Twice in August, the National Advertising Division of the Council of Better Business Bureaus (NAD), a component of the Advertising Self-Regulatory Council (ASRC), has referred two well-known national brands to the Federal Trade Commission (FTC). The self-regulatory body has the power to refer a marketer to the FTC when it either refuses to participate in the advertising review process or fails to make a good-faith effort to comply with NAD’s recommendations.
On August 1, NAD announced that it had referred enterprise computing company Oracle to the FTC because the company had failed to comply, on four separate occasions, with the self-regulator’s recommendations that the company should discontinue unsubstantiated comparative product-performance claims. Oracle maintained that NAD had "failed to take into account the sophistication of the ad's target audience,” and appealed three of the decisions to the National Advertising Review Board (NARB), which upheld each of NAD’s decisions.
On August 13, NAD referred brewer MillerCoors to the FTC after the company declined to participate in the review of advertising that appeared on cans of Coors Light beer. MillerCoors called the challenge, which was brought by competitor Anheuser-Busch, “frivolous,” and said that all challenged claims were either puffery or literally truthful. The company also stated that the campaign in question is scheduled to be discontinued by September 2013.
In a story about the Oracle matter, ASRC spokesperson Linda Bean told InformationWeek that the self-regulatory body refers “a handful of cases” to the FTC each year. She added that the mere referral sometimes spurs companies to change direction and participate in the self-regulatory process. Other times, she said, the FTC may open its own investigation into the challenged advertising claims.
Click here to read NAD’s press release about the Oracle matter.
Click here to read the InformationWeek story about the Oracle matter.
Click here to read NAD's press release about the MillerCoors matter.