Advertisers in the Ring – a Roundup of This Month's Competitor Advertising Challenges: NAD Tasks Internet Service Providers and Vacuum Makers with Tailoring Their Claims to Their Support

Recent Happenings in APRM February 2015 The D.C. Circuit's POM Wonderful Decision: New Precedent for Advertisers Making Disease and Health Claims New Global Rules for Use of Marine Genetic Materials? Sunscreen Ingredients' New Path to U.S. Market Approval The European Chemicals Agency (ECHA) issues practical guidance on the Biocidal Products Regulation Advertisers in the Ring – a Roundup of This Month's Competitor Advertising Challenges: NAD Tasks Internet Service Providers and Vacuum Makers with Tailoring Their Claims to Their Support

Below, we provide a high level summary of NAD decisions from the past month. A summary of last month's NAD decisions can be found here.

As we head into February, the number of reported case decisions remains low for 2015, but three cases this month emphasis the importance of matching claims and data in a carefully tailored way.

Internet Service: Even Advertisers Should Heed the "Location, Location, Location" Mantra

Comcast Cable Communications, LLC: Xfinity Extreme 505 High-Speed Internet Service, Case No. 5802 (January 16, 2015). AT&T challenged Comcast advertising in which Comcast broadly advertised in general markets that it could offer Internet download speeds up to 505 Mbps. AT&T also challenged Comcast's claims to deliver the fastest internet speed available, at "twenty times faster" than the top available speed for AT&T. A&T argued that by airing such commercials in general market advertising in Atlanta, Chicago and Miami, Comcast was implying that this high speed (505 Mbps) was in fact widely available in those markets, when in fact the speed tier was not widely available in those locations. AT&T also argued that the top speed actually available in the relevant markets was not "twenty times" faster than AT&T's top available speed, which was 45 Mbps in the same markets. 

NAD agreed that the commercials, which had only fine print disclaimers that service availability might be limited, did not sufficiently alert consumers to the fact that the 505 Mbps tier of service was in fact "more unavailable than available" in those markets. Although, based on confidentially submitted data, NAD found that Comcast's service was available to an "appreciable" number of consumers in the advertising locations, NAD recommended disclosing that the availability of the service was limited. NAD further concluded that the "twenty times faster" claim was literally false because one reasonable interpretation of the claim was that Comcast's top speed was 20X faster than AT&T's top speed of 45 Mbps. Comcast had argued, much like AT&T did, that the AT&T 45 Mbps speed was not widely available and need not be considered when making the "20X" claim. The NAD disagreed, however, finding that the speed tier was sufficiently available to constitute a valid comparison. NAD therefore recommended Comcast discontinue the claim. 

NAD also recommended discontinuance of claims in which Comcast touted Xfinity as "the most reliable" and "only . . . consistently reliable" Internet service. Comcast attempted to base these claims on an FCC report that compared Internet download speed reliability of various ISPs at peak hours. The NAD found, however, that the challenged claim was not phrased narrowly in terms of speed reliability, and could also reasonably imply a superior signal reliability, which Comcast could not support.   

This case is a reminder that while advertisers are entitled to pick and choose a point of comparison, they must do so in a way that discloses the basis of the comparison, and avoid implying comparative advantages more broad than those supported by the data.

Vacuum Cleaners: "Most Recommended" Claims Require Support Representative of the Relevant Consumer Population

Euro-Pro Operating, LLC: Shark-brand Vacuum Cleaners, Case No. 5717C (January 21, 2015). This compliance matter stemmed from an earlier challenge brought by Dyson, Inc. against Euro-pro Operating advertisements of Shark-brand vacuums as "America's Most Recommended Vacuum." In the earlier proceeding, NAD sided with Dyson and recommended that the Shark-brand claims be discontinued. The "most recommended" claim was based on a survey of the percentage of online reviews of popular vacuum brands from vacuum retailer websites. Specifically, the survey looked at the total number of "yes" responses to the question "would you recommend" the vacuum being reviewed. NAD found that the results of this tally would not adequately include in-store purchaser opinions, an important—and likely majority—segment of the vacuum-buying population. NAD also concluded that Euro-Pro's method lacked sufficiently verifiable demographic information generally.

Following the original proceeding, Dyson asked NAD to initiate the compliance matter here after continuing to observe the "most recommended" claim on television, particularly in a Shark vacuum infomercial and some on-line advertisements. In response to the compliance action, Euro-Pro described extensive efforts to modify its advertising, and explained that its infomercial was modified during the course of the compliance inquiry. Euro-Pro further explained that some on-line content was posted by a third-party marketer without Euro-Pro's approval, but that Euro-Pro had since contacted the third-party to request the claim be discontinued. In light of these efforts, NAD recommended no further action and closed the compliance inquiry. Notably, some important steps Euro-Pro took to achieve compliance (revising the infomercial, contacting the third-party advertiser) appear to have been as a result of the compliance action, as opposed to inevitable steps already underway.

Disinfectants: Broad Superiority Claims Require Broad Support

sBioMed, LLC: Steriplex SD, Case No. 5805 (January 28, 2015). In this case, sBioMed's claims about its disinfectant product were challenged by The Clorox Company, who competes in the same market for hospital and institutional disinfectants. According to the Clorox challenge, sBioMed's advertising campaign for its Steriplex disinfectant, including claims such as "offers a powerful combination of safety and efficacy" and "is far more effective in denaturing DNA than bleach" conveyed a net impression that its product is more effective than bleach. Clorox also took issue with claims that the product required "no precautionary statements," arguing that the EPA registration and material safety data sheet require certain precautionary statements. sBioMed modified the majority of its efficacy claims after Clorox brought the challenge, but these particular claims remained pending before the NAD. NAD concluded that the unqualified statement "far more effective" could reasonably imply that Steriplex outperforms bleach in all consumer relevant respects. NAD acknowledged that the advertiser provided study data in support of its claim, but concluded that the study's scope was too limited as it only compared samples placed in contact with blood for five minutes without wiping. NAD found that these results were too narrow to support the broader claim, especially since the same study also found bleach to be an effective cleaning agent. In contrast, NAD found that sBioMed had sufficient support for its "no precautionary statements" claim because EPA had approved an amendment to the product's registration containing virtually identical language. NAD also cautioned the advertiser regarding the use of a "shown in hospital studies" claim as requiring additional vigor in order to support an establishment claim. In the end, the claims NAD recommended be discontinued were not unsupported by data, but lacked broad enough applicability and reliability to support the particular claims at issue.

Takeaways for this Month

The cases from this month serve as reminders that when making an advertising claim (direct or implied) about a particular population, whether the market for an internet service, the purchasers of a vacuum, or items disinfected in a hospital, the data supporting that claim should be representative of the relevant population. If you have data showing your product to offer a competitive advantage or to be consumer-preferred in some markets, your claim should be tailored accordingly, rather than taking a stance broader than the scope of the underlying data.