Comparative advertising has long been employed by businesses as a marketing tool to convince consumers to choose their product over one offered by their competitors. However, businesses need to be extremely careful claims to ensure that any comparative claims are not misleading and deceptive.
A recent Federal Court decision involving a Specsavers advertisement demonstrates the approach courts will adopt when identifying the audience to whom representations are made in order to determine whether or not the representations are misleading. A Specsavers TV and internet advertisement compared OPSM and Specsavers' pricing. Part of the advertisement had an image of a single pair of glasses underneath the logo for "OPSM" and with the words "paid over $480 on average" under the graphic. The "$480" was in large, bold text and was the prominent part of the graphic. The advertisement also involved a voiceover, stating "on average, OPSM customers paid over $480 for their prescription glasses".
OPSM claimed that the advertisement represented that OPSM customers paid over $480 for a single pair of spectacles, when this was not the case. OPSM also claimed that, due to the large number of people with private health insurance, the graphic did not accurately represent the amount that an OPSM customer, on average, would actually pay for their spectacles. Specsavers asserted that their research showed that the figure of $480 was the average price paid by OPSM customers during their most recent visit to an OPSM store. Specsavers contended that the advertisement as a whole was about the comparison between a customer's spend at OPSM or Specsavers, rather than the price.
The Court confirmed that for television advertisements, the relevant audience will be the casual, but not overly attentive viewer, viewing a free-to-air program with only a marginal interest in the advertisements shown between the segments of the program. Accordingly, the first impression conveyed to that audience by the advertisement is the key to determining whether the representation is misleading or deceptive. In this case, the Court found that the impression created for the "not overly attentive viewer" would have been that the references to "$480" and for "$114" were for the price for a single pair of sunglasses, which was not true. The advertisements were therefore misleading.
The Court did however find that the advertisement was essentially about price, so that viewers would be unlikely to consider the health insurance consequences. The Court determined that this would be an "over-analysis" of the advertisement, so the advertisement was held not to be misleading in this respect.
What does this mean for your business?
If your business chooses to utilise comparative advertising, key considerations in ensuring your advertising is not misleading or deceptive (or likely to mislead or deceive) are whether the advertising campaign compares "like with like" and, of course, whether the representations being made are true. You must ensure that the first impression that your advertising conveys is not misleading and deceptive, especially when it comes to comparing your products or services with those of your competitors. It is not enough that a careful analysis of the advertisement would pick up any disclaimer or provide a complete explanation of the true position, what is relevant is the overall impression conveyed to an inattentive audience.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.