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”

TrollsYes, we’re a tease.  The Bureau Director and Commissioners do not have cameos in next month’s final installment of the Hobbit (and no, this is not strategically placed native advertising #notanad).  The Commission has taken a starring role in battling trolls of a much more human sort.

The agency last week announced a settlement

Many advertisers who appear before the National Advertising Division assume that once an NAD challenge is filed there’s no turning back.  The NAD rarely declines an opportunity to review cases, and when it does reject a complaint it is usually for one of the narrow reasons stated in Section 2.2(B)(i) of the ASRC Policies and Procedures.  Those reasons include where the challenged advertising is local in nature, subject to pending litigation, exceedingly technical, or permanently withdrawn before the challenge.  In other words, short of one NAD party filing a lawsuit against the other, an advertiser and challenger who wish to mutually resolve a pending NAD dispute may believe they have no way of doing so.  But before you resign your advertising to the self-regulatory microscope, there’s still hope for settlement that avoids the costs of litigation and the risks of a detailed public case report.

The NAD recently issued a trio of case reports (Cases #5719, #5720, #5721) administratively closing cross-challenges between T-Mobile and AT&T based on settlements that the NAD found satisfactory.  The NAD’s one-page orders in each case are succinct and substantively identical.  First, the NAD explains that “[d]uring the pendency of the instant inquiry, the parties informed the NAD that they reached an agreement concerning the challenged claims.”  Next, the NAD notes that “the parties’ agreement regarding the advertising claims at issue addresses NAD’s concerns for the public’s interest in receiving truthful and accurate information.”  For these reasons, the NAD concludes that “supplemental review by the self-regulatory forum would be duplicative and, consequently, lacks sufficient merit to warrant the expenditure of its resources”—a catch-all basis for administrative closure under Section 2.2(B)(i)(f) of the ASRC Policies and Procedures.  Finally, in a footnote, the NAD reserves the right to re-open the challenges “[i]n the event of a breach of the settlement agreement by either party.”
Continue Reading NAD Settlements? Yes, They’re Possible and Often Worth Considering

James Bond MartiniJames Bond preferred his martinis “shaken, not stirred” but what about Greek yogurt with fruit at the bottom?  Well, according to the NAD, stirred or not stirred are both equally acceptable (no word on “shaken”).  That was only one of several questions NAD resolved in a challenge by Chobani to a Yoplait Greek Yogurt taste test commercial.

Chobani, Inc. (“Chobani”) challenged several of General Mills, Inc.’s (“General Mills”) advertising claims that “nearly 2 out of 3 people agree—Yoplait Greek Blueberry tastes better than the leading Chobani” and “tastes better than the leading Chobani.”  To substantiate these claims, General Mills used a national taste test comparing Yoplait blended blueberry “Greek” Yogurt to Chobani’s blueberry fruit on the bottom yogurt. 
Continue Reading NAD Issues Split Decision in Greek Wrestling Match over Taste Test, Social Media and Providing Free Goods to Bloggers Issues

AirRamIn today’s global marketplace, it is common to expand the marketing footprint of successful consumer products from one geographic market to multiple.  In doing so, it is tempting to leverage economies of scale regarding the substantiation for any advertising claims associated with the consumer product.  However, when moving a successful international product into the United States market, special care should be taken to ensure that the substantiation relied upon is relevant to U.S. consumers, as the recent NAD decision in GTech instructs.

GTech manufactures and markets the AirRAM cordless vacuum cleaner.  The AirRAM is a very popular vacuum cleaner in the U.K. which touts performance that is equal to that of a corded upright vacuum cleaner.  GTech sought similar success in the U.S., recently introducing its AirRAM vacuum into the U.S. market.  However, GTech’s marketing claims were challenged within the U.S. by Dyson at the NAD.

Among other marketing claims, GTech claimed that its AirRAM cordless vacuum performed as well as a corded upright vacuum.  However, to substantiate its claim, GTech relied upon the substantiation it developed for the European market.  Specifically, GTech’s substantiation was based upon vacuums that are offered for sale in Europe tested according to a European test protocol (IEC 60312).


Continue Reading Substantiation—One Size Does Not Fit All