To Have a Beer and Drink It Too: A Craft Brewery Sues a Competitor for Misleading Slogans Referring to AI… and Makes Them Too

In the last decade, Bulgaria has joined the worldwide frenzy for craft beer. Dozens of small brewers have emerged, bringing new flavors, quality ingredients, techniques, and of course – original marketing and advertising to consumers. What makes craft beer so special is not only the blend of traditional artisanal production and modern recipes but also the experience it creates. From unusual labels and catchy names (Cohones Brewery and Beer Bastards are the main participants in the judicial saga we are about to discuss, while the latter’s brands include “F**ing awesome” and “Naked Attraction”) to original campaigns, consumption rituals, and hipster events, craft beer attracts creative and alternative people, and everyone else who wants to be like them. 

The world of craft beer is undoubtedly exciting, but it is also very competitive, especially in the small Bulgarian market. Coming up with original names, recipes, and campaigns becomes more and more of a challenge, so some Bulgarian craft brewers have turned to Artificial Intelligence (AI) to do the creative work for them. They have even decided to take advantage of the popularity of AI by making it a central part of their marketing campaigns, which has become the object of the scrutiny of the Bulgarian Commission on the Protection of Competition (“CPC”) in a recent misleading advertising case. 

“AI” stands for… “Administrative Infringement”?

The proceedings were initiated by Cohones Brewery (worthy of its name one might say) and several other small brewers against Beer Bastards (probably also worthy of their name), who claimed in a series of social media posts that their new beer variety was “the first AI-generated beer”, while in others it was stated that it was “the first beer with an AI-generated label”.

*The caption starts with: “The first beer with an AI-generated label is a fact”

The claimants alleged that the statement “AI-generated beer” was misleading for consumers because it attributed certain qualities to the product that it did not actually possess. The beer itself was not AI-generated, only the design of its label was, which could mislead consumers and influence their economic behavior. 

Beer Bastards denied these allegations as “preposterous” and “absurd” and stated that “the average intelligent, informed, tech-savvy and cautious consumer was familiar with the nature, purpose, and way of functioning of AI”, and could not be misled into believing that the entire product (beer) was “manufactured” by AI. 

The CPC disagreed and held that AI is a relatively new technology, and the average consumer is still not fully acquainted with its capabilities. Thus, since it does not become clear at all from the advertising claims which part of the product is AI-generated, the average consumer might understand it literally and believe that the entire product was created by AI. Given that this technology is popular and attracts consumers’ curiosity, the claims are likely to motivate the average consumer to make a purchase. 

This reasoning of the CPC comes after the decision in the EON case previously analyzed in this blog where the CPC accepted that the average consumer of telecommunications services is “sufficiently informed and critical enough not to take advertising messages at face value”. Therefore, the slogan that the online TV service was worth BGN 1 per month was not misleading, despite that this price was valid only for the first six months of the subscription period. 

Contrary to the approach in the EON case where the CPC examined whether the average consumer was familiar with the terms and the characteristics of the service itself, in the present case the CPC did not analyze the knowledge of the average consumer of the brewing process but focused its analysis on AI. 

Interestingly, the claimant Cohones Brewery also announced on social media the launch of an AI-generated beer approximately at the same time as Beer Bastards. While Cohones clearly indicated in their social media posts that AI was used for the design of the label, the recipe for the beer, and the marketing campaign, on the beer can only the following statement was made: “Fat Robot. AI-Generated Lager”. 

The question arises whether consumers can be misled by this statement since there is no explanation or disclaimer on the can or on the company’s website clarifying which part of the beer is AI-generated. 

This leads to the next question: under what conditions could one claim that AI is involved in the creation of their product? We understand from the decision of the CPC that it is not justified to make such a claim where AI was used only for the label design unless appropriate and sufficient disclaimers are included. However, would it be enough to involve AI in the creation of the label, the recipe, and the advertising of the product to claim that it is “AI generated” or “created by AI” where AI has nothing to do with the manufacturing process itself?

The CPC decision does not give answers to these questions. Thus, a more thorough interpretation of the issue in the case law of the CPC and the Courts (the decision is under appeal before the Administrative Court for the Region of Sofia) will be welcome. 

The best Bulgarian beer is “F**ing awesome”… or not

The issue of the involvement of AI in the process was not the only accusation against Beer Bastards. The CPC was also asked to evaluate the claim that its beer “F**ing awesome” is “the best beer in Bulgaria” and “the best Bulgarian beer” according to the ranking of ratebeer.com – an American website providing ratings and reviews of a wide range of beers worldwide.

The CPC applied its longstanding approach concerning superlative claims and examined whether the claim was true and non-misleading in light of the substantiation provided by the advertiser. 

The CPC could not establish the methodology used by the website to make the ranking (who voted, based on what criteria, and which were the competing Bulgarian brands) and found that the number of votes was relatively low. Therefore, the CPC considered that the ranking was not representative enough and could not justify the claim “best beer in Bulgaria”. 

The CPC made this conclusion notwithstanding the presence of disclaimers in the advertising communication clarifying that this title was awarded by a third-party website. Thus, although the slogan was not untrue in light of the disclaimer and did not hide from consumers any relevant information, the claim was considered misleading because, in CPC’s view, the ranking was not legitimate. 

To be or not to be…. a craft beer manufacturer 

Finally, Cohones et al. alleged that Beer Bastards misled consumers because it did not meet the national law requirements for a small independent brewery and could not be considered a beer manufacturer because it did not own its own manufacturing facilities but assigned the production of its beers to other breweries in Bulgaria and other EU countries. These allegations were entirely dismissed by the CPC, which accepted that Beer Bastards did not breach any requirements for beer trade in the country and the fact that it assigned the production of its beers to third parties did not deprive it of its quality of manufacturer since it sells the products under its own brand.  

The Craft Beer decision demonstrates a more stringent approach of the CPC towards advertising claims involving new technologies, especially in the context of the growing public interest in the development of AI. Advertisers referring to AI or other complex technologies, that were used for the creation of their products, must clearly explain the role of the technology for the product and not use exaggerated slogans which might mislead consumers. In our view attention must be paid not only to advertising communication but also to the content of their websites and packaging itself. In addition, superlative statements should be avoided unless it can be unequivocally proven that they are true based on reliable and representative sources.