Comparative advertising can be an effective marketing tool, making consumers feel like they are making an informed choice about a product or service. But if one of your competitors is running an ad claiming their product or service is better than yours, you probably want to put a stop to the negative publicity for your business. In this article, we look at when comparative advertising turns into misleading and deceptive conduct, and what you can do to take down comparative advertising.

Is Comparative Advertising Legal?

Businesses can compare products and services in their advertising, but it must not be misleading or deceptive to consumers. If a business claims their product or service is better than someone else’s, that claim needs to have a proper foundation. This means their comparison should:

  • rely on objective results (e.g. an independent survey that compares two services);
  • be based on a source that is readily and publicly available (otherwise it may be considered unfair); and
  • be up-to-date. For example, if a business was voted Best Smoothie Bar in 2017 by a local magazine, they cannot keep using that title in 2018 if the winner of that category has changed.

Additionally, the advert generally should clearly state the nature of the comparison and the source of that comparison. So if their product or service was only voted the best in certain categories, they cannot claim that it is the ‘best’ overall. These details should be included on the advertisement itself to ensure consumers are not misled. 

Markers of Misleading and Deceptive Conduct

To determine whether the comparative advertisement may be misleading or deceptive, ask yourself the following questions:

  1. Does my competitor’s claim have a genuine basis?
  2. Does the advert name the source of the claim?
  3. If it relies upon a survey, was the survey conducted independently?
  4. If my competitor’s business outperformed mine, was it in all categories or only in some? Does their advert acknowledge this?

If your answer to any of the above is ‘no’, you should seek legal advice. This advice will address whether you can restrain your competitor from using that advert.

However if the competitor’s claim to superiority is based on legitimate and independent survey results, it may be hard for you to argue that it is misleading or deceptive. However, note that this does not mean that your competitor can exaggerate or embellish survey results to create an unfair advantage. The comparison they make must be true and fair.

Partially-True Comparative Adverts

If the comparative advertisement involving your business is only partially true, you can still take action if it is misleading or deceptive. Misleading or deceptive conduct does not require actual deception, or for the advertisement to be entirely untrue. But it is not enough if the ad would only cause ‘confusion’.

When determining misleading or deceptive conduct, the court may look at the nature of the advertisement, particularly whether it is serious or humorous. Where a competitor uses humour when comparing their product to yours, it may find that consumers are less likely to be led into error due to the playful nature of the advert.

Available Remedies

If a competitor is not responding to your requests to take down comparative advertising, you have two options available to you.

1. Engage a Lawyer

Talk to a lawyer about the situation and engage them to write a cease and desist letter. This is a formal way of requesting the competitor take down problematic comparative advertising. You can also threaten court action if they do not comply.

A cease and desist letter should outline why:

  • your competitor’s advertising is unfair at law; and
  • it would likely mislead or deceive consumers.

A cease and desist letter will carry more weight if a lawyer writes and sends it.

2. Apply for a Court Order

If the competitor refuses to comply with your letter, you can apply to the court for an injunction. An injunction is a court order that lawfully requires a party to do, or stop doing, a particular thing. In this scenario, an injunction would usually allow you to take down comparative advertising and prevent further publication.

If the comparative advertising is causing significant negative effects on your business, you may want to apply for an urgent interlocutory injunction. This injunction is an temporary order that applies until the court has heard the full case and made a determination.

A court will grant an interlocutory injunction if it believes:

  • there is a serious question to be tried; and
  • the ‘balance of convenience’ favours the granting of the injunction.

In other words, when deciding whether to grant an interim injunction, the court is not deciding who would win the case. Instead, it will determine if there is actually some kind of dispute that needs to be dealt with by the court, and whether the status quo should be maintained in the meantime.

Key Takeaways

If your business competitors engage in comparative advertising, it needs to be fair and accurate. Otherwise, they leave themselves open to claims of misleading or deceptive conduct in relation to goods or services.

If you want to take down comparative advertising by a competitor that portrays your business in an unfair light, you should seek legal advice. Contact LegalVision’s marketing compliance lawyers on 1300 544 755 or fill out the form on this page.

Stacey Stanley
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