Advertisements are considered misleading if they create a false impression even if everything stated in the advertisement may be literally true. Therefore “50%” off in the example above must apply to all goods in your shop and not just selected items in order to comply.
The Regulations apply to all goods, services and any form of representation made by a trader in connection with a trade, business or profession and, therefore, are extremely broad. They state that a marketing communication is misleading if it deceives or is likely to deceive and as a result it is likely to affect that person’s economic behaviour or is likely to injure a trader's competitor.
Comparative advertisements
The Regulations also prohibit comparative advertisements which are misleading or confusing. Comparative marketing communications are defined widely as any form of representation made by a trader that explicitly or by implication identifies a competitor of the trader or a product offered by such a competitor. This could occur, for example, where a trader compares its product more favourably with a competitor’s product which is not intended for the same purpose, advertises its product as an imitation of another product protected by a trade mark or does not
objectively compare material and representative features of products (which may include price).
Note that an advertisement can be deemed comparative even if it just implies reference to a competitor or its products without naming them.
Sanctions for breach
It is a criminal offence for a trader to make false claims about goods, services or prices if it is likely to mislead and therefore cause loss, damage or injury to the public. Under the 2007 Act a first summary conviction for any such offence is a fine of up to €3,000 and/or six months imprisonment (and up to €5,000 and/or 12 months imprisonment on a subsequent conviction). If prosecuted on indictment (more serious offences), fines of up to €100,000 and/or 24 months imprisonment can be imposed.
Under the Regulations a person can apply for a Circuit or High Court order prohibiting that trader from engaging in, or continuing to engage in, a misleading marketing communication or a prohibited comparative marketing communication. In determining the matter, all interests will be considered by the court including the public interest. The onus is on the trader to prove that the representation is true. The court may make an order without proof of any actual loss or damage on the part of the person making the application or any intention or negligence on the trader’s part and may impose any terms it sees fit (for example, a requirement that the trader
publish a corrective statement at the trader’s own expense).
An injunction may not be available as a remedy, as Tesco found out when, in December 2009, it sought an injunction to stop Dunnes Stores from running allegedly misleading price comparison advertisements in the run-up to Christmas.
ASAI advertising code
The Advertising Standards Authority for Ireland (ASAI) is an independent self-regulatory body set up to ensure that all commercial advertisements and promotions are legal, decent, honest and truthful. Its revised 2007 Manual of Advertising Self-Regulation and the Code of Standards for Advertising, Promotional and Direct Marketing in Ireland came into force on 1 January 2007 and applies to commercial marketing communications and to sales promotions that promote the sales of goods or services. Although a non-statutory code, ASAI members are required to abide by it and not to publish an advertisement which contravenes Code rules.
Also in any court proceedings, a code of practice is admissible in evidence and, if any provision of the code is relevant to a question arising in those proceedings, that provision may be taken into account by the court.
Ensuring compliance
All businesses should ensure that their advertisements and other marketing practices are compliant in order to avoid complaints or prosecution which can be embarrassing and damage a business’s goodwill in addition to being costly and both financially and in terms of precious management time. In particular it is important to ensure that any factual claims made about any product are true and can be validated.