Comparative advertising is an effective way of promoting your product directly against a competitor’s. But what are the rules behind it? Grid Law founder David Walker provides readers with a legal overview.
We all want our products and services to stand out, and when we know they’re better than our competitors’ we naturally want to let our customers know. One of the best ways to do this is through comparative advertising.
From a consumer’s perspective, adverts that show how or why one product or service is better than another are really valuable. They help us make informed choices. However, from the competitor’s perspective, these activities can be really damaging to their business because they can immediately lead to lost sales. It’s no wonder then, that these types of adverts lead to a huge number of complaints.
Comparative advertising is legal, so long as you follow strict rules. If you don’t, you can be in breach of the Advertising Standards Authority’s (ASA’s) CAP Code and you could also be guilty of trade mark infringement or passing off.
In this article I’m going to look at three situations where comparisons are often made. If you’re the advertiser this will give you a better chance of staying on the right side of the law. If you’re the competitor, this will help you identify when advertisers have overstepped the mark and you need to make a complaint or consider taking legal action against them.
Comparing products and services
In highly competitive industries, you often find rival companies battling it out for supremacy in the minds of their customers. An example of an advert that lead to a legal dispute was when Electrolux claimed its “Intensity” vacuum cleaner had over 50 per cent more suction power than the UK’s leading upright cleaner.
Dyson complained and quite rightly pointed out that the advert must make it clear who the competitor is, and what products or services are being used as a comparison. This advert didn’t. All it said was “the UK’s leading upright cleaner” and that was implied to be a Dyson.
Adverts comparing products and services must not be misleading or confusing. They must give a fair comparison of the products and not omit important information. In this example, the court decided that Electrolux should not have made comparisons based on suction power alone. Instead, they should have compared the cleaning performance of both products such as their ability to remove dust.
It wasn’t an issue in this case, but if products and services are being compared, they must be like for like. For example, they must be of a similar quantity, quality and have the same intended use. Using a vacuum cleaner example, it wouldn’t be a “like for like” comparison to compare an upright cleaner to a handheld cleaner.
In all cases, the advertiser must have documentary evidence so they can back up any claims, statement or statistics they are making or giving about the products or services.
The advertiser must also be careful not to exaggerate the benefits of their products and services or understate the benefits of their competitors.
Price comparisons are extremely common between supermarkets. We often see one supermarket claiming that a basket of big name branded products are cheaper at their stores than their rivals.
With these adverts, the advertiser must clearly name the competitor with whom the price comparison is being made. So, for example, Tesco must say that its basket of products is cheaper than Asda, Sainsbury’s and/or Morrisons.
The comparison between prices must be clear and unambiguous so the customer understands which product or services is cheaper or more expensive. This is what often leads to the complaints, especially when comparing a basket of products where some things are cheaper and others are more expensive.
Again, the advertiser must have documentary evidence to prove the comparison is accurate and most importantly that it’s up to date.
The advert must make it clear when the prices were applied and if necessary, where those products and services were on sale at those prices. For example, is the comparison between in-store or online prices?
When comparing brands, extra care must be taken when the competitor’s brand is a registered trade mark.
The advertiser must be careful to ensure that the comparison doesn’t confuse potential customers as to whose product or services is whose.
Likewise, there must be no chance of confusion that there is some kind of relationship between the advertiser and competitor.
New brands, when advertising their products and services, must also take care to ensure that they’re not trying to build their business by taking an unfair advantage of their competitor’s brand strength or reputation.
This doesn’t just apply to new brands. It can also apply to an existing business with a strong reputation moving into a new area.
When Asda launched their optical business, they used the slogan “Be a real spec saver at Asda”. As you can imagine, Specsavers objected to this and successfully sued Asda for trade mark infringement.
Comparative advertising is such an involved topic that I can’t possibly cover everything in this article. However, if you are actively involved in comparative advertising, following the principles above will help you comply with the ASA’s CAP Code and avoid being sued for trademark infringement.
If you’re thinking of running a comparative advert or you think an advertiser is taking unfair advantage of your business, please feel free to email me with any questions at email@example.com. I’ll happily answer them for you.
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