STATEMENT OF POLICY REGARDING COMPARATIVE ADVERTISING
FEDERAL TRADE COMMISSION
WASHINGTON, D. C. 20580
August 13, 1979
(a) Introduction
The Commission's staff has conducted an investigation of
industry trade associations and the advertising media regarding their comparative
advertising policies. In the course of this investigation, numerous industry codes,
statements of policy, interpretations and standards were examined. Many of the industry
codes and standards contain language that could be interpreted as discouraging the use of
comparative advertising. This Policy Statement enunciates the Commission's position that
industry self-regulation should not restrain the use by advertisers of truthful
comparative advertising.
(b) Policy Statement
The Federal Trade Commission has determined that it would
be of benefit to advertisers, advertising agencies, broadcasters, and self-regulation
entities to restate its current policy concerning comparative advertising.(1)
Commission policy in the area of comparative advertising encourages the naming of, or
reference to competitors, but requires clarity, and, if necessary, disclosure to avoid
deception of the consumer. Additionally, the use of truthful comparative advertising
should not be restrained by broadcasters or self-regulation entities.
(c) 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. For
these reasons, the Commission will continue to scrutinize carefully restraints upon its
use.
(1) Disparagement
Some industry codes which prohibit practices such as
"disparagement," "disparagement of competitors," "improper
disparagement," "unfairly attacking," "discrediting," may operate
as a restriction on comparative advertising. The Commission has previously held that
disparaging advertising is permissible so long as it is truthful and not deceptive. In Carter
Products, Inc., 60 F.T.C. 782 modified [1963 trade cases ΒΆ 70,902], 323 F.2d
523 (5th Cir. 1963), the Commission narrowed an order recommended by the hearing examiner
which would have prohibited respondents from disparaging competing products through the
use of false or misleading pictures, depictions, or demonstrations, "or
otherwise" disparaging such products. In explaining why it eliminated "or
otherwise" from the final order, the Commission observed that the phrase would have
prevented:
respondents from making truthful and nondeceptive
statements that a product has certain desirable properties or qualities which a competing
product or products do not possess. 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.
Industry codes which restrain comparative advertising in
this manner are subject to challenge by the Federal Trade Commission.
(2) Substantiation
On occasion, a higher standard of substantiation by
advertisers using comparative advertising has been required by self-regulation entities.
The Commission evaluates comparative advertising in the same manner as it evaluates all
other advertising techniques. The ultimate question is whether or not the advertising has
a tendency or capacity to be false or deceptive. This is a factual issue to be determined
on a case-by-case basis. However, industry codes and interpretations that impose a higher
standard of substantiation for comparative claims than for unilateral claims are
inappropriate and should be revised.
1. For purposes of this Policy
Statement, comparative advertising is defined as advertising that compares alternative
brands on objectively measurable attributes or price, and identifies the alternative brand
by name, illustration or other distinctive information. |