Misleading advertising practices in Sweden

Misleading advertising

How is editorial content differentiated from advertising?

Editorial content is regulated by the principles in the Freedom of the Press Act (1949:105) and not by the general rules in the Marketing Act. Editorial content may, however, be tried as advertising under the marketing rules if the purpose and content is of a commercial nature. It is therefore necessary to make a clear distinction between what constitutes editorial content and what constitutes a paid advertisement. Failing to identify the commercial content of an advertising message is regarded as misleading advertising.

How does your law distinguish between ‘puffery’ and advertising claims that require support?

The Marketing Act does not explicitly distinguish puffery from claims that require support, which means that the same marketing rules apply. The former Swedish Market Court has, however, in its rulings expressed that puffery is allowed only as long as the average consumer identifies it as a general praise and it is not meant to be taken literally.

What are the general rules regarding misleading advertising? Must all material information be disclosed? Are disclaimers and footnotes permissible?

The general rules regarding misleading advertising are set out in the Marketing Act. According to these rules, advertisers are not allowed to use false claims or other misleading statements in their marketing. Advertising is considered to be misleading and false if it affects the consumer’s ability to make an informed transactional decision. Advertisers are furthermore not allowed to leave out any material information that is of importance and that may result in unclear, unintelligible, ambiguous or otherwise inappropriate advertising.

Although not all material information needs to be disclosed, the advertisers are subject to different information requirements depending on the product or service being advertised. Advertisers of therapeutic goods and financial services are, for example, naturally required to provide more detailed information in their marketing compared to advertisers of other products and services.

As for the use of disclaimers and footnotes in advertising, there is no specific stipulation regarding these in the law. However, advertising that contains small print text that has conflicting marketing messages compared to the main text is considered to be in violation of the Marketing Act’s requirements on clarity and thus misleading. For instance, the NBL has ruled that certain information regarding medicinal products must be designed and placed so that such information can be noticed even from a fairly quick and cursory glance.

Must an advertiser have proof of the claims it makes in advertising before publishing? Are there recognised standards for the type of proof necessary to substantiate claims?

Advertisers are generally not required to provide proof of their advertising claims before publishing. However, in the event of a court proceeding, it is the advertiser’s responsibility to provide the necessary evidence to support the accuracy of the claims made in the advertising. The stringency of the standard of proof applied is dependent on how general or narrow the statement or claim is. For example, claiming a product is the best in the country naturally requires a higher standard of proof compared to claiming a product is the best within a local area.

Are there specific requirements for advertising claims based on the results of surveys?

No, such advertising must be compatible with the general marketing rules stated in the Marketing Act (see question 17). Advertisers must keep in mind that the quality of the survey is of great importance so that the conclusions made are well founded.

What are the rules for comparisons with competitors? Is it permissible to identify a competitor by name?

Advertisers are generally allowed to make comparisons to identifiable competitors and products as long as the explicit requirements listed in section 18 of the Marketing Act are observed.

For example, this section explicitly states that comparative advertising must not be misleading and is allowed only if comparisons are made between products meeting the same needs or intended for the same purpose. Further, taking unfair advantage of the reputation of another trader’s mark, name or other distinguishing mark is not allowed, nor are comparisons that are discrediting or may create confusion among traders.

Do claims suggesting tests and studies prove a product’s superiority require higher or special degrees or types of proof?

Advertisers must be able to substantiate superiority claims against other products; that is, not only to prove that the advertiser’s product is superior but also that no other product is of the same quality. Advertisers should furthermore be careful not to draw the wrong conclusions based on inadequate studies or tests, otherwise it may be viewed as misleading advertising (see question 20).

Are there special rules for advertising depicting or demonstrating product performance?

No. All advertising, including the depiction or demonstration of a product performance, should be in accordance with the general advertising rules in the Marketing Act (see question 17).

Are there special rules for endorsements or testimonials by third parties, including statements of opinions, belief or experience?

Advertisers are responsible for all the material used in their advertising, including the use of testimonials and endorsements by third parties, such as customer reviews and evaluations. Such claims can be used for marketing purposes only if they are true, relevant and verifiable. Thus, testimonials and endorsements that are outdated are regarded as misleading and the same applies to claims for which the advertiser lacks proof. Misleading commercial practices also include the use of a trust mark, quality mark or equivalent mark without having obtained the necessary authorisation, as well as claiming that a code of conduct has an endorsement from a public or other body for which it does not have.

Advertisers should additionally be aware that the use of trademarks or copyright-protected material, such as text or images that belong to someone else, requires the authorisation of the holder. The same requirement for consent applies to the use of a name or image of an individual if used for advertising purposes.

Are there special rules for advertising guarantees?

Traders, who in their advertising offer warranties or similar undertakings are, according to the Marketing Act, obliged to give the purchasing party clear information regarding the warranty as well as the information necessary for the purchasing party to enforce the warranty. Such advertising may not include a statement or otherwise create a false impression that the consumer will be in a better legal position than it would have otherwise been in. The commitment or information must also be submitted as a document or in another legible and durable form available to the buyer.

Are there special rules for claims about a product’s impact on the environment?

The Marketing Act makes explicit reference to environmental claims, meaning that such claims require particular honesty and trustworthiness. In this regard, the former Swedish Market Court has, in a number of judgments, emphasised that the term ‘environmentally friendly’ can be used for marketing purposes only if the product or service either improves or at least does not harm the environment. In 2017, a supermarket chain, Coop Sverige AB, was subject to the proceeding of the Patent and Market Court in which the court held that the grocery store’s advertisement, claiming that organic food reduces the level of pesticides in the body, was a violation of the Marketing Act.

Are there special rules for describing something as free or a free trial or for special price or savings claims?

Advertisers are not allowed to make unfair, false or misleading claims about a product’s price, the basis for calculating the price, specific price advantages or the terms of payment. In view of this, words like ‘free’ or ‘free of charge’ may not be used for marketing purposes if in fact the consumer has to pay something in return. The same applies to the phrase ‘free trial’ if the consumer has to pay something in return for the advertised ‘free’ period. Phrases such as ‘buy one, get one free’ are, on the other hand, allowed, provided that the liability for all costs is made clear, the free product is a complimentary good and that the regular price of the paid goods is neither reduced nor increased. Concerning the phrase ‘special price’, this indicates that the product or service is on sale. Advertisers may advertise products or services on sale, however, certain criteria needs to be met for this kind of advertisement, inter alia, the sale must last for a limited time, the product and service that is on sale has to be included in the store’s regular line of products, the product or service must be available in a sufficient amount (it is not allowed to advertise a product or a service as on ‘sale’ if the advertised product or service is not available in a sufficient amount that the shop owner believes corresponds to demand) and the advertised product and service must exist (the advertised product or service cannot be a way to attract consumers for the purpose of selling a more expensive product or service to them). Furthermore, it is not allowed to raise the price of a product or service before the sale starts and then lower the price and advertise that the product or service is on sale (products and services on sale should have a significantly lower price than the store’s regular price of the same products and services).

Are there special rules for claiming a product is new or improved?

No. The Marketing Act, however, specifically prohibits advertising that includes misleading information about a product’s existence, nature, quantity, quality and other distinguishing characteristics. Claiming a product is new or improved is therefore allowed only if such statement is true.

Are there special rules for claiming where a product is made (such as country of origin)?

Advertisers are responsible for all claims in their advertisements, including any claims that a product has its origin in a certain country or certain location. Such a claim can be used for marketing purposes only if it is true and verifiable. Thus, such a claim is regarded as misleading and the same applies to claims for which the advertiser lacks proof of the product’s origin and still advertises this. In fact, the Marketing Act specifically prohibits advertising that includes misleading information about a product’s origin. Claiming a product is from a certain area is therefore allowed only if such statement is true.