I help clients practically navigate Canada’s advertising and marketing laws and offer a full range of Canadian advertising and marketing law services in relation to print, online, new media, mobile and e-mail marketing and telemarketing, including comparative advertising.
“There is nothing wrong with the aggressive promotion of one’s own goods and services so long as there is no untruthful disparagement of a competitor’s goods or services. In the circumstances, it could not be said that this advertisement had that effect. What this advertisement did was raise awareness that could lead business purchasers to make enquiries to determine whether their shipment requirements would attract the discount set out in the advertisement. Advertising is unfair where claims are made which lack a reasonable basis. That was not the case here. Courts should be reluctant to intervene in the competitive marketplace unless the advertisements are clearly unfair.”
(Purolator Courier Ltd. v. United Parcel Service Canada Ltd. (1995))
“Comparative advertising is advertising (as defined in the Code) that compares the advertiser’s products or services, and the products or services of one or more identifiable organization(s) or of the marketplace as a whole, concerning, for example, product or service characteristics, value, performance, consumer preference, market share, sales origin or availability.”
(Advertising Standards Canada, Canadian Code of Advertising Standards)
“Comparative advertising fosters price competition by allowing prospective clients to compare fees. When consumers cannot compare the prices for legal services, there is little or no incentive for lawyers to compete on price, thereby raising the costs to consumers.”
(Competition Bureau, Self-regulated professions – Balancing competition and regulation)
OVERVIEW OF COMPARATIVE ADVERTISING
A common type of advertising/marketing that can be the subject of challenge by provincial or federal enforcement agencies (e.g., provincial consumer protection officials or the federal Competition Bureau) is comparative advertising.
Generally speaking, comparative advertising is where individuals or companies compare prices, product or service quality or performance to their competitors.
Like performance claims (see our Performance Claims page), comparative advertising can be an effective and legitimate way to distinguish products or services from the competition.
For example, the Competition Bureau has endorsed the potentially pro-competitive benefits of comparative advertising, including in its 2007 Report on the self-regulated professions in Canada (Self-regulated professions – Balancing competition and regulation) with respect to legal fees:
“[c]omparative advertising fosters price competition by allowing prospective clients to compare fees. When consumers cannot compare the prices for legal services, there is little or no incentive for lawyers to compete on price, thereby raising the costs to consumers.”
However, comparative advertising can also raise misleading advertising concerns in some cases – for example, where the information in a comparative advertising claim is false or misleading or where it includes a performance claim that is not substantiated (i.e., that is not based on adequate and proper testing, which is required under the Competition Act).
As such, it is important to ensure that comparative advertising claims are, among other things, true, accurate and that any important information (e.g., conditions, limitations, etc.) is clearly disclosed. In addition, if comparative advertising involves performance claims, such as claims relating to the performance or reliability of a product/service, it is also important that any such claim be both accurate and substantiated before being made.
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