Following a complaint by cable provider Comcast, the Better Business Bureau’s National Advertising Division (NAD) urged DirecTV to abandon certain advertising claims found in its popular series of television ads featuring actor Rob Lowe. See April 7, 2015 Press Release here.
The commercials, which promote the benefits of DirecTV’s satellite television subscription services over cable, feature Rob Lowe as a DirecTV subscriber, and a variety of Rob Lowe alter egos, including “super creepy Rob Lowe,” “crazy hairy Rob Lowe,” and “scrawny arms Rob Lowe,” who subscribe to cable. In the commercials, DirecTV claims that its service has:
- 99% signal reliability
- up to 1080 p [HD] picture quality
- the industry’s best picture quality and sound, and that its service is
- the undisputed leader in sports; and
- ranked higher than cable for over 10 years.
At the end of many of the commercials, Rob Lowe tells consumers “Don’t be like this me. Get rid of cable and upgrade to DirecTV.” YouTube.
According to the NAD, DirecTV’s advertising implied that its service had better signal reliability than cable, better picture and sound quality than cable, and that its sports programming was superior to cable’s sports programming. Because the NAD determined that there was no supporting evidence for any of these claims, it recommended that DirecTV discontinue them. The NAD did determine that DirecTV’s testing substantiated its “99% signal reliability” and “up to 1080p” picture quality claims, although it recommended that DirecTV clearly and conspicuously disclose that the enhanced resolution was available only on limited programming.
BBB’s National Advertising Division
The NAD of the Council of Better Business Bureaus offers alternative dispute resolution services for advertisers. Although the goal of the NAD is to resolve advertising disputes quickly (within 60 days) and at less cost than litigation typically entails, the NAD has no authority to award monetary damages to those who claim to have been harmed by false or misleading advertising, and compliance with NAD decisions is voluntary. However, if an advertiser refuses to comply with an NAD decision, NAD may elect to refer the advertiser to an appropriate regulatory agency. NAD decisions are monitored by both national advertisers and by the advertising industry.
Comcast’s decision to pursue its claims before the NAD — rather than federal court — may have been strategic. It is not clear that the mere lack of substantiation for DirectTV’s advertising claims would have been enough to find the company liable in a federal lawsuit.
The Federal Trade Commission has long required that advertisers have a reasonable basis (i.e. substantiation) for their advertising claims before they are disseminated. Thus, when an ad contains an express reference to proof (e.g., “tests prove”, “doctors recommend”, and “studies show”) “the Commission expects the firm to have at least the advertised level of substantiation.” FTC Policy Statement Regarding Advertising Substantiation, appended to Thompson Med. Co., 104 F.T.C. 648, 839 (1984), aff’d, 791 F.2d 189 (D.C. Cir. 1986). Even absent an express or implied reference to a certain level of support, the FTC assumes that consumers expect a “reasonable basis” for claims. Id.
Competitors, however, have no standing to bring actions to enforce the FTC Act. Instead, they may rely on Section 43 of the Lanham Act, which provides a private cause of action permitting a company to sue a competitor that “misrepresents the nature, characteristics [or] qualities” of its own or the plintiff’s products or services. 15 U.S.C. § 1125. To establish a violation under the Lanham Act, a plaintiff must prove the following:
- the advertiser made false statements of fact about its product;
- the false advertisements actually deceived or had the capacity to deceive a substantial segment of the target population;
- the deception was material;
- the falsely advertised product was sold in interstate commerce; and
- the party bringing the lawsuit (plaintiff) was injured as a result of the deception.
The Lanham Act does not expressly mention or require advertising “substantiation,” and in many situations a plaintiff cannot rely on the fact that the defendant’s advertising lacks support. Instead, a plaintiff generally has the burden of proving affirmatively that the defendant’s advertising claims are false. See e.g., United Indus. Corp. v. Clorox, 140 F.3d 1175, 1182 (8th Cir. 1998)(“When challenging a claim of superiority that does not make express reference to testing, a plaintiff must prove that the defendant’s claim of superiority is actually false, not simply unproven or unsubstantiated.”); Johnson & Johnson-Merck Consumer Pharm. Co. v. Rhone-Poulenc Rorer Pharm., Inc., 19 F.3d 125, 129 (3d Cir. 1994) (“A plaintiff must prove that the claim is false or misleading, not merely that it is unsubstantiated.”); Toro Co. v. Textron, Inc., 499 F. Supp. 241, 253 (D. Del. 1980) (“The plain language of Section 43(a), which prohibits false rather than unsubstantiated representations, requires that a plaintiff establish not merely that the defendant’s claim lacks substantiation but also that it is false or deceptive.”)
However, courts have held that for certain types of advertising claims, a plaintiff may rely on the defendant’s lack of substantiation and effectively shift the burden to the defendant to support those claims with reliable data. For example, “although the plaintiff normally has the burden to demonstrate that the defendant’s advertising claim is false, a court may find that a completely unsubstantiated advertising claim by the defendant is per se false without additional evidence from the plaintiff to that effect.” Novartis Consumer Health v. Johnson & Johnson, 290 F.3d 578, 590 (3rd Cir. 2002). Likewise, courts have found that an “advertisement [that] relies either implicitly or explicitly on scientific studies” must be supported by tests “sufficiently reliable to permit one to conclude with reasonable certainty that they established the proposition for which they are cited. Johnson & Johnson Vision Care, Inc. v. Ciba Vision Corp., 348 F. Supp. 2d 165, 178 (S.D.N.Y. 2004). Although some claims of product superiority can require substantiation, for “implicit in most assertions of superiority . . . is that some type of comparison between products has been made,” BASF Corp. v. Old World Trading Co., 41 F.3d 1081, 1091 (7th Cir. 1994) (citing Accu-Sort Systems, Inc. v. Lazerdata Corp., 820 F. Supp. 928, 932 (E.D.Pa. 1993), other courts have noted that “vague or highly subjective claims of product superiority including bald assertions of superiority” may constitute nothing more than non-actionable puffery. Home Show Tours, Inc. v. Quad City Virtual Inc., 827 F. Supp.2d 924, 937 (S.D. Iowa, 2011). Thus, many courts have held that if the advertisement generally asserts that a product is superior, but does not explicitly refer to scientific tests as support, the plaintiff still carries the burden to affirmatively prove that the claim is false, i.e., that the defendant’s product is equal or inferior to the plaintiff’s. Id.; United Indus. Corp., 140 F.3d at 1182; Castrol, Inc. v. Quaker State Corp., 977 F.2d 57, 62-63 (2d Cir. 1992); Home Show Tours, Inc. 827 F. Supp.2d at 938; Precision IBM v. PCM Capital, No. 10-0682-CG-B, 2011 WL 2728467, at*3 (S.D. Ala. 2011)).
In this matter, the NAD recommended DirecTV discontinue its “rated #1″ claim and modify its “ranked higher than cable” claim even though DirecTV had results from customer-satisfaction surveys to support these claims. It also recommended DirecTV discontinue its “implied” advertising that its sports programming was superior to cable’s sports programming, and the general “unsupported superiority message” NAD said was communicated by the “Don’t be like this me. Get rid of cable and upgrade to DirecTV,” statement at the end of each commercial.
For its part, DirecTV has stated that it believes that “the various Rob Lowe advertisements are so outlandish and exaggerated that no reasonable consumer would believe that the statements being made by the alter-ego characters are comparative or need to be substantiated.” Although DirectTV has reportedly stopped airing the Rob Lowe commercials in favor of a new ad campaign featuring model Hannah Davis, it has also said that it plans to appeal the NAD’s adverse findings to the National Advertising Review Board.