Unfair Competition and False Advertising

Advertising is a very important tool in marketing. Almost all of the companies spend an enormous budget on marketing every year. The basic purpose of marketing is to persuade consumers to buy specific products or goods. However, the online market has expanded a lot so different companies started using false advertising or misleading advertising.

Do you know about false advertising? It is a process in which a company or source uses a deceptive, false, or misleading statement to persuade users about a product. Nowadays, various companies are falling apart due to misleading advertisements and unfair competition. In unfair competition, various companies use illegal acts or deceptive trade practices to confuse customers.

Laws Regarding Unfair Competition and False Advertisement

The Unfair Competition Prevention Act prevents the use of various acts. These illegal acts include:

• Unauthorized use of popular products or services
• Copying or imitation of products
• The revelation of trade secrets
• Illegal use of trade names and trademarks
• Assertion or distribution of misleading information

The main goal of the Unfair Competition Prevention Act is the protection of trade secrets, patents, or other commercial assets of a company. Therefore, a company or a firm must hire a professional lawyer who can respond appropriately to these unfair competition concerns.

Whereas, in the case of false advertisement, state false advertisement laws indicate that a company or source must have the following things:

• Appropriate and authentic information about a product
• They should equally treat all of their rivals or competitors
• These companies have enough supply of advertised products or goods
• No false statement about the price of goods
• Must be very careful when they are using words like free or sale

Forms of unfair competition and false advertisement

There are the following different forms of unfair competition and false advertisement.

• Trademark infringement refers to the stealing of your intellectual property like a trademark or patent. For example, if your competitor steals your logo or trademark, you can take action against them.
• Unauthorized substitution is also known as “Bait and Switch”. In this process, a company misrepresents a product or reduces the product’s quality.
• If a competitor steals your trade secrets like formulas, strategies, or recipes to get financial profit, you can report it.
• Price deception occurs when a company uses false prices in its ads to attract customers.
• In false comparison, a competitor uses false representation or false claims to attract consumers. It also includes product warranties, misleading images, or illustrations so that products look more attractive.

How to avoid unfair competition and false advertisement?

Advertising Standard Authority (ASA) gets almost 70% of the complaints regarding false advertisements. These complaints prove that customers take this issue very seriously so companies must take the following steps to avoid these mistakes.

• Keep your pricing clear

Price is a very important factor in persuading customers or users to buy specific products. Therefore, keep the price of advertised goods clear. If there is a difference in the price then customers will not likely buy that product because of misleading information. This decreases your customers so include all the taxes and mentions the actual price. Moreover, keep this price the same at all places whether it is an online store or any advertisement.

• Mention key information

Mention all the relevant information on the product because it will attract new customers. When you have written all the information on the product then customers might like it. This given information might be the area of customer’s interest and they might purchase it.

• Do not exaggerate things

The main purpose of advertising is to introduce a product in the best possible conditions. However, when you exaggerate the abilities of a product, customers do not like it. When they have a bad experience, they will not likely to purchase from your brand.

• Clarification of qualifications 

The aim of qualifying text like small prints or footnotes is to clear a claim in an advertisement. Various companies use qualifying text to conceal important information. So, try to make things clear.

• Have the evidence to prove your claim

When you are advertising your product, you must have enough evidence to support your claim. When you are claiming that this product has multiple qualities, it should have those qualities. Moreover, the level of evidence will vary according to your claim and given product. For example, you need a robust clinical trial for health, beauty, or slimming claims.