Comparing your product with a competitor’s can be one of the most persuasive things an advertisement does. Shoppers like a clear reason to pick one option over another. A side by side price table or a “lasts longer than” claim gives them that reason quickly.

The same comparison can also land a business in trouble with the regulator. Australian law does not ban comparative advertising. It does, however, expect every comparison to be fair, accurate and complete.

Comparative advertising is allowed in Australia

Some business owners assume it is illegal to name a rival brand in an ad. That is not the case here. The Australian Competition and Consumer Commission (ACCC) has said that comparative advertising is good for competition and that Australia does not stop competitors comparing products.

The catch is the Australian Consumer Law. Section 18 prohibits conduct in trade or commerce that is misleading or deceptive, or likely to mislead or deceive. The ACCC’s education material on comparative advertising explains that a comparison is not unlawful in itself, but it breaches section 18 if it misleads.

So the real question for any campaign is simple. Would an ordinary person seeing the ad come away with a false impression about your product or the rival’s? If the answer could be yes, the comparison needs more work before it goes live.

What the ACCC looks for in a comparison

The ACCC has long said it supports comparative advertising as long as it is not misleading and compares like with like. In one older matter it described comparative advertising as a valuable tool of competition, but only when scrupulous accuracy is observed. That phrase is a good test to keep in mind when you brief a designer or write ad copy.

The regulator also looks at an advertisement as a whole and in its context. A headline that is technically true can still mislead if the fine print, images or overall message point in a different direction. Leaving out information can be just as much of a problem as stating something false. When you plan a comparison, check these points first:

• You are comparing products that are genuinely similar in size, features or purpose.
• The claim holds true across the range you are naming, not just one model.
• Prices include rebates, discounts or extras that change what customers actually pay.
• Your figures are current at the time the ad runs.
• Any demonstration or test shown in the ad reflects what really happens.
• You can back up every claim with records if someone asks.

Real examples of comparisons going wrong

The same ACCC education page uses several case studies. In one, a claim that a product lasted as long as a rival’s was found to be misleading. It was true for only one of the rival’s products, not the whole range the ad implied.

In another example, a price comparison was misleading because it left out a rebate. That rebate reduced what the competitor’s customers actually paid. The comparison looked fair on the surface, but the missing detail changed the picture.

A third example involved a staged contest shown in an ad. In five of the six takes, both products gave off smoke, so the one sided result shown in the ad did not match reality. Demonstrations and “before and after” images deserve the same care as written claims.

Older ACCC matters show the same themes. A telecommunications provider’s ads suggested its long distance rates were always lower than its rival’s, yet the rival was cheaper in several significant situations. A breakfast cereal ad showed a health tick against its own product and a cross against competitors that also met the same nutrition guidelines.

Price comparisons need extra care

Price is the most common thing businesses compare. It is also where small errors cause the biggest problems. Competitor prices change often, and a table that was right last month may be wrong today.

Keep a dated record of where each competitor price came from. Check it again before the ad is printed, posted or boosted. If you run the comparison online for a long time, set a reminder to review it on a regular schedule.

Think about the full cost to the customer as well. Delivery fees, setup charges, contract lengths and rebates can all change which option is cheaper. If your ad only compares the headline price, make sure that is a fair way to judge both offers.

Online businesses selling through their own site face the same rules. If you are planning an online store, the advice in our ecommerce web design tips can help you set out product and price details clearly. Clear layout makes it easier for customers to see exactly what your comparison covers.

Comparisons in service industries

Comparative claims are not limited to products on a shelf. Service businesses often compare response times, insurance cover, ratings or years of experience. A removalist or courier might say it is faster or cheaper than “the big guys”.

Claims like these still need to be accurate and supported. If you say you are cheaper than a named competitor, you should be able to show the quotes or published rates you relied on. Vague claims can mislead too if they suggest a comparison you cannot back up.

Our guides on marketing your transport company and online marketing for removalists cover ways to stand out in crowded service markets. Comparative claims can be part of that approach. They simply need the same care as any other promise in your marketing.

Comparison websites and coverage claims

If your business runs a comparison service, or lists products on one, there are extra points to watch. The ACCC has issued guidance for comparator website operators and suppliers. It expects operators to be accurate about how much of the market they cover.

In 2017 the operator of a well known comparison site paid a penalty of $10,800 under an ACCC infringement notice. The ACCC alleged the site overstated how many health insurance policies it compared. The claim was removed from the website.

The lesson applies to any business making coverage claims. Words like “all”, “every” or “the whole market” invite scrutiny. Use them only when they are true.

Building comparisons into your website and ads

Comparison tables and feature charts are popular on business websites. They work well when they are easy to read and honest about what is included. Plan where they sit on the page early, rather than squeezing them in at the end.

If you are starting a new site, our guide on how to start designing a website walks through planning pages and content. Add a note under any comparison table explaining the date of the data and what was compared. That small step helps customers and shows you have taken care.

Before any comparative ad goes live, ask someone outside the project to read it cold. Ask them what they think the ad is claiming. If their answer differs from what you can prove, change the wording.

Frequently asked questions

Can I name a competitor in my advertising?

Yes, Australian law does not ban naming a competitor in an ad. The comparison must not mislead or deceive under the Australian Consumer Law. You should also be careful with trade marks and logos, and get advice if you plan to use them.

What does “like with like” mean?

It means comparing products or services that are genuinely similar. A small budget model should not be compared with a rival’s premium model to make your price look better. The ACCC has said it supports comparative advertising when it compares like with like and is not misleading.

Do I need proof for comparison claims?

You should keep records that support every claim you make. That might include dated screenshots of competitor prices, test results or published specifications. Records make it much easier to respond if a competitor or the regulator questions your ad.

Who can complain about a misleading comparison?

Customers, competitors and the ACCC can all raise concerns about misleading advertising. Competitors are often the first to notice an unfair comparison of their own products. The ACCC can take action, including infringement notices and court proceedings.

This article is general information only and is not legal advice. Consumer and advertising law can change, and your situation may raise other issues. Please speak with a qualified lawyer before running a comparative campaign you are unsure about.