Criticizing a rival's products is a high-risk, but increasingly popular marketing strategy. Some regulators would like to ban it because certain tactics can be "unfair" and "denigrating", although they may not be "false" or, strictly speaking, "misleading". The reasoning behind restricting such advertisements is partly cultural taste, but legally often is to respect for the "sole user rights" which some companies have over their logos (sometimes even the names) of their brands.
Comparative advertising originated in the mid-60s in USA, where it exists without special restriction other than those afforded by advertising laws. It has been legal in Japan since 1987. Hard-sell advertising of any variety is virtually unknown in certain countries, such as France, where it could easily be considered offensive. The EEC/EU has compromised to allow comparative advertising since 1993, with conditions which effectively ban all but the narrowest advertisements. These limits are that: advertisements must be scientifically verifiable (market research showing consumer preferences would not count); they cannot feature a rival's trademark (no cans of Coke in Pepsi commercials); and they must include all "relevant" comparisons (if one computer is, say, more reliable than another but also more expensive, its maker could not tout the first point without publicizing the second).
In the USA, about 30% of the 25,000 advertisements shown each year on network television are comparative. Most are direct comparisons. Fewer than 1% are challenged by competitors. For example, the overnight courier company, Federal Express, established itself solidly and quickly in the marketplace by knocking America's leisurely postal service, without any backlash. Almost all the 200 brands in the $900 million American breakfast-cereal market use comparative advertising (since it is tightly contested, and only 31 brands have more than 1% of the market). The breakfast cereal "Total" was successfully launched into the market by saying it was the same as Kelloggs's "Cornflakes" but with more vitamins. However, a two-party slugging match can simply subtract value from the whole market. Two years of slanging in America between soyabean and palm-oil companies about the deleterious effect on health of each other's products, did nothing but stop many people from buying all edible oils and reverting to other fats. A computer company was ordered by a UK court to change false information in one of its advertisements about the price of one of its competitor's models.
Free-market arguments supporting the free flow of consumer information and lower barriers to market entry must be balanced against the dangers of deceptive or slanderous advertisements and against intellectual property claims by companies over their branded images.
Knocking copy has produced some of the USA's most brilliant commercials – the Pepsi ad in which young people in the distant future find a relic (a Coke bottle) so ancient that they cannot identify it; the ad for a fast-food restaurant, which jibed its rival's hamburgers by asking "Where's the beef ?".
Comparative advertising makes little sense for an established brand, but is an efficient was for new brands – especially fast-moving consumer goods – to break into markets, or for established but "tired" ones to regain lost market share.
Once a company has placed its product on the market, it should expect comment and criticism, so long as such comment is not libellous or provably false. That is the essence of free commercial speech.