This article is a little more than a week old, but I thought it was worth sharing. I know we’ve all seen and heard promises in advertising that have made us go “hmmmm.” Phrases such as “lose 10 pounds in 2 weeks guaranteed” and “boosts energy and metabolism” are just a few of the more common kinds of false advertising we see on a regular basis. Minyanville.com published an article recently highlighting “Great Moments in False Advertising.” What was interesting to me about this piece aside from the big brand names that were mentioned were the wide variety of reasons why these brands were on the list.
Nike’s false advertising issues actually had nothing to do with claims about its products, but rather with the way its products were made. After reports surfaced that the sports apparel giant tolerated Asian sweatshops to manufacture its products in 2002, Nike countered with a series of press releases, direct letters and advertisements refuting the accusations. Consumer activist Marc Kasky fought back claming that the company lied in these reports, which he considered to be false advertising. The matter was settled out of court.
Then there’s Dell. In 2008, the computer company pushed a financial promotion that included “no payment” and “no interest.” Instead, Dell Financial Services increased the charges in other areas much to the chagrin of their customers who thought they were getting a great deal. A New York judge ruled in favor of the consumers and brought down a litany of charges against the company including false advertising, fraud, deceptive business, and abusive debt collection practices.
Often, it’s the brands’ competitors that will take it upon themselves to make a false advertising claim if they feel their own brand is being hurt by the message. Take Powerade for example. Coca Cola’s sports drink brand asserted itself as a superior drink over Pepsi’s Gatorade in 2009 with the claim that it contained two important ingredients Gatorade didn’t: calcium and magnesium. The assertion would have held water except that the amount of these electrolytes was only 0.5% of your daily value, essentially making their value inconsequential. Pepsi naturally filed a lawsuit citing false advertising that was later dismissed in court because of a lack of evidence that these ads either caused Gatorade harm or caused Powerade success one way or the other.
Just as recently as last month, AT&T filed suit with competitor Verizon claiming that their new ad campaign, “There’s a Map for That,” which shows 3G coverage areas for both companies, is misleading. The ad campaign plays on AT&T’s iPhone slogan, “There’s an App for That” and shows red and blue maps which AT&T claims will lead consumers to believe that the maps refer to cell phone coverage area in general and not just 3G coverage. Instead of just sitting back and letting the courts decide, though, AT&T countered with a campaign of their own where they claim to “set the record straight. As of December 2nd, AT&T had dropped the lawsuit altogether.
You can see AT&T’s latest ad below:
I think it’s safe to say that as long as we have brands, competitors, and consumers, the FTC will have its hands full.