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Comparative Advertising: The Contours of Puffery and Disparagement

Updated: Jun 4



With ever-increasing competition in the consumer product space, companies rely on advertisement and marketing campaigns to gain a competitive edge and attract consumers. Engaging campaigns involve the use of ‘comparative advertising’ which essentially allows companies to advertise their products by drawing a comparison with their competitors’ products. With the recent Delhi High Court judgement in the Ponds v. NIVEA case, one must ensure that the advertisement does not amount to a disparaging and/or misleading advertisement under prevalent laws.

 

In India, advertisements must conform to the Consumer Protection Act, 2019 and the guidelines governing the subject matter. Furthermore, the Advertising Standards Council of India (“ASCI”) has introduced the Code for Self-Regulation of Advertising Content in India (“ASCI Code of Self-Regulation”) and ancillary guidelines regarding advertisements.

 

The provisions regarding comparative advertisement as found in ASCI Code of Self-Regulation states that comparative advertising is permissible if:

 

  • It is clear what aspects of the advertiser’s products are being compared with those of its competitor’s products.


  • The subject of comparison is not chosen to gain an artificial advantage upon the advertiser or indicate that there is a better deal offered than what’s truly available.


  • The comparisons are accurate, factual and can be substantiated.


  • The customer is not misled due to the comparison, whether with reference to the advertiser's product or the compared product.


  • Directly or indirectly, the advertisement does not wrongly denigrate, attack or discredit other products, advertisers or advertisements.

 

Though brands may engage in puffery by making exaggerated statements in their advertisements, , they are not allowed to denigrate competitors’ products by displaying them to be inferior or bad.

 

DISPARAGEMENT OR MERE PUFFERY?

 

The line between puffery and disparagement in comparative advertising, is a fine one. Apart from the ASCI Code of Self – Regulation, the law governing this fine line can be found in a plethora of case laws.

 

Notably, in the case of Reckitt Benckiser (India) Private Limited and Ors. v. Wipro Enterprises (P) Limited[1] (“Wipro Case”), the Delhi High Court culled out guiding principles highlighting the difference between puffery and disparagement. We have set out some of the important guiding principles below:

 

  • If the advertisement does not directly or indirectly refer to the competitor's product, the competitor cannot claim that its product is targeted merely because it enjoys a significant market share.

 

  • The advertisement must not be false, misleading, unfair or deceptive, irrespective of whether it uses puffery or not. Puffery is an exception as it involves exaggeration, hyperbole and an element of untruth which is bound to exist. Such untruth is permissible because it is inherently not taken seriously by the average consumer.

 

  • Denigration of a competitor's product is permissible to the extent that it states that the advertised product is superior to its competitors. Provided however, attributing the superiority to some fault in the competitor’s product is not permissible.

 

  • The advertisement cannot claim that a competitor's goods are bad, undesirable or inferior.

 

  • The advertisement is to be viewed as a normal viewer would view it, and not with the specific aim of catching disparagement.

 

  • One cannot be hypersensitive regarding comparative advertisements as the consumer’s choice is not limited to the advertisement and depends on a number of allied factors too.

 

THE NIVEA vs. PONDS CASE

 

Recently, the Delhi High Court in Beiersdorf AG v. Hindustan Unilever Limited (HUL)[2] (“Beiersdorf v. HUL Case”) dealt with a case of comparative advertising by HUL, which compared its ‘Ponds Superlight Gel’ with Beiersdorf’s ‘NIVEA Crème’.

 

HUL’s marketing activities involved their sales representatives comparing ‘Ponds Superlight Gel’ with a cream in a blue tub (identical to the ‘NIVEA Crème’ tub (without the sticker)). The sales representatives would apply cream from the ‘blue tub’ on the skin of the walk-in customers on one hand and ‘Ponds Superlight Gel’ on the other hand. Thereafter, they would use a magnifying glass indicating that the ‘blue tubproduct left an oily residue compared to ‘Ponds Super Light Gel’.

 

The court relied on numerous judgements, including the Wipro Case and held that HUL’s marketing tactic of comparing ‘Ponds Superlight Gel’ with ‘NIVEA Crème’ was misleading and disparaging. A deep-dive of the court’s reasoning for this decision is as follows:

 

Intent and objective

 

The court considered the intent of HUL and noted that it could have easily used a different colour tub. By using the same distinctive blue colour, HUL’s intent was to make its consumers associate the blue tub cream with that of Nivea’s cream. The court noted that HUL’s use of a distinctively blue colour tub, without a label ventures “into the area of deception, misstatement and by implication, into the area of disparagement.”

 

Comparison of like products

 

HUL in its marketing campaign, chose to compare the lightest cream in its product line, i.e., Ponds Superlight Gel with the heaviest cream in Beiersdorf’s product line, i.e., NIVEA Crème. The court noted that “comparison has to be of like products, not unlike products; ‘apples to apples, oranges to oranges’, as is the commonly used phrase.” It relied upon the ASCI Code of Self-Regulation, which states “comparative advertisements are permissible if it is clear what aspects of the advertiser’s products are being compared to what aspects of the competitor's product.” 

 

Furthermore, the impression in a consumer’s mind was that the product being compared with, left a heavy oily residue, which the court considered to be misleading as dissimilar products were being compared. For disparagement, the ‘overall effect’ and ‘message conveyed’ needs to be assessed.

 

CONCLUSION

 

In a landscape where advertising shapes consumer perceptions and drives market competition, the delineation between acceptable puffery and actionable disparagement in comparative advertising holds immense significance. As companies compete for consumer attention, understanding the legal boundaries becomes paramount.

 

The Beiersdorf v. HUL Case underscores the court’s role in ensuring fair play and consumer protection. Through a meticulous analysis, the Delhi High Court reaffirmed the importance of adhering to established legal principles. HUL's comparative advertising tactic, which attempted to compare its 'Ponds Superlight Gel' with Beiersdorf's 'NIVEA Crème,' was deemed misleading and disparaging. The court's scrutiny of intent, product comparability, and the overall message sent a clear signal: advertising must be truthful, fair, and not detrimental to competitors.

 

As companies continue to innovate in their advertising strategies, adherence to legal and ethical standards remains crucial to foster a climate of fair competition and informed consumer choice.


[1] MANU/DE/3301/2023

[2] 2024 SCC Online Del 3443.

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