Is the law adequate to prevent unfaircomparative advertising practices

Maruti Udyog Ltd recently served a legal notice on arch rival Hyundai Motor India Ltd alleging that the latter had printed incorrect information about its latest car Swift in an advertising brochure. With the liberalisation and globalisation of the Indian economy, firms have been aggressively and vigorously promoting their products and services.In a competitive environment, every representation of a product or service is about what ‘others are not’. These practices raise questions about truthfulness and fairness of representation of products and services.The paper extracted from Vikalpa - the journal of IIM, Ahmedabad - explores regulations on comparative advertising in the context of globalisation and liberalisation in India.

Is the law adequate to prevent unfaircomparative advertising practices? In the Indian context, should the balance in interpreting the law not be tilted against such an ad? The opening up of the economy, on its own, is not going to create and sustain competition. An appropriate law, adequate enforcement, strong infrastructure, and a quick dispute settlement mechanism would be needed to sustain competition. Retreat of the State, in the context of free economy, is not to be misunderstood as the State not regulating the economy. The State would need to develop adequate knowledge of the working of businesses in a free economy, enact laws, and create infrastructure and mechanisms for sustaining competition. In its absence, we would only be regressing from a ‘license permit raaj’ to the ‘jungle rule of the market’. The processes of liberalisation and globalisation are nascent. It is not too late to begin.

comparative Advertising complan vs Horlicks

Horlicks was invented by William Horlick (William) and his brother James Horlick (James) (1844-1921) in 1873.Complan, owned by the Heinz Company, was one of the most popular health drinks in India.
until the 1990s, Horlicks was the more aggressive player in the health drink market compared to Complan. While Horlicks introduced a series of variants aimed at the family segment and promoted its products well, Complan lay low on the promotional front, with its ads just focusing on the "extra growth" attribute.
Experts felt that in their quest to outdo their rivals, advertisers resort to comparative advertising and at times ends up denigrating the competitor brand. Some analysts felt that companies resorted to comparative advertising to gain publicity and to increase sale.Though both the companies backed their claims with scientific research data, they were still locked in a legal battle. Issues of disparaging ads by rival companies were often resolved by the ASCI. But with constant mudslinging at each other, the two companies decided to battle it out in the courts instead

RIN VS TIDE comparative advertising

The latest offensive comparative advertising from Rin – a TV commercial claiming to be better than Tide by not just naming but showing the competitive product, has brought the debate on comparative advertising back in focus. In my view, comparative advertising is permissible if it’s based on facts.

In Rin, comparative advertising the claim is limited to a whiter wash- ‘Tide se kahin behatar safedi de Rin’ (Rin gives better whiteness than Tide), without getting into specific, feature-to-feature comparison. Almost all detergent ads promise a whiter wash – except that they used to refer to ‘ordinary detergents’ leaving the consumer to figure that they are talking about her brand. The only difference here is that a competitor has been named, and shown brazenly. According to this article: ‘this claim is based on laboratory tests done through globally accepted protocols in independent third-party laboratories’.

Comparative ads aren’t new to India. Many years ago, Trikaya Grey created an ad for HCL Photocopiers which directly named Modi Xerox in their ads. The comparison was feature-to-feature and specifically mentioned why HCL was better. I don’t have the ads, but you can read about it in this 1989 article from Economic Times (link to pdf file).There have been others too – the recent Horlicks vs. Complan ads come to mind.

Without solid factual backup, comparative ads only serve to create a ruckus and bring the advertising and the brand(s) into the public eye. It remains to be seen how Tide will react but reports indicate that they may not respond directly. The ads remain on air with a high frequency for a short period of time, creating a lot of buzz before ASCI or a consumer complaint forces the advertiser to pull the ad off the air. Sometimes it may backfire on the advertiser – like in the case of Fusion water tanks. They released an ad (around the same time as the HCL ads) which said: ‘Bad news for Sintex’. It was based on a claim that Fusion had 6 new features over Sintex – the generic name for water tanks. I am not sure if it benefited Fusion; the HCL ads on the other hands helped increase shares dramatically. It’s a double edged sword since it reminds the consumer about your competing brand – just as the Surf Lalitaji ads reminded consumers of Nirma. It may also repulse a few consumers who don’t like brand bashing preferring for you to speak about your positives rather than the negatives of the competition.