Advertising has a direct impact on the way that markets operate – both for traders and for consumers. Misleading and unlawful comparative advertising can distort competition on the market, deceive consumers and cause significant injury to those who rely on such campaigns.
The advertising industry has boomed over the last decade, as traders seek to promote their goods and services in ways that will capture the attention of consumers. These campaigns can often border on the unacceptable.
In Romania, the legal provisions on advertising are intended to protect both traders and consumers from unlawful advertising. The EU approach to advertising – including misleading and comparative advertising – has been transposed into Romanian law and regulation.
The Law on Misleading and Comparative Advertising (158/2008) implemented the EU Comparative Advertising Directive (2006/114/EC). The Audiovisual Law (504/2002) and Government Emergency Ordinance 181/2008 – the first national law to implement the EU Television without Frontiers Directive (89/552/EEC) – and decisions of the National Audiovisual Council set out further rules on audiovisual advertising.
Romanian law expressly prohibits misleading and, under certain circumstances, comparative advertising. Breach of the rules can incur significant fines and other remedies.
Advertising is unfair and misleading if it deceives or is likely to deceive consumers and if, due to its deceptive nature, it is likely to affect the economic behaviour of those individuals or otherwise cause damage to a competitor.
Misleading advertising is not allowed. The criteria that should be considered when assessing the misleading character of an ad are diverse and must be established on a case-by-case basis. They include:
- characteristics of the goods or services such as availability, nature, execution, composition, method and date of manufacture or provision, fitness for purpose, expected uses or results, quantity, specification, geographical or commercial origin, and results and material features of tests or checks carried out on the goods or services;
- the price or manner in which the price is calculated,
- the conditions of delivery; and
- the nature, attributes and rights of the advertiser, such as its identity, assets, qualifications and ownership of industrial, commercial or IP rights.
If, based on an analysis of the above criteria, it is determined that an ad includes false or exaggerated claims, the advertiser will likely be fined up to Lei30,000 (€6,700).
In disputes involving comparative or misleading advertising, both the Romanian courts and the administrative authorities have penalised the advertisers and ordered them to remove the unlawful advertising messages or campaigns. Interesting cases in this regard include the following:
- The claim “1000 free minutes” was considered to be misleading as it simultaneously presented information about the free 1,000 minutes and details of a monthly subscription fee of $9.52, which was likely to cause confusion and thus deceive consumers, whose economic interests were injured as a result. One of the criteria cited by the National Audiovisual Council was the price and the manner in which this was calculated.
- The claim “The largest medical network” was considered to be misleading as it did not comprise clear and justified information. The court held that the information provided by the advertiser was limited to only some of the medical services offered to consumers and was equivocal, likely to distort consumer behaviour and thus affect competitors on the medical market. Moreover, it was found that the advertiser did not provide minimum information on the criteria on which this claim was based or the circumstances under which medical examinations were offered free of charge.
- An ad stating “Only S card brings you minimum 10% assured discount and the biggest benefits in the world of pharmacies. S, healthy advice” also included an illegible message that “the offer is subject to certain terms and conditions”. The council found the ad to be misleading, given that it did not mention the maximum discount available or the conditions for awarding the discount. This was considered likely to deceive consumers and make them believe that they could benefit from high discounts for any products sold by S pharmacies. The council held that the ad suggested that S pharmacies were the best option from a financial point of view, which was an act of unfair competition that would likely cause damage to competitors in the market.
- A misleading price was displayed on a website in order to promote traffic. The advertiser claimed that the reference to a price of Lei149 instead of Lei1,449 was merely an error, but the court dismissed this argument, holding that the price could distort consumers’ economic behaviour. It also held that the advertiser could have benefited from the higher traffic to its website and even from increased sales due to the misleading price.
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Lawful comparative advertising
Any ad which explicitly or implicitly identifies a competitor or its goods or services is considered to be comparative advertising. This is allowed only if certain strict criteria are met. Thus, the ad:
- must not be misleading;
- must compare goods or services that meet the same needs or are intended for the same purpose;
- must objectively compare one or more material, relevant, verifiable and representative features of those goods and services, which may include price;
- must not create confusion in the marketplace 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;
- must not discredit or denigrate the trademarks, trade names, other distinguishing marks, goods, services, activities or circumstances of a competitor, or products with a designation of origin;
- must relate in each case to products with the same designation;
- must not take unfair advantage of the reputation of a trademark, trade name or other distinguishing mark of a competitor or of a designation of origin for competing products; and
- must not present goods or services as imitations or replicas of goods or services bearing a protected trademark or trade name.
Based on these criteria, the Romanian courts and the National Audiovisual Council issue decisions in order to combat comparative advertising. The most common cases are those involving consumer protection issues.
As an example, the court found that the commercial message “Nothing is more powerful than P” (a dishwashing detergent) both was misleading and constituted unlawful comparative advertising. The court held that the advertiser based its slogan on a test conducted against only two competitors on the market, without revealing the test circumstances. Even if no test had been conducted, the slogan implicitly denigrated all other dishwashing detergents as less efficient, by including the word ‘nothing’. The slogan would thus mislead consumers into thinking that the advertiser’s product was superior to all others on the market, without those products being subject to any tests.
The case law discussed above relates mainly to audiovisual advertising and reflects the regulators’ willingness to tackle misleading and comparative advertising. In most cases, the courts upheld those decisions on appeal.
With misleading and unlawful comparative advertising on the increase as advertisers continually seek new ways to promote their goods and services, a corresponding increase in case law may be expected in the years to come.
Dragos M Vilau
This article first appeared in World Trademark Review. For further information please visit www.worldtrademarkreview.com.