Uhthoff, Gómez Vega & Uhthoff
Most comparative and unfair advertising campaigns are designed to denigrate the quality or reputation of a competitor’s goods or services. Fortunately, remedies are available
Advertising is legally protected as a manifestation of freedom of expression. However, as competition on the market continues to intensify, companies are continually seeking new ways to gain an edge over their competitors. What parameters must companies work within in this regard, and how can consumers be protected from a barrage of potentially false claims about goods and services?
The advent of new means of communication, such as social media, has presented new advertising opportunities for companies. Marketing strategies are increasingly directed at competitors and aim to promote the advertiser’s goods or services as pre-eminent in the relevant market. Advertisers frequently compare their goods or services with those of competitors and try to mislead consumers into believing that the rival goods or services are somehow inferior, by emphasising certain qualities of their own goods or services which they may not even have – and often without any substantive evidence.
Comparative advertising can be either indirectly or directly comparative, positive or negative. Its main objective is to associate or distinguish the competing goods or services.
Numerous countries have introduced laws to regulate comparative advertising, in order to protect consumers and prevent misleading campaigns by ensuring that all information provided to promote a product or service is accurate and justified. For instance, the US Federal Trade Commission defines ‘comparative advertising’ as an “advertisement that compares alternative brands on objectively measurable attributes or price and identifies the alternative brand by name, illustration or other distinctive information” (Federal Trade Commission Commercial Practice Rule 16 CFR §14.15 n 1 (2002)).
In Mexico, the Federal Consumer Protection Agency (PROFECO), the Mexican Institute of Industrial Property (IMPI) and the Federal Commission of Protection against Sanitary Risks (COFEPRIS) regulate comparative advertising, including the treatment of comparative advertising claims.
PROFECO – a public institution which safeguards consumers’ rights and prevents abuse by analysing the content of advertisements – tries to ensure that the information provided in advertisements is accurate and justified, based on the guidelines established by law. These govern unfair and comparative advertising by setting out the corresponding obligations and prohibitions under which all goods or services promoted in Mexico must be regulated.
These rules stipulate that every ad should provide information including:
- accurate details of the product;
- correct specifications and characteristics of the product;
- information relating to the composition, quality and price of the product;
- conditions of delivery of the product; and
- information on the nature, attributes and rights of the advertiser.
This type of advertising may be considered comparative. If no accurate information is provided to the consumer, the advertising will be considered unfair and illegal.
Thus, if a company plans to promote its goods or services through comparative advertising, it should ensure that all ads meet the following criteria:
- The goods or services being compared are of the same nature, are available on the market under the same conditions and meet the same consumer needs and requirements (ie, like is compared with like);
- The information provided is in Spanish, without sound, text, dialogue or images that exaggerate qualities or highlight deficiencies when compared to other goods or services, thus misleading consumers into making a wrong decision as to which product to buy;
- The information provided is justified;
- If the ad makes a price comparison, this refers to identical goods or services and is justified; and
- The ad does not discredit other companies’ trademarks or create confusion among traders.
In addition to PROFECO, IMPI and COFEPRIS regulate and enforce the laws on comparative advertising. The Industrial Property Law prohibits acts that are against the best practices of industry and commerce, as well as the intent to discredit goods, services or industrial or commercial activities, based on Article 213, which specifies what is considered to constitute infringement.
For its part, COFEPRIS mainly oversees the General Healthcare Law, which regulates ads that promote the use or sale of health products, alcoholic beverages and tobacco. Its main purpose is to prevent companies from selling so-called ‘miracle’ goods, which could mislead consumers into believing that by using such goods, they can achieve certain illusory benefits.
It might appear unrealistic to review all ads - especially given the new and evolving ways that are emerging to promote goods and services (eg, via the Internet and social media) - in order to determine whether they are misleading for consumers. However, the regulatory framework should be availed of to prevent companies from gaining market share by misleading consumers into erroneous purchasing decisions based on unfair advertising.
Fair comparative advertising can be beneficial not only for advertisers, but also for consumers, since it helps them to learn more about the benefits or deficiencies of competing goods or services in order to make informed purchasing decisions. It should therefore be permitted, provided that the relevant conditions and guidelines are met in the interests of fair competition.
Carolina Ponce is an associate at Uhthoff, Gomez Vega & Uhthoff, SC who specialises in trademarks. She has a law degree from the Universidad Iberoamericana (2008) and is a member of the Mexican Association for the Protection of Intellectual Property. She is fluent in Spanish, English and French.