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Comparative Advertising Around the World

Comparative advertising is a type of advertising that compares two or more products or services, usually those of competitors, to highlight the superiority of the advertiser’s product or service. While comparative advertising is widely practiced in many countries, it is subject to different legal frameworks and cultural norms across the world. In this article, we will explore the use of comparative advertising in various countries and regions.

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USA

The Federal Trade Commission (FTC) regulates advertising practices in the U.S. and allows comparative advertising as long as it is truthful, non-misleading, and supported by reliable evidence. However, the FTC has guidelines that restrict the use of comparative advertising in certain contexts, such as when it denigrates the competitor’s product or service or when it creates confusion between the brands. Comparative advertising, when truthful and non-deceptive, is a source of important information to consumers and assists them in making rational purchase decisions. Comparative advertising encourages product improvement and innovation, and can lead to lower prices in the marketplace.

Europe

In Europe, there are also very liberal views on Comparative Advertisements. In Europe, the use of comparative advertising is subject to the European Union’s Comparative Advertising Directive. The Directive allows comparative advertising as long as it is not misleading, does not discredit or denigrate the competitor’s trademarks, and provides objective and verifiable information. The Directive also requires that the advertiser notifies the competitor at least one month before running the comparative advertisement.

In Barclay Banks vs RBS Advanta, RBS made comparative data of all the credit cards, and it was considered good practice. In British Airways vs Ryanair, there was comparative data on airways, although the data was somewhat false, the end result was good, so practice was allowed.

In Loreal vs Bellure, perfume infringement was allowed as it did not cause a change in the economic behavior of consumers. In Intel vs CPM, the mark was the same but applied to a different category of products, so infringement was not considered.

China

Comparative advertising is permitted in China, except for medicines and medical apparatuses. However, comparative advertising containing false or misleading information or information that denigrates a competitor’s goods or services is not allowed. Comparative advertising is allowed in China so long as there are no direct comparisons made with another advertiser. In China, the use of comparative advertising is regulated by the Advertising Law of the People’s Republic of China, which was amended in 2015. The law allows comparative advertising as long as it is truthful, does not infringe on the competitor’s legal rights, and provides objective and verifiable information. However, the law requires that the comparison is fair, and the products or services are of similar or comparable quality.

Australia

In Australia, comparative advertising is regulated by the Australian Consumer Law, which prohibits misleading or deceptive conduct in advertising. The Australian Competition and Consumer Commission (ACCC) allows comparative advertising as long as it is truthful, not misleading, and based on factual and verifiable information. The ACCC also requires that the comparison is fair and does not create an overall impression that is misleading.

Conclusion

Comparative advertising is a widely practiced marketing strategy that can be effective in attracting consumers and increasing sales. However, it is subject to different legal and cultural frameworks across the world. Advertisers should be aware of the regulations and guidelines in the countries they operate in to ensure that their comparative advertising is truthful, not misleading, and compliant with local laws and norms. Overall, comparative advertising is a popular advertising strategy used by companies around the world. While the rules and regulations regarding this type of advertising may vary depending on the country, it remains an effective way for companies to differentiate themselves from their competitors and highlight the unique benefits of their products or services.

Author: Mansi Goel, Trainee Associate at PA Legal.

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