NAD Recommends Sprint Modify, Discontinue Certain Comparative Claims, Following T-Mobile Challenge

New York, NY – March 11, 2014 – The National Advertising Division has recommended that Sprint Corporation modify or discontinue certain comparative advertising claims made in print and online advertising for the company’s “Unlimited My Way” monthly service plan.

NAD determined, however, that certain claims – when accompanied by clear and conspicuous disclosures – were supported.

The claims at issue were challenged by T-Mobile USA, Inc.

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

T-Mobile challenged advertising claims that included:
• “A Better Plan. A Better Promise.”
• “With Unlimited My Way from Sprint, you could save up to $360/year compared to the competition, and we’ll guarantee unlimited talk, text & data for life.”
• “Guaranteed Unlimited For Life.”
• “Save More. Do More.”
• “Save $83/Year with Unlimited, My Way from Sprint.”

T-Mobile argued that Sprint’s campaign, in which it provided consumers with “scenarios” through which they “can” save money by choosing Sprint, communicated the broader message that consumers “will” save money by choosing Sprint.

T-Mobile argued that Sprint should discontinue or significantly modify its “Guaranteed Unlimited for Life” claim, contending that the guarantee was imprecise and could confuse consumers about whether Sprint’s lifetime guarantee applies to the unlimited data or the $80 monthly price. Further, the challenger contended Sprint’s claims fail to disclose that certain plans may limit speeds for streaming video at 1 Mbps, and argued that Sprint should discontinue its claim “Guaranteed for life and only from Sprint” as the claim implies that only Sprint offers unlimited talk, text, and data.

Sprint, meanwhile, said that the company delivers unlimited data to its customers in contrast to the two largest wireless service providers. Sprint noted that it announced its new “Unlimited, My Way” plan in July 2013 and that the plan provides unlimited talk, text and data service for as low as $80 per month. The plan includes a guarantee that new and existing Sprint customers can receive the unlimited services features for as long as they remain on the plan.

NAD recognizes how important it is for advertisers to promote distinctions between competitors and highlight the strengths and benefits of their own products or services –
provided they do so accurately and that their claims are adequately substantiated. NAD carefully scrutinizes disparaging claims about competing products to ensure that they are truthful, narrowly drawn and fully supported. Advertisers must be able to support all reasonable interpretations of the advertising claims, not simply the messages they intended to convey. Further, advertisers may compare dissimilar products or services as long they also clearly and conspicuously communicate material differences.

In this decision, NAD noted that Sprint and T-Mobile are the nation’s third and fourth largest wireless phone carriers respectively and offer service plans with unlimited data for their mobile devices. Both companies aggressively market their unlimited data plans as an important differentiator in the marketplace because the two largest carriers have discontinued offering unlimited data plans to new customers.

Following its review of the evidence in the record, NAD determined that the pricing model of Sprint’s “Unlimited My Way” plan is materially different than T-Mobile’s “Simple Choice” plan because T-Mobile service is available at a lower price without a device cost and did not require a two-year service contract, as the “Unlimited My Way” plan required.

NAD recommended that Sprint discontinue price comparisons based on “Sprint’s most popular free smartphone” or modify the advertising to identify more clearly the object of the price comparison (i.e., the iPhone 4).

The language “guaranteed unlimited for life” is used in various contexts through the advertising campaign.

NAD recommended that Sprint either discontinue use of the claim “guaranteed unlimited for life” where the phrase was used in conjunction with the price of Sprint’s plan, or modify the claim to clearly and conspicuously disclose that the guarantee applied to Sprint’s unlimited data service rather than the price of the plan. Wherever Sprint made the claim “guaranteed unlimited for life,” NAD recommended that Sprint disclose that it reserves the right to limit download speeds.

NAD separately examined the “only from Sprint” claim and determined that – in the context in which it appeared – the claim specifically referred to Sprint’s “unlimited for life” guarantee and was not misleading.

Several of Sprint’s advertisements included the heading, “A Better Plan. A Better Promise,” and clearly and conspicuously identified the basis of comparison – pricing, unlimited talk, text and data and its lifetime guarantee. As a result, NAD determined that to the extent Sprint could support its comparative pricing claim with appropriate clear and conspicuous disclosures of specific device costs and differences in material terms, its comparative claim “A Better Plan. A Better Promise.” was supported.

Sprint, in its advertiser’s statement, said it appreciated the “opportunity to participate in NAD’s voluntary advertising review process and thanks NAD for its work in this matter.”

The company took issue with certain of NAD’s findings, but said: “The cost comparison claims at issue in this challenge have run their planned course, as Sprint has moved on to messaging about its new Framily plan offers; nevertheless, Sprint respects the NAD self-regulatory process and will take NAD’s views into consideration in its advertising going forward.”