BBB National Programs Archive
NAD FINDS SONY ELECTRONICS VIOLATED NAD PROCEDURES
New York, NY – Jan. 26, 2012 – The National Advertising Division of the Council of Better Business
Bureaus has determined that Sony Electronics, Inc. – in communicating with customers regarding
the outcome of a NAD case and breaching confidentiality provisions – violated the procedures that
govern the advertising industry’s system of self-regulation.
NAD learned that a Sony executive contacted customers regarding the outcome of that case in
advance of NAD’s decision. Further, NAD determined that the executive’s communication
represented a promotional purpose.
The self-regulatory process requires fair dealing on the part of both parties; NAD procedures and
participation agreements make clear that parties are prohibited from using NAD decisions for
promotional purposes. Further, procedures require parties to maintain confidentiality regarding the
process until a decision is made public.
In the underlying case, Sony had challenged certain advertising claims made by LG Electronics.
NAD’s inquiry was conducted under NAD/CARU/NARB Procedures for the Voluntary Self-Regulation of National Advertising. Details of the initial inquiry, NAD’s decision, and the advertiser’s response will be included in the next NAD/CARU Case Report.
About Advertising Industry Self-Regulation: The National Advertising Review Council (NARC) was formed in 1971. NARC establishes the policies and procedures for the National Advertising Division (NAD) of the Council of Better Business Bureaus, the CBBB’s Children’s Advertising Review Unit (CARU), the National Advertising Review Board (NARB) and the Electronic Retailing Self-Regulation Program (ERSP).
The NARC Board of Directors is composed of representatives of the American Advertising Federation, Inc. (AAF), American Association of Advertising Agencies, Inc., (AAAA), the Association of National Advertisers, Inc. (ANA), Council of Better Business Bureaus, Inc. (CBBB), Direct Marketing Association (DMA), Electronic Retailing Association (ERA) and Interactive Advertising Bureau (IAB). Its purpose is to foster truth and accuracy in national advertising through voluntary self-regulation.
NAD, CARU and ERSP are the investigative arms of the advertising industry’s voluntary self-regulation program. Their casework results from competitive challenges from other advertisers, and also from self-monitoring traditional and new media. NARB, the appeals body, is a peer group from which ad-hoc panels are selected to adjudicate NAD/CARU cases that are not resolved at the NAD/CARU level. This unique, self-regulatory system is funded entirely by the business community; CARU is financed by the children’s advertising industry, while NAD/NARC/NARB’s primary source of funding is derived from
membership fees paid to the CBBB. ERSP’s funding is derived from membership in the Electronic Retailing Association. For more information about advertising industry self-regulation, please visit www.narcpartners.org.