Comparative advertising is considered the most aggressive and as a strategy that allows a brand, person, or product to be positioned in the market through comparison with another brand, person, or product with similar characteristics. [1] The purpose of the comparison is that a brand becomes favored by trying to demonstrate to the consumer that the brand has a certain advantage over the competition. The comparison can be on a brand in its entirety or on a characteristic.
In some legislations, like the United States of America, one, it is allowed and favorable, since they consider that honest comparisons allow consumers to be informed in a valid way and promote competitiveness among companies. And in other countries it is totally forbidden, either in general or for a specific product, since it can lead to unfair competition. [2]
Advantages and Disadvantages of Comparative Advertising
Advantage
– Consumers are aware of the differences between the two products, helping them to discern more concretely and allowing them to purchase the product or service that they consider most convenient.
– Competition between companies is encouraged, motivating them to generate a better quality of service and to provide better quality products.
Disadvantages
– The information provided to consumers can confuse them about the quality of the product that they are obtaining, by providing facts that are not true and concrete.
– They can give the appearance to the public that the product or service that is offered lacks quality when trying to compare it with another that already exists in the market.
Comparative Advertising and Unfair Competition: Farmacias Ahumada S.A vs. Cruz Verde S.A (Chile)
Farmacias Ahumada sued Cruz Verde based on the campaign called “Cruz Verde Challenge, Low Prices without Competition”, in which the advertising of 685 drugs was compared through television commercials and insertions in the press.
The court in 2010 issued a ruling sanctioning Cruz Verde SA, mentioning that although it is true that all advertising is intended to capture the interest of the consumer, it must [4] be done using legitimate techniques and should have as its purpose the principles of truthfulness and verification, and that Cruz Verde did not provide assimilable or truthful information, incurring a series of inaccuracies, ranging from comparing product prices to including some non-drug products within that campaign, for which it was condemned and confirmed in all instances the penalty for unfair competition filed by the courts.
The court did not condemn the idea of comparative advertising, on the contrary, they highlight it and point out that the comparison, in a market where various bidders and acquiring consumers concur, is not and cannot be reprehensible since the products or services are presented to the public as The best option, however, is sanctioned for a comparison that is based on an antecedent that is not truthful or demonstrable. [5]
Honduras
Within the Honduran Legislation we find several provisions that expressly tell us why comparative advertising is not allowed in any aspect since it would be falling into unfair competition.
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The video shows how a boy’s French fries are stolen every day until he puts his fries in a Burger King bag trying to show that the children who stole his fries every day think that Burger King potatoes are not good
According to Honduran legislation, if that type of Advertising had been carried out in Burger King Honduras, they could have taken civil, administrative and even criminal actions according to the following provisions:
1. In numeral II, subsection a), b) and e) of article 425 of the Commercial Code, unfair competition is considered such as the following:
II. Directly harm another merchant, without violating contractual duties towards him by:
b) Propagation of notices capable of discrediting the products or services of another company;
c) Direct and public comparison of the quality of the prices of those of the merchandise itself or the services of the other entrepreneurs indicated nominally or in a way that makes the identity well known.
III. Any other similar acts, directed directly or indirectly, to divert the clientele of another merchant.
2. The Consumer Protection Law in its article 27 related to deceptive or false advertising, which details that all types of advertising that may be totally or partially misleading or false are prohibited, or that, in any other way, including omission. of your essential data, be able to mislead consumers.
3. Industrial Property Law in its article 170 number 1), 2), and specifically number 3) in which it mentions that it will be prohibited “The use or propagation of false indications or allegations capable of damaging it or discrediting the establishment, the products, services or activities of other merchants. “
The holder of a protected right may bring an action before the competent court against any person who infringes his right. The resolution that declares the existence of unfair competition will provide, in addition to its cessation, the necessary measures to prevent its consequences and to avoid the repetition of said acts, the compensation of damages when appropriate and even consequences in the criminal field.
There is a high degree of possibility that companies when creating some type of advertising try to imitate or copy some characteristic of some advertising made by the competition, in the same way it is very likely that when trying to position a product or service as a number one within society tries to compare with some other that has existed and that has a high degree of acceptance and knowledge on the part of the consuming population.
Companies must be very cautious and must act with fair competition, since by not doing so they may commit risks that have been established within the legislation of each country, and even greater if within the publicity that is explicitly disclosed to society by which product or brand the comparison is being made. [6]
The impact that advertising can have depends on the creativity and commitment that is applied both to the product so that it becomes something innovative that gives it an advantage over the existing ones, as well as the way it is exposed to the consuming public to differentiate it from the rest. When promoting an advertising campaign, care must be taken to ensure that the relevant laws applicable to each country are respected. Knowing the legal regulations and what comparative advertising implies must be the highest priority when planning which will be the guideline to follow to be able to position a product or service within the market in the national and international sphere, in this way it will be possible to protect by intellectual property rights and avoid falling into the infringements established for that purpose.