NAD Refers T-Mobile Advertising to FTC, FCC for Further Review After Advertiser Declines to Participate; Claims Challenged by AT&T

New York, NY – Feb. 16, 2018 – The National Advertising Division has referred advertising claims made by T-Mobile USA Inc., to the Federal Trade Commission (FTC) and Federal Communications Commission (FCC) for further review after the company declined to participate in a proceeding before NAD.

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

The claims at issue were challenged by AT&T Services, Inc. AT&T contended in its challenge that a video created and posted online by T-Mobile made unsubstantiated, false, and misleading claims, and disparages and denigrates AT&T.

The video, produced in the style of 1974 classic stop-motion animated television special “The Year Without a Santa Claus,” was released Dec. 19, 2017. The holiday-themed video appeared on T-Mobile’s official YouTube channel and T-Mobile CEO John Legere (who appears in the video as an animated character) shared it via his Facebook page and with his more than five million Twitter followers.

The video followed the basic storyline of “The Year Without a Santa Claus,” and depicted AT&T as the evil “snow miser” character who hides in a dark cave and spews a “blizzard” of hidden added fees, restrictions, limits, and taxes into the world.

AT&T is referred to as an “abominable carrier” and a “major miser.” AT&T’s business practices are called “bullshit” and a snowman character says that AT&T “only cared about silver and gold,” “hid[ing] in the shadows preying on consumers who didn’t have any other choice.”

In response to NAD’s inquiry, T-Mobile denied that the video made any claims about present business practices and argued that it did not represent the kind of advertising that NAD was designed to review.  T-Mobile requested that NAD administratively close the proceeding pursuant to ASRC procedures, arguing that AT&T’s challenge was without sufficient merit to warrant the expenditure of NAD’s resources.

NAD declined T-Mobile’s request and noted in its decision that it did not consider the whimsical tone of the video or its seasonal nature to be persuasive reasons to close the proceeding.

The video, NAD noted, compares T-Mobile’s service to its competitors, references AT&T and makes the kinds of comparative claims routinely addressed in NAD proceedings. It also makes stand-alone claims about T-Mobile’s service that require support. Further, NAD said, the fact that the video was primarily disseminated through social media does not deprive NAD of jurisdiction to review the video. ASRC procedures define advertising broadly to include content “controlled by the advertiser” that has the purpose of “persuading the audience of the value or usefulness of a company, product, or service.”

NAD noted that it was disappointed that the advertiser declined to participate in the self-regulatory process. Pursuant to its procedures, NAD has referred the advertising to the

appropriate regulatory authorities for review.

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.