The Court of Justice of the European Union has recently published a ruling in which it said that the rules on comparative advertising in the Misleading and Comparative Advertising Directive (2006/114/EC) do not apply to a comparison website that ranks various competing goods or services but does not compete with them itself.
The Directive includes criteria for comparative advertising to be lawful. It is implemented in the UK by the Business Protection from Misleading Marketing Regulations 2008. Comparative advertising is defined as advertising which expressly or impliedly identifies a competitor or goods or services offered by a competitor.
HUK-COBURG is the parent company of a large German insurance group whose subsidiaries offer insurance in various fields, including motor insurance. Check24 operates an online comparison website allowing users to compare various products, including insurance packages, free of charge. The comparisons are based on various grades, including price. Consumers can also use the website to enter into contracts with the various insurers.
HUK took issue with the grading system and said that the comparisons were contrary to German laws on unfair competition. The case reached the CJEU with the German courts asking if Article 4(c) of the Directive means that the conditions of permitted comparative advertising may also be satisfied where the comparison is performed by a grading or points system.
The CJEU made the point that the Directive does not actually define who a competitor is. Therefore, it took a look at the previous case law, especially the decision in De Landtsheer Emmanuel SA v Comité Interprofessionnel du Vin de Champagne Veuve Clicquot Ponsardin SA. In that case, it held that an advertisement that does not refer to a specific undertaking or product might fall under the Directive's scope if it is possible to identify that undertaking or the goods it offers as being actually referred to by the advertisement.
The CJEU said that the relevant national court has to decide on the existence of any competitive relationship. However, it considered that a provider of insurance products and a provider of online comparison services for insurance products do not offer substitutable services, and so they operate in different markets. Although the comparison website allowed consumers to conclude contracts with insurance companies, it did not offer insurance services itself.
The CJEU concluded that the concept of comparative advertising under the Directive does not include an online comparison service for goods or services provided by an undertaking which is not a competitor, ie it does not itself offer the goods or services which it compares and which therefore operates in a market for separate goods or services. The same applies where that undertaking acts as an intermediary and allows consumers to conclude contracts with undertakings which offer the goods or services concerned, without itself operating in the market for those goods or those services.
The case is of interest for those making advertising comparisons in the EEA, and may also be taken into account by courts in the UK.
Back in 2017, the CMA completed a market study considering comparison websites' impact on consumers and found that although there were a few problems, they were useful for consumers. Therefore, they should not be regulated out of existence.
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