A retailer's claim that its rival's comparative advertising campaigns breached the Fair Trading Act 1986 has been held to be unsuccessful by the High Court. In Luxottica Retail New Zealand Ltd v Specsavers New Zealand Limited (HC Auckland, 22/6/2011, CIV 2010-404-5439, 22 June 2011), the advertisements in issue compared the prices of two pairs of progressive glasses at OPSM and Specsavers, based on mystery shopping exercises. The plaintiff, which operates the OPSM chain of stores, argued that the advertisements made various misleading and deceptive representations.

Associate Judge Faire granted summary judgment against the plaintiff, holding that the advertisements did not breach the Act as the statements they made were based on specific facts and the overall impression given by them was not misleading. In reaching his decision, Associate Judge Faire observed that there is nothing wrong in principle with comparative advertising as long as it is accurate. However, he also noted that comparative advertising may be misleading where it creates a half-truth by omitting material necessary to make the comparison fair. Nevertheless, the focus is on what is said and done, rather than on what is not said or done. The obligation is to avoid falsehoods, not provide compendious explanations. The test is an objective one, and must be determined on an overall assessment, having regard to the effect of the advertising on reasonable members of the public in all the circumstances.

The case confirms that comparative advertising, when properly undertaken, can be used as a legitimate form of marketing.