Advertising Ethics on Shopping Web Sites

Q: I manage a chain of retail outlets and some of our products feature on a website that compares like products. While the website generates product exposure, it doesn't always portray our products accurately - sometimes it makes unfounded criticisms and quotes incorrect prices. I also suspect that

A: There are a number of websites around that compare goods and services of a similar nature. If these are considered to be advertisements (which appears to be the case), the Advertising Standards Authority codes will apply.

In relation to your concerns, the ASA's Advertising Code of Ethics and Code for Comparative Advertising are relevant. Rule 2 of the Advertising Code of Ethics prohibits advertisements which contain statements or create an overall impression which directly or by implication mislead or deceive or are likely to mislead or deceive.

If you are familiar with section 9 of the Fair Trading Act you will note the similarity in wording. Based on what you have told us, you would seem to have a strong argument for saying that the comparisons on the website are misleading and deceptive and therefore in breach of Rule 2. For the same reasons you may have a claim for breach of section 9 of the FTA.

The ASA Code for Comparative Advertising specifically deals with advertising that identifies a competing product or service. The Code states that comparisons should be factual and informative, and should not mislead the consumer about other products or services with which comparisons are made.

Based on what you have told us, the website also appears to breach this Code in several respects.

If the website claims to be, or creates the impression that it is "independent" then the non-disclosure by the website host of its interest in the products shown on the website is likely to be misleading.

Products should be fairly and properly identified in the website, but not in a manner that degrades your products.

The ad must not suggest that a better bargain is offered than is actually the case.

If the website misquotes the prices of your products, it is likely that they are suggesting their products are a better bargain than what they are.

The claims made on the website should be able to be supported by documentary evidence which is easily understood.

Recently, a complaint about a comparative website was upheld by the Advertising Standards Complaints Board (ASCB). The website provided summary information about different New Zealand companies offering online travel insurance.

It claimed to be an independent advice site, however the website was actually owned, administered and registered by a company advertised on the website.

In this case, the ASCB found that it was not obvious to the consumer that the website was actually owned by the company it was promoting. The website was found to be in breach of the Advertising Code of Ethics as it was likely to mislead or deceive the consumer. The ASCB also found a breach of the Code for Comparative Advertising.

Therefore in response to your original question - if the website is not independent then no, the website should not give the impression that it is, and misleading comparisons should not be made about products.

If pictures of your products are shown there may also be copyright infringement issues, but we would need to view the website to determine this.