4â Comparative advertising

400

Business protection from misleading marketing

new demands upon the advertiser, although it follows that any comparative

advertisement that is misleading under BPMM Regulations 2008, regulation

3 or breaches regulations 5 or 6 of the CPUT Regulations 2008 will also be in

breach of regulation 4 and can be enforced as such.

Regulation 4(c) requires that the goods being compared in a comparative

advertisement must meet the same needs or be intended for the same purpose.

Like must be compared with like. Thus, it would not be acceptable for a super-

market to claim a price advantage by comparing the prices of their basic range

with those of the prestige range of a competitor. However, it would be permis-

sible to compare the same product from two basic ranges or, indeed, the cost

of a selection of products from the comparable ranges as long as the individual

products selected are themselves comparable.33 Equally, it would not be accept-

able for a financial institution to compare the interest rates of their mortgages

with those of the interest rates applicable to credit cards issued by a competi-

tor.34 Mortgages and credit cards, while both financial products, have different

characters and serve different purposes and, as such, are not amenable to direct

comparison.

Regulation 4(d) requires that there must be an objective comparison of one

or more material, relevant, verifiable and representative features of the prod-

ucts, which can include the price. Thus, it requires a comparison of factors that

are capable of being verified, such as dimensions, capacity, origin, method of

manufacture and price. It deals with facts, not opinions or marketing claims.

Thus, subjective comment such as ‘best value’ or ‘lower prices’ cannot be used in

comparative advertising as they are not verifiable facts, merely opinions. Shop

A cannot place an advertisement simply stating ‘We are cheaper than Shop B’

without backing that comment with verifiable facts about the cost of compar-

able products in both shops.35

The next criteria, contained in regulation 4(e), only relates to comparative

advertising that misleads traders as opposed to consumers. It addresses situ-

ations in which a business purchaser is misled into thinking that goods adver-

tised and produced by the advertiser were, in fact, produced by one of his

competitors. Thus, it relates to causing confusion in the mind of a business

purchaser between the advertiser and his competitor, whether by name, trade

mark, trade name, etc., such that the prospective business purchaser is con-

fused as to who produced the product in question.36 Clearly, such confusion

may result in the business purchaser purchasing goods from a supplier other

than the one that he intended to use and therefore not getting the product that

33

See Lidl Belgium GmbH & Co. KG v. Etalbissementen Franz Colruyt NV C-356/04 [2007] 1 CMLR

9, as quoted in Butterworths Trading and Consumer Law, above n. 22, Division 5, para. 229.

34

See OFT Guide, above n. 18.

35

See Lidl Belgium GmbH & Co. KG v. Etalbissementen Franz Colruyt NV C-356/04 [2007] 1 CMLR

9, as quoted in Butterworths Trading and Consumer Law, above n. 22, Division 5, para. 229.

36

This provision only relates to business purchasers. Consumer buyers are given similar protection

under the CPUT Regulations 2008, see Part 5 Chapter 2.

401

4â Comparative advertising

he really wanted. Equally, the advertiser’s competitor has lost the opportunity to

make a sale with the consequent loss of the opportunity to make a profit from

that sale.

Comparative advertising allows the advertiser to objectively and directly

compare his products or services with those of a competitor. It follows that,

if the advertisement is to be an objective comparison, traders should not be

allowed to use such advertisements as a means to denigrate or discredit their

competitors. Regulation 4(f) stipulates that a comparative advertisement must

not ‘discredit or denigrate the trademarks, trade names, other distinguishing

marks, products, activities or circumstances of a competitor’. Advertisements

must not be used as a vehicle for making derogatory comments about a com-

petitor, they are only to be used for legitimate comparisons within the meaning

of the BPMM Regulations 2008.

One verifiable factor of a product is its designation of origin, whether it be

Double Gloucester cheese, Welsh lamb or Scotch whisky. While these examples

are all foodstuffs, many other products can also include an express statement of

origin as part of their verifiable characteristics. The Regulations require37 that

when a product has a designated origin, it must be compared with products

of the same designation. This approach negates the potential for misleading

advertisements based on the price difference between similar goods produced

in different places, e.g., the difference between champagne and sparkling wine

produced elsewhere by the same method. Thus, if a supplier wishes to com-

pare the cost of his Italian sparkling wine with wine sold by a competitor, he

must compare it with similar wine from the same origin and not with cham-

pagne being sold by his competitor, which will necessarily command a higher

price and give the misleading impression that the competitor ‘s product is more

expensive. However, if both products have an indication of origin, it must be

the same one if the comparison is to be permitted. The European Court of

Justice has held that where one product does not have an indication of origin it

is acceptable to compare it to a product that does have an indication, e.g., com-

paring beer to champagne.38

As already discussed, regulation 4(e) seeks to prevent any confusion aris-

ing in the minds of trader-purchasers about which person has produced the

goods they are intending to buy, so as to prevent producer A from passing off

his goods as being made by producer B, thereby depriving producer B of the

opportunity to make a sale and make some profit from that sale. Regulation

4(h) takes this approach a step further by stipulating that a comparative adver-

tisement must not take unfair advantage of the reputation of a trade mark,

trade name or other distinguishing mark of a competitor or of the designation

37

BPMM Regulations 2008, reg. 4(g).

38

See De Landtsherr Emmanuel SA v. Comité Interprofessional du Vin de Champagne, Veuve Cliquot

Ponsardin SA C-381/05 ECJ, [2008] All ER (EC) 1068 as quoted in Butterworths Trading and

Consumer Law, above n. 22, Division 5, para. 229.