Comparative Price Advertising

Concept of Comparative Advertising

Comparative price advertising is when a seller advertises consumer products or services by comparing their prices with their own previous or future prices, or with their competitors who are named therein.

To be clear, a seller takes out an advertisement stating therein the selling price as compared to their previous or future price, or the price that their named competitors are selling.

Rules for Comparative Price Advertising

In R.A. 7394 (Consumer Act of the Philippines), the following rules were laid down to regulate comparative price advertising:

  1. Where the comparison relates to a former price of the seller, the item compared shall either have been sold at that price within the ninety (90) days immediately preceding the date of the advertisement, or it shall have been offered for sale at least four (4) weeks during such ninety day period. If the comparison does not relate to an item sold or offered for sale during the ninety-day period, the date, time or seasonal period of such sale or offer shall be disclosed in the advertisement.
  2. Where the comparison relates to the seller’s future price, the future price shall take effect on the date disclosed in the advertisement or within ninety (90) days after the price comparison is stated in the advertisement. The stated future price shall be maintained by the seller for a period of at least four (4) weeks after its effective date: Provided, That compliance thereof may be dispensed with in case of circumstances beyond the seller’s control.
  3. Where the comparison relates to a competitor’s price, the competitor’s price shall relate to the consumer products or services advertised or sold in the ninety-day period and shall be representative of the prices similar consumer products or services are sold or advertised in the locality where the price comparison was made.

The above rules shall be explained hereunder.

Rule 1: Seller Compares with Previous Price

If the advertisement is about comparing a previous price by the same seller, then the item being compared should have been sold at that previous price within 90 days immediately preceding the date of advertisement. In the alternative, the same item should have been offered for at least 4 weeks within the 90-day period.

Should the 90-day rule be not met, then the seller is required to disclose in the advertisement the date, time or seasonal period of such sale or offer.

Rule 2: Seller’s Future Price

If the advertisement is about comparing a future price by the same seller, such future price shall take effect on the date disclosed in the advertisement or within ninety (90) days after the price comparison is stated in the advertisement.

The seller is required to maintain the future price for a period of at least four (4) weeks after its effective date. Notwithstanding, this compliance may be dispensed with “in case of circumstances beyond the seller’s control.”

Rule 3: Competitor’s Price

If the advertisement is about comparing a competitor’s price by a seller, the competitor’s price shall relate to the consumer products or services advertised or sold in the 90-day period. That is to say, the consumer product or service being advertised must be the same with that of the competitor.

In addition, the competitor’s price should be representative of the prices of similar consumer products or services as are sold or advertised in the locality where the price comparison was made. The advertisement is, thus, dependent on the geography. The seller cannot make a comparative price advertising using a competitor’s price outside the locality where price comparisons are made. If price comparison is made in Manila, the seller cannot advertise the same in Cebu as prices in the latter may be different for various reasons.

PHL lemon law test case

R.A. 10642 or the Philippine Lemon Law is put to the test by a businessman who filed a DTI complaint for a newly bought Audi A63.0 TDI.

The complaint stated that the new car “showed signs of defects as erratic and/or random error messages kept appearing on the dashboard which were very alarming and misleading.”

Philippine Lemon Law is a new piece of legislation signed last July 15.