In Argentina, like in many other countries, the legality of the so-called “comparative advertising” was widely discussed.
For much of the last century, several of the most renowned doctrinarians of our country considered it illegal.
Zabala Rodríguez, for example, considered it as a kind of unfair competition through advertising, which denigrated competitors[1] and equally illegal even if comparison was supported by reality – and not by arguing false facts.
“It cannot be accepted… that in order to promote a product the competitor uses or takes as a point of view the rival products.”[2]
Said position – which I consider extreme – was shared by the renowned jurist Ernesto Aracama Zorraquín – like Zabala Rodríguez, master to several generations of lawyers – who stated, for example, in the brief treatise entitled “Against comparative advertising” (Contra la publicidad comparativa)[3], that “Comparative advertising is an unfair action. And it is generically and also specifically, an unfair action.”
Under the influence of said doctrinal trend, Panel II of the Federal Appellate Court having jurisdiction in Civil and Commercial rendered by the end of 1971, the very well-known judgment “Rolex v. Orient”[4], striking down comparative advertising, by considering it contrary to moral and good customs and consequently that it was breaching section 953 of the Civil Code then in force.
The judicial doctrine of judgment “Rolex” clearly prevailed up to the early nineties.
After the precedents “Navarro Correas”[5], “Tango”[6] and especially[7] the rendering of the Supreme Court of Justice of the Nation’s judgment in the case of “Pepsi Challenge”[8], comparative advertising was leading the way in the Argentine Republic.
Among the most renowned defenders of the comparative advertising legality in Argentina we can mention Jorge Otamendi, who, for many years maintained a position contrary to this type of advertising. His change of opinion was reflected in the work entitled “La Competencia Desleal” (Unfair Competition), published in “Revista Jurídica de la Universidad de Palermo” (Legal Magazine of the University of Palermo)[9], which reads as follows:
“In my opinion, and I modify what I sustained 20 years ago, comparative advertising, provided that it does not denigrate another product, it is truthful, does not lead to confusion, is referred to determining characteristics of the quality of the products or services or activities and compares what is comparable, must be admitted.”
The German doctrinarian Burkhart Menke[10] and the Argentines Zapiola Guerrico[11] Alonso.[12], among others have spoken out also in favor of comparative advertising in Argentina.
In Europe, where the legality of comparative advertising was also a subject of discussion for many years, the issue was finally settled by the European Directive 97/55 – issued by the European Parliament and the European Union Council over 20 years ago, on October 6, 1997 – which, among other modifications, included in its similar Directive, Nº 84/450/CEE; section 3 bis, a rule that sets forth that comparative advertising[13] will be allowed provided that it complies with the following conditions:
a) it must not mislead pursuant to the definition of paragraph 2 of section 2[14] and the provisions of section 3[15] and paragraph 1 of section 7[16];
b) It must compare goods or services that satisfy the same needs or have the same purpose;
c) it must objectively compare one or more essential, relevant, verifiable and representative characteristics of said goods and services, among which the price may be included;
d) it must not lead to confusion in the market between the advertiser and a competitor or between the trademarks, trade names, other distinctive signs or the goods or services of advertiser and those of any competitor;
e) it must neither discredit nor denigrate the trademarks, trade names, other distinctive signs, the goods or services or activities or circumstances of any competitor;
f) it must refer in each case, in products with designation of origin, to products with the same designation;
g) it must not take undue advantage of the reputation of a trademark, trade name, another distinctive sign of any competitor or of the designations of origin of competing products;
h) it must not present a good or service as an imitation or replica of a good or service with a protected trademark or trade name.
In the meantime, in Argentina, except for the concise and – let’s say – lateral mention contained in section 29 of the Resolution issued by the Secretariat of Trade Nº 100/83[17] – that regulates the Fair Commercial Practices Act – no legal regulation expressly refers to comparative advertising, up to the recent issuance of Emergency Decree Nº 274/2019 (new Fair Commercial Practices regime),which section 15, first paragraph, defines comparative advertising as the advertising that explicitly or implicitly mentions a competitor or its trademark or the products or services offered by it.[18] And subject to the conditions specified below, it provides its legality.
Said section 15, which is clearly inspired in the European rule mentioned above, provides that comparative advertising shall be allowed if it performs all the following conditions:
a) It must not lead to error, deception or confusion between the advertiser and a competitor or between the goods of the advertiser and those of any competitor.[19]
b) It shall compare goods that satisfy the same needs or have the same purpose.[20]
c) Comparison must be objectively made, between one or more essential, relevant, verifiable and representative characteristics of said goods (among which the price may be included).[21]
d) The purpose of advertising must be to inform to the public to whom it is addressed, the advantages of the advertised goods.
e) Advertising must neither discredit nor denigrate the intellectual and industrial property rights nor the circumstances of any competitor.[22]
f) Advertising must not take undue advantage of the reputation of a trademark, of any competitor.[23]
g) It must not present either a good or service as an imitation or replica of a good or a protected trademark or trade name.[24]
Finally, the Argentine regulation differs from the European one, only because it does not expressly refer to the internal legal regulations that define misleading advertising (section 11 of the Emergency Decree 274/2019). Without it meaning, of course, that comparative advertising is allowed when by means of inaccuracies or concealments may lead to an error, deception or confusion with respect to the characteristics or properties, nature, origin, quality, purity, mix, quantity, use, price, commercialization conditions or production techniques of personal property, real property or services.
And by the regulation of subsection d) of section 15, that provides that the purpose of comparative advertising must be to inform to the public to whom it is addressed, the advantages of the advertised goods. In my opinion, this provision is inspired in section 19th, item 2 of the Code of Ethics and Self-regulatory advertising of the Self-regulatory Advertising Council (CONAR), that sets forth that: “Section 19th – The messages containing comparisons of prices or other characteristics must: … 2. Have the purpose of informing consumer on the verifiable advantages of the advertised product.”
The regulation of section 15 deserves further analysis than the brief one contained in this work, which purpose is basically to help to spread that comparative advertising has been – finally – legislated in Argentina, to allow it.
Said further analysis and that of the legal consequences of the “illegal” comparative advertising, due to the breach of one or more conditions set forth in section 15 of the Emergency Decree 274/2019, shall be subject to new works that I intend to write in the near future.
[1] In his work “Publicidad Comercial – Régimen Legal” (Commercial Advertising – Legal Regime) (Printing House Depalma, Buenos Aires, 1947, page 415), the quoted author states: “Another way to denigrate a competitor, less frank but not less damaging than the previous ones, is to publish advertisements setting comparisons between one’s own products and those of the competitor. This is called comparative advertising.”
[2] Zabala Rodríguez, Carlos Juan, op. cit., page 416.
[3] Published in “Jurídica”, Anuario del Departamento de Derecho de la Universidad Iberoamericana, (“Legal Publication” Yearbook of the Department of Law of the Ibero-american University), Number 20. Available in: https://revistas-colaboracion.juridicas.unam.mx/index.php/juridica/issue/view/642.
[4] “Rolex S.A. v. Orient S.A. et alius”, judgment dated December 30, 1971, published in “La Ley”, Volume 147, pages 231 et seq.
[5] Judgment rendered by Panel II of the Federal Appellate Court having jurisdiction in Civil and Commercial matters on March 22, 1991, in the case captioned “Bodegas Edmundo Navarro Correas S.A. v. Agro Industrias Cartellone S.A.”.
[6] Judgment rendered by Panel I of the Federal Appellate Court having jurisdiction in Civil and Commercial matters on December 30, 1993, in the case captioned “Axoft Argentina S.A. v. Megasistemas S.A.”
[7] In my opinion, which might not be totally objective, since I was one of the two co-leaders of the team of lawyers that defended the then Pepsi Cola Argentina S.A.C.I. in the legal actions filed by The Coca Cola Company trying to prevent – in the long run unsuccessfully – the production of the so-called “Pepsi Challenge”.
[8] Judgment rendered in the motion for admission of a denied appeal: “The Coca Cola Company et al, precautionary measures”, Supreme Court of Justice of the Nation, September 12, 1995.
[9] Available in: https://www.palermo.edu/derecho/revista_juridica/pub_a3n2.html.
[10] Who published in Argentina, among other works, those entitled, “La publicidad Comparativa” (Comparative Advertising), La Ley, 1995-A and “Publicidad comparativa, nuevas modalidades en Europa” (Comparative Advertising, new modalities in Europe), La Ley, 1999- C.
[11] “La publicidad comparativa. (Aspectos jurídicos)” (Comparative Advertising). (Legal Aspects), Zapiola Guerrico, Martín, published in La Ley 1988-C, 772.
[12] “Publicidad comparativa. Análisis de un reciente fallo” (Comparative Advertising. Analysis of a recent judgment), Alonso, Fernando Martín, published in La Ley, 1991-C, pages 526 – 543.
[13] Defined in its section 2, paragraphs 2 bis, as: “comparative advertising: all advertising that explicitly or implicitly mentions a competitor or the goods or services offered by a competitor.”
[14] Paragraph 2 of section 2: “misleading advertising: every advertising that, in any manner, including its presentation, leads to an error or may lead to an error to the persons to whom it is addressed or affects and which, due to its deceptive nature may affect its economic conduct or that, for said reasons, damages or is capable of damaging a competitor.”
[15] Said section 3 sets forth that: “In order to determine if an advertising is misleading, all its elements and mainly its indications shall be borne in mind regarding the following: a. the characteristics of the goods or services, such as their availability, nature, execution, composition, procedure and manufacturing or provision date, their appropriate nature, uses, quantity, specifications, geographical or commercial origin or the results that may be expected from their use, or the results and essential features of the tests or controls made on the goods or services; b. the price or its pricing and the conditions for the supply of goods or provision of services; c. the nature, characteristics and the advertiser’s rights, such as its identity and equity, its qualifications and its industrial, commercial o intellectual property rights, or the prizes or honors that it may have received.
[16] Section 7, 1. This Directive shall not be an obstacle for the Member States to maintain or adopt provisions tending to ensure a broadest protection, regarding misleading advertising, of consumers, of the persons that practice a commercial, industrial, craft or professional activity, as well as of the public in general.
[17] The above said section 29: Comparative Analyses – When in order to check the compliance with the law it is necessary to comparatively analyze two or more products (For example: to check the accuracy of comparative advertising), said analyses shall be carried out before all the interested parties, who shall be summoned as provided for in section 26, under penalty of considering final the result of the analysis carried out if they fail to appear, acknowledging in a notarial record or certificate signed by the attending parties.
[18] On such respect the first paragraph of section 15 of the Emergency Decree mentioned above reads as follows: “Comparative Advertising. For the purposes of this Decree, the advertising that explicitly or implicitly mentions a competitor, or its trademark, or the products or services offered by it is considered to be comparative advertising.”
[19] Please note the similarity with section 3 bis, subsection d), of the European Directive, that provides: “d) it must not lead to confusion in the market between the advertiser and a competitor or between the trademarks, trade names, other distinctive signs or the goods or services of advertiser and those of any competitor;”
[20] This rule is almost identical to that of section 3 bis, subsection b), that literally reads as follows: “b) that it compares goods or services that satisfy the same needs or have the same purpose;”
[21] Please note the similarity with the rule of subsection c) of section 3 bis, that provides: “it must objectively compare one or more essential, relevant, verifiable y representative characteristics of said goods and services, among which the price may be included;”
[22] Similar to the rule of subsection e) of section 3 bis, which text is the following: “e) it must neither discredit nor denigrate the trademarks, trade names, other distinctive signs, the goods or services or activities or circumstances of any competitor;”
[23] Inspired in the rule of section 3 bis, subsection g): “it must not take undue advantage of the reputation of a trademark, trade name, another distinctive sign of any competitor or of the designations of origin of competing products;”
[24] Almost identical to subsection h) of section 3 bis: “h) it must not present a good or service as an imitation or replica of a good or service with a protected trademark or trade name.”