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This alert was featured in Tech Bytes, our technology law newsletter.
Tech Bytes contents
- EU-wide sales law
- Get ready for new EU distance selling rules
- Wholesale access to telecoms infrastructure: EU consultations on regulation and pricing
- Online publishers: EU’s top court rules on jurisdiction in defamation claims
- Latest guidance for telcos and ISPs on advertising “unlimited” broadband and “up to” speeds
- UK spectrum auction to take place Q4 2012 at the earliest
- Patents: UK court ruling on computer-simulated design methods
- Featured article: In defence of the cloud
Following an 8-month public consultation, the Committee of Advertising Practice (“CAP”) has issued new guidance on the use in advertising of “unlimited” usage and “up to” claims for broadband speeds. The new guidance will take effect on 1 April 2012 and sets out CAP’s recommended approach for ensuring that such claims do not fall foul of the “misleading advertising” sections of the broadcast and non-broadcast advertising codes – the “BCAP Code” and the “CAP Code”. CAP recognises that “unlimited” and “up to” claims falling outside its recommended approach may nonetheless be Code-compliant – but it will be for the marketer to justify why a claim is not misleading.
Currently, the Advertising Standards Agency allows advertisers to claim that a service is “unlimited” as long as the provider’s Fair Use Policy (“FUP”) is fair and reasonable and the advert states that the service is subject to the FUP.
Under the new guidance, advertisers will have to ensure that any limitations on a service advertised as “unlimited” are in line with the average consumer’s expectations. The guidance says that unlimited claims are likely to be acceptable as long as there is no additional charge or suspension of service for “legitimate” use over a certain threshold. Service providers are warned against taking usage restrictions out of the FUP and putting them into their terms and conditions. Use of the service will not cease to be “legitimate” just because it exceeds thresholds contained in the service provider’s terms and conditions.
“Moderate” speed or usage restrictions are acceptable, provided these are clearly explained. CAP’s view is that customers expect some level of service variation, for example at busy periods, but any restriction should not prevent everyday activities such as legal streaming and some downloading.
As for “up to” claims for connection speeds, these can only be made if at least 10% of customers are able to gain access to the advertised speed. Ofcom had wanted “up to” claims to be accompanied by a statement setting out the range of speeds actually achieved by 50% of customers. Instead, advertisers will have to ensure that maximum speed claims are accompanied by additional information to ensure the average consumer is not misled.