Comparative advertising: What is permissible and what is not?

In the context of advertising, the aim is to convince a potential customer of one's own product or the service offered and to trigger an incentive to buy.

Since there are a large number of competitors in practically all areas, it is of great importance for a provider to be superior or at least equal to the competition.

While comparative advertising was generally prohibited in Germany in the past, the legal situation is different today.

Contents

1. The legal situation
2. What is allowed to be done?
3. Avoiding confusion
4. Specific characteristics
5. The consequences of unfair advertising

1. The legal situation

The direct comparison with a competitor's product mentioned by name in advertising was not permitted in Germany up to and including August 2000. Other forms of representation that identifiably depicted another's trademark were also not allowed to be used to advertise one's own products.

On 1 September 2000, however, the European Directive 97/55/EC was transposed and transformed into German law. To this end, the Unfair Competition Act (Gesetz gegen unlauteren Wettbewerb, UWG) was amended, which now allows anyone to make a direct comparison in advertising.

However, certain restrictions must be observed. For example, comparative statements must not only be true, but also verifiable. Above all, they must not be classified as misleading.

Since the comprehensive reform of the Unfair Competition Act in 2004, the exact definition of the offence can be found in Section 6 (1) UWG. However, since comparative advertising has its limits, Section 6 (2) UWG describes exactly when it is unfair.

2. What is allowed to be done?

In order not to exceed the limits of what is permitted in the case of comparative advertising, the restrictions defined in the law must be observed.

Thus, it is written in § 6 para. 2 no. 1 that the comparison may not refer to a product that has a different purpose than one's own. It must therefore actually be comparable.

Even if the scope of functions does not have to be one hundred percent identical, at least a certain degree of interchangeability should be recognisable for the customers addressed.

In difficult cases, this can be a matter of judgement.

For example, comparing one's own laptop with that of another manufacturer would be possible without any problems. Comparing the competitor's desktop PC, on the other hand, would not be permissible, since decisive criteria such as mobility, dimensions and weight or, for example, battery life are not important for the latter.

3. Avoid confusion

Comparative advertising is also inadmissible under Section 6 (2) No. 3 UWG if it creates a risk of confusion with a competing product or another trademark and its distinctive signs.

A clear distinction must therefore be recognisable.

Furthermore, the advertising statements must not discredit a competing company and damage its reputation. This also includes the goods and services as well as the activities of the competitor.

Anyone who wants to start a campaign should in any case seek legal advice. Only in this way can the specific individual case be precisely assessed and the permissibility checked in advance.

4. Specific characteristics

In principle, comparative advertising must be limited to specific characteristics of the products or services.

According to the law, it is crucial that the direct comparison is objective and refers to essential characteristics. These must be typical for the type of product and, above all, verifiable.

However, comparative advertising may also refer only to the price difference.

Furthermore, the legislator allows the inclusion of all criteria that may be important for the customer and decisive for the purchase decision. Thus, a company may also use criteria that are not physically present.

These may include legal and social factors, a TÜV certificate, services such as delivery time and warranty period or sensory characteristics such as smells and sounds. The only important thing is that these criteria are actually relevant.

5. The consequences of unfair advertising

If the legal requirements are not observed, companies have to reckon with sometimes considerable consequences.

In most cases, these go beyond legal consequences. This is because there is often also a threat of damage to their own image, which those affected find difficult to restore.

The costs arising from legal disputes, in connection with claims for damages usually amounting to five to six figures, can also quickly drive small and medium-sized companies to ruin. Because in the end, it is not the advertising agency that is liable, but its client.

It is therefore best to have your advertising campaign checked by a lawyer for competition law before it is made public. This way you can avoid problems later on and possibly serious consequences due to unfair advertising.

Picture credits: © Shenki / panthermedia.net