Comparative advertising: the new regulation and the unfair competition dimension
With Law No. 6502 on Consumer Protection, which entered into force on 28 May 2014, Turkey became acquainted for the first time with “comparative advertising”, a new concept in marketing communications.
Comparative advertisements are subject to the following general rules laid down for advertisements in Article 61 of Law No. 6502 on Consumer Protection, pursuant to which all commercial advertisements must comply with the principles determined by the Advertising Board, with public morality, public order and personal rights, must be truthful and honest, and must not be deceptive to the consumer or exploit its lack of experience and knowledge, endanger the safety of life and property, encourage acts of violence and the commission of offences, impair public health, or exploit patients, the elderly, children and the disabled.
Furthermore, comparative advertisements must likewise not be in the nature of surreptitious advertising and, as the most fundamental rule, must necessarily be structured so as to compare competing goods or services that meet the same needs or are directed at the same purpose.
Comparative advertising has been regulated in greater detail by the Regulation on Commercial Advertising and Unfair Commercial Practices dated 10 January 2015 and numbered 29232, issued on the basis of Article 61 and the following provisions referred to above. The provision of the said Regulation concerning Comparative Advertisements entered into force as of 10 January 2016, and its full text is set out below:
ARTICLE 8 – (1) Comparative advertisements may only be made;
a) provided that they are not deceptive or misleading,
b) provided that they do not give rise to unfair competition,
c) provided that the goods or services compared are of the same nature and respond to the same want or need,
ç) provided that a matter which will provide a benefit to the consumer is compared,
d) provided that one or more material, essential, verifiable and typical features of the goods or services compared, including price, are compared objectively,
e) provided that claims based on objective, measurable, numerical data are proven by scientific tests, reports or documents,
f) provided that they do not disparage or discredit competitors’ intellectual and industrial property rights, trade name, business name, other distinctive signs, goods, services, activities or other characteristics,
g) provided that, in a comparison relating to goods or services whose origin is indicated, the goods or services are from the same geographical place,
ğ) provided that they do not give rise to confusion with regard to the trademark, trade name, business name or another distinctive sign of the advertiser and its competitor, or with regard to their goods or services,
subject to the conditions set out above.
(2) In comparative advertisements, names, trademarks, logos or other distinctive shapes or expressions belonging to competitors, as well as trade names or business names, may be included, provided that they comply with the provisions set out in the first paragraph of this Article.
(3) Comparative advertising of food supplements may not be made.
By its very nature, the concept of comparative advertising, newly integrated into our marketing communications, concerns not only the Law on Consumer Protection from the standpoint of the protection of consumers, but also, through its “unfair competition” dimension, Turkish Commercial Code No. 6102 (the “TCC”). For this reason, it is imperative that the subject of comparative advertising also be addressed, in its unfair competition dimension, within the meaning of the TCC.
In general, within the scope of the TCC, it is stated that, in matters of unfair competition, deceptive conduct or conduct contrary to the rule of good faith, as well as commercial practices, which affect the relations between competitors or the relations between suppliers and customers, are unfair and unlawful (Article 54 of the TCC). Furthermore, Article 55 of the TCC sets out the instances of unfair competition in detail as follows:
When the provision of Article 55 of the TCC is taken into consideration, it is readily established that, particularly in relation to comparative advertisements, the instances listed below are characterised as instances of unfair competition.
• Disparaging others or their goods, work products, prices, activities or commercial affairs by means of statements that are false, misleading or unnecessarily offensive, and
• Comparing oneself, one’s goods, work products, activities or prices with others, their goods, work products or prices in a manner that is contrary to the truth, misleading, unnecessarily disparaging of a competitor or unnecessarily exploitative of the competitor’s reputation, or advancing a third party by similar means
When comparative advertising practices and the provision of the TCC are assessed together (and since, in particular, pursuant to Article 8/1 (b) of the Regulation on Commercial Advertising and Unfair Commercial Practices, the condition is required that a comparative advertising practice “does not give rise to unfair competition”, it is essential that the provision of the TCC also be taken into account when implementing any comparative advertising practice), in order for comparative advertisements to be lawful under the TCC, the following conditions are required: that they not be of a nature deceptive to the consumer and that they be truthful; that the goods and services which are the subject of the comparison be of the same nature and characteristics or respond to the same want and need (in other words, that they be equivalent and substitutable); that the advertisement not be unnecessarily disparaging or denigrating; that it not unfairly benefit from another’s reputation; and that it under no circumstances give rise to confusion.
It is possible to say that both sets of legislation generally lay down parallel and mutually complementary provisions. However, when comparative advertising practices are carried out, in addition to the main principles envisaged in respect of advertising in Law No. 6502 on Consumer Protection, both the relevant provisions of the Regulation on Commercial Advertising and Unfair Commercial Practices and the provisions of the TCC on unfair competition must be observed. Taking into account solely the Regulation on Advertising and Unfair Commercial Practices — on the assumption that the provisions of these two sets of legislation are independent of one another, and on the ground that it is the special legislation relating to advertising — will result in the details envisaged in the TCC in relation to unfair competition being disregarded and, rather than serving the objectives pursued through comparative advertising, namely a more honest and transparent competitive environment and the informing and protection of the consumer at the highest level, will produce the opposite result of impeding/restricting competition.
Azra Erözler Oğuzhan
Partner
SOMS LEGAL LAW OFFICE