Dispute between Two Popular Ride-sharing Companies in Brazil Reinforces that Comparative Advertising is not Illegal
The dispute between ride sharing companies Uber and 99 is increasingly fierce. Now the main stage is Rio de Janeiro. In May 2018, Uber filed a lawsuit against 99 in the city, claiming misleading advertising. Less than two months ago, 99 began an aggressive discount campaign in the city to promote the 99Pop service in Rio, competing directly with Uber. Since the acquisition by the Chinese transportation company Didi, in January 2018, 99 has been investing in its strategy of expanding and attracting customers to the 99Pop service.
The company has spread advertising billboards, calling out consumers to compare prices between both companies. For such, research done between consumers was used, comparing the prices of rides in the same locations and routes.
Uber then filed for a preliminary injunction to have the advertising pieces taken down the streets, claiming they were based on untruthful information.
In the lawsuit, Uber argues that "99 Tecnologia Ltda. launched a campaign of different prices, while having an exclusive price in Rio de Janeiro.” Uber also affirms that an injunctive relief (with the withdrawal of advertising)" is very much needed due to the high aggressiveness and presence in various media outlets and places of great audiences."
It also contests the price comparison displayed on posters. "Both companies use the dynamic price tool for fares, aimed at balancing supply and demand for transportation services and that the activation of the dynamic price in one platform does not imply that the same will occur in the other, since the supply and demand are different between the two, " says. Uber then questions that the campaign uses timely prices, obtained on a specific day and time, and does not explain which Uber modality was used as a basis for comparison.
The case led to a discussion of the possibility of comparative advertising. There is a false perception that in Brazil this type of advertisement is not allowed, being an act of unfair competition.
However, the Brazilian Code of Self-Regulation in Article 32 states that comparative advertising is permitted. The article establishes only some limits that must be respected by the companies among them that the comparison is made in an objective way and that the image of the other company is not denigrated.
Therefore, whenever two products and / or services that are similar and of the same quality, there is a possibility of comparison in an advertising piece, provided it is objective, does not denigrate the image of the other company and is also verifiable.
On July 18, 2018, Justice Denise Levy Tredle, of the Appellate Court of the State of Rio de Janeiro dismissed Uber’s claim, maintaining 99’S advertising campaign. Justice Tredle concludes that "the information provided is truthful, objective and not abusive", therefore, there is no illegality in comparative advertising. On July 14, Judge Maria da Penha Nobre Mauro had already decided, in the first instance, on the maintaining of the campaign, but Uber appealed, requesting that the decision be reviewed again by the Appellate Court.
The injunction is only the beginning of a battle in Rio. It is the first unfolding of a lawsuit that Uber is moving against 99 in the city, questioning not only misleading advertising but 99’s aggressiveness.
Sources: https://www.jusbrasil.com.br/diarios/documentos/587735165/andamento-do-processo-n-0029929-4920188190000-agravo-de-instrumento-11-06-2018-do-tjrj?ref=topic_feed. Accessed on October 28, 2018.
Official Diary of the State of Rio de Janeiro: https://diarios.s3.amazonaws.com/DJRJ/2018/06/II_Judicial_2a_Instancia/pdf/20180620_198.pdf?AWSAccessKeyId=AKIAI45WSOUE2QEAQ6HQ&Expires=1540930563&Signature=dAy1h%2BaelkeSU3OAl3mX5xyVXI0%3D. Accessed on October 28, 2018.