The purpose of the Directive on Misleading and Comparative Advertising is to protect traders against misleading advertising and its consequences. It also aims to lay down the conditions under which comparative advertising is permitted.
The Directive provides for a minimum level of protection throughout Europe as concerns misleading advertising, and it fully harmonises the rules of the EU countries on comparative advertising.
Since the implementation of the Directive on Unfair Commercial Practices , the scope of application of the Misleading and Comparative Advertising Directive has been restricted to business-to-business (B2B) relations concerning misleading advertising.
Its provisions on comparative advertising also apply in the context of advertising directed at consumers.
On 27 November 2012 Vice President Reding presented the Commission's strategy to improve the protection of businesses against misleading marketing practices. The Communication "Protecting businesses against misleading marketing practices and ensuring effective enforcement" contains a detailed list of actions:
1. Revise the rules prohibiting certain practices
- To enhance legal certainty and ensure there are no gaps, some clearly misleading practices, such as those of the misleading directory companies, will be explicitly banned so that traders will instantly know that such practices fall under the Misleading and Comparative Advertising Directive and are thus illegal.
- To make sure everyone plays by the rules of the game, the Commission envisages strengthening the penalties for infringements. Member States will have to ensure that their laws foresee effective proportionate and dissuasive penalties.
2. Strengthen enforcement of the rules in cross-border cases
- Every Member State will be required to designate an enforcement authority with the necessary powers to make sure the rules are also applied in business-to-business relations. Today this is not the case in all EU countries.
- The Commission will establish a cooperation procedure between enforcement authorities. This enforcement network will enable the relevant authorities, such as competition or consumer protection agencies, to exchange information, request cross-border assistance from each other and stop misleading practices affecting businesses.
The Commission plans to present a legal proposal in the course of 2013, following a thorough impact assessment.
According to the Directive, misleading advertising is any advertising which, in any way, including in its presentation, is capable of:
- deceiving the persons to whom it is addressed;
- distorting their economic behaviour; or
- as a consequence, harming the interests of competitors.
When determining whether advertising is misleading, several factors shall be taken into account. These are:
- the characteristics of the goods or services concerned;
- the price;
- the conditions of delivery of the goods or provision of the services involved;
- the nature, attributes and rights of the advertiser.
The Directive lays down the conditions under which comparative advertising is permitted and, in particular, it requires traders to make sure that their advertisements:
- are not misleading;
- compare "like with like" - goods and services meeting same needs or intended for the same purpose;
- objectively compare important features of the products or services concerned;
- do not discredit other companies trademarks;
- do not create confusion among traders.
The enforcement of this legislation is the responsibility of the competent authorities and courts in the EU countries.
The Directive requires the EU countries to set up adequate mechanisms that enable persons and organisations having a legitimate interest to bring an action to the competent courts or administrative authorities for the cessation and/or the prohibition of misleading or unlawful comparative advertising.