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Such a comparison may have the effect of disparaging the competing product, but we know of no rule of law which prevents a seller from honestly informing the public of the advantages of its products as opposed to those of competing products." (60 F.T.C. at 796)

"The Commission has supported the use of brand comparisons where the bases of comparison are clearly identified. Comparative advertising, when truthful and non-deceptive, is a source of important information to consumers and assists them in making rational purchase decisions. Comparative advertising encourages product improvement and innovation, and can lead to lower prices in the marketplace." (Statement of Policy Regarding Comparative Advertising, Federal Trade Commission, Washington, D.C., August 13, 1979)

Europe Attitude Towards Comparative Advertising

While in the United States comparative advertising has been a well-recognised and acceptable form of advertising, Europe was divided in this point of view. There was a significant difference in Europe in the Seventies. The majority of European countries have been hostile to such advertising for a long time and this form of advertising was considered as unfair market practice.

After the EC Legislation, Comparative advertising is considered as a legitimate means of informing consumers of the advantage of the product or service compared with that of a competitor. The EC accepted the comparative advertising both by the legislation and by the court practice.

The reform is achieved by amending the Directive 84/450/EEC concerning misleading advertising so as to include comparative advertising. European Parliament and of the Council adopted an amending Directive the "Directive 97/55" in 1997 which states that, Comparative advertising shall be permitted when the following conditions are met:

(a) It is not misleading
(b) It compares goods or services meeting the same needs or intended for the same purpose
(c) It objectively compares one or more material, relevant, verifiable and representative features of those goods and services, which may include price
(d) it does not create confusion in the market place between the advertiser and a competitor or between the advertiser's trade marks, trade names, other distinguishing marks, goods or services and those of a competitor
(e) It does not discredit or denigrate the trade marks, trade names, other distinguishing marks, goods, services, activities, or circumstances of a competitor
(f) For products with designation of origin, it relates in each case to products with the same designation
(g) it does not take unfair advantage of the reputation of a trade mark, trade name or other distinguishing marks of a competitor or of the designation of origin of competing products
(h) It does not present goods or services as imitations or replicas of goods or services bearing a protected trade mark or trade name

Conclusions

Sticking to hard facts and meaningful issues is always a good idea. Avoiding any negative references to competitive products, and showing both products in a fair and equal manner goes a long way towards ensuring that comparative advertising is fair and accomplishes its dual mission - that of educating the consumer and selling the product.

Concluded.

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