NARB Finds Oracle Took Necessary Action in Discontinuing Comparative Performance Claims for Exadata

New York, NY – March 18, 2013  – A five-member panel of the National Advertising Review Board has determined that Oracle Corporation acted properly in discontinuing comparative product-performance claims for the company’s Exadata database machines. The claims at issue were challenged by International Business Machines Corporation.

NARB is the appellate unit of the advertising industry’s system of self-regulation.

The advertising claims at issue appeared in a full-page advertisement in the Wall Street Journal and included the following:

• “Exadata 20x Faster … Replaces IBM Again”
• “Giant European Retailer Moves Databases from IBM Power to Exadata … Runs 20 Times Faster”

IBM challenged the claims before the National Advertising Division, which determined that the advertising  reasonably conveyed a “line claim” that all or most Exadata systems consistently performed 20 times faster than all or most IBM Power systems.

NAD found that the record did not provide a reasonable basis to support this claim.

NAD also determined that the advertising conveyed the message that its Exadata system was 20 times faster than the IBM Power system in all or the most important respects, and further found that this message was not reasonably supported.

NAD noted that Oracle had permanently discontinued the challenged advertising, which it found to be necessary and proper. Oracle disagreed with NAD’s findings and appealed them to NARB.

Oracle argued that the challenged advertisement makes a “20x faster” claim only with respect to the specific metrics measured by a “Giant European Retailer” that switched from an older IBM power system to Exadata.

However, the panel found that the challenged advertisement made broader comparative claims that applied generally to IBM Power and Exadata systems, and further found that the record did not show there was a reasonable basis for the claims.

The panel further found that one message conveyed by the advertisement’s reference to the experience of the “Giant European Retailer” was that the retailer’s new Exadata system ran 20 times faster than the replaced IBM Power system with respect to all significant system operations. The NARB panel found that the evidence in the record did not support that message. The panel noted that, in fact, “information on a web page in which Oracle provided further details of the European retailer’s experience asserted that the retailer’s new Exadata system only ran ’up to‘ 20 times faster in one instance (record queries) and had a lesser speed advantage with respect to other functions (data loading and full backups).”

“Since Oracle’s ‘20x faster’ claim is not supported even with respect to the European retailer, the claim should be discontinued,” the panel stated.

Finally, the panel found it was not necessary to resolve in this proceeding the possible applicability of the FTC Guidelines Concerning the Use of Endorsements and Testimonials in Advertising to the challenged advertisement, an ancillary question raised in the course of NAD’s review.

The panel, in its decision, said it found “that Oracle’s permanent discontinuance of the challenged advertising claims was both necessary and proper.”

Oracle, in its advertiser’s statement, said the company “respectfully disagrees that the advertisement in question constitutes a line claim and that Oracle’s substantiation did not meet the requisite standard to support the case study claim relating to a European retailer’s experience. Nevertheless, as indicated in the course of the underlying NAD proceeding, the advertisement in question is no longer running and Oracle has no plans to run it in the future.”