Comparative Advertising

Comparative advertising is a form of advertising where one party advertises its goods or services by comparing them with that of its competitors. Generally the competitor is the market leader in that product category. With the market becoming overcrowded with a large number of products, all the brands are looking for ways to attract the customers attention and comparative advertising is one such way they have discovered.

Although comparative advertising was started long ago, yet it is only in past few years that it has become extremely popular way of advertising especially in sectors like FMCG, automobiles etc. This form of advertising is aggressive and is different from parody advertisements where a fictional product is advertisements with the aim of poking fun at other advertisements.

PROS AND CONS OF COMPARATIVE ADVERTISING:

The question which arises is that why so many brands use comparative advertising for promotion. This can be understood better by evaluating the advantages and disadvantages of comparative advertising.

Pros

  • It helps customers by keeping them informed about a product. It is an important source of information for customers and helps them in rational decision making.
  • Comparative advertising is an extremely good way to differentiate ones brand from others in a highly competitive market. Comparative advertising helps to highlight the perks of a product which may not be found in the competitors.
  • It works extremely well in case the advertising brand is less known.

Example:

When Samsung entered India its punch line said: ‘If you are not interested in buying the world’s best TV, you can always but a Sony, Philips or Panasonic’. Since all the other three brands are extremely popular in India, it created enough curiosity about Samsung.

  • It has been scientifically proven that comparative advertisements have higher recall as compared to non comparative advertisements

Cons and Risk

The following are the disadvantages and risks of comparative advertising-

  • Many times unknown or little known brands may use it to gain unfair advantage over the well known brands.
  • The facts represented in the advertisement may not be true, but till it is proved the advertising company would have received sufficient publicity.

This is based on the belief that no publicity is bad publicity.

  • When two brands advertise against each other, it adds to the consumer’s confusion and the consumers lose faith in such brands.

Example, during the recent comparative advertising between Horlicks and Complan, both claimed that their product is superior. Ultimately, it was the consumers who started doubting the truth behind the claims made by such advertisements.

  • Even if the comparative advertising is based in test results, the methodology used in such advertisements may be questionable.

INSTANCES OF COMPARITIVE ADVERTISING IN INDIA[1]

Comparative Advertising has been practiced in India since a long time. However more recently the trend has started shifting towards direct comparative advertising.

Direct comparative advertising is the most aggressive form of comparative advertising and it is also the form where disparaging is most common. Three well known cases of comparative advertising are analyzed below:

                                                        Santro vs. Indica and Icon

Sector – Automobiles

Hyundai Santro compared itself to Ford’s Icon and Tata’s Indica in terms of design, features and technology and published the results in print media. Through these advertisements Santro conveyed its superiority over its competitors Also; it benefited consumers as they got to know the advantages and disadvantages of each of the car which could help them in taking their own decision regarding car purchase.

Later due to MRTPC regulation Hyundai India soon scrapped these advertisements.

        Complan vs. Horlicks[2]

Sector – Health Drinks

On Indian television the first high profile case of direct comparative advertising was GSK’s Horlicks and Heinz India’s Complan. Both the companies ran direct comparative advertisements against each other, each claiming that it is better than the other.

Years ago, Complan had indirectly targeted Horlicks by claiming in its ‘I am a Complan Boy’ advertisement that complain was better than another Brand ‘H’. However, now the comparisons between two have become more aggressive and blatant.

Horlicks in one such advertisement attacked Complan saying that while Complan makes a child taller, Horlicks makes him ‘Taller, sharper and smarter ‘. Horlicks further mocked complain saying that while Complan costed Rs 170, Horlicks was priced at just Rs 132 i.e. Horlicks is cheaper than Complan. Heinz later sued GSK and the advertisement was taken off air.

However, later Complan also came out with print advertisements where Complan was compared to Horlicks on parameters like Main ingredients, Protein content, Protein quality, number of nutrients etc.

Needless to say, with all these advertisements, each showing a different result, the consumers became very confused and irritated. Hence, later both the companies stopped such advertisements.

       Rin vs. Tide Naturals

Sector – Detergents

Rin and Tide are the most recent example of direct comparative advertising. Rin openly launched an attack against Tide saying that it gave superior whiteness as compared to Tide. Also, HUL played safe with this ad by putting a disclaimer in its advertisement saying,”Schematic representation of superior whiteness is based on Whiteness Index test of Rin Vs Tide Naturals as tested by Independent lab”.

 P&G later filed a case against HUL in Kolkata and got an interim injunction for the advertisement. HUL on the other hand claimed that it was Tide which had been misleading customers by claiming that its product Tide Naturals had natural ingredients whereas by P&G’s own admission Tide Naturals was a synthetic detergent. A case had been filed by HUL against P&G in the Madras high court before HUL released this controversial advertisement. The Madras court ruled in favor of HUL and directed P&G to remove the advertisement and change its packaging.

LAWS ABOUT COMPARATIVE ADVERTISING IN INDIA[3]

Comparative advertising is governed by different laws in different countries. While it is permissible in India and US provided it follows some guidelines, it is banned in countries like Europe and Malaysia.

Comparative advertising has to comply with following legal and regulatory provisions within India:

Constitutional Provisions:

The constitution of India has given certain rights regarding freedom of speech

However, article 19(2) also puts limits on the freedom of speech and expression in case they cause defamation or incitement to an offence.

The question which arises is that whether the advertisements as ‘commercial speech’ can be protected under freedom of speech under article 19(1) (a).

The Supreme Court has ruled that ‘commercial speech is a part of freedom of expression guaranteed under article 19(1) (a) of constitution since it creates awareness amongst the general public. However it is subjected to article 19(2).

Concept of Disparagement:

Section 36 A of the MRTP Act purports that unfair trade practices are those which lead to disparagement of the goods, services or trade of another person. The term “disparagement” has not been defined in any statute, but judicial pronouncements have adopted its dictionary meaning. As per The New International Webster’s’ Comprehensive Dictionary, disparagement means, to speak of slightingly, undervalue, to bring discredit or dishonor upon, the act of depreciating, derogation, a condition of low estimation or valuation, a reproach, disgrace, an unjust classing or comparison with that which is of less worth, and degradation.

In the electronic media the disparaging message is conveyed to the viewer by repeatedly showing the commercial everyday thereby ensuring that the viewers get clear message as the said commercial leaves an indelible impression in their mind. But, it must be noted that a mere opinion, which is not a statement of fact, would not attract Clause (x) of Section 36A (1).

Trade Mark Act:

Provisions against comparative advertising are also made in under section 29(8) and 30(1) of Trademark act, 1999.

Section 28(a) says that an advertisement infringes upon trademark when it takes unfair advantage or is against the reputation of trademark.

However, section 30(1) says that a registered trademark can be used for identification purpose if it neither takes unfair advantage nor does it detriment repute of the trademark.

Advertising Standards  Council of India (ASCI) Guidelines:[4]

ASCI is a voluntary regulatory body of the advertising world which provides guidelines for ethical advertising and deals with complaints against false misleading advertisements.

The ASCI code of India says that Comparative advertising is allowed   if:

  • Advertisements are substantial and based on facts
  • Advertisements do not mislead consumers.
  • There should not be any unfair disparaging of competing product

Legal Cases of ‘Disparagement’ in India

The following cases demonstrate the decisions taken by Indian courts in case of comparative advertising.

Cherry Blossom vs. Kiwi

Kiwi liquid wax polish in one of its advertisements showed that while the liquid from its bottle was not dripping, the liquid from another bottle ‘X’ was dripping. The shape of this bottle ‘X’ was similar to Cherry Blossom- Kiwi’s competitor- for which they had design registration also. The advertisement thus became a case of disparagement since it could be identified with ‘Cherry Blossom’.

Ujala vs. Regaul case

Ujala in one of its advertisements established its superiority by showing that while it required only 4 drops, the other brands required several spoons. The lady in the advertisement looked down at the bottle of the other brand and said ‘Chi chi chi’in disgust.

Later the competing brand Regaul filed a case of disparagement in court.

The court ruled the verdict in favor of Ujala stating that since the bottle of the other brand in the advertisement did not carry any label nor did it have resemblance to the bottle of any other brand, so it was not a case of disparagement.

The judgment indicated that a case of disparagement can be filed in case of comparative advertising if the other product shown is of an ‘identifiable’ manufacturer.

Colgate vs. Pepsodent[5]

Colgate filed a case against Hindustan Unilever Limited’ when the latter advertised that its product new Pepsodent was ‘102 % better than the leading Toothpaste’. Since at that time the market share of Colgate was 59 % and that of Pepsodent was 27%, Colgate was automatically assumed to be the leading toothpaste.

The court ruled in favor of Colgate stating that since Colgate had been the leader in oral care segment for so many years the word toothpaste had become synonymous with its name.

The court ruled that the other product in the advertisement was identifiable with ‘Colgate’; a claim could be made of the disparagement of Colgate products.

From all these examples it can be concluded that if in comparative advertising the other brand is identifiable and is described as inferior without substantial proof then it becomes a case of disparagement of that product.

CONCLUSION:

From the above research, it can be concluded that the Indian law, although interpreted to allow comparative advertisement, does not address the issue in a direct or comprehensive manner in any legislation.

TM Act and MRTP Act have to be read together to understand the concept of CA. In view of the policy shift from curbing monopolies to promoting competition, the Union Cabinet on June 26, 2001 approved the repeal of the Monopolies and Restrictive Trade Practices Act. Hence, the Competition Law which aims at doing away with the rigidly structured MRTP Act is tipped to come into force by mid-2008, and all cases pertaining to unfair trade practices referred to in clause (x) of sub-section (1) of section 36A of the MRTP Act, and pending before the Monopolies and Restrictive Trade Practices Commission on or before the commencement of this Act shall, on such commencement, stand transferred to the Competition Commission of India, and the Competition Commission of India shall dispose of such cases as if they were cases filed under that Act.

 It must also be noted that several important terms related to the concept of comparative advertising such as “disparagement” and “honest practices” are not defined in any legislation, and the dictionary meaning or judicial interpretations have to be used in ascertaining the meaning of these terms. ‘Unfair trade practice’ has been defined u/s 36A of Monopolies and Restrictive Trade Practices, 1969 that stands repealed now.

Another statute, Consumer Protection Act, 1986 provides protection against unfair trade practice but in the cases of ‘comparative advertising’ the parties are firms (whose products are endorsed by the advertisements), which would not come in the ambit of ‘consumers’ to approach the consumer forum.

Therefore to counter the unfair practice of advertising more competent and comprehensive laws are needed. The terms of such laws must be clearly stated leaving no room for free interpretation. Moreover, more stringent action should be taken against the defaulters by ASCI under law, than merely banning the comparative advertisement from being aired.


References:-

[1] https://www.ukessays.com/essays/marketing/comparative-advertising-and-its-future-indian-perspective-marketing-essay.php, Last visited 10-10-2017.

[2] https://www.scoopwhoop.com/Rival-Brand-Advertisements-Wars/#.cg1quxxzv, Last visited 10-10-2017.

[3] http://www.legalserviceindia.com/article/l182-Comparative-Advertising-laws.html, Last visited 11-10-2017.

[4] http://www.mondaq.com/india/x/371760/Trademark/Comparative+Advertising+How+Far+Can+One+Go, Last visited 11-10-2017.

[5] https://spicyip.com/2013/08/colgate-v-pepsodent-comparative.html, Last visited 10-10-2017.

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