Misleading Marketing

Overview I

As misleading and inappropriate marketing communications and comparative advertising may distort the Single Market, they are regulated at the EU level.  Earlier Misleading Advertising Directives were updated by the Unfair Commercial Practices Directive 2005 and the Misleading and Comparative Advertising Directive 2006.

The European Communities (Misleading and Comparative Marketing Communications) Regulations implement the updated EU Misleading Advertising Directive.  The regulations apply to traders, who are persons or companies acting in the course of a trade, business or profession or persons who act on their behalf.

The regulations  apply for the benefit of the fellow traders and others. Traders may take action against other traders in respect of misleading and prohibited marketing communications.

Overview II

In this context, advertising is defined as the making of a representation in any form in connection with a trade, business, craft or profession in order to promote the supply of goods or services including immovable property rights and obligations.

Marketing communications in relation to the supply of a service or product may be an oral, written, visual or descriptive representation made by persons in business by way of trade or profession. Services cover any service or facility for gain or reward, including financial services.

It is an offence to engage in a prohibited marketing communication.  A marketing communication is prohibited if it is misleading under the Misleading and Comparative Marketing Regulations or the Consumer Protection Act (in the latter cases as an unfair commercial practice).

Misleading Marketing Communication

A trader must not engage in a misleading marketing communication.  A marketing communication is misleading if, in any way, including its presentation, it deceives or is likely to deceive in relation to any of the matters set out below, traders to whom it is addressed or reaches and by reason of its deceptive nature it is likely to affect the trader’s economic behaviour or for any other reason specified below, it injures or is likely to injure a competitor.

In deciding whether a marketing communication is misleading, the marketing communication is considered in its factual context, taking into account all of its features and circumstances.The matters in relation to which a communication may be misleading include the existence or nature of the product and its main characteristics including any of

  • its commercial geographical origin, availability at a particular time or particular place;
  • its quantity weight or volume;
  • its benefit or fitness for purpose;
  • the results that may be expected from it;
  • the risk it presents;
  • its use or prior history;
  • its composition, ingredients, components or accessories;
  • its specifications including grades, standards, styles, status, and model;
  • the after-sale consumer assistance available;
  • the complaint handling available;
  • the method or date of delivery, supply or provision;
  • in the case of goods, the method or date of their manufacture;
  • the results and material features of tests or checks carried out on the product;
  • in relation to a service the manner of its execution or performance.

Misleading Elements

The matters in relation to which a communication may be misleading also include

  • the price of the product, the manner in which it is calculated or the existence or nature of a specific price advantage;
  • the need for any part replacement, servicing or repair in relation to the product;
  • the existence, extent or nature of any approval or sponsorship direct or indirect of the product by others;
  • the nature attributes and rights of the trader who made the marketing communication or those on whose behalf of whom it is made, including the trader’s identification, qualification, assets or status; the trader’s affiliation or connection with others; the existence, extent or nature of any commercial, industrial or intellectual property rights or any award or distinction, approval or sponsorship direct or indirect;
  • the extent of the trader’s commitments;
  • the trader’s motives for the commercial practice;
  • the nature of the trader’s supply process;
  • the legal rights of the trader to whom the product is supplied or matters in relation to their exercise.

Where the geographic origin of goods manufactured or produced in one country is to be decided, consideration is given to where the goods underwent their last substantial and economically justified processing or working (in a place equipped for that purpose) resulting in the manufacture of new goods or representing an important stage of the manufacture.

Price Issues

Where the price of a product, the manner in which it is calculated and the existence of a price advantage is a matter to be considered, and the marketing communication concerned involves a representation or creates an impression that the product was previously offered at a different price, consideration is to be given to whether the product was previously offered openly in good faith at that price and at the same place for a reasonable period of time before the representation was made.

Where the marketing communication involves the representation, or creates an impression that the product is being offered by the trader at a lower price than that recommended by the manufacturer, supplier or producer of the product, consideration is to be given as to whether that recommended price was given and recommended in good faith by the manufacturer, producer or supplier concerned.

Comparative Advertising / Marketing

Advertising has been held by the Irish Courts to be a representation in connection with a trade, business or craft, made in order to promote the supply of goods and services.  Statements by the business which are not made for the purpose of promoting it are not advertisements for this purpose.

A comparative marketing communication is any form of communication made by a trader that explicitly or by implication identifies a competitor of the trader or a product offered by the competitor.Comparative advertising in itself is not unlawful.  It may be unlawful if it is false or misleading.  It may constitute a breach of intellectual property rights, such as a trademark.

There is an exception in the trademark context if it constitutes honest practice in industry or commercial matters and the use is not without due cause and does not take unfair advantage of the mark’s distinctive character.  Copyright may be more readily infringed and there is no equivalent defence.

Prohibited Marketing Communication

A trader must not engage in a prohibited comparative marketing communication.  A comparative marketing communication is prohibited as regards the comparison if

  • it is misleading in the above sense;
  • it is a misleading commercial practice under the Consumer Protection Act
  • it does not compare products meeting the same needs or intended for the same purpose;
  • it does not objectively compare one or more material, relevant, verifiable or representative features of the product which may include price;
  • It discredits or denigrates trademarks, trade names, other distinguishing marks, products, activities or circumstances of a competitor;
  • for products with a designation of origin, it does not relate in each case to products of the same designation
  • it takes unfair advantage of the reputation of a trademark, trade name or other distinguishing features of a competitor or other designation of origin of competing products;
  • it presents goods or services as imitations or replicas bearing the protected trademark;
  • it creates confusion between a trader who makes the comparative marketing communication and a competitor, or between trademarks, trade names or other distinguishing goods and services of the trader who made the communication and those of the competitor;

Key Definitions

A comparative marketing communication is any form of representation made by a trader that explicitly or by implication identifies the competitor of the trader or the product offered by such competitor. Goods include all goods, ships, aircrafts, animals, minerals, crops, cars, electricity, water, software, tickets, vouchers, coupons and any other rights deriving from goods.

A marketing communication is any form of representation made by a trader in connection with its trade, business or profession in order to promote the supply of a product.  A product includes both goods and services. Services mean any service or facility undertaken for gain or reward, or otherwise than free of charge.

Services include but are not limited to banking, insurance, financial services, amusement, cultural events, entertainment, instruction, recreation, accommodation, transport, travel package, storage, care of an animal person or things, membership in a club or organisation or any service or facility provided by it.

It includes all benefits, privileges, obligations provided or conferred in the course of the service. A service in this context does not include service under a contract of employment. The supply of goods or services includes their sale, offer for supply, leasing, their display for supply or lease and their transfer by way of security.

Court Order to Restrain I

A trader or any other person may upon giving notice of the application to the trader against whom an order is sought, apply to the Circuit Court or the High Court for an order prohibiting the trader from engaging on, and or continuing to engage in misleading marketing communication or prohibited comparative marketing communication.  In deciding on the application, the court considers all interests involved, including the public interest.

The court may make an order without proof of loss or damage on the part of the person making the application and without proof of an intention or negligence on the part of the trader against whom it is sought.  The court may impose terms and conditions in the order, that it considers appropriate. This may include a requirement that the trader publish a corrective statement at its own expense and in any manner the court considers appropriate.

The matter may be heard by a Circuit Court where it is appropriate for it to do so, as a court of local and limited jurisdiction.  The court considers the nature and extent of the misleading / prohibited marketing communication and the estimated cost of complying with the order to which it relates.  The Circuit Court may transfer the matter to the High Court if it considers that it is not appropriate to deal with the matter at Circuit Court level.

Court Order to Restrain II

The burden of proof is placed on the respondent trader to establish that the representation is true on the balance of probabilities.  It is presumed that the representation is untrue until the respondent proves to the contrary.

The Courts have held that advertisements and marketing communications must be looked at as a whole.  A reference to a competitor must be honest.  This is measured by reference to what would be reasonably expected of advertisements by a reasonable audience, who are aware of the full facts.

The question as to whether the practice is honest is determined with reference to a hypothetical well-informed audience. The test is objective.  The public may expect a certain degree of hype in promotion.  If the advertisement is significantly misleading, it is not likely, to be honest.

Intellectual Property Issues

Comparative advertisements may constitute a breach of the other trader’s intellectual property rights. It may be in breach of trademark.  The use of trademarks in advertisements is prohibited if it causes a likelihood of confusion.  This would constitute trademark infringement on general principles.

The use of another’s registered trademark for the purpose of identifying goods, services as those of the proprietor is permissible where it is done in accordance with honest practices in industrial and commercial matters. If it takes undue advantage or is detrimental to the distinctive character or reputation of the trademark, the defence is not available.

Comparative advertisements may constitute a breach of copyright.  It may be easier for the trader to prove a breach of copyright in some cases, as there is no defence equivalent to that above under trademark legislation.

Comparative advertising may constitute the tort of passing off on first principles.  Most commonly, however, the advertiser will seek to avoid confusion between his products and that of the competitor.

Codes of Practice

Where a code of practice promotes misleading marketing communication or misleading comparative marketing communications, any person may make an application for a High Court or Circuit Court order, prohibiting the code promoter from using such promotion or requiring the code owner to withdraw or amend the code, as the court considers necessary.

A code of practice refers to any code, agreement, rules or standards, that are not imposed by law, but govern or purport to govern matters relating to marketing communication of one or more traders generally, or in relation to a particular trade, who agree to commit to, abide by or be bound by such rules and standards.

The code owner means any person responsible for formulating and revising the code of practice and/or monitoring compliance with the code by those traders who agree, commit or undertake to abide by it.

References and Sources

Irish Texts

Consumer Law Rights & Regulation    Donnelly & White (2014)

Consumer Protection Act 2007 Annotated  Bird (2008)

Consumer Rights Long (2004)

Commercial & Consumer Law: Annotated Statutes O’Reilly, P (2000)

UK Texts

Consumer Sales Law: The Law Relating to Consumer Sales and Financing of Goods 3rd ed

John MacLeod, James Devenney (2019)

Electronic Consumer Contracts in the Conflict of Laws 2nd ed Zeng Sophia Tang (2018)

The Law of Consumer Redress in an Evolving Digital Market: Upgrading from Alternative to Online Dispute Resolution Pablo Cortes (2017)

Blackstone’s Statutes on Commercial & Consumer Law 2017-2018 Francis Rose

Consumer and Trading Standards: Law and Practice 2017 Bryan Lewin, Jonathan Kirk

Woodroffe and Lowe’s Consumer Law and Practice Woodroffe and Lowe’s Consumer Law and Practice 10th ed Geoffrey Woodroffe, Chris Willett, Christian Twigg-Flesner (2016)

Butterworths Trading and Consumer Law Looseleaf Annual Subscription Deborah L. Parry, Roland Rowell (2016)

Butterworths Commercial and Consumer Law Handbook 8th ed Richard B. Mawrey, Tobias Riley-Smith (2015

Consumer and Trading Standards: Law and Practice 4th ed