Changes to comparative price ad rules by ASA take immediate effect

Comparative advertising is one of the trickiest areas of advertising law as it deals with brand owners comparing their products head to head with their competitors.

The Advertising Standards Authority (ASA) that administers the UK Code of Broadcast Advertising (BCAP Code) and the UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (CAP Code) has made a slight amendment to the existing rules that makes comparison advertising between competing products like TVs, vacuum cleaners, airline tickets and the weekly shopping basket down the supermarket that much easier.

The Broadcast Committee on Advertising Practice (BCAP) considered arguments for retaining the rule that in effect prevented marketers from comparing items that weren’t identical or substantially similar but nevertheless met the same need or intended purpose as required under comparative advertising law.

The argument put forward by those brand owners with strong brands was that if two products met the same need or intended purpose but differed markedly in their quality, then this comparative advertising would be both misleading to the consumer as well as being unfair because significant differences in quality weren’t likely to be apparent in the advert.

The old BCAP Code 3.39 states:

Advertisements that include a price comparison must state the basis of the comparison. Comparisons with a competitor price must be with the price of an identical or substantially equivalent product and must explain significant differences between the products. If the competitor offers more than one similar product, marketers should compare their price with the price for the competitor’s product that is most similar to the advertised product.

On the other side of the argument were brand owners who sought for a more flexibility in the rules where it shouldn’t be necessary to compare products or services that were identical or substantially similar in order to run a comparative advert.

They argued they still had the responsibility to ensure that their advertising wasn’t misleading and were also under a duty to justify their comparative advertising claims, so there wasn’t going to be any risk of confusion if the requirement of ‘identical’ or ‘substantially equivalent’ product comparison was dropped.

BCAP considered that on balance reform to BCAP Code 3.39 was possible because BCAP Codes 3.3 -3.35 governed comparisons with identified competitors in addition to the general rules that prevent misleading advertising and this offered sufficient protection for businesses and consumers.

The new BCAP Code 3.39 now states:

Advertising that include a price comparison must make the basis of comparison clear.

Such wording didn’t have the effect of restricting legitimate comparative claims and would provide reassurance to consumers and marketers that the basis of comparisons would be clear in ads where, for example, a retailer would be required to state if premium goods were being compared with non-premium goods.

BCAP also decided to add the words ‘which may include price’ to the end of BCAP Code 3.35 to reflect fully the legal requirements for comparative claims and underscore the principle enshrined in EU law (EU Misleading and Comparative Advertising Directive 2006/114/EC) that comparisons with identifiable competitors, including those based on price, must be objective, representative and verifiable.

The new BCAP Code 3.35 now states:

Advertising must objectively compare one or more material, relevant, verifiable and representative feature of those products, which may include price.

The Committee of Advertising Practice (CAP) also agreed with this removal of the necessity for non-broadcast price comparison advertising to be about an ‘identical’ or ‘substantially equivalent’ product.

The new CAP Code 3.35 now states:

They must objectively compare one or more material, relevant, verifiable and representative feature of those products, which may include price.

The new CAP Code 3.39 now states:

Marketing communications that include a price comparison must make the basis of the comparison clear.

CAP has published guidance on retailers’ price comparisons and on lowest price claims and price promises.

The changes to the BCAP Code and CAP Code take immediate effect.

Ardi Kolah is the author of Essential Law for Marketers (£19.99) published by Kogan Page and is CIM’s Book of the Month. Click on the book to order your copy today!