“There’s a long, black, and dirty history of comparing products and services in an attempt to gain some kind of profit from the product or service they’re comparing,” says Peter Mertz, an advertising professor at Boston University.
“That’s why companies like Amazon have been doing it since the early 1990s.”
The practice is called comparative advertising, and it’s a well-documented phenomenon that dates back to the 1980s.
But it’s gotten a lot of attention lately, thanks to recent scandals, from the US Senate’s investigation into Amazon to the revelations that a former Google engineer secretly recorded a company meeting in 2015 with a former colleague to talk about how to sell a competitor’s product.
The practice, which involves people comparing products or services and comparing prices, has been around for years, but it’s only now that it’s becoming a real problem.
In the US, some states and cities have passed laws banning the practice outright.
But the UK has the most strict, with a law that makes it illegal for people to use the practice to “distort” the market.
A UK study published last year found that between 2013 and 2019, there were 8,744 complaints about comparative advertising made to the Advertising Standards Authority in the UK, and the agency has made 745 rulings on the issue.
But there’s more to the story than just what the rules say.
“A lot of people in the advertising industry feel that the rules aren’t strong enough to deal with the problem,” says Merts.
“We’ve got a big problem.”
A study by the University of Cambridge found that while the number of complaints about this practice rose dramatically between 2014 and 2019 as a result of the Google scandal, it didn’t rise to the same level as the rise in consumer demand.
“The main issue that we’ve been seeing is that the advertising business is becoming more saturated with online advertisements,” says Richard Bowers, director of the Advertising Analysis Unit at the University’s School of Journalism and Communication.
“And in fact the average ad has now gone up by 20% over the past five years.”
“What we’re seeing now is the biggest threat to this system is people comparing things,” says Dr. Bowers.
“What you see is that consumers are becoming less willing to accept the fact that there is this kind of comparison.”
A common problem, experts say, is when people compare the price of an item with a different product or services that aren’t comparable.
The result can be an unfair advantage or a loss of money for the retailer or company that’s comparing the products.
It’s a process called comparative pricing, which is often used by online retailers and companies.
“In some cases, it’s unfair competition,” says Bowers “If you compare a pair of shoes and a pair, and you’re comparing the shoes on the market and the shoes online, you’re getting an unfair price advantage.”
A recent study from the marketing research firm Ipsos found that a quarter of American adults have heard of comparative pricing before, and a further 30% have heard about it in the past month.
While the practice has been illegal for decades, it has recently come under renewed scrutiny after an investigation into Google’s alleged collusion with a rival’s competitor.
The company was accused of “direct and indirect collusion” with a competitor to try to “gain competitive advantage” in the search for a way to sell Google search ads.
The case has been dubbed “Googlegate” because Google and its rival search engine have been caught colluding to make the company more profitable.
Google has said it’s cooperating with the investigation, and that the company has done everything it can to “do everything in our power to resolve this matter.”
But many experts think the company will have a difficult time winning the case in the courts.
“If Google is found to be guilty, it will be a real blow to the whole industry,” says Gary Tuckman, a professor at Cornell University’s Department of Marketing.
“The whole industry is going to be very shaken.”
A Google spokesperson did not respond to a request for comment.
In the UK it’s also been used to make deals with other companies to boost their advertising revenues.
In 2016, the UK Advertising Standards Agency ruled that a company using Google’s search engine to advertise against the British retailer Argos would have to pay the competitor $1.5 million, because it was using Google to “dramatically increase its own advertising revenue.”
In response to the ruling, Argos said that it would no longer use Google to advertise on the Argos website.
Argos has since dropped the case.
In recent months, the BBC has been investigating the practice, with an investigation in November revealing that Google had secretly recorded audio conversations with the CEO of the rival online retailer Shopify, and had secretly edited and uploaded a video to YouTube in which he discussed the company’s business practices.