Can You Name Your Competitors in Your Ads?

What Australian Law Really Says About Comparative Advertising

It is one of the most effective marketing tools available to a business — and one of the riskiest.

From Botox to burgers, the case law shows exactly where comparative advertising goes right, and where it goes very wrong.

There is a reason the most memorable advertisements are the ones that name names. “Compare the pair.” “25% more Aussie beef.” “Instant Botox® alternative.” Comparative advertising works because it does the consumer’s homework for them, and it stings because your competitor is watching every word of it. In our experience advising businesses on advertising campaigns, no other form of marketing generates litigation quite so quickly — and no other area of advertising law depends quite so heavily on nuance. This article explains the legal framework, walks through the recent cases, and shows why there are no hard and fast rules — only principles, applied to impressions.

Is comparative advertising actually legal in Australia?

Yes, and this surprises many business owners.

Breaking it all down, it is true to say that Australian law has never prohibited naming a competitor or comparing your product against theirs. In fact, the Full Federal Court made clear in Gillette Australia Pty Ltd v Energizer Australia Pty Ltd [2002] FCAFC 223 that comparative advertising is not held to any higher or more stringent standard than ordinary advertising, a point confirmed in the case of Polaris Communications Pty Ltd v Dynamic Hearing Pty Ltd [2009] FCA 890.

You are not required to compare every feature of the competing products, and you are entitled to select the feature where your product wins.

As Lindgren J explained in the Gillette case, consumers understand that an advertiser has chosen the comparison that favours its own product, and a comparison confined to one selling feature does not imply the products are equivalent in every other respect — a principle applied as recently as Invisalign Australia Pty Limited v SmileDirectClub LLC [2023] FCA 395.

So the question is never whether you can compare. It is whether your comparison misleads.

And that is where the legal terrain becomes genuinely treacherous. You see, a comparative advertisement can breach up to five different bodies of law at once: the prohibition on misleading or deceptive conduct in section 18 of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)), the prohibitions on false or misleading representations in section 29(1) — including representations about standard, quality or grade under s 29(1)(a) and (b), performance characteristics and benefits under s 29(1)(g), and price under s 29(1)(i) — the common law tort of injurious falsehood, trade mark infringement under section 120 of the Trade Marks Act 1995 (Cth), and copyright infringement under the Copyright Act 1968 (Cth). One advertisement, five ways to be sued. Its quite a mouthful.

How do courts decide whether a comparison is misleading?

Glad you asked! So the courts have long accepted that advertisements involve “a certain amount of loose thinking” and that the ordinary reader will “read between the lines in the light of his general knowledge and experience of worldly affairs”.

What matters is the overall impression the advertisement leaves on the ordinary and reasonable consumer, assessed as a whole and in context.

This means an advertisement in which every individual word is literally true can still be unlawful.

The classic danger is the “half truth” recognised in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 — a statement that is accurate as far as it goes but misleads without qualification — and as Gummow J observed in Hoover (Australia) Pty Ltd v Email Ltd (1991) 104 ALR 369, a comparison can become misleading simply through the omission of material needed to make it fair.

In case you are wondering what this means, suppose an ad truthfully says “our washing machine costs $300 less than Brand X’s” but omits that the Brand X model includes a ten-year warranty and yours includes one.

Here, every word is accurate, yet the comparison misleads because the thing that explains the price difference has been left out. Or imagine comparing your ladder’s weight — “5kg lighter than Brand Y” — without mentioning that Brand Y’s ladder is rated to carry twice the load. The omission is what does the misleading, not anything said.

What do the recent cases tell us?

The last few years have delivered a remarkable run of comparative advertising decisions, and together they map the modern battleground. In Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8, the High Court considered a cosmetic serum marketed as an “instant Botox® alternative”. The Court held that the ordinary and reasonable consumer would not understand the phrase as claiming the product matched Botox’s long-term efficacy, and — critically for trade mark law — that the phrase was not used “as a trade mark” at all, because consumers would read “Botox” as a reference to Allergan’s well-known product rather than as a badge of origin for Self Care’s own goods. The decision is now the leading authority on both indirect comparative claims and the use of a competitor’s mark in comparative contexts.

In McD Asia Pacific LLC v Hungry Jack’s Pty Ltd [2023] FCA 1412, McDonald’s challenged Hungry Jack’s “Big Jack” burger on two fronts, and the result cut both ways. The trade mark infringement claim failed — “Big Jack” was not deceptively similar to “Big Mac” — but Hungry Jack’s advertising claim that its burger contained “25% more Aussie beef” was held misleading, because while the uncooked patty was indeed about 25% heavier, the difference after cooking shrank to somewhere between 12% and 15%. It is a textbook illustration of how a claim can be arithmetically defensible on one measure and misleading on the measure that matters to the consumer, who eats the burger cooked.

In RB (Hygiene Home) Australia Pty Ltd v Procter & Gamble Australia Pty Ltd [2023] FCA 383, the Federal Court held on an interlocutory basis that the packaging claim “30 Minute Miracle” for a dishwashing product was not mere puffery, and that the qualification “Tested vs. Fairy All in One”, printed in small and inconspicuous font on the back of the pack, did not neutralise the impression conveyed by the front. The decision sits squarely in the tradition of Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640, where the High Court confirmed that it is the dominant message of an advertisement that governs, and that fine print will rarely rescue a misleading headline. And in Invisalign v SmileDirectClub, the Court reaffirmed the Gillette principle that selecting favourable comparison criteria is legitimate — while demonstrating, through the claims that failed, that selectivity tips into illegality the moment the chosen frame distorts the overall picture.

When is a boast just “puffery” — and when is it a misleading claim?

This is where the absence of hard and fast rules is most obvious, because the line between lawful exaggeration and unlawful misrepresentation runs entirely on context. In Procter & Gamble Australia Pty Ltd v Energizer Pty Ltd [2011] FCA 1347, the claim “best shave for your skin” was held to be advertising puffery — the kind of sales talk no reasonable consumer takes literally. In REA Group Limited v Fairfax Media Limited [2017] FCA 91, claims that “the best property listings in Melbourne are on Domain” and “#1 property app in Australia” were likewise treated as vague expressions of superiority rather than factual assertions. Yet “30 Minute Miracle” — which sounds no less promotional — was not puffery, because in its packaging context it read as a verifiable performance claim. The distinction the courts draw is between statements incapable of being proved true or false, which are safe, and statements a consumer would reasonably take seriously, which must be substantiated. The same words can fall on either side of that line depending on the product, the placement, the audience and what sits alongside them, which is exactly why no checklist can replace judgment.

Can you use a competitor’s trade mark, logo or photographs?

Here the law offers a defence that is narrower than it looks. Section 122(1)(d) of the Trade Marks Act 1995 (Cth) provides that a registered trade mark is not infringed when it is used for the purposes of comparative advertising. But in Allergan Australia Pty Ltd v Self Care IP Holdings Pty Ltd [2021] FCAFC 163, the Full Federal Court held the defence unavailable because it protects use of the registered mark itself — “BOTOX” — and not use of the mark embedded in a composite phrase of the advertiser’s own creation, such as “instant Botox® alternative”. Although the High Court ultimately resolved the case on the anterior ground that there was no trade mark use at all, the Full Court’s reasoning stands as a warning: the safer course is always to use a competitor’s mark accurately, on its own, and only to identify the product being compared, rather than folding it into your own slogan. Copyright is a separate trap again, as Key Logic Pty Ltd v Blue Groper Investments Pty Ltd [2019] FCA 63 demonstrates — there, the respondents used the applicant’s photographs in a comparative advertisement without licence, and the Court found deliberate infringement undertaken for commercial advantage. The comparison itself was permissible; lifting the competitor’s images to make it was not.

What happens if a comparative ad gets it wrong?

The consequences operate on three fronts, and the regulator is usually the least of them. Under section 224 of the Australian Consumer Law, the maximum penalty for a corporation making false or misleading representations is now the greater of $50 million, three times the benefit obtained, or 30% of adjusted turnover during the breach period, with individuals exposed to penalties of up to $2.5 million.

The Australian Competition and Consumer Commission can also issue a substantiation notice under section 219 compelling an advertiser to produce the evidence behind a claim, which is why prudent businesses assemble their proof before publication rather than after a complaint arrives.

A competitor can also seek an urgent injunction to stop the campaign overnight, damages under section 236 for lost sales, and corrective advertising.

False and malicious statements about a competitor may also give rise to an injurious falsehood claim. However, because that tort generally requires proof of malice and actual financial loss, the Australian Consumer Law will often be the more practical avenue. The position will always depend on the particular facts and wording used, so legal advice should be obtained.

So is there a safe formula for comparative advertising?

That would be good but the reality is that the question of whether a comparative advertisement is lawful will depend on the particular facts, including the words, images and, as said above, overall impression.

Remember to that a comparison that is accurate when first published may even become misleading if circumstances later change.

The recurring themes are the comparative claims should be accurate, capable of being substantiated and kept up to date.

The use of a competitor’s trade mark, copyright material or other branding also requires careful consideration and legal advice is well worth getting as it is such a nuanced area.

Comparative advertising can be an effective marketing tool, but it can also create legal risk if not handled carefully.

If a campaign involves comparative claims or references to a competitor, it is worth asking whether the wording, visuals and supporting evidence have been legally reviewed before publication. Sometimes a single word, image or design choice can make a significant difference to the legal position.

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Please note the above article is general in nature and does not constitute legal advice.

Please email us info@iplegal.com.au if you need legal advice about your brand or another legal matter in this area generally.