An interesting case on comparative advertising from the European Court. It concerned an online comparison website being sued by a German insurer. Users of the website were able to compare various products, including insurance packages, free of charge. The comparisons were made on the basis of a series of criteria, including price, by means of scores or grades awarded to the various insurance packages.
It was claimed that such a comparison fails to satisfy one element of the test for comparative advertising set out in EU (and UK) law, namely that it didn’t constitute an objective comparison of the compared products’ features. That seems a somewhat surprising assertion, given many comparisons of complex multi-faceted products are based on grades or points type systems which have an underlying objective rationale even if there is some subjectivity over the way in which the system is constructed and the products assessed.
The European Court didn’t give a view on the issue that was referred (about comparison sites based on grading or points systems). Instead, it ruled on whether the activities of an online comparison website fall within the definition of comparative advertising at all. This was despite the fact that, surprisingly, the defendant didn't appear to raise this issue in the national proceedings.
However, the European Court took the point, and decided it didn’t, based on there not being a competitor relationship between the website and the claimant insurer (even though the site offered consumers the possibility of entering into contracts with the suppliers of the compared products, presumably on the basis of an affiliate relationship).
There is longstanding case law on this issue, which has held that whether there is a competitor relationship depends on the substitutability of the goods or services which the undertakings offer on the market.
Although it falls outside the rules on comparative advertising, the activity of a comparison website could still amount to trade mark infringement or passing off if the necessary elements are satisfied (and without the benefit of the comparative advertising defence).
It could also be in breach of consumer law, perhaps a misleading commercial practice or contrary to the requirements of professional diligence, for example, if the way in which the comparisons are carried out or presented omits material information or is done in a manner which falls short of the standard of skill and care reasonably expected to be exercised towards consumers.
So while comparison sites may draw some comfort from this ruling, it doesn’t mean they can rest easy on potential legal challenges. More generally, those who undertake comparative advertising should carefully consider whether they are within scope of the EU's comparative advertising directive and equivalent UK legislation.
