks of litigation and help you adjust your communication to minimise these risks. This preventive audit can avoid costly litigation that could damage your image.
Comparative advertising is a legal and potentially effective marketing tool, but its use is strictly regulated to prevent abuse. Scrupulous compliance with the conditions of legality is the key to reaping its benefits without exposing yourself to penalties. If you are considering such a campaign or if you are the victim of comparative advertising that you consider unfair, do not hesitate to contact our firm to discuss your options and secure your actions.
Sources
- Consumer Code (in particular articles L. 122-1 to L. 122-7)
- Intellectual Property Code (in particular article L. 713-6)
- Civil Code (in particular article 1240)
- Directive 2006/114/EC of the European Parliament and of the Council of 12 December 2006 concerning misleading and comparative advertising
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