NAD Suggests Comcast Discontinue ‘Unlimited 5G’ and ‘Best Price’ Claims for Xfinity 5G Mobile Plans | Manatt, Phelps & Phillips, LLP

NAD noted that 5G mobile service is the latest development in the telecommunications industry and that as a result, “claims about 5G offerings abound, as do disputes over their truthfulness and accuracy.”

T-Mobile argued that Comcast’s Unlimited 5G plan is misleading because 5G speeds on the plan are limited to the first 20GB of data per line, after which users will be provided 3G speeds. It contended that the cap on 5G speeds associated with the plan, using a process referred to as “throttling,” is a limit that renders the “Unlimited 5G” claim misleading.

Comcast responded that “unlimited” refers to the unlimited data available with the plan as well as the variety of 5G-related offerings associated with the plan. It argued that consumers understand “unlimited” in the context of a mobile service plan to mean the amount of data offered, not the particular speeds provided.

In the absence of reliable consumer perception evidence, NAD used its own expertise to step into the shoes of the consumer to determine the messages reasonably conveyed by the challenged claims. NAD determined that Comcast’s “Unlimited 5G” claim communicates the specific message that the plan offers an unlimited amount of data at a particular speed, that is, at 5G speed. NAD stated that by pairing “unlimited” and “5G” in the claim, Comcast made a promise to consumers that its “unlimited” plan offers “unlimited 5G” data speeds. NAD found that Xfinity Mobile customers get access to 5G speed up to 20GB of data per month. After reaching 20GB of data, a customer’s data is limited to 3G speeds.

Comcast’s “Unlimited 5G” claims were sometimes accompanied by a disclaimer stating, “Reduced speeds after 20GB of usage/line.” NAD noted that the Federal Trade Commission’s “.com Disclosures” Guide states, “A disclosure can only qualify or limit a claim to avoid a misleading impression. It cannot cure a false claim. If a disclosure provides information that contradicts a material claim, the disclosure will not be sufficient to prevent the ad from being deceptive. In that situation, the claim itself must be modified.” NAD found that the disclosure cannot cure the misleading message conveyed by the main claim, because it contradicts the message that 5G data on the plan is unlimited.

Therefore, NAD determined that Comcast’s “Unlimited 5G” claims were not supported and recommended that they be discontinued.

T-Mobile also challenged a series of “best price” claims for the Xfinity Mobile Unlimited 5G plan. These claims included “Xfinity Mobile now has the best price for Unlimited 5G” and “Break free from the big three . . . Save up to $400 and get the best price for Unlimited 5G.”

T-Mobile contended that these claims are not supported when compared with the promotional price of its Essentials plan’s four-line pricing. Comcast responded that when factoring the total cost of each plan for consumers, it offers the lowest price compared with the “big three.”

NAD observed that price comparison advertising “serves very important marketplace functions. It informs consumers of important choices about a critical product characteristic, and it encourages price competition in the relevant market. Price comparisons that are based on inaccurate information, however, fail to accomplish these goals.”

NAD determined that Comcast’s “best price” claims could reasonably communicate the message to consumers that Xfinity Mobile’s price for its Unlimited 5G mobile service plan is lower than its competitors’ plans. The claims are not qualified or limited in any manner that might prevent consumers from taking away an absolute superior pricing message. NAD stated, “The message of an unqualified ‘best price’ claim is that consumers will always receive the lowest prices without ever needing to comparison shop.”

NAD determined that Comcast’s “best price” claim conveys the message that a four-line plan for Xfinity Mobile Unlimited 5G at $30 per line costs less than its competitors’ four-line pricing at the time the claim was disseminated, including T-Mobile’s four-line promotional price for its Essentials plan of $26 per line. Therefore, the claim was not supported.

Accordingly, NAD recommended that the claim that Xfinity’s plan has the best price be discontinued. NAD noted that the evidence in the record may support more qualified, unsurpassed price comparison claims that make clear that the comparison excludes temporary promotional pricing. NAD also noted that as pricing shifts in the marketplace, Comcast may be able to support a more limited unsurpassed pricing claim.

In its advertiser statement, Comcast stated that it “agrees to comply with NAD’s recommendation.” Comcast further stated that it “agrees that an appropriate disclosure can make clear to consumers the basis of comparison (including comparisons which exclude temporary promotional pricing) and will comply with NAD’s recommendation in future advertising.”

Why It Matters

This case is the latest in a series of challenges at NAD between the telecommunications companies regarding their mobile plans. Since 5G is the latest development in the telecommunications industry, claims regarding 5G mobile plans and challenges against those claims have proliferated. This decision addressed two strong claims.

NAD found that Comcast’s “Unlimited 5G” claim communicated the message that its mobile plan offered an unlimited amount of data at 5G speed. Because Comcast’s Xfinity Mobile customers got access to 5G speed up to 20GB of data per month, but after reaching 20GB of data, they were limited to 3G speeds, that claim was not supported. The NAD also found that although Comcast’s “Unlimited 5G” claims were sometimes accompanied by a disclaimer stating, “Reduced speeds after 20GB of usage/line,” this disclosure could not cure the misleading message conveyed by the “Unlimited 5G” claim, because it contradicted the message that 5G data on the plan was unlimited.

In addition, NAD determined that Comcast should support its “best price” claim with evidence that compares its price with the current nationally available prices for its competitors’ plans, in this case including T-Mobile’s promotional four-line price for its Essentials mobile service plan. NAD found that this unqualified claim was not supported because T-Mobile had a promotional price for its four-line plan that was lower than Comcast’s price for its four-line plan.

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