Can a trade association stop its members from running comparative ads?

Not if the ads are truthful. The FTC's order against the American Institute of Certified Public Accountants bars the association from restricting, among other advertising, "any self-laudatory or comparative claim" by its members. The association keeps some room, though: the order still lets it formulate reasonable ethical guidelines on advertising that it reasonably believes would be false or deceptive within the meaning of Section 5.

Do I need proof for a claim like “better” or “best”?

Only when the boast is more than a vague opinion. A general claim of quality so recognizably personal opinion that no substantiation is possible or expected is "mere puffing" and has never been subject to regulation. The analysis changes once the ad says in what respect, why, and compared to whom, because the Commission then treats the claim as objective; in the Doan's matter it called such a claim the "opposite of puffery."

Does an ad have to name a competitor to make a comparative claim?

The FTC's position is that it does not. In the Garden of Life contempt appeal, the Commission argued that the district court erred in ruling there was no violation because the defendants did not compare their calcium products to other calcium supplements. The district court had found that the company "did not compare its product to any other specific product."

If most of my comparison ad is accurate, am I covered?

No. The Commission treats an ad as conveying a claim if consumers acting reasonably would interpret it that way, even when a misleading claim is accompanied in the same ad by non-misleading claims.

How many consumers must read an ad as a superiority claim before it counts?

Fewer than a majority. A claim would likely mislead a reasonable consumer if at least "a significant minority of consumers" would be deceived by it. The Doan's matter shows the scale: copy tests there showed approximately 30 to 45% of consumers tested discerned a superiority message.

Does a comparative claim have to have raised sales to be material?

Not if the claim is likely to deceive. As one court put it, in a passage quoted in the Kraft casebook, "[i]f a claim is material because it is likely to deceive, it is not rendered otherwise simply because it is unsuccessfully advertised."

DeceptionLegal test

Comparative claim

Also known as "Superiority claim"

Berkeley Robinson, Managing Attorney at Robinson Law Firm PLLC

Author

Berkeley Robinson, Esq.

Managing Attorney, Robinson Law Firm PLLC

Berkeley has served as the go-to counsel for many scaling businesses in a transactional and litigation management capacity. Before becoming an attorney, Berkeley grew sales teams, ran online marketing campaigns, and did everything else an entrepreneur does—and still does today as the founder of two online businesses.

Definition

A comparative claim is an express or implied statement that a product or service works better, or is more beneficial, than competing products. Source: Brief for Plaintiff-Appellant Federal Trade Commission (Garden of Life contempt appeal) The Commission distinguishes an absolute efficacy claim ("this product works") from a comparative one ("this product works better than others"). Source: In re Novartis Corp., Opinion of the Commission

The comparison does not have to be spelled out. In the Doan's matter discussed below.

Key legal rules

A comparative claim is a claim like any other, so it has to be truthful and substantiated. Five rules put that to work:

The Commission "evaluates comparative advertising in the same manner as it evaluates all other advertising techniques," and industry codes and interpretations that impose a higher standard of substantiation for comparative claims than for unilateral claims are inappropriate, under its Statement in Regard to Comparative Advertising, 16 C.F.R. § 14.15(c)(2). Source: In re California Dental Association, Opinion of the Commission
A comparative quality claim that implicates objective standards for which consumers would expect proof may be proscribed on a showing that it is false or unsubstantiated, and that showing requires proof that the claim is untrue or that the advertiser lacked "a reasonable basis for advertising claims before they are disseminated." Source: In re California Dental Association, Opinion of the Commission
Whether an ad makes a comparison, express or implied, is judged by the entire ad and the overall net impression it conveys; the Commission treats the ad as conveying a claim if consumers acting reasonably would so interpret it, even when a misleading claim sits beside non-misleading ones, and a claim is likely to mislead if at least a significant minority of consumers would be deceived. Source: In re Novartis Corp., Opinion of the Commission
Some general quality claims are mere puffing, recognizable personal opinion for which no substantiation is possible or expected, but a superiority claim that specifies in what respect, why, and compared to whom is objective rather than puffery and is the kind of claim a consumer would reasonably expect to be substantiated. Source: In re California Dental Association, Opinion of the Commission
The Commission is entitled to apply, within reason, a presumption of materiality to express claims, to implied claims where there is evidence the seller intended to make the claim, and to claims that significantly involve health, safety, or other areas with which reasonable consumers would be concerned. Source: Kraft, Inc. v. Federal Trade Commission, 970 F.2d 311 (7th Cir. 1992)

For the sake of space, this page lists only the primary rules related to this term that most businesses should follow. More may apply to your situation, and your unique facts affect how they apply.

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Why these rules exist

The substantiation duty exists because buyers usually cannot test a comparison themselves. In the Doan's matter the Commission reasoned that superiority over other analgesics is even harder to judge without well-controlled clinical trials, so consumers necessarily rely on the manufacturer's representations and act reasonably when they assume those representations are substantiated and accurate. Source: In re Novartis Corp., Opinion of the Commission

The same concern limits private policing of comparisons. In the dentists' association matter, the Commission's order left the association (CDA) free to regulate false and misleading marketing by its members but did not allow broad categorical bans on truthful and nondeceptive advertising of price, quality, or availability, because the restrictions deprived consumers of information they value. Source: Opinion of the Commission (CDA)

Enforcement examples

Kraft, Inc. v. FTC (processed cheese slices)

Kraft, Inc. v. Federal Trade Commission, 970 F.2d 311 (7th Cir. 1992)

Kraft's broadcast "Skimp" ad told shoppers that "Imitation slices use hardly any milk. But Kraft has five ounces per slice." Source: Kraft, Inc. v. Federal Trade Commission, 970 F.2d 311 (7th Cir. 1992) The FTC found that the ad conveyed an "imitation superiority" claim, that Kraft Singles contain more calcium than most imitation slices. Source: Kraft, Inc. v. Federal Trade Commission, 970 F.2d 311 (7th Cir. 1992) The claim was untrue, because the vast majority of imitation slices contained roughly the same calcium per ounce as Kraft Singles. Source: Kraft, Inc. v. Federal Trade Commission, 970 F.2d 311 (7th Cir. 1992)

Outcome. The Seventh Circuit enforced the Commission's order directing Kraft to cease and desist from the misrepresentations. Source: Kraft, Inc. v. Federal Trade Commission, 970 F.2d 311 (7th Cir. 1992) On materiality, the court held that the presumption applied to the imitation superiority claim was supported by substantial evidence. Source: Kraft, Inc. v. Federal Trade Commission, 970 F.2d 311 (7th Cir. 1992)

AstraZeneca Pharmaceuticals, LP (acid reflux drug switch letter)

FTC Staff Closing Letter re AstraZeneca Pharmaceuticals, LP, FTC File No. 032-3067 (July 2, 2003)

AstraZeneca's "switch program" letter, sent to 125,000 Wal-Mart customers in August 2001, told them Nexium "has been shown to be clinically superior to Prilosec," another acid reflux drug AstraZeneca makes. Source: FTC Closing Letter re AstraZeneca Switch Program, FTC File No. 032-3067 (July 2, 2003) The trouble was that the FDA-approved labeling for Nexium did not permit a claim that it had been proven clinically superior to Prilosec. Source: FTC Closing Letter re AstraZeneca Switch Program, FTC File No. 032-3067 (July 2, 2003)

Outcome. AstraZeneca and Wal-Mart mailed a correction letter to everyone who received the switch letter, without any governmental intervention. Source: FTC Closing Letter re AstraZeneca Switch Program, FTC File No. 032-3067 (July 2, 2003) Staff closed the investigation in light of a number of factors, including that prompt correction, and recommended that AstraZeneca be more careful in the future. Source: FTC Closing Letter re AstraZeneca Switch Program, FTC File No. 032-3067 (July 2, 2003) Closing the file was not a determination that no violation occurred. Source: FTC Closing Letter re AstraZeneca Switch Program, FTC File No. 032-3067 (July 2, 2003)

FTC v. Lane Labs-USA, Inc. (calcium supplement)

FTC v. Lane Labs-USA, Inc., 624 F.3d 575 (3d Cir. 2010)

In the FTC's contempt motion, the Commission described Lane Labs' message for AdvaCAL, a calcium supplement, as repeated over and over: it was the "only" calcium product that can "build bone." Source: FTC v. Lane Labs, Memorandum for Order To Show Cause One advertising chart went further and said AdvaCAL was nearly 4 times better than Calcium Citrate Malate and nearly 3 times better than Calcium Citrate at building bone density. Source: FTC v. Lane Labs, Memorandum for Order To Show Cause The FTC argued that the chart deceptively conveyed that head-to-head studies existed, when the defendants could point only to defective studies comparing AdvaCAL to Calcium Carbonate. Source: FTC v. Lane Labs, Memorandum for Order To Show Cause

Outcome. As the Commission later described the decision, the district court denied the contempt motion, but the Third Circuit reversed because the court below failed to consider the superiority claims the Commission challenged. Source: Brief for Plaintiff-Appellant Federal Trade Commission (Garden of Life contempt appeal) The Third Circuit found that the defendants lacked substantiation, and so violated the consent order, when they claimed their supplement was unique in its ability to increase bone density and comparable or superior to osteoporosis drugs. Source: Brief for Plaintiff-Appellant Federal Trade Commission (Garden of Life contempt appeal)

FTC v. Garden of Life, Inc. (calcium supplements)

Brief for Plaintiff-Appellant Federal Trade Commission (contempt appeal), filed after the district court’s February 27, 2012 order

Garden of Life's ads for RAW Calcium and Grow Bone System claimed the products were "better able than other calcium supplements – indeed, uniquely able – to reverse normal bone density loss by growing bone," according to the FTC's brief. Source: Brief for Plaintiff-Appellant Federal Trade Commission (Garden of Life contempt appeal) The FTC reported that the defendants did not try to justify the claims that the products confer greater bone benefits than other calcium supplements, and simply denied making calcium superiority claims. Source: Brief for Plaintiff-Appellant Federal Trade Commission (Garden of Life contempt appeal)

Outcome. On February 27, 2012, the district court denied the contempt motion, finding the Commission had not shown by clear and convincing evidence that the defendants violated the Stipulated Final Order, and the Commission sought review. Source: Brief for Plaintiff-Appellant Federal Trade Commission (Garden of Life contempt appeal) The district court had reasoned that "GOL only discussed the benefits of Grow Bone System in generic terms and did not compare its product to any other specific product." Source: Brief for Plaintiff-Appellant Federal Trade Commission (Garden of Life contempt appeal)

In re Novartis Corp. (Doan’s back-pain analgesic)

In the Matter of Novartis Corporation, et al., Opinion of the Commission

Research showed Doan's had a weak image against leading brands, so the strategy of the new campaign was to compare Doan's to other general analgesics. Source: In the Matter of Novartis Corporation, et al., Opinion of the Commission In the first ad, a Doan's package appeared beside packages of Advil, Tylenol and Bayer while the audio concluded: "With an ingredient these pain relievers don't have." Source: In re Novartis Corp., Opinion of the Commission Copy tests showed that approximately 30 to 45% of consumers tested discerned a superiority message. Source: In re Novartis Corp., Opinion of the Commission Yet Novartis conceded that no scientific studies demonstrate the therapeutic superiority of Doan's active ingredient over aspirin, acetaminophen, ibuprofen, or naproxen sodium for back pain. Source: In re Novartis Corp., Opinion of the Commission

Outcome. The Commission affirmed the ALJ's holding that the unsubstantiated superior efficacy claims for back pain relief were material and deceptive, and reversed the ALJ's refusal to order corrective advertising. Source: In the Matter of Novartis Corporation, et al., Opinion of the Commission

Exposure

A deceptive comparative claim falls under Section 5 of the FTC Act, which prohibits "unfair or deceptive acts or practices in or affecting commerce." Source: In re Novartis Corp., Opinion of the Commission The test is whether the claim is likely to mislead, and proof that particular consumers were actually deceived is not required. Source: In re Novartis Corp., Opinion of the Commission Nor does an advertiser have to fool all of the people to be found liable. Source: In re Novartis Corp., Opinion of the Commission

In the Doan's matter, the administrative law judge's order would bar Novartis from representing that an over-the-counter analgesic is more effective than others for pain unless it possesses and relies on competent and reliable scientific evidence that substantiates the claim. Source: Initial decision and order (Doan’s analgesic advertising), as reproduced in D09344 - Respondents' Renewed Motion to Exceed the Five (5) Expert Limit And Memorandum in Support For that provision the order defined the required evidence to include at least two adequate and well-controlled, double-blinded clinical studies. Source: Initial decision and order (Doan’s analgesic advertising), as reproduced in D09344 - Respondents' Renewed Motion to Exceed the Five (5) Expert Limit And Memorandum in Support The judge also found that the violations were serious, deliberate, and transferable, so that a comprehensive "fencing-in" order was appropriate; the challenged ads ran for eight years and were extensively disseminated. Source: Initial decision and order (Doan’s analgesic advertising), as reproduced in D09344 - Respondents' Renewed Motion to Exceed the Five (5) Expert Limit And Memorandum in Support

The ALJ declined to order corrective advertising, but the Commission reversed. Source: In the Matter of Novartis Corporation, et al., Opinion of the Commission The Commission ordered a corrective message to appear for one year on all packaging and advertising, except radio and television ads of 15 seconds or less, and until Novartis had spent on Doan's advertising an amount equal to the average spent annually during the eight years of the challenged campaign. Source: In re Novartis Corp., Opinion of the Commission The message it adopted read: "Although Doan's is an effective pain reliever, there is no evidence that Doan's is more effective than other pain relievers for back pain." Source: In re Novartis Corp., Opinion of the Commission

A marketer already under an order faces contempt as well. In the Lane Labs contempt proceeding, the Commission sought a monetary contempt award to compensate consumers who bought the products in reliance on unsupported claims and misrepresentations. Source: FTC Opening Brief, Lane Labs contempt appeal And in Kraft, a court enforced a Commission order requiring the company to cease and desist from its misrepresentations about calcium compared with imitation slices. Source: Kraft, Inc. v. Federal Trade Commission, 970 F.2d 311 (7th Cir. 1992)

FAQs

1.Corel Office Document. Brief for Plaintiff-Appellant Federal Trade Commission (Garden of Life contempt appeal)See also Kraft, Inc. v. Federal Trade Commission. Kraft, Inc. v. Federal Trade Commission, 970 F.2d 311 (7th Cir. 1992)
2.In the Matter of Novartis Corporation, et al. - Opinion. In re Novartis Corp., Opinion of the Commission
3.Document. In re California Dental Association, Opinion of the Commission