[Code of Federal Regulations]
[Title 16, Volume 1]
[Revised as of January 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 16CFR14.15]

[Page 127-128]
 
                     TITLE 16--COMMERCIAL PRACTICES
 
                   CHAPTER I--FEDERAL TRADE COMMISSION
 
PART 14_ADMINISTRATIVE INTERPRETATIONS, GENERAL POLICY STATEMENTS, AND 
ENFORCEMENT POLICY STATEMENTS--Table of Contents
 
Sec. 14.15  In regard to comparative advertising.

    (a) Introduction. The Commission's staff has conducted an 
investigation of industry trade associations and the advertising media 
regarding their comparative advertising policies. In the course of this 
investigation, numerous industry codes, statements of policy, 
interpretations and standards were examined. Many of the industry codes 
and standards contain language that could be interpreted as discouraging 
the use of comparative advertising. This Policy Statement enunciates the 
Commission's position that industry self-regulation should not restrain 
the use by advertisers of truthful comparative advertising.
    (b) Policy Statement. The Federal Trade Commission has determined 
that it would be of benefit to advertisers, advertising agencies, 
broadcasters, and self-regulation entities to restate its current policy 
concerning comparative advertising. \1\ Commission policy in the area of 
comparative advertising encourages the naming of, or reference to 
competitiors, but requires clarity, and, if necessary, disclosure to 
avoid deception of the consumer. Additionally, the use of truthful 
comparative advertising should not be restrained by broadcasters or 
self-regulation entities.
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    \1\ For purposes of this Policy Statement, comparative advertising 
is defined as advertising that compares alternative brands on 
objectively measurable attributes or price, and identifies the 
alternative brand by name, illustration or other distinctive 
information.

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[[Page 128]]

    (c) The Commission has supported the use of brand comparisions where 
the bases of comparision are clearly identified. Comparative 
advertising, when truthful and nondeceptive, is a source of important 
information to consumers and assists them in making rational purchase 
decisions. Comparative advertising encourages product improvement and 
innovation, and can lead to lower prices in the marketplace. For these 
reasons, the Commission will continue to scrutinize carefully restraints 
upon its use.
    (1) Disparagement. Some industry codes which prohibit practices such 
as ``disparagement,'' ``disparagement of competitors,'' ``improper 
disparagement,'' ``unfairly attaching,'' ``discrediting,'' may operate 
as a restriction on comparative advertising. The Commission has 
previously held that disparaging advertising is permissible so long as 
it is truthful and not deceptive. In Carter Products, Inc., 60 F.T.C. 
782, modified, 323 F.2d 523 (5th Cir. 1963), the Commission narrowed an 
order recommended by the hearing examiner which would have prohibited 
respondents from disparaging competing products through the use of false 
or misleading pictures, depictions, or demonstrations, ``or otherwise'' 
disparaging such products. In explaining why it eliminated ``or 
otherwise'' from the final order, the Commission observed that 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 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. 60 
F.T.C. at 796.


Industry codes which restrain comparative advertising in this manner are 
subject to challenge by the Federal Trade Commission.
    (2) Substantiation. On occasion, a higher standard of substantiation 
by advertisers using comparative advertising has been required by self-
regulation entities. The Commission evaluates comparative advertising in 
the same manner as it evaluates all other advertising techniques. The 
ultimate question is whether or not the advertising has a tendency or 
capacity to be false or deceptive. This is a factual issue to be 
determined on a case-by-case basis. However, industry codes and 
interpretations that impose a higher standard of substantiation for 
comparative claims than for unilateral claims are inappropriate and 
should be revised.

(Sec. 5, 38 Stat. 719, as amended; 15 U.S.C. 45)

[44 FR 47328, Aug. 13, 1979]