BUSINESS MATTERS Comparative advertising
Whether you are contemplating a comparative advertising campaign or are the unfortunate target of an unwelcome comparative advertisement, there are several issues to bear in mind, explains Martine Nathan, Partner at Teacher Stern Solicitors.
Martine Nathan A
dvertisements which refer to competitors’ products and services are subject to complex
legal considerations and there are many pitfalls for the unwary. If you are not careful, a business whose adverts contravene the rules may find itself the subject of a regulatory or legal challenge.
What is comparative advertising? You will no doubt be familiar with the concept of comparative advertising. Legally, a comparative advertisement is defined as one that explicitly or by implication identifies a competitor, or goods or services offered by a competitor, which could encompass a wide range of advertising. Negative adverts, specific comparisons and general claims to be on par with the best, if not better than all competitors, could all fall under the umbrella of ‘comparative advertising’ for the purposes of UK regulations.
What are the legal requirements? The Business Protection from Misleading Marketing Regulations 2008 (BPRs) implement the EU regulations relating to misleading and comparative advertising and set out a checklist of conditions which must be met under UK law before a comparison is permitted. The requirements are incorporated
within the self-regulatory advertising codes and are enforceable by the Office of Fair Trading (OFT) or Trading Standards or by the Advertising Standards Authority (ASA).
What are the legal risks? Breach of the conditions does not in itself give rise to any independent right of action and, on the whole, an unhappy competitor is likely to make a complaint to ASA first. If the advert is found to be in breach, ASA will issue a legal decision (an adjudication) to that effect, which it reports on its website. While ASA cannot grant injunctions, levy fines or award compensation, it has a powerful sanction in the adverse publicity caused by negative adjudications, which are often reported on by the media. ASA may also refer persistent or serious offenders to the OFT for court action.
An advertiser may also potentially be exposed to a legal claim by a competitor for any of the following: Trade mark, copyright and design infringement; passing off (misrepresentation calculated to injure the goodwill of the competitor causing actual damage to its business); interference with the competitor’s business by unlawful means; malicious falsehood (if the competitor is referred to
in a false or reckless way which causes them financial loss); or defamation (if there is an untrue suggestion that the competitor is doing something wrong).
What are the commercial risks? Do not forget that, contrary to intention, adverts may reflect badly on the original advertiser. Bear in mind the light in which your advertising campaign may portray you. There is a risk of coming across as dishonest or unfair and you should test the market in advance to assess the likely consumer response. Consider keeping a negative advertisement light-hearted (take for example the comical Apple versus PC advertisements) or contrasting product type rather than individual manufacturers.
Unsuccessful comparative advertising could impact on the value of your own products or services as, while an ad might work in specific contexts, if it is too complicated or too innovative there is a chance consumers may fail to understand its purpose, see it as inappropriate or, worse, attribute its positive message to your competitor. In this way you risk affecting your own credibility as a business. Further still, negative advertising may have an unforeseen adverse effect on the whole category
of products concerned. Think about conveying simple messages such as price comparisons or the results of taste tests (as utilised in COSTA coffee’s advertisement promoting the favourable results of a taste test against Starbucks). On the other side of the coin, if you are the target of a comparative advertisement, do not be tempted automatically to hit back at its originator. This may create an adverse consumer reaction to your own business or draw further attention to the original message. Instead, consider pursuing regulatory or legal avenues through the ASA or court proceedings, as mentioned above.
A balancing act
In principle, comparative advertising is encouraged in the UK as it is pro- competitive and can be beneficial to consumers. The European Court of Justice (ECJ) and the English courts have historically tried to accommodate comparative advertisers, seeing their activities as conducive to healthy competition in the EU, and have tended to be slow in granting injunctions to prevent it. Having said that, be aware of what comparisons can be made and which you should steer clear of.
To find out more about the issues raised in this article please contact
m.nathan@
teacherstern.com
n
36 COMMS DEALER DECEMBER 2011
www.comms-dealer.com
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