Misleading consumers in comparative advertising … are you allowed to say that?


Posted By on 25/10/15 at 2:01 PM

Samsung v LG: who won?

Delivering judgement earlier this year, the Federal Court has finally resolved proceedings between two of the biggest names in electronics – Samsung and LG.

Samsung commenced proceedings against LG in 2011 for misleading and deceptive conduct under the Australian Consumer Law in relation to television commercials and marketing materials used by LG to promote its 3D televisions. The Court found that aspects of LG’s comparative marketing TV ad campaign were misleading.

Technology background

In early 2011 Samsung released its new 3D “active shutter technology”. This technology involves images being rapidly displayed one image after another. LG introduced its 3D TVs using film patterned retarder (‘FPR’) or “passive” technology at about the same time. Both technologies require the use of special glasses to view the 3D screens.

Judgement

The Court found one of LG’s commercials to be misleading and deceptive, having the potential to cause Samsung’s business significant harm. The commercial in question was a parody of a ‘scientific’ experiment that compared both shutter and passive 3D televisions. The ad represented that 3D televisions utilising shutter technology caused discomfort, flickering and interfered with the consumer’s viewing experience.

The Court found the commercial to be a ‘half truth’ stating that the flickering only occurred if used under fluorescent light or in direct sunlight which was not ordinary viewing conditions. The Court highlighted that comments containing a “half truth” can be misleading and deceptive to consumers – a statement ‘which, on one view, is literally true, but likely to mislead or deceive unless suitably qualified’.

The Court also found misleading representations in a set of LG retailer instructions. This included the statement “that many people feel dizziness and even nausea from watching conventional [shutter] 3D glasses” and if viewers were to lay down watching ‘shutter’ 3D TV the screen would darken. These statements had the effect of representing that LG FPR technology had less chance of this occurring which was misleading.

Distinguishing between a humorous exaggeration & representations that are misleading and deceptive …

Humour was used by LG in the commercials to compare the technological features of the different televisions. The Court acknowledged that reasonable viewers would make a ‘significant allowance’ for what would be an entertaining exaggeration.  The Court thankfully took a practical approach in determining if an advertisement is indeed misleading.

Your business –

This case highlights the risks with using comparative advertising and indicates that the following questions should be considered:

  • Consider the use of humour– what would the effect of the advertisement be on an ordinary reasonable viewer?
  • What is the effect of the representations and key messages to consumers? Are they likely to mislead?
  • To ensure that the representation is not misconstrued should a “qualification” be included in the advertisement?

Looking for more information?

For more information on any of the issues mentioned and minimizing your risks in advertising please contract me.

Amelia Edwards

Senior Associate

Since joining us in 2014, Amelia has developed broad commercial experience and interests working across the firm’s practice areas and on secondment. She holds a Bachelor of Arts (Anthropology)... Read More