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Bulletins Story:
LEGAL RESTRICTIONS ON COMPARATIVE ADVERTISING
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Date:
26.04.2000
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New regulations on comparative advertising came into force on 23
April 2000.
The Control of Misleading Advertisements (Amendment) Regulations
2000 implement an EC Directive intended to harmonise comparative
advertising laws across Europe. Comparative advertising has
until now been governed by a patchwork of different laws in
different countries.
Whilst the general aim of the Directive was to liberalise the
European market for comparative advertisers, in the interests of
consumer awareness, the UK has been obliged to adopt new rules that
will have the opposite effect in this country.
Comparative advertising in the UK is governed principally by
advertising codes and also by trade mark legislation, defamation
law and general laws against misleading advertising. Since
the Trade Marks Act 1994 advertisers in the UK have had a
relatively free hand to use their competitors’ registered trade
marks.
The new regulations incorporate specific new rules on
comparative advertising into the existing Control of Misleading
Advertisements Regulations 1988. Whilst the DTI’s view is
that the new restrictions already substantially exist in the
advertising codes, there are several question marks.
The main points of the regulations are as follows:
- A comparative advertisement is one which “in any way, either
explicitly or by implication, ... identifies a competitor or goods
or services offered by a competitor.”
- Comparative advertisements will only be permitted if they
satisfy eight conditions set out in the Regulations (see
below).
It has been suggested that generalised superiority claims such as
“Persil washes whiter” might come under the heading of comparative
advertisements under this definition. In our view this is not
a comparative claim. “Persil washes whiter” would not even by
implication “identify” any individual competitor unless there was
only one other washing powder on the market.
However, it remains to be seen what the courts will say about
this. The courts in more restrictive continental countries
could take a different view. Cross-border advertisers may
find that the European playing field is still far from level.
A comparative advertisement will be unlawful unless it
“objectively compares one or more material, relevant, verifiable
and representative features of [goods or services meeting the same
needs or intended for the same purpose],” although this may include
a price comparison. The BACC Notes of Guidance currently
allow for the possibility of limited claims based on subjective
criteria, eg “Out of 100 people we asked, 80 thought Jones’s Baked
Beans tasted nicest.” But it is doubtful whether a claim of
this type would be an objective comparison of a verifiable feature
so far as the new regulations are concerned.
The good news for comparative advertisers is that competitors
will not be able to bring civil claims under the regulations.
Enforcement will be the responsibility of the Office of Fair
Trading (OFT) for non-broadcast advertising (including Internet
advertising) and for the ITC, Radio Authority or S4C for broadcast
advertising. The OFT can apply to the court for an injunction
and the regulatory bodies can require a commercial not to be
broadcast. The OFT is only likely to get involved if the ASA
has been unable to deal with a complaint adequately.
Further developments are likely next year. The European
Injunctions Directive will allow consumer bodies throughout the EU
to apply to the courts for injunctions to stop infringements of
nine specific consumer protection directives if the infringement
harms the collective interests of consumers. The Misleading
Advertising Directive is one of those nine directives (as also are
the directive on advertising medicinal products for human use and
the directive on distance selling).
Charlie Swan
April 2000
32
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