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).