Unfair advertising - when do we deal with it?

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Acts of unfair competition can take many forms. One of them is advertising that violates the basic principles of law and the free market. It is completely prohibited to unfairly promote your goods and services at the expense of another trader. But what exactly is unfair advertising?

Acts of unfair competition

Pursuant to Art. 3 of the Act on Combating Unfair Competition, an act of unfair competition is an act that is against the law or morality, if it threatens or violates the interest of another entrepreneur or client.

The acts of unfair competition are in particular:

  • misleading designation of the company;

  • false or fraudulent indication of the geographical origin of goods or services;

  • misleading designation of goods or services;

  • breach of trade secrets;

  • inducing the termination or non-performance of the contract;

  • imitation of products;

  • slander or dishonest praise;

  • obstruction of market access;

  • bribery of a person holding a public office;

  • unfair or prohibited advertising;

  • organizing an avalanche sales system;

  • running or organizing activities in a consortium system;

  • unjustified extension of payment terms for delivered goods or services rendered.

Unfair advertising is one of the acts contrary to the principles of proper competition on the market. The Polish legislator pays special attention to this issue.

What is unfair advertising?

Contemporary advertisements take a wide variety of shapes, often balancing on the edge of correctness or compliance with applicable law. Interestingly, advertising allowed in one country may be completely banned in another - mainly due to the customs prevailing in a given country or the legislation in force there.

The concept of fair advertising is very broad and it is impossible to clearly define the definition of a proper promotion of the goods sold or the service offered. Undoubtedly, proper advertising must comply with the applicable regulations (it cannot persuade to violate them) and the conditions of fair competition on the market (it cannot lead to the so-called destruction of another enterprise). Judgment of SA in Kraków of February 11, 2020 (file reference number I Aga 39/19)

Honest advertising should be positive, ie it should aim at encouraging customers to purchase products of the advertised company, and not discourage them from using the offer of competing companies by amorally undermining their reliability.

The fairness of an advertisement should always be determined on the basis of the circumstances of the case. The nature of the promotion, however, is not so important here - unfair advertising can manifest itself in any form (paper, radio recording, TV recording, internet spot or even incorrect product placement in media programs).

What is unfair advertising?

Help in determining the unfairness of a given advertisement comes directly from the Act on Combating Unfair Competition. According to the content of its Art. 16 an act of unfair competition in the field of advertising is in particular:

  • advertising contrary to the provisions of law, good manners or offending human dignity;

  • advertising that misleads the customer and could therefore influence his decision to purchase a good or service - the error caused by the advertisement should be significant, i.e. it should cause at least the potential ability to influence customers' decisions regarding the choice of the advertised product;

  • advertising that appeals to customers' feelings by causing fear, taking advantage of children's superstitions or credulity;

  • statements which, by encouraging the purchase of goods or services, give the impression of neutral information;

  • advertising, which constitutes a significant interference in the sphere of privacy, in particular by harassing customers in public places that are burdensome for customers, sending unsolicited goods at the customer's expense or abuse of technical means of communication.

When assessing misleading advertising, all its elements should be taken into account, in particular those relating to the quantity, quality, ingredients, method of production, suitability, applicability, repair or maintenance of the advertised goods or services, as well as customer behavior. Judgment of the SA in Lublin of March 7, 2018 (file reference number I Aga 21/18)

The entity responsible for the acts of unfair competition in the field of advertising is undoubtedly also, and even above all, the entity whose products, services or activities are the subject of advertising, i.e. the entity in whose interest the advertising is conducted.

It is commonly accepted that advertising is all forms of communication, including those that do not contain any evaluation or incentive to buy elements, but may be accepted by their recipients as an incentive to buy. [...] the basic determinant of an advertising message is not only a more or less clear incentive to buy the goods, but also the actual intentions of the transmitting entity and the reception of the message by the target entities.

Comparative advertising

A special type of advertising, which may be an act of unfair competition, is the so-called comparative advertising. In practice, it consists in compiling products or services of the same type that come from different entrepreneurs, and then promoting only one of them (coming directly from the advertiser).

In principle, comparative advertising is not prohibited, but if it violates the fundamental rules of fair competition, it cannot be used at all. Advertising enabling the direct or indirect recognition of a competitor or goods or services offered by a competitor constitutes an act of unfair competition if it is contrary to morality. Comparative advertising is not contrary to morality if jointly meets the following conditions:

  • is not misleading advertising;

  • compares goods or services meeting the same needs or intended for the same purpose in a fair and verifiable manner;

  • it objectively compares one or more material, characteristic, verifiable and typical features of those goods and services, which may also include price;

  • does not cause confusion in the market between the advertiser and his competitor, or between their goods or services, trademarks, company signs or other distinguishing signs;

  • does not discredit goods, services, activities, trademarks, company signs or other distinctive signs, as well as the circumstances of the competitor;

  • in the case of goods with a protected geographical indication or a protected designation of origin, it always applies to goods with the same indication;

  • does not unfairly exploit the reputation of a trademark, company name or other distinctive sign of a competitor, or a protected geographical indication or protected designation of origin of competing products;

  • it does not present a good or service as an imitation or imitation of a good or service bearing a protected trademark, geographical indication or protected designation of origin or other distinctive sign.

Remember that comparative advertising related to a special offer should, depending on its terms and conditions, clearly and unambiguously indicate the date of expiry of this offer or contain information that the offer is valid until the stock of goods is exhausted or the services are no longer provided, and if the special offer is not yet valid , should also indicate the date from which the special price or other specific conditions of the offer will apply. Start a free 30-day trial period with no strings attached!

Summary

Advertising of products and services is legally allowed in Poland, provided, however, that such promotion does not violate applicable laws, good manners, and does not constitute the so-called aggressive competition. Unfair advertising is prohibited and appropriate compensation can be requested for its use. However, the advertisement must be carefully assessed each time, and the aggrieved party should prove what its unlawfulness is. Description of unfair advertising can be found, among others in the catalog of the Act on Combating Unfair Competition.