IP, IT & Life Sciences

Simply the Best: The Risks in Stating Your Product is Superior to All Others

The author discusses some important aspects when using superiority claims in advertising and potential sanctions for non-compliance.

Why do companies like to make superiority claims?

Companies tend to advertise with the catchiest slogans possible, which is perfectly understandable. And the non plus ultra slogan is a clear claim of the no. 1 market position. Since such claims may have a big impact on the volumes sold, their use, and sanctions for their illegal use, must be regulated carefully. Otherwise, false advertising may be worth it if the commercial benefits (eg, increased sales volumes) outweigh the sanctions.

Unlawful advertisements – misleading advertisements

Commercials are misleading if they cause or may cause the consumers to make a business decision they would not have mad, provided that (i) the company has not hidden relevant information from them about attributes of the product advertised and (ii) the company has not provided such information in a misleading or unclear way.

Some important aspects when making superiority claims in an advertisement

Requirement of an objective and independent survey

A superiority claim must be based on an objective and independent survey conducted by a professional measurement enterprise. Since the addressees of the advertisement are supposed to believe in the correctness of the claim, there must be an objective and independent survey the statements of which are reflected in the claim in a non-misleading way. The survey must extend to all competitive products or to all competitors1; otherwise, the superiority claim qualifies as unlawful.

Subjectivity of the superiority claim

If the superiority claim declares a slogan that cannot be proven via an objective and independent survey (eg, “our radio station broadcasts the best hits all day long”), then it is impossible to prove its misleading character. Therefore, such an image campaign does not raise legal concerns at first sight2.

Application of limitations or qualifications marked with an asterisks (*) attached to the main slogan

Using small letters attached to the main slogan and marked with an asterisk (footnotes) is not unlawful. The main message and the additional message marked with an asterisk may, however, not vary substantially from each other3. This requirement is not fulfilled if, for example, a TV channel claims in the main slogan the largest number of viewers based on a survey, but the limitations4 on this claim are included only in small letters marked with an asterisk5. The TV channel should have included this information in the main slogan, and fines have been imposed in such cases.

No voice-over of the wording marked with an asterisk in a TV spot

Another risk may be a TV spot in which the advertisement contains small letters marked with an asterisk on the screen but no voice over connects to the message. This corresponds to the special attributes of a TV spot: the viewer has time only for a quick glance at the message, and it is assumed that the additional text marked with the asterisk will not get through to the viewer. With printed advertisements, the reader can focus on the message for a longer time.

Misleading statement of “the most popular” product 

An undertaking may not claim that its product is “the most popular” on the market if the survey shows superiority only in terms of sales value but not in terms of sales volume. This might occur even if less sales volume results in bigger sales value because of the high price of the product promoted as “the most popular” on the market.

Legal sanctions for infringement

An unlawful advertisement may be challenged by the Hungarian Competition Authority (Gazdasági Versenyhivatal; GVH) if the commercial practice in question can materially affect the competition. This is given if, among others, the commercial is broadcasted via a nationwide TV channel or is published in a nationwide newspaper distributed in at least three counties of Hungary. If declaring the infringement, the GVH may prohibit the infringing advertising practice and impose a fine, which may reach 10% of the company’s net turnover in the last financial year.

Summary

The above are some aspects to consider when making superiority claims in advertisements, but the list is not exhaustive. The applicability of such claims depends on the facts and the proposed advertisement campaign.

Since such claims may have a big impact on the volumes sold, their use and sanctions for their illegal use must be regulated carefully.

1
See also decision of the Hungarian Competition Authority Nr. Vj-85/2011.
2
See also decision of the Hungarian Competition Authority Nr. Vj-15/2005.
3
See also decision of the Hungarian Competition Authority Nr. Vj-86/2007.
4
The name of the organisation that prepared the survey and the fact that the claim only refers to viewers between 18-49 years and to prime time.
5
Decision of the Hungarian Competition Authority Nr. Vj-63/2011.