In the course of harmonization of Montenegrin laws with the EU law the Parliament of Montenegro passed the new Prohibited Advertisement Act (Zakon o nedozvoljenom oglašavanju, Official Gazette of Montenegro no. 30/2017, the “Act”) on 27 April 2017. The Act came into force on 17 May 2017.

The Act deals with protection of traders and consumers from misleading and prohibited comparative advertisement. According to the Act, if any advertising, including the way of issuer’s presentation, deceives or is likely to deceive addressees of the advertisement, is likely to affect their economic behavior or which injures or is likely to injure a competitor’s interests, is regarded as misleading advertisement, and is, therefore, forbidden.

On the other hand, any advertising which explicitly or implicitly refers to a competitor or goods or services offered by a competitor is regarded as comparative advertising, and it is not always forbidden. Comparative advertising is permitted in case all of the following requirements are met:

  • it is not misleading (in accordance with provisions of the Act and Consumer Protection Act);
  • it compares goods or services aimed for the satisfaction of same needs or the same purpose;
  • it objectively compares one or more material, relevant, verifiable and representative features of those goods and services, which may include price;
  • it does not discredit or denigrate the trademarks, trade names, other distinguishing marks, goods, services, activities or relations among competitors;
  • it relates in each case to products with the same designation, for products with designation of origin;
  • it does not take an unfair advantage of the reputation of a trademark, trade name or other distinguishing marks of a competitor, or of the designation of origin of competing products;
  • it does not present goods or services as imitations of goods or services bearing a protected trademark or trade name; and,
  • it does not create confusion among traders, between the advertiser and a competitor or between the advertiser’s trademarks, trade names, other distinguishing marks, goods or services and those of a competitor.

The Act provides for the protective mechanism against the prohibited advertising, i.e. for submission of a lawsuit for forbiddance of prohibited advertising. The lawsuit can be filed against the trader or a group of traders belonging to the same industry sector, that use or encourage the same or similar prohibited advertising, or an entity whose code of conduct encourages such prohibited advertising. This lawsuit can be submitted by (i) the trade chambers and associations autonomously, or on the basis of the initiative of individual trader of group of traders, or (ii) the organizations for consumer protection authorized to file a lawsuit for the protection of collective consumers’ interests, or (iii) when Montenegro becomes the member-state of the EU, authorized person from the other member-state of the EU in case the breach of the provisions of the Act in Montenegro affects the traders in such state, provided that entity filing the lawsuit proves that it is registered as an organization for protection of collective rights of traders within the EU.

If the court finds the lawsuit grounded, it will render decision which would remedy prohibited advertising by ordering cessation of prohibited advertising, refraining of the defendant from further prohibited advertising, and publishing of the decision of the court or its part at defendant’s cost and correction of such advertising, as the case may be. The effects of the court’s decision may not be limited only to particular plaintiff but also towards the traders who did not participate in the proceedings.

The Act is passed in a course of harmonization with EU laws, particularly with the Directive 2006/114/EC of the European Parliament and of the Council. However, its effects are broader to some extent as it applies also to consumers. However, as the protection of the rights of consumers is subject to Montenegrin Consumer Protection Act, the Act should be read as complementary source of law for the consumers and their associations.

As this is completely new area of law in Montenegro, the effects of the Act are yet to be assessed in the future.