Intermarché successfully claims EUR 43 million from Lidl due to alleged deceptive business tactics
In a significant ruling, the Paris Court of Appeal has ordered German supermarket chain Lidl to pay €43 million in damages to its French rival, Intermarché [2]. The case revolves around Lidl's promotional campaigns, which the court found to be misleading consumers about pricing or product offers, thereby giving Lidl an unfair competitive advantage.
The deceptive practices in question span from 2017 to 2023 [1]. The ITM company, in charge of the commercial policy of the Groupement des Mousquetaires, first sued Lidl in 2019 over these advertisements [1]. However, the initial lawsuit was dismissed in May 2022, and ITM subsequently appealed the decision [1].
The court's ruling suggests that Lidl's advertisements, which promoted products at attractive prices using product displays and price large displays, were not transparent enough [2]. For instance, the mention of "Supermarkets concerned on Lidl.fr" in Lidl's television spots from 2021 onwards was found to be not easily noticeable, as it appeared only for a few seconds, in small characters, and at the bottom right of the screen [1].
Moreover, the court noted that Lidl was aware that it was not guaranteeing the availability of products for a sufficient duration in all stores, which the court considers as an intentional element of the offenses [1]. It is likely that consumers may not notice or misunderstand the mention, according to the court [1].
The court also deemed this practice as unfair competition against Intermarché [1]. Intermarché is entitled to compensation due to Lidl's deceptive practices [1]. This decision underscores the strict regulatory environment in France regarding misleading advertising and commercial competition.
In response to the court's decision, Lidl has announced its intention to appeal the ruling [1]. The company plans to present its arguments before the highest court to give the dispute the appropriate attention [1].
This case serves as a reminder for businesses to uphold transparency and fairness in their advertising practices, lest they face legal consequences and reputational damage.
Sources: [1] Le Figaro, "Lidl doit verser 43 millions d'euros à Intermarché pour des pratiques publicitaires trompeuses," 22 November 2022. [2] Le Parisien, "Lidl condamné à verser 43 millions d'euros à Intermarché pour des pratiques publicitaires trompeuses," 22 November 2022.
The ruling against Lidl indicates a necessity for transparency in advertising practices within the industry, as the misleading promotional campaigns were found to violate fair business competition, leading to a €43 million fine. This decision serves as a warning to all businesses, particularly those in finance and retail, to ensure their advertising is clear and honest to avoid legal penalties and reputational damage.
