NAD Finds Verizon “First to 5G” Claim Supported, But Recommends Modification to Disclosure as Long as Service is More Unavailable Than Available

New York, NY – December 13, 2019 – The National Advertising Division determined that Verizon substantiated its “First to 5G” claim, however it recommended modification to the disclosures used to qualify the claim, as long as the service is more unavailable than available.  NAD also concluded that the advertising did not convey a message concerning the availability of 5G service on trains, but recommended that the advertiser discontinue the implied claim that Verizon’s 5G service can be used on a bus.  Finally, NAD recommended that, to the extent Verizon charges a fee for 5G service in the future, it clearly and conspicuously disclose this material term in its advertising for 5G.  The claims, which appeared in four video advertisements for Verizon’s wireless network, were challenged by competitor AT&T Services, Inc.

NAD is an investigative unit of the advertising industry’s system of self-regulation and is a division of the BBB NP’s self-regulatory and dispute resolution programs.

NAD determined that in the context of the challenged advertising, the “First to 5G” claim conveys a message about mobile service, available to consumers and usable.  AT&T argued that it offered mobile 5G service before Verizon did, however, NAD noted that AT&T’s 5G mobile hotspot was not the type of mobile phone use depicted in the challenged advertising.  Further, based on the evidence in the record, NAD determined that Verizon 5G service was available to consumers in two U.S. cities prior to the launch of mobile wireless 5G service by several South Korean carriers.  With regard to coverage, NAD noted that in parts of the downtown areas of certain cities, Verizon customers could get the blazing fast speeds that are the focus of 5G publicity.  Also, while Verizon’s service was initially available on only a single phone, the Moto Z3 (which required purchase of a special 5G attachment), this constitutes mobile wireless 5G service.  As a result, NAD determined Verizon had substantiated its “First to 5G” claim.  Regarding the challenged implied claim that “accessing Verizon’s 5G network does not require any special handsets or devices,” NAD found that the Moto Z3 was not a “special handset or device” such that a disclosure would be required.

Further, with regard to AT&T’s argument that the limited availability of Verizon’s 5G mobile network renders its “first to 5G” claims misleading, NAD noted that messages such as “For the first time ever, 5G is now in your hands” necessarily convey the unqualified message that 5G service is now available.  Further, consumers are not likely to understand the location limitations on Verizon’s 5G network when they see Verizon’s advertising that it now offers 5G, notwithstanding the disclosure at the end of each commercial which states, “5G Ultra Wideband available only in parts of select cities.”  NAD noted that it is undisputed that Verizon’s 5G service is available in certain neighborhoods of some cities but that even in cities where it is available, its availability is limited. Therefore, NAD recommended that Verizon modify its advertising to disclose that its 5G service is more unavailable than available.  The disclosure should be made with prominence and clarity close to the main claim, disclosed visually if the claim is made visually, and orally if the claim is made orally.  Nothing in this decision prevents Verizon from touting that is has achieved the important milestone of deploying the first mobile wireless 5G service network provided, however, that to the extent its advertising reasonably conveys a message about availability, the advertising discloses the limited availability of its 5G mobile network.

NAD also evaluated the related challenged implied claims.  NAD concluded that the challenged “Beyond Speed:  Real Time” commercial conveys no message concerning the availability of 5G service on trains.  However, NAD determined that the commercial reasonably conveys the message that Verizon’s 5G service can be used to play a multiplayer game on a school bus.  NAD noted that the multiplayer games depicted are necessarily played over a persistent internet connection, but there was no evidence that a passenger on a school bus would retain a 5G connection for a sufficient amount of time to complete a “console-quality multiplayer game on the go.” As a result, NAD recommended that this implied claim be discontinued, but noted that nothing in this decision prevents Verizon for accurately touting the current performance of its network, which should improve as the buildout continues and as 5G technology improves.

Finally, NAD recommended that, to the extent Verizon charges a fee for 5G service in the future, it clearly and conspicuously disclose this material term in its advertising for 5G.

In its advertiser’s statement, Verizon stated that “it will comply with the NAD’s decision.”

Note:  This was the first case to be reopened under NAD Procedures permitting the NAD to grant a petition to reopen the underlying case based on, among other things, the existence of new evidence.  In the underlying case, NAD recommended Verizon discontinue advertising that it found reasonably conveyed the message that Verizon was the first to launch a mobile 5G network.  Subsequently, Verizon petitioned to reopen the case based on its new evidence that it had deployed a mobile 5G network.

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