In 2013 the Irish High Court issued a decision which made comparative advertising a game of Russian roulette. It had significant consequences for Irish and UK advertisers running campaigns across both markets and was out of step with both European decisions and the policy goals underlying comparative advertising law. In Aldi Stores (Ireland) Ltd v Dunnes Stores ([2017] IECA 116), the Court of Appeal overturned the decision on almost all counts. However, an appeal to the Supreme Court is pending.
In the comparative advertising campaign at issue, Dunnes Stores had displayed shelf labels that compared its products with individual products sold by Aldi, which alleged that the products were incomparable or that the labels had failed to compare the products properly. In addition, Aldi complained that Dunnes had used banners that featured Aldi’s trademark and the words “lower price guarantee”, “guaranteed lower prices on all your family essentials every week” and “Aldi match”.
The third category of complaint was that Dunnes had used shelf labels that compared Aldi’s products to Dunne’s products and contained the words “lower price guarantee” and “always better value”.
In a lengthy decision, the High Court acknowledged the approach and principles arising from cases such as LIDL SNC v Vierzon Distribution SA (Case C-159/09 [2010]) in the context of the relevant legislative provisions, but in its essential finding went on to hold that the 15 own-brand products compared in the shelf labels, in relation to standard items such as tomato sauce, strawberry yoghurt, sparkling orange drink and tinned dog food, were incomparable as they differed in terms of provenance or quality. For example, the court found that identical sizes of a chicken dinner dog food product were incomparable because one contained 4% carrots, and identical sizes of tubs of strawberry yoghurt were incomparable because one had 13% more strawberry in it. The court also found that:
- the Dunnes’ banners were so vague that they did not make a proper comparison and were misleading; and
- the “lower price guarantee” shelf labels did not make objective comparisons in relation to products meeting the same needs and purposes and were thus misleading by omission.
As a result, the High Court found that Dunnes’ comparative advertising defence failed and that it had infringed Aldi’s trademarks.
On appeal, the three-member Court of Appeal found that the first-instance judge had misconstrued the Irish regulations that implemented EU Directive 2006/114/EC. While its analysis and application of the Irish implementing provisions is useful for anyone practising in this jurisdiction, perhaps the most important point for present purposes was that the court found that it is inconsistent with the legislative framework to take an overly technical or detailed approach to comparative analysis and this is more so the case in relation to a comparison of everyday grocery items that are available as own-brand products. All of the products compared met the same needs or were intended for the same purposes and were therefore interchangeable and properly comparable. The court noted that it would have been a different matter if the High Court judge had found that there were material differences in their nature or composition.
As noted by the court, the legislative framework seeks to promote competition while prohibiting misleading advertising. In this context, advertisers must be able to compare standard own-brand products in a fair but straightforward manner that reflects a reasonable consumer’s purchasing decisions. The standard of assessment should not be overly technical or detailed, as to do so would mean that almost no comparison could be made.
Accordingly, the Court of Appeal held that the trial judge’s findings in relation to the 15 products compared were based on an incorrect premise and should be overturned. Further, the court found that it was unnecessary for Dunnes to have identified the specific product being compared on the shelf labels in circumstances where shoppers should be able to make the comparison themselves. The court upheld the finding that the banners were impermissible, but on the grounds that they did not function in any event as comparative advertisements.
Despite its findings in relation to the banners, the court set aside the injunctive relief ordered by the High Court. It then invited the parties to make submissions as to whether it should direct a retrial of the 15 product comparisons and the labels based on its revised analysis of the applicable rules.
Aldi has now obtained leave to appeal to the Supreme Court on the basis that the Court of Appeal dismissed the test applied by the High Court but did not define what the correct test should be. A directions hearing is imminent this month (May 2018) and it therefore looks as if the appeal will be heard shortly.
