I am often asked, "Can I talk about my competitor on my website?"
To answer this question, I thought I would do a quick post about comparative advertising. The Federal Trade Commission promotes lawful comparative advertising as a great way to inform consumers and increase competition.
Describing how your product is superior to your competitor's can be a very effective positioning tool and possibly lead to significant economic gains. However, it can also invite litigation. There are strict rules about casting your competitor in a negative light. Further, the more successful your campaign, the more it is likely to offend and provoke retribution from your competitor.
If you want to compare your competitor's products to your own, you need to (1) evaluate whether it's worth the risk of being sued, and (2) mitigate those risks by strictly complying with the law.
Let's take a closer look:
To answer this question, I thought I would do a quick post about comparative advertising. The Federal Trade Commission promotes lawful comparative advertising as a great way to inform consumers and increase competition.
Describing how your product is superior to your competitor's can be a very effective positioning tool and possibly lead to significant economic gains. However, it can also invite litigation. There are strict rules about casting your competitor in a negative light. Further, the more successful your campaign, the more it is likely to offend and provoke retribution from your competitor.
If you want to compare your competitor's products to your own, you need to (1) evaluate whether it's worth the risk of being sued, and (2) mitigate those risks by strictly complying with the law.
Let's take a closer look:
Evaluate Whether It Is Worth The Risk of Being Sued
Even if you follow the letter of law when developing your comparative advertising campaign, you may still get sued. Being right doesn't prevent someone from suing you. In most cases, it helps to act as a deterrent. However, everybody knows that big corporations with armies of lawyers at their disposal are not always deterred by the fact that the law is not on their side. Large corporations sometimes use the law to outspend and bully their smaller competitors.
Thus, before you decide to engage in a comparative advertising campaign, reflect a moment on who you are likely to offend. Does this party have a history of aggressive litigation and the money to outspend you? If so, then whatever gains you make in market share and revenue may be eaten up by legal fees. Remember, you will pay your attorneys to defend you whether you acted rightly or wrongly.
Mitigate the Risk of Being Sued By Strictly Complying With The Law
If you decide to go ahead with your comparative advertising campaign, you must pay strict attention to advertising and trademark laws in order to mitigate your risk. Unfortunately, this little blog post cannot be an exhaustive list of compliance procedures because state and federal laws vary. However, there are some important common trends that are worth highlighting:
- All of your claims about your competitor's product must be true.
- Comparative advertising must never be deceptive. Do not mislead consumers.
- If you make specific claims about your competitor's product, be sure and have a third party substantiate those claims in a reasonable and thorough manner prior to running the ad. Don't wait until you are sued to do the research that proves your claims. Document and substantiate your claims.
- Include a disclaimer indicating that you are not affiliated with your competitor in any way. I realize this is not intuitive. Why would people think you're affiliated with your competitor when you are criticizing their product? The answer is that some courts have ruled that consumers who take a cursory look at the advertisement may recognize your competitor's branding and then, without reading more, assume that you're affiliated. I realize that having a disclaimer doesn't really solve this quick association problem, but judges seem to think that it does, so follow their rules.
- Don't manipulate your competitor's trademark or logo in any way and always use the ® symbol if it is a registered trademark. "Don't manipulate" means do not alter the shape or color of the logo or create a parody of your competitor's trademark. Even if your product is bigger, faster, and stronger, you are still violating advertising laws if you alter your competitor's logo in any way. Respect the brand while you accurately point out the ways it is deficient to your product.
Note: If your mark has been unfavorably featured in a comparative ad, then there are several venues in which it may seek relief, including: the Federal Trade Commission ("FTC"), the National Advertising Division of the Council of Better Business Bureaus ("NAD"), and the courts (under state or federal trademark and anti-dilution laws).
Thanks for your kind attention to this post.
Respectfully,
Sarah Bird
One of our clients wanted to compare his products to his (very recognizable) competitors and did not want to be sued either. We ultimately decided to compare a couple of his top competitors without actually using their brands, just their own (very identifiable) marketing language. The client has never been sued after 2 years of using this tactic despite the fact that everyone knows who he is talking about in his comparison. Whenever his competitors change their tactics, he notes it in his comparison if it is relevant. He has gotten alot of business because his customers feel like he is "sharing the truth" with them without outright bashing his competitors.
Thanks for sharing this Carmen, very insightful alternative.
Sarah, This post brings up a question that I've always wondered about. You mentioned that big corporations will sue smaller companies, even when the law is clearly in favor of the smaller company, in an attempt to intimidate or bankrupt them. My question is: what options does the small company have, that would minimize the cost of defending themselves? In other words, if someone gets sued for something that obviously won't hold up in court... can they defend themselves? Is there such thing as a civil court public defender? Personally, I wouldn't have money to hire an attorney, but I do have a whole lot of time to research the law on my own and represent myself. I'm just wondering if that's even an option. (Great post, BTW!)
You can definitely research the law on your own and represent yourself, but self-representation is, in my opinion, a one-way ticket to having a judgement against you in short order.
I'm sure it's been done, but it's a risky move.
I appreciate your expert legal opinion as always. Funny, while competitors have always denigrated each other in other media (TV commercials come to mind), I've found that mentioning your competitors positively works better on the internet.
There's actually enough business to go around, and if you have a better product people usually figure it out on their own. That may only be true for my little e-commerce niche, though :)
I have a client who wants to say "Don't believe XXX..." and then go into quite a bit of detail on how untrustworthy the competitor is, including links to nasty blog posts elsewhere.
Resisting the temptation to suggest that it was tacky, I said that it seems to me that one of the benefits of having your own web site is that your competitors aren't there.
It seems like this is an increasing trend in mainstream media. Sometimes its blatent and sometimes quite a bit more subtle. Thinking of mac vs. pc and others.
I've always wondered about the legality here.
Thanks for taking a complicated legal subject and making it digestible.
We tried a similar technique on our site. Despite getting a lawyer to sign off after the first threatening letter, the competitor in question escalated it very quickly. Knowing your threshold of risk before you venture into the murky waters of comparative advertising is always useful!
Great post - my favourite instance of this is when a client of mine mentioned half a dozen competitors on their website, just to let visitors know there were other people offering the same service. Just because of that they actually outranked 3 of the competitors for their own company names :)
Making legal stuff readable, radical!
There's an interesting comparitive advertising battle going on at the moment in the UK between Tesco and Asda (now part of the so called 'Walmart family').
Both are running TV ads showing which products are cheaper, and by how much, referencing Money Supermarket (.com) as their independent source. It's proved highly amusing to watch, as the adverts are very light hearted, but are clearly masking a fierce pricing battle between the two.
Wallmart is from the devil (thanks @sugarrae). Oh wait, can I say that?!
This blog post sure most be an example from the US market?
I just LOVE the US. When I get rich enough I am going to move there and do everything I want to, because as long I have enough money I can sue everybody else and scare them away. It is like beeing royal in Europe in the 1600-1800's. How cool is that! :-)
Thanks for sharing your legal expertise. I get this question all the time from clients and it helps to have a lawyers advice.
I oftern see general comparisons - like "we stand above the competition" without picking on a particular competitor. I probably don't have enough hutzpah to get particular. It would also be inviting their criticism back and might provoke an all out war.
Thanks for promoting thought!
Hi, your expert legal opinion is appreciated.As I was reading this post I couldnt help but thinking about purchasing trademarks on the Adwords platform or any other PPC vendor platform. Apparently, unlikely in EU, it is now possible to do that in the US..., isnt that one of the easiest and also aggressive forms of crushing down the competition particularly by hand of the big brandsout there that boast the big ppc budgets...
great post. thanks for the legal information. Always good to know the legal aspect as it is often overlooked.
I am working with a client who wants to use the logo of his competitor in a TV commercial with a parody and play of words.
The caption:"Do you desire to be delivered from:"
{logo}
The compeitor is "The Law". We investigated and this is not a registered trademark they just use it as a logo.
Is this ok?
Thanx for showing the legal way to knock the competition out...amazing post! i had a doubt but forgotten the 'disclaimer' thing for a while..its clear now.
Here's my 3 general rules.
1. NEVER use copyrighted terms in meta tags.
2. Dislclaimer representation as stated in article above..(DISCLAIMER: the opinions about copyright on this seomoz post from SEOMoz are from this author (dj paisley amoeba) and not representative of SEOMoz it's employees or it's managment, in any way shape or form.)
3. IF you bid PPC on copyrighted or trademarked terms, only do it in US and NEVER use competitor's copyrighted terms in ad copy or link.
see example..
that being said.. i am currently blogging about my shopping experience at one of my clients, https://www.marketstreetfrisco.com
<excerpt>
i usually shop at Whole Foods or Central Market but since we picked up Market Street as a client and they opened a grocery store in Frisco, Texas, i just had to go check it out..
</excerpt>
this is my personal experience.. and it is factual.. i can put this on my own blog.. (and i am..), i don't reccommend this unless you really know what you are doing.. (i've testified in a few more than 10 copyright/trademark cases as an expert), so i feel ok pushing the limits..
notice.. it is MY personal experience. MY personal opinion..
i DO normally shop at whole foods (for my lunch meat, etc.. it's 3 blocks from my office)i DO like to shop at central market, it's a very kickass grocery store..
I DID like the Market Street Frisco store.. i wish it was closer so I could shop there, and i actually might drive there a few more times anyways, just to get some unique items and chat with the wine dude.. (to see if he can order some special stuph for me)
i did disclose who my client was and also talk about the fact in the story that whole foods is 3 mins form my office, central market is 10 mins away from my home and the Frisco Market Street Grocery Store is like 45 mins away..
(see i just used the competitor's name a few more times)
does that help?
this is good information. it also brings up a question i've had for a while: what are the pros and cons of making claims about your company/brand such as "the world's best", "the world's smallest/largest", "the country's most/least...." i see these claims often and wonder if the company has any substantiation behind the claim or if this is a general marketing practice that no one challenges or has a right to challenge. If you have any information on this question, i'd be very interested in reading a post on it.
thanks again...great post!
Famous for comparative advertising is Cola Wars.... Pepsi and Coca-cola... :D
Thanks for the FTC FAQ. I've always been a fan of ABC Chainsaws, and they do make a damn fine saftey latch. ;)
ugh, reminds me once being asked to create an auction site logo with the same colors as ebay....
Good info.
I've been around this exact block before, and agree that disclaimers are your friend.
Since they usually don't know much about SEO your branded competition might not find fault with "Don't be confused - despite similar features this is not the competitors product ..."
Also, it seems that the main thing they want is to intimidate you into ceasing and desisting - not an actual day in court - so as long as you respond in both word and action it probably won't come to that. You might find a fall back position that goes under the radar.
Of course if you outrank a major brand for their own name, you probably won't be under the radar.
thanks for sharing!
Interesting post.I did talked about a competitor once and I *almost* got into pretty big trouble.
I am a home stager in San Francisco bay area and I once wrote a blog about stagers should have liability insurance because of a comment I saw on yelp. This particular comment is about a Mr. X whose business is 40 miles away from me (not really a competitor since I don't work in his neighborhood). The commenter said that Mr. X accidentally left stuff in the home on its old furnace which caught on hire and burnt down the home. Because Mr. X didn't have insurance, the home owner spent a year dealing with home owner's insurance seeking for compensations. (I also found out later from the commenter he and his wife almost divorced over the strain of the incident and dealing with the aftermath. I found out because Mr. X tried to sue the commenter as well and he posted it again on yelp.) The commenter mentioned that Mr. X refused to take responsibilities for the incident.
All I said on the blog was "yikes, don't let this happen to you. It's important to hire a stager who has liability insurance."
Several months later I received a phone call from this gentleman whose lawyer said they had a very good chance suing me and gaining compensations from it because my blog has such high SEO value, when people researched about Mr. X, they found my blog about the yelp comment, instead of his website.
Luckily, Mr. X was happy with me jsut taking the post down and calling Google to re-cache the blog.
To think I almost got sued because I had high SEO!
I've always wondered about this myself, as my other business has some distinct advantages over our competitors. Very interesting read.
Great follow up post to the discussion at the PRO training seminar!
And what if the competitor is deceitfully / misleadingly / illegitimately compared in user generated content (reviews, testimonials, comments)? Is it legal? Because if it is (and I guess it is so far as the UGC is properly disclosed), then one can legally manipulate any rules...