9/86 COMPARATIVE ADVERTISING RESTRICT IONS TO BE EASED - COUPONS OK’D -FTC -

The Fair Trade Commission has decided to permit comparative advertising in Japan for the first time. Thus firms will now be permitted to make advertisements showing where their products are superior to those of their competitors. Foreign corporations, American in particular, had long complained that this ban on comparative advertising made it more difficult for them to their products in Japan. As the Japanese government was studying marketing opening measures in their market opening package of the summer of 1985, foreign companies had repeatedly complained that the restrictions on comparative advertising constituted a nontariff barrier. Thus the FTC plans to prepare guidelines for suitable comparative advertising, and they are thought likely to center on the usage of objective data, and banning ads which simply serve to denigrate the products of competitors.. As a practical matter however, competitive advertising may be more difficult in Japan than in the US. In Japan advertising agencies are massive and firms holding accounts of competing companies are not at all unusual. While in the US, where advertising agencies do not hold the accounts of the competitors of their clients, comparative advertising is widely used, in Japan it may be difficult as the agencies do not want to lose customers. For the purpose of preparing guidelines the FTC in September 1986 dispatched members of affiliated foundations to the US to study how the US practices comparative advertising.

From August 1986 the Fair Trade Commission and the Japan Magazine Association agreed to start permitting the use of coupons for presents or discounts in magazines. Previously they had been banned by FTC regulations. The Magazine Associations has prepared guidelines for the use of the coupons and are seeking approval of the guidelines from the FTC.

THE JAPAN LAW LETTER, September 1986. By Roderick Seeman