By: Nemesis Escalante Ochoa
Associate – LatinAlliance Honduras
Comparative advertising is considered the most aggressive and as a strategy that allows positioning a brand, person, or product in the market through comparison with another brand, person, or product with similar characteristics.[1] The objective 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 about a brand as a whole or about a characteristic.
In some laws, such as the United States of America, it is allowed and favorable, since they consider that honest comparisons allow consumers to be informed in a valid way and promote competitiveness between companies. And in other countries it is totally prohibited, either in general or for a specific product, since it may result in unfair competition. [2]
Behavior on the part of any businessperson or professional that is contrary to the requirements of good faith.
Advantages and Disadvantages of Comparative Advertising
Advantages
– The consuming public is aware of the differences between both products, helping them to discern in a more specific way 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 provide better quality products.
Disadvantages
– The information provided to consumers can confuse them about the quality of the product they are obtaining by providing data that is not true and specific.
– They can give the appearance to the consuming public that the product or service offered lacks quality when trying to compare it with another that already exists in the market.
Comparative Advertising and Unfair Competition: Farmacias Ahumada SA vs. Cruz Verde SA (Chile)
Farmacias Ahumada sued Cruz Verde based on the issuance of a campaign called "Cruz Verde Challenge, Low Prices without Competition", in which the prices of 685 medicines were compared through television advertising spots and insertions in the press.
In 2010, the court issued a ruling sanctioning Cruz Verde SA, mentioning that although it is true that all advertising has the purpose of capturing the interest of the consumer, it must [4]be done through legitimate techniques and must have as its purpose the principles of veracity and verification, and that when Cruz Verde did not provide assimilable or true information, incurring in a series of inaccuracies, ranging from comparing product prices to including some products that do not They are medicines within that campaign, for which the sanction for unfair competition filed by the courts was condemned and confirmed in all instances.
The court did not condemn the idea of carrying out comparative advertising, on the contrary, I highlight it and point out that the comparison, in a market where various suppliers and purchasing 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 that comparison that is based on some antecedent that is not true or demonstrable.[5]
Honduras
Within the Honduran Legislation we find several provisions that expressly tell us why comparative advertising is not allowed in any type of aspect since it would be falling into unfair competition.
For example, McDonald's vs. Burger King in the following example:
The video shows how a child's fries are stolen every day until he puts his fries inside a Burger King bag and they leave him alone trying to show that the children who stole his fries daily think that Burger King fries are useless.
According to Honduran legislation, if this type of Advertising had been carried out in Honduras, Burger King may have exercised civil, administrative and even criminal actions in accordance with the following provisions:
1. In numeral II, subparagraph 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 infringing contractual duties towards him through:
b) Propagation of news 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 businessmen indicated nominally or in a way that makes the identity 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 regarding Misleading or False Advertising, which details that all types of advertising that may be totally or partially misleading or false, or that, in any other way, including by omission, are prohibited. of its essential data, is capable of misleading consumers.
3. Industrial Property Law in its article 170 numeral 1), 2), and specifically numeral 3) in which it mentions that it will be prohibited "The use or propagation of false indications or allegations capable of harming you or discrediting the establishment, products, services or activities of other merchants."
The owner 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 and losses 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 is about comparing 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 made known to society explicitly through What product or brand is being compared? [6]
The impact that advertising can have depends on the creativity and effort that is applied to both the product so that it becomes something innovative that gives it an advantage over the other existing ones, as well as the way it is exposed to the consuming public to differentiate it from the rest. When an advertising campaign is promoted, it must be ensured that the relevant legislation applicable to each country is respected. Knowing the legal regulations and what comparative advertising implies should be the biggest priority when planning what will be the guidelines to follow in order to position a product or service within the market nationally and internationally, in this way it will be possible to protect intellectual property rights and will avoid falling within the infringements established for this purpose.
[1] https://franciscotorreblanca.es/la-publicidad-comparativa-marketing/
[2] https://www.wipo.int/wipo_magazine/es/2005/02/article_0005.html
[3] https://bienpensado.com/ejemplos-de-publicidad-comparativa/
[4] Image: https://www.biobiochile.cl/noticias/2015/06/23/la-guerra-publicitaria-que-motivo-a-las-farmacias-a-coludirse.shtml
[5] http://www.elmercurio.com/legal/movil/detalle.aspx?Id=901672&Path=/0D/C2/
[6] https://www.wipo.int/wipo_magazine/es/2005/02/article_0005.html