NAD Addresses Apples and Oranges in Price Claims
Google recently ran two commercials for its YouTube TV service, each of which ended with the following tagline: “More than cable. For $600 less than cable.” A disclosure at the bottom of the screen explained: “Annual average savings based on a study by SmithGeiger of the published cost of comparable standalone cable in the top 50 Nielsen DMAs, including all fees, taxes, promotion pricing, DVR box rental and service fees, and a 2nd cable box.”
Charter argued that consumers would reasonably interpret the two commercials to convey a claim that they could expect to pay $600 less for YouTube TV than they would pay for all cable providers, including Spectrum TV. It introduced evidence demonstrating that one year of Spectrum TV Select Service in Los Angeles cost only about $219 more than one year of YouTube TV, rendering the “for $600 less than cable” claim false.
Google argued that the claim was more narrow because the disclosure clearly limited the comparison to “comparable standalone cable,” and that any comparisons to pricing of streaming services (such as Spectrum TV Select) weren’t relevant. It also argued that the claim was substantiated by the SmithGeiger study, which compiled cable plan costs from the top 50 Nielsen DMAs over the first two years of service and calculated an average of the annual cost.
NAD had several concerns with Google’s approach. For example, it found that consumers could interpret the generic reference to “cable” in the tagline to suggest that “YouTube TV represents a savings of $600 over any service offered by a cable provider,” which wasn’t the case. NAD also noted that it was difficult to identify what constitutes a “comparable” service when different services offer different channel lineups. In this case, the lineups used in the comparisons didn’t match exactly, which called into question whether there services were actually “comparable.”
There’s more to this case and it’s worth a read if you work in the cable or streaming industries. More broadly, the case illustrates the challenges of making comparative price claims. Those claims can be easier to substantiate when making a narrow apples-to-apples comparison between two things, but they can be much harder to substantiate when making a broader comparison against multiple things, especially when it’s hard to determine whether the other things are apples or oranges.
Google promised to appeal the decision, so we haven’t heard the last word on this yet. In the meantime, click here for additional analysis on apples-to-oranges claims.