Colgate, a famous manufacturer of dental hygiene products, may have an apology coming its way.
A Shanghai court ruled Thursday that advertising by its main business rivals was disparaging the company's tooth whitening strips.
Rival P&G China (Procter & Gamble) Co Ltd and its local distributor the Guangzhou Haolin Trading Co Ltd were ordered to apologize publicly in newspapers in Shanghai, Beijing and Shenzhen, and pay 150,000 yuan (US$18,000) and 250,000 yuan (US$30,200) in compensation.
"The two defendants have fabricated and spread false information, and adopted inappropriate comparisons in their advertisement, which has greatly disparaged Colgate and its products," the judge ruled.
"What they've conducted has created unfair competition."
Wang Jian, P&G China's lawyer, said P&G will most probably appeal.
"P&G actually has won in a case with Colgate involving the same dispute in the United States in the middle of this year."
Since late last year, flyers for Crest White Strips, a P&G product, have been distributed in supermarkets in Shanghai, Beijing and Guangzhou.
Advertisement for those strips compares the product with Colgate's tooth whitening liquid, and claims its whitening effect is three times more powerful than the latter.
Seeing this, Colgate-Palmolive (Guangzhou) Company Ltd filed the lawsuit earlier this year.
"The Colgate Liquid Whitening Gel is the only tooth whitening liquid available in China since last March," said Jin Liyu representing Colgate.
"The comparisons they made in the advertisement included derogatory words about Colgate's product.
"The groundless statement in the ad has caused wide misunderstanding and damaged the reputation of the plaintiff's product."
Colgate demanded a public apology from P&G and a compensation of 500,000 yuan (US$60,000).
P&G, however, insists that the advertisement includes all true facts.
The Shanghai No 2 Intermediate People's Court held the first hearing for the case in October 28, and ruled Thursday that "based upon the evidence provided, P&G's advertisement claims are all groundless and violate the Law for Countering Unfair Competition."
(China Daily December 10, 2004)