Favorite international yoghurt brand, Chobani, has highlighted why brands need to exercise caution when comparing their products to others. A recent advertisement and subsequent legal response by competitors brought to attention issues associated with comparing products when advertising. Advertisers use comparative advertising to demonstrate why their product is better and to differentiate themselves. For example, to say that they don’t use particular ingredients. They may also make comments as to the price and the service offering. Below, we set out the United States’ position on comparative advertising and the key takeaways for Australian advertisers and marketers.

United States Advertising Comparisons

American advertisers appear to prefer using more aggressive product comparisons. Notably, a new Chobani marketing campaign referencing some competitors including Yoplait and Dannon. The advertising associates the ingredients that the competitors’ yogurts include, such as sucralose and potassium, with negative attributes showing the model in the ad throwing the products away.

Unsurprisingly, competitors didn’t appreciate Chobani portraying their brands in a negative light and calling out their products in such a distasteful way (pun intended). Yoplait and Dannon also argue against the representation of their ingredients saying that under Federal law, they can use the ingredients and Chobani shouldn’t portray them as dangerous.

The Lanham (Trademark) Act (15 U.S.C. § 1051) is the Federal law in the US that addresses competition between businesses through advertising and misleading and unfair conduct. The competitors had concerns that Chobani may be breaching this Act among others in this type of comparative advertisement.

Comparative Advertising in Australia

You can compare products in Australia provided you comply with the Australian Consumer Law (ACL). Any statement representing your products should be true, accurate and substantiated. The overall impression your advertisement creates can’t be false or inaccurate, and you should take care to ensure that the comparison is the following:

  • Accurate,
  • True,
  • Does not mislead, and
  • Reasonable.

For example, it should be between two very similar products. Businesses can, in some circumstances, compare one of their “superior” products against a competitor’s inferior product. Although you must clearly identify the comparable products and any statements made must be truthful. The test is only whether the comparison is accurate, and not misleading or deceptive.

You should also consider the advertisement’s timing because if the product changes, it might become an issue later on and viewers could understand the ad as misleading. Your business can mitigate risk by including a disclaimer stating that the price is accurate at a certain date. Ideally, however, you should aim to advertise your product through short, but intense media coverage so competitors can’t adjust their prices. Failure to comply with the ACL can result in fines for misleading comparative advertising, and can attract the regulator’s scrutiny.

Key Takeaways

Although the Lanham Act does not apply to Australian advertising, you should know and understood how the ACL affects your ads. When you are creating ads, you should be wary when comparing your product to another and be sure that you can back up any claims.

Questions as to whether your advertisements comply with Australia’s Consumer Law? Get in touch with our consumer lawyers.

Edith Moss

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