NAD Addresses Disclosure Requirements For Paid Studies

• Published date: 13 July 2022
• Subject Matter: Consumer Protection, Media, Telecoms, IT, Entertainment, Consumer Law, Advertising, Marketing & Branding
• Law Firm: Kelley Drye & Warren LLP
• Author: Gonzalo E. Mon

Liberty Mobile Puerto Rico advertised that it has the "best network" and the "best coverage" in Puerto Rico and disclosed that the claims were based on an "independent study" conducted by Global Wireless Solutions (or "GWS"). Although T-Mobile didn't challenge the results of the study, it argued that because Liberty had paid GWS to conduct the study, the connection between the two companies should be clearly disclosed, in accordance with the FTC's Endorsement Guides.

Liberty argued that GWS provides similar services to other wireless providers and that it didn't have a close working relationship with GWS. Although NAD acknowledged that there was "nothing unusual about the relationship between Liberty and GWS," it determined that consumers "should be made aware of that relationship through a clear and conspicuous disclosure as it may affect the credibility and weight consumers give to the claim if they are aware that Liberty paid GWS for the study."

During the course of the challenge, Liberty stopped using the term "independent study" and started to use a disclosure which stated, in part, that the study was "paid...