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
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
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.
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The line separating commercial speech from First Amendment-guaranteed free speech has become blurred in the Internet age,.
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