What a Comparative Claim Has to Compare

Answer first: the policy is permissive about comparing and strict about the basis

The Federal Trade Commission's position on comparative advertising is codified as a policy statement in its administrative interpretations. It states that Commission policy in this area encourages the naming of, or reference to, competitors, but requires clarity, and, if necessary, disclosure to avoid deception of the consumer.

The statement defines its own subject in a footnote. For its purposes, comparative advertising is advertising that compares alternative brands on objectively measurable attributes or price, and identifies the alternative brand by name, illustration or other distinctive information.

Two elements of that definition do most of the sorting. Objectively measurable attributes or price excludes matters of taste and impression. And identifies the alternative brand by name, illustration or other distinctive information means the rival does not have to be named to be identified — an illustration or a distinctive detail will do.

The statement's reasoning for the permissive posture is set out plainly. The Commission has supported the use of brand comparisons where the bases of comparison are clearly identified. Comparative advertising, when truthful and non-deceptive, is a source of important information to consumers and assists them in making rational purchase decisions; it encourages product improvement and innovation, and can lead to lower prices in the marketplace.

The statement's actual target is self-regulation, not advertisers

This is the part most summaries get wrong, and reading the section's own framing corrects it. The policy statement was issued after a staff investigation of industry trade associations and the advertising media regarding their comparative advertising policies, in which numerous industry codes, statements of policy, interpretations and standards were examined.

The finding was that many of the industry codes and standards contain language that could be interpreted as discouraging the use of comparative advertising. The statement's declared purpose is to enunciate the Commission's position that industry self-regulation should not restrain the use by advertisers of truthful comparative advertising.

So its operative sentences point outward at codes rather than inward at advertisers. The use of truthful comparative advertising should not be restrained by broadcasters or self-regulation entities. And, on restraints: for these reasons, the Commission will continue to scrutinise carefully restraints upon its use.

That matters for reading a market. Where comparative claims are scarce in a product category, the absence is not by itself evidence of a legal prohibition; the Commission's stated position is the opposite one.

Disparagement is permitted if it is true

The statement takes up a specific set of words used in industry codes — disparagement, disparagement of competitors, improper disparagement, unfairly attacking, discrediting — and observes that such prohibitions may operate as a restriction on comparative advertising.

Its answer is direct. The Commission has previously held that disparaging advertising is permissible so long as it is truthful and not deceptive.

It then quotes its own reasoning from an older matter, in which it narrowed a proposed order that would have barred disparaging competing products through false or misleading pictures, depictions or demonstrations, or otherwise. Explaining why it removed the words or otherwise, the Commission said the phrase would have prevented respondents from making truthful and non-deceptive statements that a product has certain desirable properties or qualities which a competing product or products do not possess. Such a comparison may have the effect of disparaging the competing product, but, it said, we know of no rule of law which prevents a seller from honestly informing the public of the advantages of its products as opposed to those of competing products.

The statement closes that passage with a consequence: industry codes which restrain comparative advertising in this manner are subject to challenge by the Federal Trade Commission.

No higher bar for a comparative claim than for any other claim

The second half of the policy statement addresses substantiation, and it settles a question that comes up constantly.

It records that on occasion a higher standard of substantiation by advertisers using comparative advertising has been required by self-regulation entities. The Commission's answer is that it evaluates comparative advertising in the same manner as it evaluates all other advertising techniques.

It restates what the actual question is. The ultimate question is whether or not the advertising has a tendency or capacity to be false or deceptive, and this is a factual issue to be determined on a case-by-case basis.

And it takes a position on the codes: industry codes and interpretations that impose a higher standard of substantiation for comparative claims than for unilateral claims are inappropriate and should be revised.

The general substantiation rule still applies with full force, of course. The Commission's advertising substantiation policy statement requires a reasonable basis, before dissemination, for express and implied claims however conveyed that make objective assertions. A comparison on an objectively measurable attribute is an objective assertion, so the requirement attaches — it just does not attach at a heightened level because the claim happens to be comparative.

An implied comparison is still a comparison, and the endorsement rules say so

The place where comparative claims are most often made without anyone deciding to make one is in an endorsement, and the Endorsement Guides address that directly.

The expert-endorsement rule provides that to the extent an advertisement implies the endorsement was based upon a comparison to another product or other products, such comparison must have been included in the expert's evaluation. And as a result of that comparison, the expert must have concluded that, with respect to those features on which the endorser is represented to be an expert and which are relevant and available to an ordinary consumer, the endorsed product is at least equal overall to the competitors' products.

Where the impression goes further, so does the requirement: where the net impression created by the endorsement is that the advertised product is superior to other products with respect to any such feature, then the expert must in fact have found such superiority.

The Guides' own example shows how little it takes to imply a comparison, and how much latitude remains on method. The president of a cleaning service says the service uses a particular cleanser instead of its leading competitors because of its performance. Because the advertisement implies the service has experience with a reasonable number of leading competing brands available to consumers, it must in fact have that experience and must have concluded, based on its expertise, that the endorsed product is at least equal — or superior, if that is the net impression. But because nothing in the advertisement said the product was chosen, selected, or evaluated in side-by-side comparisons, it is sufficient that the service relied solely on accumulated experience without performing side-by-side or scientific comparisons.

The Guides add a relevance limit through a different example. Where a hospital selected a product over competitors because of a packaging convenience not generally available to the public, the endorsement is described as deceptive, because the basis for the choice is neither relevant nor available to consumers and was not disclosed.

What to ask of a comparison you are reading

The questions that follow from these documents are about specificity rather than tone.

What is the attribute being compared, and is it objectively measurable. The policy statement's own definition limits itself to objectively measurable attributes or price, which is a useful filter for separating a comparison from an impression.

What is the comparison group. A claim measured against one rival, against a category, or against nothing in particular are three different claims wearing similar sentences.

Is the basis of the comparison identified. The Commission's stated support is for brand comparisons where the bases of comparison are clearly identified, and its policy contemplates disclosure where necessary to avoid deception.

Is the basis relevant and available to an ordinary buyer. That is the limit the hospital example draws, and it is the one that catches comparisons resting on something a consumer could never obtain.

And where the comparison is implied rather than stated — a clinician saying they use one product rather than others, a page describing a product as preferred or chosen — the endorsement rule treats the implication as the claim, and the comparison behind it has to exist.

None of this establishes whether any specific comparison is truthful or deceptive. The policy statement itself says that is a factual issue to be determined on a case-by-case basis, and no determination about anyone is asserted or predicted here.