Court of Justice of European Union finds that comparing prices between shops of different sizes is unlawful in certain circumstances

In December 2012, Carrefour launched a television advertising campaign entitled “garantie prix le plus bas Carrefour” (“Carrefour lowest price guarantee”). The campaign compared the prices of 500 leading brand products as sold in Carrefour shops and in competitors’ shops (including Intermarche shops) and offered to reimburse consumers twice the price difference if they found cheaper prices elsewhere. From the second televised advertisement onwards, all of the Intermarche shops were supermarkets, while all of the Carrefour shops were hypermarkets. That information appeared only in smaller letters beneath the name Intermarche.

ITM, a company responsible for the strategy and commercial policy of the outlets belonging to the Intermarche retail chain, brought proceedings before the French courts seeking an injunction to stop the Carrefour advertising and damages in respect of misleading advertising.

The Cour d’appel de Paris asked the CJEU whether the advertising, which compared the prices of products sold in shops of different sizes or formats, was lawful in the light of the Comparative Advertising Directive (2006/114/EC). It also asked whether the fact that the shops concerned were of different sizes or formats constituted material information which, in accordance with the Unfair Commercial Practices Directive (2005/29/EC), must necessarily be brought to the knowledge of the consumer so that the latter can take a commercial decision in full knowledge of the facts.

The CJEU said that under the Comparative Advertising Directive, all comparative advertising must compare prices objectively and must not be misleading. However, where the advertiser and the competitors belong to retail chains which each have a range of shops of different sizes and formats, and where the comparison does not relate to shops of the same size or format, the objectivity of the comparison may be distorted if the advertising does not mention that difference: indeed, the prices of everyday consumer goods are likely to vary in relation to the format or size of the shop, with the result that an asymmetric comparison may have the effect of artificially creating or increasing the difference between the advertiser’s prices and the prices of competitors, depending on the selection of the shops used in the comparison.

The CJEU also said that comparative advertising that omits or hides material information that the average consumer requires in order to make an informed decision or which provides that information in an unclear, unintelligible, ambiguous or untimely manner, and which may consequently cause the average consumer to make a transactional decision that he would not otherwise have taken, is misleading. Advertising such as that in this case was liable to influence the economic behaviour of the consumer by causing him to make a decision in the mistaken belief that he will benefit from the price differences claimed in the advertising when buying the products concerned in any of the shops in the advertiser’s retail chain rather than in shops belonging to the competing retail chains.

Nevertheless, the CJEU declared that such advertising will be misleading only if the consumer is not informed of the differences between the shops in question. Such information must not only be provided clearly, but must also be contained in the advertisement itself. It was for the Cour d’appel de Paris to determine whether that condition was met in this case. (C-562/15 Carrefour Hypermarches SAS v ITM Alimentaire International SASU — to access the Judgment in full, go to the curia search form, type in the case number and follow the link).