An ad for a new radio ad company that charges for ads with ‘unnecessary’ information
Posted On July 1, 2021
A radio advertising company has gone on trial for deceptive advertising practices in the United States, with an expert claiming it was misleading advertisers.
The US Court of Appeals for the Federal Circuit on Tuesday ordered the company, Creative Broadcasting, to pay a record $10.7m to consumers and $1.5m to the US government in an ongoing antitrust lawsuit.
The court’s decision is the latest in a long line of legal battles over advertising and online video, which has seen online video providers like Google and YouTube accused of misleading consumers with ads that contain misleading or false information.
The Federal Trade Commission and state attorneys general have accused online video companies of using deceptive advertising to lure consumers into buying products, such as mobile phones.
Creative Broadcasting, which specialises in producing TV and radio commercials, is also the owner of an online advertising company called Advertising Standard, which claims to be a trusted advertising partner.
It was not immediately clear what the ad would have told consumers about the company’s new radio and TV advertising services, which charge for ads that include “unnecessary” information, the US Court Of Appeals for a Circuit panel ruled.
The company’s ad, which is in a US commercial broadcast, says it charges $3.99 per hour for its radio and digital ad services, and $9.99 for its TV ad services.
“If this ad were to appear in a newspaper, the advertiser would be required to identify itself as the publisher of the newspaper, and the advertisers own content would be identified, and all the information needed to run the ad, including all the costs of running the ad and the terms and conditions of use would be disclosed,” the ad’s narrator says.
“However, if this ad was to appear on a YouTube video, the person who uploaded the video would have no need to identify themselves.
The video is in fact being viewed by the person to whom the video was uploaded.
The advertiser is the person whose video is being viewed.”
Creative Advertising did not respond to a request for comment.
The case stems from a case involving the US District Court in Washington state, which ruled last year that Creative Broadcasting must pay consumers $1 per month for the service.
The appeals court said that in one of the cases in which it decided to issue the ruling, a federal judge in Los Angeles found that the court was required to apply a higher standard of proof to determine whether a service was deceptive.
The federal appeals court ruled that Creative Media could not be found to be liable because the company did not actually produce the TV ad and could not prove that its radio ad services were deceptive.
A judge in the same case ruled that the federal judge’s ruling was unreasonable, and that the lower court’s finding was too vague and would not apply in the future.
The FCC is now reviewing the case.