The Commercial Court of Borges (France) provided the CJEU with an opportunity to shed more light on the hotly debated issues of comparative advertising, following its judgment in L'Oreal v Bellure.  This time, case C-159/09 Lidl SNC v Vierzon Distribution SA provided the scenery.

Vierzon Distribution SA sells everyday consumer goods under the name ‘Leclerc’. Lidl operates a well-known chain of food supermarkets in France, including one near to that of Vierzon. In September 2006, Vierzon Distribution placed an advertisement in a local newspaper, which reproduced till receipts listing, by means of general descriptions, accompanied, as appropriate, by their weight or volume, 34 products, in the main foodstuffs, purchased from the store belonging to Vierzon Distribution and that operated by Lidl, respectively, and showing a total cost of EUR 46.30 for the Vierzon Distribution products as against EUR 51.40 for those of Lidl.The advertisement also included the slogans ‘Not everybody can be E. Leclerc! Low prices – And the proof is E. Leclerc is still the cheapest’ and ‘In English, they say “hard discount” – in French they say “E. Leclerc”. Lidl, were not thrilled with the idea, and filed infringement action, claiming violation of, among other, Article L. 121 8 of the Consumer Code, which prohibits misleading advertising. Their core arguments were that a) Vierzon selected only products which made them look good on price, b) the products were actually not comparable and c) the mere reproduction of till receipts in the advertisement does not enable consumers to perceive the different characteristics of the products and understand the reasons for the differences in prices. Vierzon Distribution replied that it is possible to compare products, which are not the same, provided that they meet the same needs or are intended for the same purpose and, in that regard, are sufficiently interchangeable. Further, that the differences between the relevant products were sufficiently clear from the till receipts in question.

The Bourges Commercial Court decided to stay proceedings and address the following question to the CJEU:   “Is Article 3a of Directive[84/450 to be interpreted as meaning that it is unlawful to engage in comparative advertising on the basis of the price of products meeting the same needs or intended for the same purpose, that is to say, products which are sufficiently interchangeable, on the sole ground that, in regard to food products, the extent to which consumers would like to eat those products or, in any case, the pleasure of consuming them, is completely different according to the conditions and the place of production, the ingredients used and the experience of the producer?"

The Court of Justice reiterated its L’Oreal principle that the aim of Article 3a of Directive 84/450 is to stimulate competition, enabling competitors to highlight objectively the merits of various comparable products while, at the same time, prohibiting practices which may distort competition, be detrimental to competitors and have an adverse effect on consumer choice.  In answering the question, the CJEU held  that Article 3a(1)(b) of Directive 84/450 is to be interpreted as meaning that the fact alone that food products differ in terms of the extent to which consumers would like to eat them and the pleasure to be derived from consuming them, according to the conditions and place of production, their ingredients and who produced them, does not necessarily mean that they cannot be compared in an advertisement provided that the products under comparison “display a sufficient degree of interchangeability” (isn’t this a phrase competition lawyers so often and so confusingly use?). However, the CJEU also held that an advertisement such as the one at issue could be considered misleading if consumer choice is based on a mistaken belief that the selection of goods made displayed in the advertisement is representative of the general level of his prices as compared with those charged by his competitor, or if such products “have different features capable of significantly affecting the average consumer’s choice, without such differences being apparent from the advertising concerned” (effectively when you cannot as a consumer judge interchangeability). Finally, the CJEU ruled that the condition of verifiability set out in Article 3a(1)(c) of Directive 84/450 requires (in a case such as the one at issue) it must be possible to identify the goods in question on the basis of information contained in the advertisement (suggesting that brand names and trademarks should be displayed in the ad).