Honesty represents an omnipresent principle in all specific areas of a business, and this should not be omitted even in the legal realm, more precisely in the field of advertising. “The cheapest product,” “Unbeatable price,” “Unique product,” “The best product on the market,” “Prices lower than competitors/competitor X,” “Number 1 product chosen by consumers” are just a few of the phrases used by merchants to stimulate their sales and attract as many buyers as possible. But what happens when merchants randomly use such phrases without being able to prove their veracity, in other words, without being able to substantiate them? In such a case, authorities can classify these practices as deceptive or comparative advertising.
A. Deceptive Advertising
Law 158/2008 stipulates that deceptive advertising is advertising that, in any way, including through its presentation, induces or can induce individuals to whom it is addressed or who come into contact with it and who, due to its deceptive nature, can affect their economic behavior or which, for this reason, harms or can harm a competitor. Thus, such a form of advertising is prohibited to protect, on one hand, consumers who can be misinformed by professionals (merchants) through such practices and, on the other hand, the competitors of these merchants from the unwanted effects of deceptive advertising, emphasized in relation to their economic activity. According to the law, deceptive advertising is prohibited.
B. Comparative Advertising
On the other hand, comparative advertising implies that form of advertising which explicitly or implicitly identifies a competitor of the merchant using this form of advertising, or goods or services offered by them. Although it is not presented by the law as a prohibited form of advertising, comparative advertising can only be done with the fulfillment of certain strict conditions, among which we non-exhaustively list the condition that: it should not be deceptive, it should not compare goods or services that correspond to the same needs or are intended for the same purposes, it should objectively compare the characteristics of the goods or services presented, it should not discredit another competitor, and should not unfairly benefit from the reputation of another brand for the promotion of their own products/services.
How do we proceed in the case of an inspection regarding deceptive/comparative advertising announcements?
In the situation where a merchant is subject to an investigation regarding their advertising announcements, they will need to demonstrate to the controlling authorities the veracity of the claims contained in these announcements, by providing any studies or documents that substantiate the apparently deceptive claims. It is recommended that the business operator cooperates well with the authorities in this process, as a refusal to provide evidence to substantiate the information contained in their advertising announcements can lead to severe sanctions, regardless of the medium through which they are presented: TV, radio, online, physical, OOH, etc.
What fines do business operators risk for promoting their goods or services deceptively?
First and foremost, it must be specified that the competent authorities for investigating and penalizing practices related to deceptive or comparative advertising are represented by both the National Authority for Consumer Protection (ANPC) and the Ministry of Finance (MF). These authorities can penalize merchants with fines of up to 30,000 RON if they find that their practices are deceptive to consumers or can harm competitors.
Business operators who refuse to provide the control body with documents that attest to the accuracy of the claims in the investigated advertising announcements can be fined an amount ranging from 6,000 to 60,000 RON. In addition to these fines, complementary measures such as discontinuing deceptive advertising or illegal comparative advertising can also be applied.
The Grecu Partners team is currently involved in investigations conducted to penalize deceptive or comparative advertising practices, providing dedicated advice to the merchants targeted by authorities and possessing relevant experience in the field of consumer law and advertising.
Elevate your advertising strategies with Grecu Partners. Contact us now for expert guidance in compliant and transparent practices. Your success, our commitment.
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Mihaela Bălău, Attorney at Law