Businesses have an inherent tendency to want to compare its products or services with those of its competitors in order to showcase ways in which its products or services have superiority. In comparative advertising, businesses should follow four simple rules in order to avoid any issues with deception of consumers.
The Federal Trade Commission has a policy that encourages truthful references to the competition and requires that comparative advertising to have clarity and the appropriate disclosures in order to not deceive consumers. 16 C.F.R. §14.15.
Businesses can have a way with words in which the comparative advertising may mislead a consumer to think a product or service has qualities superior to the competition when really that is not the case. The FTC has found companies in violation of the comparative advertising policy.
To avoid issues with violating the comparative advertising policy make sure to follow these four steps:
- Ensure the ad is truthful in its references to the competition.
- Make sure the ad would not deceive the average consumer.
- Have clarity in the advertisement.
- Provide the consumer with the appropriate disclosures.
By following these four steps a business should have compliance with the comparative advertising policy. In additional to having compliance a business may likely gain the respect of consumers for its truthful in advertising and can potentially win more customers.
For additional ethical business guidance, please review DMA Guidelines on Ethical Business Practice.