In January, the Superior Court of the State of California issued
a decision in the California attorney general's longstanding
case against Overstock.com related to the retailer's use of
comparative price advertising on its ecommerce website. This
edition of Morgan Lewis Retail Did You
Know? describes the decision and its potential impact
on retailers.
Background
One area of advertising that has been subject to increased
attention over the last several years is retailers' use of
comparison prices or advertised reference prices (ARPs) when
advertising the comparative savings or discount available. For
instance, retailers often advertise the percentage or dollar amount
off of a "regular" price or may invite their customers to
"compare" the retailer's own former price or to a
higher price offered elsewhere. Many states have detailed laws and
regulations regarding the use of ARPs, and the Federal Trade
Commission (FTC) has issued regulatory guidance on the topic.
