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Cell C / Vodacom & Others / 16341

Ruling of the : ASA Directorate
In the matter between:
Vodacom (Pty) Ltd Mobile Telephone Networks (Pty) Ltd (MTN) P van Wyk N Mahomed Complainant(s)/Appellant(s)
Cell C (Pty) Ltd Respondent

06 Oct 2010

DRAFTFCB acting on behalf of Vodacom and Webber Wentzel attorneys acting on behalf of MTN independently lodged competitor complaints as detailed below. In addition, two separate consumer complaints were also lodged.

The complaints concern Cell C’s new “4Gs” advertising campaign that covers television commercials, print advertisements and billboards. In all the print executions submitted by the complainants there is a logo reflecting “4Gs”. An execution in the Sunday Times of 8 August 2010 contains the claim “they are supposedly building the first 4Gs network in the Southern Hemisphere”. Another claims “They’re also supposedly building the first 4Gs network in the Southern Hemisphere”.

The television commercial submitted by the first complainant features well known comedian Trevor Noah claiming that “Cell C are building a 4Gs network that is apparently the most advanced in the Southern Hemisphere”.

COMPLAINT
The complainants, in essence, submitted that the respondent’s “4Gs” logo is dishonest and misleading as consumers will mistake it to be a reference to the “4G” standard of network. This is especially so as the “s” in “4Gs” is extremely small. Consumers have become accustomed to seeing the term “3G” in connection with broadband capable devices in South Africa, which always denotes speed and connectivity capability. While 4G devices are not impossible, they are yet to be perfected and rolled out into the market both internationally and locally.

It was also submitted that the respondent is effectively planning to roll out a network that is HSPA+, which at best will be on par with its competitors. As such, the respondent is misusing the technical understanding of the term “4G” and its new “4Gs” logo to create the appearance that it offers a competitive advantage that it does not possess. All the complainants denounced any claim made by the respondent’s representatives that the “4Gs” would or should be interpreted to refer to “for great service” or “for great speed” as disingenuous and deceitful.

Finally, the first and second complainants added that the respondent has not yet officially set a date for the launch of its new network. It is therefore misleading consumers as it is advertising goods that are currently unavailable, in terms of Clause 4.2 of Section IV of the Code.

RELEVANT CLAUSES OF THE CODE OF ADVERTISING PRACTICE
In light of the complaints and given the clauses identified by the first and second complainant, the Directorate considered the following clauses of the Code:

• Section II, Clause 2 – Honesty

• Section II, Clause 4.1 – Substantiation

• Section II, Clause 4.2.1 – Misleading claims

• Section II, Clause 4.2.5 – Statistics and scientific information

• Section IV, Clause 4 – Non-availability of goods

RESPONSE
Attorneys Edward Nathan Sonnenbergs, on behalf of the respondent, submitted arguments on the merits of the matter.

It firstly noted that any information conveyed in editorial publicity (such as was highlighted by some of the complainants) does not fall under the ASA jurisdiction and should therefore have no bearing on the matter.

In essence the respondent disputed that the “4Gs” logo is misleading as it stands for “4 Great Service” and “4 Great Speed”. It’s a term that is currently used by the industry for marketing purposes, and not a technical term. It launched a massive campaign to inform people of its intention to turnaround in terms of service and overall customer experience. The reason for the smaller “s” is to denote “to the power of”.

In addition, it argued that its new technology is the latest and most advanced HSPA+ network and uses world-leading Multi Standard Radio technology allowing for faster data transfer than its competitors. In support of its argument it submitted substantiation from Mr Matti Mannines CEO of GWL Networks Oy in Finland. In addition it submitted a report from Qualcomm highlighting the benefits of an HSPA+ Release 7 network, which details technical reasons for the respondent’s submission that its network is better than those currently available.

It also disputed Vodacom’s submission that the 4G standard has been officially defined, and submitted that it has not yet been ratified by International Telecommunications Union (ITU), as to which technologies will be considered to be a 4G standard. In fact, the very terms “1G”; “2G”; “3G” etc. are simply terms coined by various mobile communications industry members. Thus because the term “4G” has not officially been defined the reference to “4Gs” cannot be a contravention. Reference was made to other operators internationally making use of the “4G” term.

Given that the respondent is able to deliver superior network performance to its competitors, it should be entitled to make use of a marketing device to distinguish itself from other technologies commonly regarded as “3G”, hence the use of “4Gs”.

Finally, it advised that the new network will be rolled out in phases, some part of which has already commenced. By mid 2011 it aims to have covered 67% of the population.

The respondent also addressed the specific nuances in each of the individual complainants. These submissions, however, do not differ materially from those summarised above and as such will not be elaborated on.

ASA DIRECTORATE RULING
The ASA Directorate considered all the relevant documentation submitted by the respective parties.

Jurisdiction
The second complainant (MTN) submitted a copy of a press clipping from www.mybradband.co.za 4 August 2010, and Business Day on 29 January 2010, and lodged a complaint against the claims made there in with regard to Cell C’s new network.

It is trite that the definition of advertisement does not include editorial material, unless it was paid for.

The Directorate accepts the submission of the respondent that the said materials are in actual fact press statements or editorials. In addition there is nothing before the Directorate that suggest that the editorial were paid for. Therefore this aspect of the complaint will not be investigated as the Directorate does not have the jurisdiction.

This aspect of the complaint will accordingly not be looked into.

Now the Directorate turns to the merits of matter. There are two inter-linked issues that the Directorate has to determine first, taking into consideration what the complainants have raised in their letters:

What is the reasonable take out of the term and logo “4Gs”?

Can the respondent substantiate that its new network is the most advanced and/or first in the Southern Hemisphere as claimed?

The term “4Gs” and the logo
Clause 4.2.1 of Section II stipulates that advertisements should not contain any statement, which directly or by implication, omission, or ambiguity, or exaggerated claim is likely to mislead the consumer about the product advertised.

While the Directorate accepts that there may be a dispute in terms of what type of technology would be accepted as “4G” technology, the fact that this may or may not have been defined clearly does not weigh heavy on this determination for the following reasons:

The complainants effectively argue that the “4Gs” logo is likely to be interpreted as an implication that the respondent is offering a “4G” network. In other words, the complainants interpret this logo to mean that the respondent is offering the most advanced data network currently available (given that, to date, the most advanced and known network has been a “3G” network).

The respondent effectively dismissed this argument and submitted that the “4Gs” would be interpreted to mean “4 Great Service” or “4 Great Speed”. In line with its “revamp” of its service delivering, this is a justified interpretation. Interestingly, it also argues the converse; that the term could be interpreted to mean that it offers the best data network currently in South Africa (a claim which it believes is justified, given its latest technological improvements).

The significance of this lies in the fact that on the respondent’s own version, there are at least two reasonable interpretations of this claim, namely:

The “4Gs” means that the respondent is offering the best data network currently available on the market, and

That the “4Gs” is simply a clever way of communicating its commitment to great service and speed.

When there are two or more reasonable interpretations for a specific piece of advertising, that advertising can clearly be regarded as ambiguous.

What exacerbates this potential confusion is that there already exists a 3G standard in the country, which arguably means that consumers would automatically assume that the respondent’s logo stands for the next level; a 4G standard. To perpetuate the belief, not one of the advertisements submitted by any of the complainants qualifies the meaning of the logo. While true that the respondent has a notice on its website indicating that the “4Gs” is meant to mean “FOR GREAT SPEED & 4 GREAT SERVICE”, this is of no consequence to either the print or television advertising. It is trite that advertising appearing in one medium cannot be relied on to clear up ambiguity created in another.

The Directorate acknowledges that the respondent submitted, inter alia, opinions from Mr Michael J Kleeman of the University of California, San Diego, as well as evidence of other international advertising claiming to offer “4G” technology. These are, however, largely irrelevant for the purposes of this investigation, as the Directorate has to determine the likely takeout of South African consumers when confronted with the advertising complained of.

In light of the above, the unqualified and ambiguous “4Gs” as contained in the advertising submitted to the ASA is misleading in terms of Clause 4.2.1 of Section II.

Given the above:

  • The unqualified and ambiguous “4Gs” logo must be withdrawn;

  • The process to withdraw any unqualified and ambiguous “4Gs” logo must be actioned with immediate effect on receipt of this ruling;

  • This withdrawal must be completed within the deadlines stipulated by Clause 15.3 of the Procedural Guide;

  • The unqualified and ambiguous “4Gs” logo may not be used again in its current format in future.

The respondent’s attention is drawn to Clause 15.5 of the Procedural Guide.

“They are building a 4Gs network that is apparently the most advanced in the Southern Hemisphere” and “They’re also supposedly building the first 4Gs network in the Southern Hemisphere”.

The first claim appears in one of the print executions complained of, and is also made by Trevor Noah in the commercial complained of. Another print execution submitted by the first complainant claims “They’re also supposedly building the first 4Gs network in the Southern Hemisphere”.

The first complainant submitted that taking into account that the respondent effectively intends to deploy the broadband data network that its competitors already offer, it should submit comparative substantiation to verify that its “4Gs” network will be “the most advanced in the Southern Hemisphere” as well as the first. A similar objection was raised by the second complainant in relation to the “most advanced” claim.

The respondent submitted that it has commenced the deployment of an HSPA+ network in both the 900 MHz and 2100 MHz frequency bands. The new network is a 3GPP Release 7 network and is also all IP (Internet Protocol) and uses world-leading Multi Standard Radio (MSR) technology across its entire network making it Release 9 compliant, this being the most advanced. To substantiate its submissions and claims it submitted:

  • A report from the CEO of GWL Networks Oy from Finland, Mr Matti Manninen, which is titled “On the performance of HSPA+ mobile networks at 900MHz band”,

  • A report from Qualcomm, titled “HSPA+ for Enhanced Mobile Broadband”

  • A letter from Mr Christobal Fuentes de la Torre, a representative of the ZTE Corporation South Africa, and

  • A letter from Mr Hercules du Preez, Customer Team Head at Nokia Siemens Networks.

Clause 4.1 of Section II states, inter alia, that an advertiser must hold documentary evidence to support all claims that are capable of objective substantiation. In addition, it clarifies that such documentary evidence shall emanate from or be evaluated by an independent and credible expert in the particular field to which the claims relate.

For the reasons set out below, however, the Directorate does not need to determine whether or not the submissions from Mr Matti Manninen or Qualcomm meet the requirements of independence, credibility or expertise as specified in the Code:

It is trite that the Directorate does not have technical expertise in each and every industry. For this reason, it often has to rely on the verification of advertised claims by independent and credible experts in the field. The verification provided needs to specifically verify the exact claims used for the product as a whole.

Firstly, the report by Mr Matti Manninen is technical and general, is not product specific and does not directly address the claims made by the respondent in its advertisements. In Slender Max Tincture / HA Steinman / 14796 (2 Mar 2010) it was held that, “… the Directorate will only accept product-specific substantiation. In other words, the respondent should supply independent verification from an expert in this field to unequivocally state that its product will deliver the claimed effects”.

Nowhere in the report is the respondent’s service or product mentioned, and nowhere in the report is it indicated that the results or benefits discussed in the report relate to the respondent’s new network. In fact, no reference is made to Cell C at all in the report and the claims in dispute do not appear.

The same criticism can be levelled at the report from Qualcomm.

Finally, the letters from ZTE Corporation South African and Nokia Siemens Networks appear to emanate from service suppliers to the respondent, which means they have a contractual (and therefore business) relationship. As such, these entities do not qualify as independent as required by the Code (refer Keynote Trading & Investment / Crosscare / 15333 (31 May 2010) for additional explanation of this approach).

It is also noted that none of these documents appear to compare the respondent’s network to other networks currently available in the Southern Hemisphere, which is pertinent to the claims in question.

Accordingly, the Directorate rejects the substantiation provided as it is not in terms of Clause 4.1 of Section II of the Code. Effectively this means that the claims “They are building a 4Gs network that is apparently the most advanced in the Southern Hemisphere” and “They’re also supposedly building the first 4Gs network in the Southern Hemisphere” are currently unsubstantiated and in breach of Clause 4.1 of Section II of the Code.

Given the above:

  • These claims must be withdrawn;

  • The process to withdraw these claims must be actioned with immediate effect on receipt of this ruling;

  • This withdrawal of these claims must be completed within the deadlines stipulated by Clause 15.3 of the Procedural Guide;

  • These claims may not be used again in its current format in future.

The respondent’s attention is drawn to Clause 15.5 of the Procedural Guide.

The complaint is upheld.

In light of this the Directorate does not need to consider the other clauses at this time. It is specifically noted, however, that should the matter go on appeal, or should the Directorate accept new substantiation, these clauses may be open for consideration again.

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