False Advertising Suit
DirecTV has recently slammed the bid of Federal Trade Commission for a quick win on some claims in their suit accusing DirecTV of misleading users about their promotional packages, telling a California federal judge that FTC missed their chance to get in on a settlement.
Previously, FTC had sought summary judgment under Restore Online Shoppers Confidence Act accusing DirecTV of improper “negative option feature,” where the silence of customers on their offer is taken as approval. DirecTV argued that FTC already passed the chance to object a 2010 settlement with Attorney General that solved “the identical conduct at issue in this case.”
“The court must consider the FTC’s inexcusable delay in informing the company that it objected to the multistate disclosures, and the FTC’s extraordinary delay in bringing this suit,” DirecTV said. “It is fundamentally unfair to allow the FTC to seek a remedy based upon equity in light of the FTC’s inequitable conduct.”
As per DirecTV executives, the multi-state settlement agreement reached in line with the deceptive ad claims brought by all states and the District of Columbia had specific ad disclosure obligations that needed DirecTV to “clearly and conspicuously” disclose the material terms, which includes the terms of their premium channel offers. FTC was offered the chance to join or object the agreement, but instead they told DirecTV that they were looking at “other issues” at that time.
The states involved in the agreement have not brought any enforcement action against DirecTV for non-compliance, but still “the FTC reversed course and filed this lawsuit on precisely the same ‘issues’ resolved by the MSA,” DirecTV said.
Federal Trade Commission
They also noted that the partial summary judgment motion of FTC is just based on a peripheral review of the website of the company, which the US District Judge, Haywood S. Gilliam Jr., already ruled not sufficient for any summary judgment. In that particular ruling, Judge Gilliam rejected the claim of DirecTV for a quick win on the claims, finding that DirecTV cannot show their disclosure to be “clear and conspicuous.”
Negative options are allowed only in situations where the seller “clearly and conspicuously” offer the terms beforehand, and as per the ruling, DirecTV was unable to show up front that their monthly fees would go up after the end of the promo period.
