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Misleading and Comparative Advertisements

The Law Relating to the Control of Misleading and Comparative Advertisements of 2000 (hereinafter «Ν.92(Ι)/2000» ή «the Law») aims to protect traders from (1) misleading advertisements and (2) to define the conditions under which comparative advertisements are permitted.

A Misleading Advertisement is an advertisement which in any manner, including its presentation, misleads or may mislead persons to whom it is addressed, or to whose attention it is brought, which, due to its misleading nature, is capable of influencing their economic activity, or which for the same reason, is harmful or may be harmful to a competitor.

According to article 3 of Ν.92(Ι)/2000, for an advertisement to be deemed as misleading, all its characteristics are taken into consideration with an emphasis on the following:

«(a) The attributes of the goods or  services, such as availability, their nature, execution, composition, method and date of manufacture or provision, suitability, uses, quantity, specifications, geographical or commercial origin or the results to be expected from their use, or the results of testing or trials of the goods or,

(b) the price, the manner in which it is formulated and the terms under which the goods or services are provided, such as terms of payment, credit, delivery, exchange, return, service, maintenance and guarantee, and

(c) the capacity, the attributes and the rights of the advertised entity, such as its identity and its assets, its skills and its industrial, trade or intellectual property rights, its awards and its commendations. »

A Comparative Advertisement is an advertisement that namely refers to or insinuates a competitor or the goods or services offered by a competitor. For an advertisement to be considered as comparatively acceptable, according to Article 4 of Ν.92(Ι)/2000, it must satisfy the following criteria:

«(a) It must not be misleading according to Articles 4, 5 ,6, and 7 of the Law on Unfair Commercial Practices ·

(b) it compares goods or services which serve the same needs or purposes·

(c) it objectively compares one or more features that are essential, correlated, distinguishable and representative of the goods or services, including pricing·

(d) it is not defamatory of the trademarks, trade names, other marks, goods, services, activities or status of a competitor·

(e) regarding products with designation of origin, it compares products of the same origin·

(f) the advertised entity does not illegally benefit from the competitor’s reputation, trademark, tradename or other mark or the designation of origin of the competitor’s products·

(g) the goods or services are not presented as an imitation or replica of goods or services that bear a trademark or trade name·

(h) it does not create confusion between traders, between the advertised entity and a competitor or between trademarks, tradenames or other distinguishing features, goods or services of the advertised entity and a competitor. »

Article 5 of Ν.92(Ι)/2000 refers to specific offers. In such cases it is necessary that the comparison mentioned in a special offer clearly defines in a manner that may not be misinterpreted, the date on which the offer expires or if necessary, the fact that the special offer depends on the availability of the goods or services and in case the special offer has not yet commenced, the commencement date of the period for which the special price or other terms shall apply.

CONSUMER PROTECTION SERVICE AUTHORITY TO INVESTIGATE AND IMPOSE PENALTIES

Articles 6 to 6Ε refer to the manner in which misleading and comparative advertisements are examined, as well as the manner in which administrative fines are imposed, and the manner in which decisions are drawn up and served.

The Director of the Consumer Protection Service carries out an investigation, either on its own initiative or upon the submission of a complaint regarding any advertisement (whether published or about to be published), which is misleading or a non permitted comparative advertisement.

When the investigation is carried out upon the submission of a complaint, the Director requests from the complainant to demonstrate that it has used the procedures for handling complaints made available to it by the Director, that a reasonable opportunity has been given to the Director to handle the complaint within such procedures and that the complaint has not been handled in a satisfactory manner within such procedures.

When examining a complaint by its own initiative or upon the submission of a complaint, the Director takes into consideration the interests of the parties involved and especially the interests of the public as well as the fact that it is desirable to encourage the initiative of independent organisations or bodies to control advertisements.

Before imposing an administrative penalty, the offender has a constitutional right to be heard and such right is also specified under Article 6Β(1) of the Law.

Having decided that there has been an infringement, then according to Article 6Α(1) the Director will then impose the following penalties, depending on the nature and severity of the infringement:

«(a) An order or recommendation to the offender to terminate the infringement within a specified deadline and to refrain from repeating the infringement in the future, or if the infringement has already been terminated before the time of issuing the decision of the Director, to confirm such termination and/or

(b) An administrative fine up to one hundred thousand euros (€100,000), depending on the nature, severity and duration of the infringement and/or

(c) A decision to impose an administrative fine between one hundred and one thousand euros (€100 – €1000) for each day for which the infringement continues depending on the nature and severity of the infringement. »

According to Article 6Α(2), when imposing the above penalties, the Director may, if appropriate, take into consideration a declaration of commitment made by the offender or on behalf of the offender towards the trader regarding the infringement and the prospect of ceasing the infringement or reinstatement.

The decision of the Director is subject to administrative recourse submitted to the Minister of Εnergy, Commerce, Industry and Tourism. According to Article6Δ, when examining an administrative recourse, the Minister may:

«(a) Request from the trader to submit within a reasonable deadline under the circumstances, evidence regarding the accuracy of its factual allegations in the case, where it is deemed necessary depending on the specifics of the case and taking into consideration the legitimate interests of the trader and those of other parties involved, and/or

(b) to make a finding that the factual allegations are inaccurate, if the evidence requested by virtue of paragraph (a) above is not submitted on time or is deemed insufficient by the Minister. »

Having heard all parties involved, the Minister may reaffirm, cancel, modify or replace the decision in question. According to Article 6Β(2), administrative recourse must be submitted within 30 days of the offender receiving notice of the decision.

According to Article 6Β(5) the amount of the administrative fine is collected upon expiry of the seventy five day deadline to submit an application to the Supreme Court, starting from the date in which the offender receiving notice of the decision of the Director, or in the event of an administrative recourse, starting from the date of the offender receiving notice of the decision of the Minister.

Article 6Β(6) of the Law, most importantly states that:

«If an administrative fine imposed by the Director by virtue of this Law, is not paid, the Director shall take court measures to collect the amount as a debt owed to the Republic. »

The decision of the Director or the Minister is served to each party involved, in the manner described in Article 6Γ of the Law.

Article 6Ε of the Law, states that:

«When any infringement of this Law is committed by a legal entity or by a person acting on behalf of a legal entity, and it has been proven that it has been committed with the consent, or participation or approval or facilitation by means of negligence of a director, secretary or other officer of the legal entity or of any other legal entity acting in such a capacity, this person is also guilty of the infringement. »

Articles 7(1) and 8 of the Law state that the Director as well as persons or legal entities, which either by law or by statute demonstrate a legitimate interest in forbidding misleading advertisements or regulating comparative advertisements, may apply to the Court for a prohibitory decree or order, including an interim order, against any person involved or likely involved in issuing or publishing the advertisement. Jurisdiction lies with a Senior District Judge or a President of the District Court. Such an application is submitted by means of an originating summons. Even though it is not expressly mentioned, it seems that the conditions of Article 32 of the Law on Courts must be satisfied to obtain such an interim order.

It is also important to note that according to Article 7(2) of the Law, the Director must justify its decision to submit an application to the Court, whilst the same is not necessary in relation to any other person that is legally permitted to apply for such decrees or orders.

According to Articles 9(1) and 9(5) of the Law, the Court having taken into consideration the interests of the parties involved and the public interest (especially the general interests) and having been satisfied that the advertisement in question is misleading or is a non permitted comparative advertisement, may issue a prohibitory decree or order subject to the conditions deemed necessary by the Court. According to Article 9(3) the Court may enquire into whether or not the advertisement is accurate, specifically:

«the Court may demand that any person, which in the view of the Court is responsible for issuing or publishing the advertisement in question, submit to the Court evidence relating to the accuracy of the factual statements made in the advertisement, if it is deemed necessary for the purpose of protecting the legitimate interests of the advertised entity and those of the parties involved in the procedure. In case of a comparative advertisement the Court may demand that the advertised entity submits such evidence within a short period of time.»

Article 9(4) states that if the advertised party fails to submit the evidence demanded under Article 9(3) or if the evidence submitted is deemed inadequate by the Court, the Court may make a finding that the factual statements are inaccurate. Article 9(4) essentially creates a presumption that if the applicant simply claims that the fatual statements in the advertisement are inaccurate, then the burden is on the respondent (the advertised entity) to prove that the factual statements are true.

It is not necessary to prove damage or actual harm on any person as a result of the publication of the advertisement, or fraud or negligence on the part of the advertised entity, for the purpose of issuing such a decree or order.

The Court having been satisfied that the above conditions apply, namely, (1) that the advertisement is a misleading or non permitted comparative advertisement, (2) that to issue the decree or order serves the public interest and (3) the advertised entity has not proven the factual allegations, then according to Article 9(5) it may issue the following orders:

«(a) Immediate termination and/or non-reoccurrence of the misleading advertisement or the non permitted comparative advertisement, or

(b) Prohibition of the publication of the advertisement, if it has not yet been published but such publication is imminent, and/or

(c) An order to take such measures as deemed necessary by the Court, to rectify the situation created by the infringement in question, and/or

(d) An order to take any other action or measure deemed necessary or reasonable under the circumstances of the specific case. »

Such an order may be extended to cover not just the advertisement in question, but also any other advertisement with similar terms or that is likely to transmit a similar impression.

According to Article 9(7), in the event that an order has been issued to terminate a misleading advertisement or a non permitted comparative advertisement, the Court may in addition (a) order the publication of its decision in whole or in part in the form deemed necessary, and (b) issue an order for the publication of a corrective statement by the advertised entity.

Article 10 of the Law refers to the powers of the Director to receive and disclose information. According to the said Article, in exercising its authority under this Law (meaning its authority to investigate for the purpose of imposing an administrative penalty, or its authority to apply for a decree or order), the Director may, by written notice demand from any person to submit information or documents as specified in the notice. The notice may specify the manner and time in which the recipient shall comply with the notice and such notice may be varied or revoked by means of a subsequent notice. If a person fails to comply with such a notice for reasons other than legal professional privilege, the Director may apply for a Court order against such person.

Finally, in examining misleading or comparative advertisements, the Director may disclose to any person the contents of a complaint including any related documents in relation to the advertisement or to disclose to any person information, regardless of whether these were obtained by means of a notice as mentioned above or by virtue of any other legal provision. However, in relation to information received by means of such a notice, any person who knowingly discloses such information for purposes other than legal proceedings or in reference to such proceedings or investigations into criminal offences, that had been received on the basis of the powers conferred to it under clause (1) without the permission of the person related to the information, or where the information relates to a business, the permission of the person which at the time in question is carrying out the business, is guilty of an offence and is subject to imprisonment for a period of up to 3 months and/or a fine up to €854.

The above information does not constitute legal advice.

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