TESCO has promised not to display misleading in-store price comparisons with its rival Aldi in future.
The supermarket giant agreed to pay €150,000 to Aldi and gave a High Court undertaking not to display inaccurate comparisons in its stores.
This includes comparing products of a similar nature but with significant differences such as dry dog food compared with moist dog food.
It also prevents price comparisons of completely different products such as marmalade and tuna chunks.
The undertaking also prevents comparisons of alcohol of a different vintage, alcohol strength, colour or country of origin.
Where the products being compared are of a different weight, Tesco will also have to display accurate pro-rata weight/price calculations.
Tesco will also not be allowed compare prices on products that have not been sold in Aldi stores in the last fortnight, and will also have to indicate if products being compared have the Bord Bia Quality Assurance mark.
The settlement was agreed before Mr Justice Peter Kelly in the Commercial Division of the High Court, just days ahead of a hearing.
Aldi said that it would donate the €150,000 payout to the St Vincent de Paul charity.
The discount supermarket chain said it had taken High Court proceedings for trademark infringement against Tesco after repeatedly bringing the matter to Tesco's attention without success.
"Aldi is, of course, fully in favour of comparative advertising, but any comparative advertising must be accurate, fair and cannot mislead the consumer," Aldi said.
"The effect of today's undertakings is that consumers can expect and demand clear, transparent and accurate information on comparative advertising to enable them to make properly informed decisions about what they buy and who they buy from," said Aldi Ireland buying director Niall O'Connor.
In a statement, Tesco Ireland said that the settlement endorsed comparative advertising, which was good for the consumer.
"The settlement also sets down clearly for the first time the ground rules for how comparative advertising can happen," it said.
"It is an important part of the competitive environment in retailing and we are pleased that it can continue within the parameters set out.
"Tesco Ireland accepts the principles set down in the settlement and will continue to drive competition and innovation in the Irish market," it added.