Comparisons can help consumers judge the relative merits of competing products and choose the one which best suits their needs and budgets.
As with all advertising, comparative advertising must not mislead or deceive. The comparisons made must be accurate, should clearly indicate what comparison is being made and must be of 'like' products or services available in the same market.
Inaccurate comparisons risk misleading consumers and breaching the Fair Trading Act.
Example: A furniture manufacturing company made a comparison between its product, which was finished in plain customwood, and that of a competitor. The competitor's product was laminated, and the court decided that the comparison was misleading. The competitor obtained an injunction stopping the advertisements being run.
A business is in the best position to know whether its product can reasonably be compared to a competitor's. If comparisons are used in advertising, they must tell the full story and not leave out information that is necessary for a true and fair comparison to be made.
While the Fair Trading Act does not prohibit 'puffery' - exaggerations which are so obvious that they are unlikely to mislead anyone, businesses should be careful when using exaggerated statements about quality or price that appear to relate to facts rather than opinion, such as that a product is 'the fastest' or 'the most economical'. Representations such as these will breach the Act if they are not accurate.