An overview of Comparative Advertising. The most significant case law

This article first appeared in Bugnion Journal – To view the Journal in full click here

Comparative advertising (comp. adv.) is the direct or indirect use by one company of another company’s brand/product in order to compare that company’s brand/product with its own.

Comp. adv. is differently regulated in every country. Generally speaking, comp. adv. is allowed to a much greater degree in common law systems than in civil law ones.

For example, concerning US law, the Federal Trade Commission specifically encourages comp. adv., when truthful and non-deceptive, since it is a source of important information to consumers and assists them in making rational purchase decisions and because it encourages product improvement and innovation and can lead to lower prices in the marketplace.

In a famous US decision, a Court held that comp. adv. naming a competitor is beneficial to consumers (“25% LOWER IN CALORIES THAN WERTHER’S® ORIGINAL CANDY”) because “they learn at a glance what kind of product is for sale and how it differs from a known benchmark”.

In all European countries there is a very similar situation due to Directive 2006/114/EC concerning misleading and comp. adv., which is directly enforceable in every EU country.

However, comp. adv. is still very marginal in EU countries. An essential requirement for comp. adv. is that a company has to be able to substantiate the superiority of a product/service compared to a product / service of a competitor / all competitors on the market.

According to German case law, comp. adv. must avoid the express use of the terms “imitation,” “replication,” and “replica” in order to not be characterized as non-permissible. It is, however, permissible to claim mere product “equivalence.”

In France there was a case in which a manufacturer of a coffee press had presented in its catalogue an advertisement showing, next to its coffee press, a pile of used, deformed capsules with the slogan “make taste not waste”. A coffee capsules manufacturer and competitor argued that such advertising constituted an act of denigration and parasitism, even though the competitor’s name was not mentioned. The French Cour de Cassation held that the advertising depicted only a negative characteristic of a competitor’s product, presented in conditions likely to discredit that product.

As far as Italian case law is concerned, the Italian Advertising Self-regulatory Jury held that the picture of a podium with different cosmetic products on different steps and the sentence “Have you ever wondered how effective your anti-wrinkle cream is?” represented an unlawful comparison if a robust claim substantiation test was missing.