NAD: Our decisions cannot be utilized in advertisements
Breaking a rule set by the National Advertising Division is not equivalent to breaching a law in the US. However, advertisers heavily depend on the self-regulatory framework to resolve conflicts and assess whether particular advertisements are deceptive and warrant removal.
Typically, companies comply with the rulings of the self-regulatory organization. While they may bend the truth to benefit their own brands, they also wish to retain enough credibility to raise concerns about misleading advertisements from their rivals. This self-regulatory mechanism may help reduce governmental oversight of false and misleading claims, though the NAD occasionally refers particularly severe cases to the Federal Trade Commission.
Although the NAD frequently issues conclusions that certain advertisements are misleading and need alteration or elimination, the public criticism of AT&T was exceptional. According to the NAD, AT&T’s actions jeopardize the integrity of the entire self-regulatory framework.
NAD procedures assert that companies involved in the system consensually agree “not to misrepresent any decision, abstract, or press release or use and/or distribute such decision, abstract or press release for advertising and/or promotional objectives.”
The NAD remarked:
In clear violation of this, AT&T has published an advertisement and released a press announcement making claims about the supposed outcomes of a competitor’s involvement in the BBB National Program’s advertising industry self-regulatory procedure.
The integrity and effectiveness of the self-regulatory platform depend on the voluntary commitment of participants in an NAD process to adhere to the rules outlined in the BBB National Programs’ Procedures. As a voluntary process, fair conduct by all parties is crucial and necessitates compliance with both the letter and spirit of the procedures.
AT&T’s breach of its agreement under the Procedures, along with its inappropriate use of NAD’s conclusions for promotional ends, jeopardizes NAD’s mission to uphold truthfulness and accuracy in advertising claims and to build consumer trust in the market.
AT&T neglects its own track record of deceptive ads
The NAD informed Ars that “we did issue a cease-and-desist letter to AT&T on Friday, October 24, the day following the company’s press release and advertisement launch. The letter required AT&T to promptly eliminate such violative promotional content and to stop any future dissemination.” A cease-and-desist letter can result in a lawsuit, but the NAD indicated it “will not speculate on potential subsequent actions.”
