Comparative advertising is a well-known and long-standing marketing tool in the UK, as it is in India and many other countries around the world. It allows companies to compare their products with a competitor, to show customers why their particular offering is better.
Comparative advertising isn’t always just a one-off; it can also form part of a long-running campaign against a company’s competitor in a kind of “battle of the brands”. Some famous examples are the marketing battles between Coca-Cola and Pepsi, Apple and Microsoft and, in the UK, between the large supermarket chains.
Although comparative advertising is allowed in the UK, there are some specific regulations that must be complied with to ensure that any campaign is legal.
Keeping it legal
The principles of comparative advertising are set out in the EU Comparative Advertising Directive of 2006. Provided that a comparative advert complies with the conditions set out in this directive, it should be permitted and a competitor would not be able to rely on its trademark rights to oppose the advertising.
Generally, a comparative advert is allowed if it: (a) is not misleading; (b) compares products meeting the same needs or intended for the same purpose; (c) objectively compares one or more material, relevant, verifiable and representative features of those products, which may include price; (d) does not create confusion between the advertiser’s and a competitor’s goods, services or trademarks; (e) does not discredit or denigrate the competitor’s trademarks; (f) relates in each case to products with the same designation, for products with designation of origin; (g) does not take unfair advantage of the reputation of the competitor’s trademark; and (h) does not present products as imitations or replicas of products bearing a protected trademark or trade name.
Response of the courts
The courts in the UK and Europe are generally reluctant to get involved in comparative advertising and seem to appreciate that comparative advertising promotes competition within the UK market, which is in the interest of consumers.
However, to avoid trademark infringement, businesses need to be careful that their use of a competitor’s trademark does not give rise to a likelihood of confusion between their respective goods and services.
In most cases this seems unlikely, as the whole point of comparative adverts is to draw a distinction between the goods and services of the advertiser and those of its competitor. The difficulty in proving confusion may be one reason why so few cases relating to comparative advertising go before the courts.
Role of standards authority
The majority of comparative advertising cases in the UK are dealt with by the Advertising Standards Authority (ASA), which upholds the UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing, and its broadcast equivalent, the UK Code of Broadcast Advertising.
The codes contain principles similar to those of the EU directive, but go into more explicit and practical details in order to advise companies considering comparative advertising on how to comply with the law and with the codes.
Although the ASA cannot grant injunctions, levy fines or award compensation, the ASA may refer persistent or serious offenders to Trading Standards or, for broadcast advertising, the Office of Communications (Ofcom).
Trading Standards is a local government department set up to ensure that businesses in the local area trade within the law. Ofcom is the government-approved regulatory and competition authority for the UK’s broadcasting, telecommunications and postal industries.
Both can initiate court action or, where there are wider competition law issues, can refer the matter on to the Competition and Markets Authority.
In recent years the ASA has made rulings against hundreds of companies in relation to their comparative advertising, including ASDA, Easyjet and Unilever.
Comparative advertising is a complex area of law, but it seems to be an area where companies are willing to push the boundaries in order to show their products are better than those of a competitor.
On the one hand, comparative advertising is in the interest of consumers and companies, as it encourages competition that drives down prices and in turn increases sales. However, on the other hand, if used in an unfair or misleading manner, it can adversely affect competitors and decrease consumer choice. Advertisers need to make sure that they find a balance between these differing interests and make sure that their comparative adverts fall on the right side of the law.
James Touzel is a partner at TLT LLP.
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