It has been reported that the UK’s Advertising Standards Authority (ASA) handled 111% more cases in respect of internet price comparison complaints in 2018 than in 2017, and that in 2018 some 16 thousand non-broadcasting advertisements were found to be misleading to the consumer. While brands should not be discouraged from using comparative advertising to undercut their competitors, in light of the growing number of complaints raised, it is of paramount importance that brands recognise the legal dos and don’ts of this powerful marketing tool.
Comparative advertising refers to any advertising which explicitly or by implication identifies a competitor or their goods or services. There are specific laws on comparative advertising which must be obeyed to avoid complaints. Such laws derive from the EU Directive on Misleading and Comparative Advertising (EU DMCA, for the full text see here), which was implemented by the UK in the form of the Business Protection from Misleading Marketing Regulations 2008, and is also the basis of the Code on Non-Broadcast Advertising, Sales Promotion and Direct Marketing (for the full text see here) and the Broadcast Advertising Code (for the full text see here). In the UK, the ASA, a self-regulating organization, administers the codes and can, if a complaint is raised and upheld, order the advertisement at issue to be removed or amended.
When referring to a competing brand within a comparative ad, ensure the ad complies with the Business Protection from Misleading Marketing Regulations 2008, to avoid a valid trade mark infringement claim. Furthermore, a permitted comparative ad is not a defence against a copyright infringement action, therefore, when making comparative advertisements it is recommended that all competitor’s branding which could be considered a copyright work is removed from the ad.
With this in mind, we have summarised the rules of the permitted comparative advertising along with some practical examples.
The Dos of Comparative Advertisement
1. When making comparisons with a competitor, do make a like-for-like comparison. For example, when comparing products ensure they have the same function or intended purpose. For products with a designation of origin, they must be compared only with other products with the same designation. In a recent dispute with Tesco, Aldi was found to have misled the consumer (see full decision here) when they compared prices of two trolleys of own-branded and branded products, including the frugally-priced Aldi champagne proposed as a substitution to the Moët champagne sold by Tesco. Despite indicating on the advertisement that “Tesco may sell 'own brand' products at different prices”, the ASA found that inclusion of the high-end Moët champagne in the Tesco basket artificially skewed the comparison in Aldi’s favour and was likely to mislead consumers.
When making comparisons based on price, feel free to compare promotional prices with non-promotional prices but ensure this is stated within the ad. Similarly, when making price comparisons, ensure that the products being compared are of the same size or volume, or allow these differentiations to be reflected within your calculations. Further, advertisements should avoid absolute comparisons against the whole market. By way of example, in 2014, Tesco released an advertisement stating, “no one is cheaper for your big Christmas shop” while it had only compared the price of a shop at Tesco with products bought at 5 other UK supermarkets. The advertisement was found to be misleading because it implied that no other food and grocery retailers were cheaper than Tesco for the basket of goods comparison whilst Tesco was not able to prove it was so (see full decision here).
2. Do objectively compare one or more material, relevant, verifiable and representative features of those good and services. Brands should ensure that price comparison data is up to date and that the date of the comparison is stated in the advertisement. For the ASA Guidance on retailers’ price comparisons in marketing communications click here.
3. Do make sure the ad is supported by verifiable data available to the consumer. An ad which features a comparison with an identifiable competition must include sufficient information to allow consumer to understand the comparison, and be able to check the claim was accurate, or ask someone suitably qualified to do so. By way of example, Airsorted Ltd’s advertised to be “The world’s largest management company for Airbnb and more”. It was found to be unverifiable by the ASA as consumers were not signposted to the information that evidenced the claim (see full decision here). On the other hand, BP Oil UK Ltd’s claims that “Engines cleaned with BP Ultimate could give you up to 21 more miles per tank” were found to be valid as the average fuel consumptions figures were verified and published by the US Environmental Protection Agency and the method used by BP to calculate the increase in range was reasonable and likely to be realistic (see full decision here).
The Don’ts of Comparative Advertising
4. Do not mislead the consumer. When making price comparisons with a recommended retail prices (RRPs), the ASA will likely find the consumer to be misled when the RRP differs significantly from the price at which the product or service is generally sold. Where the ad makes a comparison with an unidentifiable competitor, the elements of the comparison must not be selected to give the advertiser an unrepresentative advantage. Medichem International (Manufacturing) Ltd was found to have misled the consumer by stating that their product was the “UK’s most effective anti-bacterial facewash”. The ASA found that the product had only been tested on leading competitors and not against the whole market. In addition, while the tests showed that the product was able to kill bacteria, there was no evidence to demonstrate the perceptible difference in effectiveness of the product for users and therefore the claim was held to be misleading (see full decision here).
5. Do not discredit or denigrate the trademarks, trade names, other distinguishing marks, goods, services, activities or other circumstances of any competitor;
6. Do not take advantage of the reputation of a trade mark or create confusion with another competitor;
7. Do not present products as imitations or replicas of products bearing a protected trade mark or trade name.
Brands should obtain legal advice before embarking on a comparative advertising campaign to evaluate the risks. Considerations should also be given where the ad will be exposed to multiple jurisdictions. The EU DMCA ensures a level of consistency across the EU member states, but the obligations on the advertiser may differ further afield. If you identify a comparative advertisement from outside the UK, a complaint can be raised through the EASA which operates in Europe to ensure advertisements are legal, decent, honest and truthful.
If you have any questions on comparative advertising, please do not hesitate to contact the Finnegan Trade Mark Team based in our London Office.
Finnegan is deeply saddened by the death of our colleague Donald R. Dunner, who passed away on October 16, 2019, after a life of dedication and inspiration to many in IP law. Don was in a category all his own with his talent and distinct knowledge of IP law. His direct approach and enthusiasm for work and life touched everyone who worked with him, and we will miss him dearly.