FedEx and UPS go “Groin to Groin” in False Advertising Claim

The National Advertising Division, a self-regulatory agency that review and sometimes mediates disputes between competitors has referred a complaint to the FTC, after Federal Express refused to cooperate.

At issue is a commercial, aired by FedEx during the SuperBowl (and immensely popular), in which the company spoofs ad tactics used to get people to remember television advertising. In the commercial, the company lists Burt Reynolds, groin kicks, dancing bears, and 7 other things that research shows get people’s attention.

Evidently, it worked, because it caught the attention of Fedex competitor, UPS. UPS filed a complaint with NAD saying that the tagline at the end of the commercial, The Most Reliable Way To Send Your Package, constituted false advertising. But when NAD requested that FedEx participate in the inquiry and hand over documentation to substantiate the company’s claim, FedEx refused. NAD had no choice but to turn over the complaint for investigation by the FTC, which has the power to secure the necessary documentation needed to review the claim. The FTC, however, does not have to take the case, so UPS may have no choice but to bring a claim under Section 5 of the FTC Act for false advertising. Ouch… that really could hurt.

Practice Pointer: While each set of facts is different and there may be sound reasons for not participating in certain regulatory activities, clients should be counseled to participate in informal self-regulatory processes. Not only does it reduce the cost of resolving the matter, but it keeps Congress from interfering and enacting legislation that could impose even stricter requirements on advertisers.

Legal Side Note: In light of the recent decision holding that the ad claim, “AMERICA’S FAVORITE” was mere puffery, is “most reliable” on its way to being used by everyone?

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