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The concept of "Consumer sovereignty" requires three conditions to be fulfilled - "Perfect competition", "Perfect information" and "free choice" - and comparative advertising creates these conditions.

Risks of Comparative Advertising

Comparisons between goods and services of different undertakings carry with them some significant risks. There is a danger that once undertakings address the merits and inadequacies of competing goods or services, they may be tempted to denigrate them or derive unfair advantages from such inaccurate comparisons. Just like traditional forms of advertising, comparative advertising seeks to both assist the development of the undertaking concerned and to inform consumers. Although both forms of advertising seek to attract customers, in case of comparative advertising, commercial relationships may be exposed to the constant threat of unfair practices.

Characteristics of True Comparisons

Much of the criticism against Comparative advertising is really directed towards Disparagement, rather than against true comparisons.

True Comparisons should have three characteristics:

• Two or more specifically named brands
• Two or more attributes of the good or service
• A statement, implication or demonstration of factual information, as a basis for the claim

The risk of consumer confusion and deception through Comparative advertising occurs in the following situations,

• When advertisers of two or more competing brands make substantiated but irreconcilable product claims
• When there are incomplete comparisons

India Attitude Towards Comparative Advertisement

In India, the "Advertising Standards Council of India (ASCI)" specifies that comparative advertisement is permissible if:

US Attitude towards Comparative Advertising

The Federal Trade Commission, when it was founded in 1914, had as its mission to protect businesses against unfair practices. In 1922 the Supreme Court ruled that the FTC has the right to regulate advertising.

In 1963 the FTC narrowed an order with respect to comparative advertising so as to allow firms to make "truthful and non-deceptive statements that a product has certain desirable properties or qualities which a competing product or products do not possess.

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* Contributed by: -
Guruprasad Pasupulety,
MBA 2007,
Tallinn University of Technology, Estonia.