The Commercial Cassation Court Within the Supreme Court - On the Consequences of the Dissemination of False Information Misleading Consumers by a Business Entity

On August 30, 2022, the Commercial Cassation Court within the Supreme Court considered the case on a company’s claim against the Antimonopoly Committee of Ukraine (the AMCU) to cancel the decision on recognition of the company’s actions as a violation of the law on protection against unfair competition.

The disputed decision of the AMCU recognized the actions of the company as a violation of Art. 15-1 of the Law of Ukraine On Protection Against Unfair Competition. It concerns the company's propagation of misleading information on counter-labels of wines of its own production under the name "LAMBRUSCO" by informing an undetermined circle of persons with false information: "the grapes of Italian origin are used in the production", "made according to Italian technology", "a unique, slightly tart taste is achieved due to the combination of white and red grapes of Italian origin". Such information, alone or in combination with other information displayed on the labels/collars of these wines, may influence the intention of individuals to purchase the company's wines, considering them Italian. A fine was imposed for this violation.

By the decision of the Kyiv City Сommercial Сourt, upheld by the ruling of the Northern Commercial Court of Appeal, the claim was rejected.

The commercial courts proceeded from the fact that the circumstances of the case in their totality confirmed the plaintiff's violation of Art. 15-1 of the Law of Ukraine On Protection Against Unfair Competition.

According to the results of the case consideration, the Commercial Cassation Court within the Supreme Court upheld the judicial decisions of the previous instances and noted the following.

The propagation of false information by a business entity that misleads an indefinite circle of persons, in particular, as a result of the chosen method of presentation regarding the name of the product, its consumer properties and the standard to which the product complies, may affect the intentions of these persons to purchase (order) the goods of this business entity. Such actions entail liability under the Law of Ukraine On Protection Against Unfair Competition.

The Supreme Court pointed out that the courts of previous instances had come to an incontrovertible conclusion that there were no legal grounds for cancelling the AMCU decision, taking into account:

• relevant legal regulations;
• established factual circumstances;
• the exclusive powers of the AMCU bodies regarding the assessment and qualification of existing actions as a relevant violation, given that the AMCU bodies monitor compliance with the legislation on the protection of economic competition, including the law on protection against unfair competition, in terms of identifying and stopping the dissemination of misleading information;
• the study of the circumstances established by the Antimonopoly Committee of Ukraine regarding the dissemination by the plaintiff of information that misleads consumers by reporting false details, is false and may affect the intentions of consumers due to the chosen method of presentation to purchase the wines of the enterprise as Italian wines, while they are Ukrainian.

The resolution of the Commercial Cassation Court within the Supreme Court of August 30, 2022, in case No. 910/2328/21 – https://reyestr.court.gov.ua/Review/105961061.

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