Statement of Policy Regarding Comparative Advertising

http://www.ftc.gov/bcp/policystmt/ad-compare.htm[6/9/2009 9:10:53 AM]

STATEMENT OF POLICY REGARDING COMPARATIVE ADVERTISING

FEDERAL TRADE COMMISSION

WASHINGTON, D. C. 20580

August 13, 1979

(a) Introduction

The Commission's staff has conducted an investigation of industry trade associations

and the advertising media regarding their comparative advertising policies. In the course

of this investigation, numerous industry codes, statements of policy, interpretations and

standards were examined. Many of the industry codes and standards contain language

that could be interpreted as discouraging the use of comparative advertising. This Policy

Statement enunciates the Commission's position that industry self-regulation should not

restrain the use by advertisers of truthful comparative advertising.

(b) Policy Statement

The Federal Trade Commission has determined that it would be of benefit to advertisers,

advertising agencies, broadcasters, and self-regulation entities to restate its current

policy concerning comparative advertising.(1) Commission policy in the area of

comparative advertising encourages the naming of, or reference to competitors, but

requires clarity, and, if necessary, disclosure to avoid deception of the consumer.

Additionally, the use of truthful comparative advertising should not be restrained by

broadcasters or self-regulation entities.

(c) The Commission has supported the use of brand comparisons where the bases of

comparison are clearly identified. Comparative advertising, when truthful and nondeceptive, is a source of important information to consumers and assists them in making

rational purchase decisions. Comparative advertising encourages product improvement

and innovation, and can lead to lower prices in the marketplace. For these reasons, the

Commission will continue to scrutinize carefully restraints upon its use.

(1) Disparagement

Some industry codes which prohibit practices such as "disparagement,"

"disparagement of competitors," "improper disparagement," "unfairly

attacking," "discrediting," may operate as a restriction on comparative

advertising. The Commission has previously held that disparaging

advertising is permissible so long as it is truthful and not deceptive. In

Carter Products, Inc., 60 F.T.C. 782 modified [1963 trade cases ¶ 70,902],

323 F.2d 523 (5th Cir. 1963), the Commission narrowed an order

recommended by the hearing examiner which would have prohibited

respondents from disparaging competing products through the use of false

or misleading pictures, depictions, or demonstrations, "or otherwise"

disparaging such products. In explaining why it eliminated "or otherwise"

from the final order, the Commission observed that the phrase would have

prevented:

respondents from making truthful and nondeceptive statements

that a product has certain desirable properties or qualities which

a competing product or products do not possess. Such a

comparison may have the effect of disparaging the competing
Statement of Policy Regarding Comparative Advertising

http://www.ftc.gov/bcp/policystmt/ad-compare.htm[6/9/2009 9:10:53 AM]

product, but we know of no rule of law which prevents a seller

from honestly informing the public of the advantages of its

products as opposed to those of competing products. 60 F.T.C.

at 796.

Industry codes which restrain comparative advertising in this manner are

subject to challenge by the Federal Trade Commission.

(2) Substantiation

On occasion, a higher standard of substantiation by advertisers using

comparative advertising has been required by self-regulation entities. The

Commission evaluates comparative advertising in the same manner as it

evaluates all other advertising techniques. The ultimate question is whether

or not the advertising has a tendency or capacity to be false or deceptive.

This is a factual issue to be determined on a case-by-case basis. However,

industry codes and interpretations that impose a higher standard of

substantiation for comparative claims than for unilateral claims are

inappropriate and should be revised.

1. For purposes of this Policy Statement, comparative advertising is defined as

advertising that compares alternative brands on objectively measurable attributes or

price, and identifies the alternative brand by name, illustration or other distinctive

information.