In its judgment of 10 October 2012 (case No I ACa 856/12),[1] the Appeal Court in Krakow found that comparative advertising may compare prices from a different dates, and that companies may continue their advertising even if the competitor changes the prices. It is only necessary to provide customers with precise information on the dates when the prices being compared were valid.
In the contentious advertisement, the operator of a chain of supermarkets, Tesco, compared the prices of a large number of fast-moving goods with prices applied by operators of various discount markets. The advertising campaign was carried out using the phrase “Discount prices” and included methods such as a promotional newspaper and many other forms associated within Tesco markets: posters, comparative price tags on the shelves and under particular products.
Tesco’s promotional prices were valid between 16 October 2008 and 12 November 2008, whereas the claimant’s (Lidl) prices were checked on 22 September 2008 – both facts were clearly indicated in the advertisement. Tesco’s promotional prices were equal to or lower than the prices of its competitors. Before the promotional period, many of Tesco’s prices being compared had been higher. The claimant’s prices did not change from 22 September 2008 until 16 October 2008, when the advertising campaign started. One day after the start of the campaign, Lidl lowered the prices of several of the products being compared.
The District Court in Krakow agreed with the claimant, who claimed that a comparison of prices from different dates was not objective, but the Appeal Court in Krakow reversed the judgment. In the opinion of the second instance court, a subsequent decrease of prices by Lidl was “a correct and natural reaction to the competitor’s advertisement,” and “a comparison of prices from different dates does not make the advertisement non-objective. This should also be examined in the context of the model of an educated, circumspect and critical consumer, who is fully aware of its rights.” The Appeal Court said that “the advertising campaign in question was honest and fair, because it does not confuse customers as to whether the prices applied by Tesco were the same or lower than prices applied by Lidl at the date of purchasing the goods.” However, Tesco described its “Discount prices” promotion as the cheapest, it was sufficient that prices were at least equal to those of competitors; the Appeal Court underlined that this was apparent from the advertising.
The Appeal Court also found the comparison of non-identical products to be admissible – in line with the judgment of the Court of Justice of the European Union (CJEU) of 18 November 2010 in the C-159/09 Lidl case (though it is not clear from the judgment whether the advertisement fully satisfied CJEU instructions as to the indication of differences between products).
The most significant problem in this case is not a mere fact of comparing prices from different dates, but continuing the advertising after Lidl decreased its prices. Using outdated advertising raises serious doubts in light of the goal of Directive 2006/114/EC of the European Parliament and of the Council of 12 December 2006 concerning misleading and comparative advertising (hereinafter: “Directive 2006/114”), which states that comparative advertising “may be a legitimate means of informing consumers of their advantage” (recital 8 of the preamble) and should not “have an adverse effect on consumer choice” (recital 9 of the preamble). An outdated advertisement does not meet its goals – information on the historical prices of a competitor is not beneficial to customers in any way, and may even have an adverse effect on their choices. Even a circumspect average consumer may believe that the information contained in the advertisement is still valid. In addition, when it comes to fast-moving goods, the level of attention required from an average consumer is not particularly high and consumers are not willing to spend a lot of time making a transactional decision. For example, it is hard to assume that the average consumer would go to a competitive supermarket to check whether Tesco’s promotional offer is still more attractive than that of Lidl. Further questions arise: for how long are advertisers entitled to continue outdated advertising? Or can an advertising campaign be started in full knowledge that, at the date of its commencement, the competitor has different prices? On the other hand – does the change of prices by a competitor mean that an advertiser who has devoted a lot of time and resources on preparing an advertising campaign (in this case Tesco compared prices of around 1700 products) has to stop the campaign after one day (many ads were already printed)? It is worth noting that the CJEU, in its judgment of 8 April 2003 in the C-44/01 Pippig Augenoptik case, remarked that “objectivity implies that the persons to whom the advertising is addressed are capable of knowing the actual price differences between the products compared, and not merely the average difference between the advertiser’s prices and those of its competitors” (point 82 of the judgment).
In its recent judgment of 13 December 2013, the Polish Supreme Court (case No III CSK 65/13)[2] dismissed a cassation filed by Lidl Polska (written grounds of the judgment had not been prepared at the time of writing).
[1] The full text of the judgment (in Polish) may be found at the official website of Ministry of Justice at http://orzeczenia.ms.gov.pl/
[2] According to the article available at: http://www.portalspozywczy.pl/handel/wiadomosci/tesco-wygralo-proces-z-lidlem,94825.html (visited on 20 December 2013).
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