We love a good March Madness legal blog (see here and here and here) and NAD gave us some great fodder this month deciding a case between two large daily fantasy sports league websites. This one wasn’t exactly an upset like so many of the games this year leading to the Sweet 16. DraftKings claimed it was the “largest US-based destination for daily fantasy sports.” FanDuel cried foul. There was no dispute that FanDuel is larger by a significant margin. The issue was whether the company was US or non-US based, the key factor which would render the claim either literally true or literally false. This case is a riff on Made in USA analysis. Instead of focusing on where a good is manufactured, including its component parts, this case looked to the right definition for determining where a corporation is based. The NAD noted that consumers “often care very much about the domestic nature of products that they purchase, and such sentiments are likely to also be felt about services that they patronize. For example, for consumers concerned about unemployment in the United States, the fact that a competing company’s labor force resides in another country may be quite important when deciding which company’s website to patronize.” As an aside, we are not so sure there are consumers who would base a purchase decision on where key executives sit or where key corporate decision are made, as opposed to where a company’s employees reside. That said, there is certainly an advantage in claiming to be the largest or No. 1, as it may well convey a message that a company has passed the test by rising to the top in terms of market share. And it is not unusual for a company to try to create a category in which it can be the champion. NAD said such a claim is particularly impactful in this case because “consumers are attracted to ‘larger’ daily fantasy sports websites because they have larger pools of players and prizes.”
Continue Reading Fantasy League Competitors Battle on the NAD Court for Decision Over Who Can Claim “Largest US-Based Website”