NAD Recommends DISH Discontinue Certain Claims Challenged by DirecTV; Finds DISH Can Support ‘Local Fee’ Claim

New York, NY – Sept. 22, 2016 –  DISH Network said it has voluntarily and permanently discontinued certain advertising claims challenged before the National Advertising Division by DirecTV, LLC. NAD has determined that Dish provided adequate support for claim related to fees charged by some service providers to view local channels.

NAD is an investigative unit of the advertising industry’s system of self-regulation. It is administered by the Council of Better Business Bureaus.

Six television advertisements formed the basis of DirecTV’s challenge: five depicted users at home using their television remotes to swipe credit cards to gain access to their content. One was set in a restaurant and featured a woman with a man named “Bill” – a reference to a DirecTV bill – who became progressively larger and less attractive.

The Swipe advertisements included claims that with DirecTV, “you could be paying over $100 per month” and that “DirecTV’s average customer pays $114.40 a month and that’s according to DirecTV.”

The Ugly Bill advertisement makes a similar claim that “On average, DIRECTV customers pay $117 a month.”

As an initial matter, the advertiser represented to NAD in writing that it has permanently discontinued two of the three claims at issue in this challenge: the claim that DirecTV customers pay an average of over $100 per month (referred to by the parties as the “ARPU claim”) and the claim that DirecTV assesses a “Year One Price Increase” on its customers.

NAD appreciated the advertiser’s willingness to permanently discontinue the ARPU and Year One Price Increase claims. In reliance on the advertiser’s representation that the claims have been permanently discontinued, NAD did not review the claims on their merits. The voluntarily discontinued claims will be treated, for compliance purposes, as though NAD recommended their discontinuance and the advertiser agreed to comply.

The remaining “Local Channels Fee” claim appears in one of the five Swipe advertisements, which features a pay-TV installer who informs a consumer that he cannot watch television without first swiping his credit card on a remote control. There is an accompanying disclaimer that this is “Not an Actual Demonstration.”

The parties disputed whether the commercial reasonably conveyed the message that DirecTV charges its customers a fee to watch locally broadcast channels, which it does not do.

Following its review, NAD determined that consumers were unlikely to take away a message that DirecTV, specifically, charges a local channels fee. DirecTV isn’t mentioned and there are no visual references to DirecTV.

Rather, NAD found that the claim is directed towards the pay-television market generally and makes generic references to a competitor’s “introductory TV deal.” NAD determined that the reasonable takeaway of the commercial is that some pay-TV subscribers may encounter additional fees on top of their package price for service. Further, DISH’s evidence demonstrated that this message was truthful and supported. Of the 11 largest pay-TV providers, only the advertiser and challenger do not charge a fee for subscribers to receive the locally broadcast channels. The advertiser also estimated that 58 million of the 113 million homes subscribed to pay-TV do pay a local channels fee. In light of these figures, NAD was satisfied that DISH adequately supported its Local Channels Fee claim.

DISH, in is advertiser’s statement, said that it “is pleased that NAD determined that DISH’s “local channels fee” claim was truthful and supported.  DISH respectfully disagrees with NAD treating the claims that it did not review on their merits as though NAD recommended their discontinuance and DISH agreed to comply, but because DISH had independently decided to discontinue those advertisements prior to initiation of the NAD process, DISH agrees to comply with NAD’s decision.”

Note: A recommendation by NAD to modify or discontinue a claim is not a finding of wrongdoing and an advertiser’s voluntary discontinuance or modification of claims should not be construed as an admission of impropriety. It is the policy of NAD not to endorse any company, product, or service. Decisions finding that advertising claims have been substantiated should not be construed as endorsements.