Can You Compare Your Product To A Competitor In Ads?

Comparing your product to a competitor's can be a powerful way to show customers why they should choose you. Maybe your software is cheaper, your delivery is faster, or your ingredients are different in a way your customers care about.

The good news is that comparative advertising is generally allowed in Australia. The catch is that your comparison needs to be accurate, fair and backed up by evidence before the ad goes live.

If the claim is wrong, unclear or based on cherry-picked information, it can quickly become a misleading advertising issue under the Australian Consumer Law. Let's look at how to do comparison ads without creating unnecessary legal risk for your business.

Can You Mention A Competitor In Advertising?

Yes, you can usually mention a competitor in advertising in Australia, as long as what you say is truthful and not misleading.

There isn't a general rule that stops you from naming another business in an ad. In fact, competitor comparison advertising is common across supermarkets, telcos, software, finance products, beauty, health and many other industries.

What matters is how you make the comparison. If you say your product is cheaper, faster, stronger, cleaner, more secure or better rated, you need to be able to prove that claim. You also need to make sure an ordinary customer would understand the comparison in the way you intend.

For example, saying our plan is 30% cheaper than Competitor X might be fine if:

• you're comparing the same type of plan
• the prices are current when the ad runs
• you include any unavoidable fees or charges
• the competitor's price is publicly available or otherwise verified
• your wording makes clear what exactly is being compared

On the other hand, the same claim could be risky if your plan has fewer features, a shorter support period, or extra fees that make the real price difference much smaller.

The practical point is simple: you don't need your competitor's permission just because you mention them. But you do need a careful advertising claims review before you put their name into a public campaign.

What Laws Apply To Comparative Advertising In Australia?

The main law is the Australian Consumer Law, which prohibits misleading or deceptive conduct and false or misleading representations in trade or commerce.

The Australian Consumer Law, often called the ACL, sits in Schedule 2 of the Competition and Consumer Act 2010. It applies to most businesses advertising goods or services in Australia, whether you're running Google Ads, Instagram reels, product packaging, email campaigns, landing pages or in-store signage.

For comparative advertising, the key ACL risks are usually claims that mislead customers about:

• price or savings
• quality, performance, features or product specifications
• availability or delivery timeframes
• test results, ratings or awards
• the nature of your product compared with a competitor's product
• your business's sponsorship, approval or affiliation with another brand

The Australian Competition and Consumer Commission, known as the ACCC, can take action where advertising may mislead consumers. Competitors can also complain to regulators, send legal letters, or challenge your campaign if they believe the comparison is unfair or inaccurate.

Other rules can also matter, depending on your ad and industry. For example:

• Trade marks: using a competitor's registered trade mark can be allowed for identification or comparison, but using it in a way that suggests endorsement or connection can be risky.
• Copyright: copying a competitor's photos, charts, product descriptions or website content can create separate copyright problems.
• Privacy: if your ad uses customer testimonials, user data or case studies, check whether you have the right consents and disclosures under the Privacy Act 1988 and your privacy policy.
• Industry codes: sectors like therapeutic goods, food, alcohol, financial services and green claims may have extra rules.

If your ad crosses into a regulated industry, the review should go beyond general advertising law.

When Does A Comparison Become Misleading?

A comparison becomes misleading when it gives customers an overall impression that isn't accurate, even if some individual words in the ad are technically true.

This is where many businesses get caught. You might have a spreadsheet that supports one narrow point, but the ad itself creates a broader impression. Under the ACL, regulators and courts look at the overall message a reasonable customer is likely to take away.

Common Examples Of Misleading Comparative Advertising

Your comparison could be misleading if it:

• compares your entry-level price with a competitor's premium product
• uses old competitor prices after they have changed
• ignores compulsory fees, subscriptions, delivery charges or minimum spend rules
• claims you're number one without explaining the metric
• uses a small test sample to suggest a broad market-wide result
• highlights one feature while hiding a major limitation
• uses a competitor's brand in a way that suggests they endorse your product

Say you run an online meal kit business in Melbourne. You advertise that your box is 25% cheaper than FreshBox. Your box is $90 and FreshBox is $120, so the headline looks right.

But your box serves 3 meals for 2 people, while FreshBox's box serves 4 meals for 2 people. On a per-meal basis, your price is $15 per meal and FreshBox's price is also $15 per meal. The headline could mislead customers because the comparison isn't like-for-like.

A safer claim might be: Our 3-meal box is $90. FreshBox's 4-meal box is $120. Compare the plan details before choosing. It isn't as punchy, but it gives customers a much more accurate picture.

Comparative claims don't need to be boring. They just need to be clear enough that the ad doesn't overstate the advantage.

How Do You Substantiate A Comparison Claim?

You substantiate a comparison claim by collecting reliable evidence before the ad runs and keeping records that show exactly how you reached the claim.

Don't wait until a competitor complains to start looking for proof. If your marketing team wants to say you're cheaper, faster or better, your business should be able to point to the data straight away.

A Practical Advertising Compliance Checklist

Before approving a comparison ad, work through these checks:

• Define the claim: write the exact claim in one sentence, such as our standard plan is 20% cheaper than Competitor A's standard plan.
• Choose a fair comparator: compare products or services that customers would reasonably see as equivalent.
• Check the date: record when you checked competitor pricing, features or performance data.
• Include the full cost: factor in GST, delivery, setup fees, cancellation fees and compulsory add-ons where they affect the comparison.
• Keep evidence: save screenshots, test reports, invoices, public price lists, independent research or survey results.
• Test the overall impression: ask what a reasonable customer would think after seeing the ad for a few seconds.
• Add qualifications clearly: if the claim only applies to a certain plan, location, time period or customer type, say so near the claim.
• Set a review date: comparisons can go stale quickly, especially where competitors change pricing often.

A Fill-In Review Sheet For Your Team

You can use this outline as a starting point for an internal comparison claim review sheet. A lawyer should tailor it to your business, ad channels and industry before you rely on it.

1. Claim wording: write the exact words, visuals and any disclaimer that will appear in the ad.
2. Competitor and product: identify the competitor, product, plan or package being compared.
3. Evidence source: list the screenshots, reports, receipts, tests or data used to support the claim.
4. Date checked: record when each piece of evidence was collected and who checked it.
5. Assumptions: explain any assumptions, such as usage levels, locations, contract length or customer type.
6. Qualifications: write any conditions or limits that need to appear near the claim.
7. Approval: record who approved the claim from marketing, legal and management.
8. Review date: set the date the claim must be checked again or removed.

This doesn't have to slow your campaign down. Once you build the process into your marketing workflow, it becomes much easier to approve strong claims with confidence.

Can You Use A Competitor's Name, Logo Or Trade Mark?

You can often use a competitor's name to identify them in a genuine comparison, but using their logo or branding can carry more risk.

A competitor's business name, product name or logo may be protected as a registered trade mark under the Trade Marks Act 1995. Trade mark law doesn't automatically stop all comparative references, because sometimes you need to name the brand you're comparing against.

For example, a landing page that says Compare Our Accounting Software With Xero may be lower risk than an ad that copies Xero's logo, colours and page design in a way that makes customers think the campaign is connected with Xero.

When using a competitor's name or brand, ask:

• are we using only what we need to identify the competitor?
• could the ad suggest the competitor sponsors, approves or is connected with us?
• are we using their logo, images, screenshots or website content without permission?
• are we making fun of the competitor in a way that could become a reputational or defamation issue?
• are we bidding on competitor names in search ads, and if so, does the ad copy make the source of the service clear?

You should be especially careful with logos. Using plain text is often enough for a comparison. If your creative team wants to use a competitor's logo, product images or screenshots, get legal advice first.

Also be careful with words like official, authorised, partner or compatible. These can be fine in the right context, but they can also imply a relationship that doesn't exist.

Common Mistakes To Avoid Before Your Ad Goes Live

The biggest mistake is treating comparative advertising as a marketing issue only, instead of checking the legal and factual basis of the claim.

Here are the issues we often see businesses run into:

• Relying on memory: someone remembers a competitor's old price, but the current price has changed.
• Using unclear graphs: a chart exaggerates the visual difference between products, even though the numbers are close.
• Hiding qualifications: the condition appears in tiny text, far away from the headline, or disappears on mobile.
• Making broad claims from narrow data: one customer survey becomes Australia's favourite without enough evidence.
• Letting ads run too long: the claim was true in January, but not after the competitor updated its offer in March.
• Comparing bundles poorly: your product looks cheaper until the customer adds features the competitor includes as standard.
• Forgetting affiliates and influencers: partners repeat or exaggerate your claim without the same substantiation.

A good approval process should cover all channels where the comparison appears. That includes your website, paid ads, social posts, email campaigns, scripts for sales calls, comparison charts and influencer briefs.

If an ad is already live and you're worried the claim may be wrong, act quickly. Pause the ad, save copies of what was published, collect the evidence you relied on, and check whether customers need a correction. If a competitor has complained, don't fire back publicly before you've reviewed the facts.

For higher-risk campaigns, especially ones naming major competitors or making bold performance claims, a legal review before launch is usually much cheaper than cleaning up the issue later.

Key Takeaways

• Comparative advertising is generally allowed in Australia, but your claims need to be accurate, fair and properly substantiated.
• The Australian Consumer Law is the main law to watch, especially the rules against misleading or deceptive conduct.
• Compare like-for-like products, keep evidence, and make any limits or conditions clear near the claim.
• You can often mention a competitor by name, but using their logo, branding or content can create trade mark or copyright risks.
• Review comparison ads regularly, because competitor prices, features and offers can change quickly.
• A tailored approval checklist can help your marketing team move faster without taking unnecessary legal risks.

If you'd like help with reviewing your comparison ads, substantiating advertising claims, using competitor names safely or setting up an approval checklist for your marketing team, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.